From the category archives: Retirement
Hyperbole -- fact twisting and sheer omission -- false truths presented by “courageous truth-tellers.” None of this is really new to American politics. However, today New Jersey Governor Chris Christie deployed all of these time-worn propaganda techniques to unveil his plan to cut $1 trillion in benefits (that’s $1,000,000,000,000) from generations of Americans who will depend on Social Security, Medicare and Medicaid.
He says it’s all about “fairness.” However, he proposes not a single dime of new revenue and has no problem with average Americans paying payroll taxes on all of their income while the wealthy do not.
Apparently, slashing pensions in New Jersey to preserve his no tax pledge simply isn’t enough. Now he hopes to do the same nationwide. In spite of his promise to offer the GOP Presidential primary race something new, today’s comments were merely a recitation and doubling-down on the same GOP claims that our nation can’t afford to honor its commitment to America’s workers and future retirees.
NCPSSM President/CEO, Max Richtman, sums it up this way:
“The Governor’s plan to means-test Social Security, cutting off some Americans and transitioning the program from an earned benefit to welfare has long been the goal of those who oppose social insurance programs. It seems the Governor acknowledges that his flagging Presidential campaign needed a jolt because today’s speech was far more about burnishing Governor Christie’s conservative credentials than offering new proposals that could help America’s workers and retirees. He certainly isn’t showing bold leadership by claiming we must cut middle-class benefits, while protecting tax expenditures benefiting huge corporations and the wealthy. That’s been the GOP position for a very long time. Today Governor Christie joins a long line of conservative politicians who hope to convince voters they are “courageous truth-tellers” when in truth their goal is to dismantle the very programs which have kept millions from poverty.
The majority of Americans – of all ages, no matter their political party -- opposes cutting already modest benefits and is willing to pay more to boost the program. They understand Social Security and Medicare are not welfare programs nor should they be. Getting any GOP Presidential candidate to acknowledge that fact takes true political courage. But unfortunately that’s not the ‘red meat’ the GOP’s conservative base expects to hear nor the truth candidates like Governor Christie are willing to tell.”...Max Richtman, NCPSSM President/CEO
While he claims “no one” will talk about cutting benefits like he will, the fact is, the past decade has seen numerous attacks on the programs from Presidents, Presidential commissions, Congressional “Gangs of 6” and too many legislative proposals to even list here. Senate Governor Christie is merely the latest in a growing list of GOP Presidential candidates who all promote the same “strengthen = slash” approach. They tout their protection of poorer seniors while proposing benefit cuts, cost sharing and means testing that will impact millions of poor and middle-class beneficiaries. Each candidate also follows the conservative-crafted playbook which promises current retirees (who consistently vote) will be protected from cuts, instead targeting their children and grandchildren (who aren’t thinking about retirement yet) for even smaller benefits.
Many GOP Candidates – Same Social Security & Medicare Approach
- Senator Ted Cruz supports privatizing Social Security, turning Medicare into “Coupon Care”, raising the retirement age and Medicare eligibility age, and cutting Cost of Living Allowances (COLAs). Each of these proposals would cut benefits well below the current $1,200 average monthly benefit.
- Senator Rand Paul has called Social Security a Ponzi scheme and supports allowing people to opt out of the program. He also supports raising the retirement age and Medicare eligibility age, Social Security privatization, and raising seniors’ Medicare premiums and copayments.
- Senator Marco Rubio supports privatizing Social Security, raising the retirement age and cutting Cost of Living Allowances (COLAs). He considers current benefits “generous” and supports the GOP/Ryan budget which turns Medicare into “Coupon Care”.
None of these candidates have expressed support for lifting the payroll tax cap so that wealthy Americans pay the same rate as everyone else or proposals addressing income adequacy for millions of beneficiaries of all ages.
Now, that would be a true act of political courage.
This week has seen a wave of attacks by conservative columnists and think-tankers outraged that the call to Boost Social Security benefits is gaining traction on Capitol Hill (it’s already widely supported by Americans of all political persuasions nationwide). The shifting political tide was most recently apparent when an amendment to expand Social Security benefits was introduced by Senators Elizabeth Warren and Joe Manchin and supported by the majority of Senate Democrats. That Congressional support mobilized a host of anti-Social Security writers, with libertarian Ann Ryand fan Megan McArdle leading the pack, to pen feverish anti-Social Security tomes. Each of them following the same conservative talking points portraying Social Security as welfare, seniors as “greedy geezers” and demanding benefit cuts to pay for billionaire tax cuts they consider off-limits for reform.
NCPSSM’s Equal Time details McArdle’s Bloomberg piece:
The Left Gets It Wrong About Social Security
Megan McArdle, Columnist
McArdle’s disdain for Social Security is sprinkled throughout her error-laden story. Here are just a few samples (emphasis is ours):
“no one, left or right, really wants to take on our vast army of retirees...”
“progressives who are ideologically opposed to shrinking the welfare state...”
“It is supremely irrelevant whether that money flows through the "trust fund" or Uncle Sam holds an annual ceremony in which the trustees are handed one of those giant checks they present to lottery winners...”
“Social Security's great political strength is the perception that beneficiaries have earned their benefits...”
“The only reason that the system isn't in the red already is the net interest the government is paying itself on the bonds in the trust fund.”
As a columnist, McArdle is paid to express her opinions. However, as an employee of a “news organization” she should be expected to at least build her case based on facts. As the Los Angeles Times correctly assessed, “It's rare to find so much sophistry, misunderstanding and misinformation about Social Security in one place.” So much so, we can’t even begin to fact-check all of it; however, we’ll address the first four quotes listed above as classic examples of how conservatives consistently choose language describing Social Security as if it’s a “welfare state” where “vast army of retirees” are lucky enough to be “handed...giant checks” like lottery winners. After all, it’s only a “perception that beneficiaries have earned their benefits.” Of course, the truth for millions of Americans who have actually worked and paid into Social Security for a lifetime (not just “perceived” that they did) does not resemble the political and verbal mythology created by conservatives like McArdle in any way.
The claim that Social Security’s financing is actually worse than it appears because of some sort of accounting gimmick by which “the government is paying itself” shows either complete ignorance of how the Trust Fund works or willful misrepresentation of the facts. Simply put, the federal government pays interest on the money it borrows from American workers’ payroll tax contributions to Social Security. That’s not the same as “paying itself.” It’s a legal obligation we owe to all bond holders. We also do this for the bonds in Warren Buffett and Pete Peterson’s portfolios, so why do conservatives never treat that as somehow suspect? While defaulting on our debt to Pete Peterson or China would never be allowed (nor should it)...refusing to pay back America’s retirees is not only acceptable to conservatives but exactly the solution alleged “fiscal hawks” want Congress to adopt.
Apparently, just one attack on the Boost Social Security movement wasn’t enough so Bloomberg posted a second piece, written by National Review’s Ramesh Ponnuru on the very next day (followed by yet another McArdle article later that afternoon). Sensing the panic here?
Here’s Richard Eskow’s Huffington Post analysis of Ponnuru’s version of the anti-Social Security playbook:
“...we're taken on a wild ride that includes misperceptions about the financing of social insurance, the mischaracterization of Social Security as an anti-poverty program, and the citation of a methodologically flawed study from the American Enterprise Institute which incorrectly ascribes all sorts of economic evils - including "reducing work, saving, and even birth rates" - to Social Security.
But then, the anti-Social Security crowd has been playing by the same rules for decades: Ignore the needs and wishes of the majority, mislead the public about the fiscal facts and your opponents' arguments, and stigmatize the elderly (a cohort which most of us will eventually join) as a morally flawed "special interest."
Not content to let Bloomberg News have all the fun, the Washington Post’s editorial board piled on today adding yet another “cut Social Security” oped to their long list of similar screeds, claiming support of the Boost movement is just “pandering to seniors.”
“Of course, there’s nothing particularly original about the progressives’ campaign, either politically or policy-wise. Pandering to the elderly may be especially urgent for Democrats now, given that the formerly reliably blue 65-and-older set has evolved into a Republican constituency in the past decade, according to Gallup . But buying votes with Social Security promises is a hoary ploy whose master practitioner was none other than President Richard M. Nixon.”
The Post then goes on to claim there is no retirement crisis, the rich can’t afford to be taxed so much and seniors are actually doing quite well, thank you very much. According to the Washington Post, supporting Social Security means you’re pandering to seniors (conveniently ignoring the fact that millions of children and people with disabilities of all ages also receive benefits). But why doesn’t the Washington Post ever describe those opposed to cutting even a penny from trillions of dollars in tax expenditures for corporations as pandering to the 1%?
Why? Because that’s definitely not in the anti-Social Security playbook.
Tomorrow, Republicans leading the House Ways and Means Social Security subcommittee will continue their campaign to try and convince Americanswhy it’s OK to threaten a 20% benefit cut for people with disabilities unless Congress enacts larger “reforms” (“reforms” actually meaning benefit cuts since conservatives have already ruled out revenue increases) from retirees, widows and survivors who depend on Social Security.
This divide and conquer strategy ignores the fact that, once you step outside Congressional hearing rooms, average Americans understand that Social Security’s value goes far beyond just retirement. Demonizing people with disabilities discounts the basic truth that American workers contribute throughout their working lives into one program -- Social Security. Their contributions provide economic security for a whole host of needs from birth to death – for children who’ve lost a parent, spouses who’ve lost their “significant other” and people with disabilities no longer healthy enough to work. Worker contributions provide all of these benefits. Cutting Social Security disability is cutting Social Security benefits, no matter how conservatives in Washington want to pretend otherwise. Targeting one group of Social Security beneficiaries is a political first step to attack the whole program.
Web Phillips is the National Committee’s Senior Legislative Representative and will testify before the committee tomorrow:
“Our members come from all walks of life and every political persuasion. What unites them is their passion for protecting and strengthening Social Security and Medicare, not just for themselves but for their children and grandchildren. Our members see Social Security as an inter-generational compact that protects all members of the family. To them, it is a single integrated system of benefits that provides family protection from birth to death. It is a system where all of its parts, whether SSDI or retirement and survivors benefits, are equally important.
Most seniors have children and grandchildren and are as concerned for their offspring’s well-being as they are for their own. Maybe more so. They may have had sons and daughters who were born with a disabling condition or who became disabled later in life. They are familiar with the disappointment and financial hardship unanticipated events cause and are grateful that Social Security is available to provide help when it is needed. Fundamentally, they understand SSDI’s value and they support the program.”
At the heart of this issue is the GOP’s refusal to simply allow a modest and temporary reallocation of part of the 6.2 percent Social Security tax rate to the DI Trust Fund which would put the entire Social Security program on an equal footing, with all benefits payable at least until 2033. Again, Americans pay taxes to one Social Security system with the understanding their money provides disability, retirement and survivor benefits – all of them – so changing that allocation formula temporarily avoids any shortfall. In fact, Democrats and Republicans have authorized this same strategy eleven times without controversy (including four times during the Reagan administration). Extending the DI Trust Fund’s solvency to match the Retirement Trust Fund is a simple common sense step that sets the table for a more constructive long-term conversation about Social Security between now and 2033, rather than this faux crisis mentality promoted by the billion dollar anti-Social Security lobby and it’s allies on Capitol Hill.
GOP leaders call this common-sense solution “kicking the can down the road” while they ignore the reality of what a 20% benefit cut would mean to millions of people with disabilities. It’s a “death sentence” according to Social Security Acting Commissioner, Carolyn Colvin. She’s right. However, rather than address this immediate need for Social Security disability beneficiaries, as so many other Congresses have, Republican leaders continue their cynical political attack in which all Social Security beneficiaries are the hostages.
This week America’s wealthiest will make their last contribution to the Social Security system for 2015. The rest of us...middle class and the working poor...will continue to pay 6.2% of every dollar we earn to keep Social Security strong. How can this be?
So, the payroll tax cap means the wealthy will never have to contribute on all of their income, just the first $118,500 (in 2015). Because most Americans never earn that much in a year, many don’t even realize this unfair tax cap exists or the devastating effect it’s having on Social Security’s long-term fiscal outlook:
“... the Social Security trust fund, which currently holds $2.8 trillion, is projected to be drawn down by about 2033 (according to the Social Security trustees). After that point, if no changes are made to the program, retirees will receive only about 75 percent of scheduled benefits. One of the main causes of this projected shortfall is the growth in inequality over the last 30 years. Back in the 1980s, the last time changes were made to Social Security, Congress and President Reagan decided to build up the trust fund with workers' payroll taxes in order to essentially pre-fund the coming retirement of the Baby Boom generation.
As a result, the trust fund has been steadily building up over the decades, but they weren't able to predict how much income gaps would widen over that time. So while the payroll tax cap has been adjusted for inflation every year, the income of the richest workers has increased faster, allowing more and more earnings to escape the tax, and causing the payroll tax to collect less than needed.” Nicole Woo, Center for Economic and Policy Research
It’s no coincidence that conservatives who constantly clamor for cutting Social Security benefits never list raising or eliminating the payroll tax cap as an alternative solution to strengthening Social Security. Once again, for America’s 1% and their supporters in Congress, middle-class benefits cuts are always the preferred solution.
“I found an even more glaring example of the vast inequity of the Social Security tax system a couple of years ago when I was reading a report issued by an association of CEO’s here in Washington. The report made recommendation to “fix” Social Security by cutting benefits, cutting the Social Security cost of living adjustment, raising the retirement age…no mention of the payroll cap. I was curious about the membership of this group and after a little research I did the math and discovered that one member of their executive committee reached the cap and stopped paying FICA tax after lunch on New Years Day. Earning $54 million dollars a year allows you to do that…but doesn’t make it right.” Max Richtman, NCPSSM President/CEO
The National Committee proudly moderated a Capitol Hill event today with Senator Bernie Sanders (D-I), Rep. Jan Schakowsky (D-IL) and the Strengthen Social Security Coalition bringing attention to this Social Security payroll tax giveaway provide only to the richest people in America each year.
The Center for American Progress released a new report today analyzing what America’s income inequality has meant for Social Security’s funding. First, some historical background...when the 1983 Greenspan Commission passed its Social Security reforms 90% of American workers paid on all of their annual income. In other words, only 10% were exempted from the payroll tax cap. Since then, our nation has seen more and more income shifted to the wealthy meaning there are 6 times the number of millionaires and billionaires today compared to 1983 and more people above the tax cap. That’s means America no longer collects the Social Security payroll taxes from 90% of workers...today it’s only 83%. CAP reports that’s more than a trillion dollars lost.
“Had 90 percent of covered wages been taxed from 1983 to 2013, the OASDI trust funds would have been $1.1 trillion larger by 2013, shrinking the 75-year expected shortfall by 10.1 percent.
The simulation that we have modeled is retrospective; it addresses what would have happened had 90 percent of wages been taxed since 1983. In their annual report, the Social Security trustees answer a similar, but prospective, question: How would raising the cap to cover 90 percent of earnings starting in 2015 affect the trust funds’ shortfall? The trustees find that over the 75-year period, this change would close about 27 percent of the expected shortfall in the trust funds.”
As Center for Economic and Policy Research Co-Director, Dean Baker, told the crowd today, “Social Security isn’t broke...America’s economy is.” Contrary to the current GOP divide and conquer messaging, American seniors aren’t stealing money from children’s programs and the disabled aren’t bankrupting the Social Security retirement system. Conservatives don’t want average Americans to see the truth -- our economic policies have shifted the nation’s wealth to the wealthy and away from everyone else.
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