Salon.com > Social Security

It’s time to focus on jobs

Fri, 04 Jan 2013 14:52:00 +0000

The news today from the Bureau of Labor Statistics is that the U.S. job market is treading water.

The number of new jobs created in December (155,000), and percent unemployment (7.8), were the same as the revised numbers for November.

Also, about the same number of people are looking for work (12.2 million), with additional millions too discouraged even to look.

Put simply, we’re a very long way from the job growth we need to get out of the gravitational pull of the Great Recession. That would be at least 300,000 new jobs per month.

All of which means job growth and wage growth should be the central focus of economic policy, not deficit reduction.

GOP demands Social Security cuts, setting back fiscal talks

Sun, 30 Dec 2012 20:34:00 +0000

In what Democratic aides told reporters was a "major setback" in fiscal cliff negotiations, Republicans proposed throwing a Social Security cut into the scaled-back deal Congress is attempting to cobble together in advance of the New Year deadline. As things stand at the time of writing, negotiations are close to breakdown.

Aides to Republican Senate Minority Leader Mitch McConnell presented the Social Security proposal, which included a method of calculating benefits with inflation. The plan would lower cost of living increases for Social Security recipients. Democrats were swift to reject the offer.

A Democratic aide told ABC News that the proposal was a "poisoned pill" in the current negotiations. However, it should be noted that President Obama has suggested a similar proposal within the context of negotiations on a broad deficit-reduction deal. Such a measure had been taken off the table in discussions over a scaled-back, short-term agreement.

Compromise or betrayal?

Wed, 19 Dec 2012 18:01:00 +0000

Time magazine named President Obama its 2012 "Person of the Year," and it makes sense. Just two years ago he came out of the 2010 shellacking battered, his chance at a second term diminished. Instead he put together an astonishing coalition of America's future, and became the first president in 75 years to win more than 50 percent of the vote twice. Aware of historic second-term overreach, most notably when George W. Bush tried to privatize Social Security, Obama says he nonetheless has an ambitious agenda for the next four years.

It would be sad if he launched it by doing what Bush never did: cutting Social Security benefits for seniors by agreeing to a change in cost of living calculations called the chained CPI.

Once a topic for only the wonkiest of wonks, now the intricacies of the chained CPI are being debated by the hackiest of hacks. The bottom line is this: The longer you live, the less your benefits would grow. We still don't know how it would work; anonymous White House sources have promised any deal would include protections for the poorest seniors, the disabled and veterans.

The progressive case for the chained CPI

Wed, 19 Dec 2012 17:22:00 +0000

Liberals are going to have to decide if they’ll stick with the president if the plan he floated this week to cut Social Security benefits by switching to the so-called chained CPI becomes a reality, and it’s not an easy choice. Progressive pressure groups and lawmakers are furious with Obama for proposing the cuts, as I noted yesterday, but House Democratic Leader Nancy Pelosi said she’s confident that her caucus would ultimately support the plan if the president asks them too.

The case against moving to the chained CPI is easy to make: It represents a real cut to seniors’ Social Security benefits, which has so far been a non-starter. Even advocates of the switch acknowledge this. But since we may have to swallow it, it’s worth laying out the best progressive argument possible in favor of the chained CPI. We're not saying it's right, but it's a case that should be made.

Obama Social Security offer at odds with top Dems

Wed, 19 Dec 2012 15:18:00 +0000

WASHINGTON (AP) — President Barack Obama's offer to slow the growth of Social Security benefits would force fellow Democrats in Congress to abandon promises to shield the massive retirement and disability program from cuts as part of negotiations to avoid the year-end fiscal cliff.

Both Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif., pledged not to touch Social Security as part of deficit reduction talks. Now that Obama and House Speaker John Boehner, R-Ohio, have agreed to a new measure of inflation that would reduce annual cost-of-living adjustments, or COLAs, for Social Security and other government programs, Democrats are reluctant to call it a deal-breaker.

As Obama and Boehner continued to haggle over how much to raise taxes and cut spending, White House Press Secretary Jay Carney called the new inflation measure a technical adjustment designed to make inflation estimates more accurate, and he emphasized it's Republicans who want it.

"Let's be clear. This is something that the Republicans have asked for, and as part of an effort to find common ground with the Republicans, the president has agreed to put this in his proposal," Carney told reporters Tuesday. "The president has always said, as part of this process when we're talking about the spending cut side of this, that it would require tough choices by both sides."

Don’t sell out progressives, Barack!

Tue, 18 Dec 2012 21:06:00 +0000

That didn’t last nearly as long as I had hoped. I put on my Obama baseball cap – the one I picked up from a street vendor walking to the inauguration four years ago – a few weeks before the November election. I’ve worn it every day since, to both celebrate his victory and cheer on the president for keeping to a progressive promise in the fiscal negotiations. Part of that promise was telling the DesMoines Register that Social Security benefits should not be cut. But it looks like my cap is going back on the shelf if reports that Obama is willing to cut Social Security benefits prove to be true.

Liberals reject Obama’s Social Security offer

Tue, 18 Dec 2012 17:45:00 +0000

President Obama and House Republicans appear to be closing in on a deal to avert the fiscal cliff, but liberals are not happy with it.

Late last night, the White House offered a plan with two major concessions to Republicans. First, it would hike taxes on the wealthy, but only on income above $400,000, instead of the current $250,000 threshold. Second, and far more controversially, Obama offered to change the formula used to calculate Social Security benefits in a way that would cut outlays to seniors slightly while saving the program $225 billion over a decade.

The reaction from liberals, who have been demanding all along that social safety net programs be off the table, was swift and fierce. "This is a cut affecting every single beneficiary -- widows, orphans, people with disabilities and many others. It is a cut which hurts the most those who are most vulnerable: the oldest of the old, those disabled at the youngest ages, and the poorest of the poor. Perhaps fittingly, this will be done during the holiday season, when the American people are distracted," Nancy Altman, the founding co-director of the advocacy group Social Security Works, said in a statement.

Obama surrendering to Boehner?

Tue, 18 Dec 2012 12:41:00 +0000

We need to get the disclaimer out of the way immediately: Nothing has been officially announced and a lot is surely still up in the air. That said, reporting out of Washington points to a fiscal cliff deal between Barack Obama and John Boehner rapidly taking shape, with the president sending to the speaker Monday night a new offer that's not very different from the plan Boehner submitted last Friday.

According to multiple reports, the main features of the emerging compromise include a tax rate hike on income over $400,000 and new rules for deductions, a jump from 15 to 20 percent in the capital gains rate, an extension of unemployment benefits, the end of the payroll tax holiday, and a change to the cost-of-living formula for Social Security benefits. Further cuts to Medicaid or Medicare, needed to meet Boehner’s demand for more than $1 trillion in spending cuts, would be sorted out by Congress, and both parties would agree to pursue tax reform in the new year. The debt ceiling would also be raised, although the parties remain apart on the duration of the increase. Overall, there’d be about $1.2 trillion in new revenue, with spending cuts of a roughly equal amount.

Poll finds support for Elizabeth Warren’s “balanced approach”

Thu, 13 Dec 2012 16:55:00 +0000

The progressive movement is feeling more confident than it has in years and is flexing its muscles in the fiscal cliff fight to put pressure on Democrats not to cave on the tax increases for the wealthy or on cuts to social safety net programs. So far, the Democratic establishment seems to have listened. President Obama, unlike in his negotiations with Republicans last year, is drawing a hard line on the tax hikes and is forcing Republicans to make the first move on entitlement reform.

And yesterday, progressives scored another huge victory with the confirmation that Massachusetts Sen.-elect Elizabeth Warren will get a spot on the Senate Banking Committee, where she can carry on the work that has made her a liberal hero in the fight to make Wall Street accountable. Given Warren’s star power, the progressive activists who fuel her campaign see her as a leader in Washington whose influence extends far beyond her single vote in the Senate. Many are rallying around her vision of a “balanced approach” to reducing the deficit, which is notch or two to the left of Obama's.

Big government isn’t the problem

Tue, 11 Dec 2012 13:00:00 +0000

Has the United States mutated from democracy into kludgeocracy? The term “kludgeocracy” is a coinage by Steven M. Teles, a professor of political science at Johns Hopkins University and a leading public intellectual in his own right. In a new paper commissioned by my colleagues and me at the New America Foundation, Teles argues that the complexity of American government is a greater long-run threat than its size.

“You can’t solve a problem until you can name it,” Teles argues. The term “kludge” originated in computer programming, and means “an inelegant patch put in place to be backward compatible with the rest of a system. When you add up enough kludges, you get a very complicated program, one that is hard to understand and subject to crashes.” This sounds very much like American government -- thus “kludgeocracy.”

Teles finds kludgeocracy everywhere he looks. Sometimes it takes the form of multiple, overlapping or contradictory programs to promote a single objective. For example, to promote the objective of retirement security, Social Security, a simple and straightforward program, must now compete with “401(k)s, IRAs, 529 plans and the rest of our crazy quilt of savings incentives.”

The GOP may have some real leverage here

Tue, 11 Dec 2012 12:29:00 +0000

For all we know, the fiscal “cliff” deal that ultimately emerges – if one emerges at all – won’t end up touching the eligibility age for Medicare or altering the formula for Social Security benefits. But the possibility that it will, first raised in a widely-circulated Ezra Klein column last Friday, has spurred outrage and panic on the left.

Klein wrote that a deal seemed to be taking shape quietly, and that “the headline Democratic concession is likely to be that the Medicare eligibility age rises from 65 to 67.” This would be in exchange for Republicans giving in partially on Obama’s call for the restoration of the Clinton-era tax rates on income over $250,000; whereas the top marginal rate was 39.6 percent in the ‘90s, Klein suggested the deal would set it at 37 percent. Alternately, there's talk that the White House will instead settle for chained CPI -- that is, using a new, less generous cost-of-living measure to compute Social Security benefits.

Social security’s most media-friendly foe

Mon, 03 Dec 2012 12:00:00 +0000

For those familiar with Ayn Rand's writing, the question "Who is John Galt?" is succinct shorthand to summarize conservatives' ideological campaign against government. But to really appreciate how that crusade operates on a day-to-day basis in the most important political battles of the moment, the best question right now is, "Who is Maya MacGuineas?"

The incurious political press' answer to that query can be seen in a quick Google News search of her name. As you will see, she is one of the most oft-quoted, and therefore influential, "experts" in the so-called "fiscal cliff" negotiations. Most often, she is simply described by Washington reporters as the president of the "nonpartisan" Committee for a Responsible Federal Budget and, in that role, as the lead coordinator of the so-called "Fix the Debt" coalition.

Though words like "nonpartisan" are designed to cast both groups, and MacGuineas herself, as apolitical and ideologically dispassionate, the boards of both organizations (which you can see here and here) are teeming with business executives and lawmakers-turned-corporate lobbyists. That is, they are teeming with precisely the kind of hyperpartisan, ideologically driven Big Money interests that have a financial stake in balancing the budget in a way that at once prevents tax increases on the rich and cuts or privatizes social programs.

The Simpson-Bowles consensus makes no sense

Wed, 28 Nov 2012 23:51:00 +0000

The Simpson-Bowles budget balancing plan seems to have become the common-sense standard for dealing with America’s future budget deficits. I’d say this move toward the right is dangerous to the future of the nation and essentially cruel—far more dangerous than the level of the deficit over the next 15 years. The commission, formally known as the Commission on Fiscal Responsibility and Reform, appointed by President Obama, achieves its deficit reduction by reducing government spending to do two-thirds of the job and raising taxes to do only one-third of the job. Even 50-50 would not be fair in such a low-tax nation. The commission proposed cuts in Social Security benefits of 15 percent for medium earners, for example.

But easily the most short-sighted objective is to hold federal spending to 21 percent of Gross Domestic Product into the future. How did they get this number? It is roughly the average level of federal spending since 1970. This is not a reasonable standard—it is not even a way to think about the issue. So where did the idea originally come from? The answer: the right-wing Heritage Foundation.

GOP’s big Social Security lie

Tue, 20 Nov 2012 18:49:00 +0000

Trying to convince the public to cut America’s best-loved and most successful program requires a lot of creativity and persistence. Social Security is fiscally fit, prudently managed and does not add to the deficit because by law it must be completely detached from the federal operating budget. Obviously, it is needed more than ever in a time of increasing job insecurity and disappearing pensions. It helps our economy thrive and boosts the productivity of working Americans. And yet the sharks are in a frenzy to shred it in the upcoming “fiscal cliff” discussions.

The most popular red herring Social Security hustlers have unleashed into the waters of public discourse has grown into such a massive whale of a lie that liberals frequently subscribe to it. The idea goes like this: We need to somehow “fix” Social Security because people are living longer – “fix” in this context being code for “cut.” Two groups stand to benefit in the short-term from such a scheme: the greedy rich, who do not want to pay their share in taxes, and financiers, who want to move towards privatizing retirement accounts so they can collect fees. As for the masses of hard-working people who have rightfully earned their retirement, the only “fix” is the fix they will be in if already modest benefits are further reduced.

The case against a “grand bargain”

Tue, 13 Nov 2012 17:20:00 +0000

According to news reports, President Obama wants a “grand bargain” with the Republicans, who retain a majority in the House of Representatives even though in this year’s election more Americans voted for Democrats than for Republicans for Congress. The details of various “bipartisan” grand bargains vary, but most proposals, like the one proposed by the right-wing Republican Alan Simpson and the conservative Southern Democrat Erskine Bowles, the heads of the president’s failed deficit reduction commission, would trade modest Republican concessions on higher taxes on the rich for Democratic support for major cuts in Social Security, Medicare and other entitlements.

Any such grand bargain would be a bad deal for mainstream Americans.

Social Security and Medicare have absolutely nothing to do with the short-term U.S. fiscal problem. Middle-class entitlements do have long-term problems, like inadequate payroll tax revenue for Social Security in the 2030s, and excessive medical prices in the U.S., which affect private healthcare as well as Medicare and Medicaid. But these are unrelated problems that deserve to be discussed in unrelated debates according to unrelated timelines.

The coming debt battle

Thu, 08 Nov 2012 22:20:00 +0000

In the tense run-up to Hurricane Sandy, I clicked on one of those headlines that appears on the right side of the screen: “Civilization May Not Survive This, Economist Says.”

Once there, I knew I'd been had. It was about … the public debt. It cited one Lawrence Kotlikoff of Boston University, one of America's most talented artificers, who “estimates the true fiscal gap is $211 trillion when unfunded entitlements like Social Security and Medicare are included.” Compared to that, what's a thousand mile-wide hurricane?

That the looming debt and deficit crisis is fake is something that, by now, even the most dim member of Congress must know. The combination of hysterical rhetoric, small armies of lobbyists and pundits, and the proliferation of billionaire-backed front groups with names like the “Committee for a Responsible Federal Budget” is not a novelty in Washington. It happens whenever Big Money wants something badly enough.

Big Money has been gunning for Social Security, Medicare and Medicaid for decades – since the beginning of Social Security in 1935. The motives are partly financial: As one scholar once put it to me, the payroll tax is the “Mississippi of cash flows.” Anything that diverts part of it into private funds and insurance premiums is a meal ticket for the elite of the predator state.

America didn’t vote for a “grand bargain”

Thu, 08 Nov 2012 22:00:00 +0000

By 10 p.m. on Tuesday, it was all over but the shouting -- the shouting of Karl Rove, incredulous that Fox News' "decision desk" would dare deploy the best statistical evidence at its disposal to call Ohio for the president; the shouting of wingnuts everywhere that — no fair! — Obama only won because of superstorm Sandy (because demonstrated competence in running the government is no reason to choose someone to ... run your government); the shouting of the joyous throngs at McCormick Place waiting to receive their new second-term president. In my Hyde Park apartment just five blocks from the president's home, soon all around me was jubilation. A second Barack Obama term! I alone seemed to feel the disquiet. This reelection troubles me. It troubles me because of the signal it may send to some of the people running the Democratic Party, and to Barack Obama, a signal that may threaten the long-term health of the Democratic Party itself.

Was Ryan’s Social Security plan inspired by Pinochet?

Tue, 30 Oct 2012 18:25:00 +0000

While the Republican Party and its wealthy plutocrat backers have been accused of waging an elitist virtual war against the American majority, both Mitt Romney and Paul Ryan have financial and ideological ties to rich Latin American elites who have waged real wars against average citizens in their countries.

The anti-democratic ethos of today's GOP, displayed in Republican presidential candidate Mitt Romney's apparent contempt for 47% of U.S. citizens, is reflected in the origins of Mitt Romney's private equity firm Bain Capital, which was founded with money from Central American financiers linked to government-backed death squads in El Salvador. Paul Ryan's budgetary ideas have a similarly dark origin, in the paradigmatic case of what author Naomi Klein has dubbed "The Shock Doctrine".

One-third of Americans say they need to work into their 80s

Thu, 25 Oct 2012 14:56:00 +0000

Nearly one-third of Americans say they plan to work into their 80s since they can't afford to retire earlier, according to a Harris Institute survey.

As Bonnie Kavoussi noted in the Huffington Post, "Retirement is becoming an unaffordable luxury for a growing number of middle-class Americans." She attributes the increasing inability to retire at 65 and live decently to the middle-class squeeze of recent decades -- a mixture of inflation, productivity increases and stagnating wages:

The U.S.' real median household income, at just $50,054, is roughly at the same level where it was in 1989. While worker productivity has risen 69 percent since 1979, median hourly compensation rose just 6.5 percent during the same time period, according to the Economic Policy Institute.

Taxes go up for 163 million workers next year

Sun, 21 Oct 2012 14:36:00 +0000

Come January, a temporary reduction in Social Security payroll taxes is due to expire and 163 million workers will face a considerable rise in taxes -- up to $1,000 a year for the average worker. Neither Democrats nor Republicans are pushing to extend the payroll tax holiday, which was implemented two years ago. Via the AP:

"The payroll tax holiday was intended to be temporary and there is strong bipartisan support to let that tax provision expire," said Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee. "The continued extension of a temporary payroll tax holiday has serious long-term implications for Social Security and, frankly, it's not even clear that it has helped to boost our ailing economy."

When it comes to tax cuts, Congress' attention will focus on the January expiration of the Bush-era cuts, which are expected to take center stage in the coming lame-duck session.