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From the category archives: entitlement reform

Decades of Bad Social Security & Medicare Proposals Rolled into One – Courtesy of Governor Chris Christie

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.

 

 

Congress Targets Social Security with Fast-Track Commission Plan

"Reps. Tom Cole (R-OK) and John Delaney (D-MD) plan to introduce a bill this Congress that would create a Social Security commission to propose changes to the program, Cole's office confirmed to TPM on Monday." - Talking Points Memo.

“The commission would probably gradually raise retirement age, it would probably look at chained CPI, would probably look at means-testing and probably look at some sort of revenue, or reduce benefits for upper-income people,” Cole said. “Then you have to vote.”  - The Hill.

 “We are troubled that H.R. 1578 takes several steps to circumvent a deliberative public process, limiting the participation of Social Security stakeholders and advocates. For example, the Committees of jurisdiction over the Social Security program — the Senate Committee on Finance and the House Committee on Ways and Means — would have limited input in the development of the Commission’s recommendations. Under “fast track” procedural rules in your bill, the legislation embodying the Commission’s recommendations would be considered by Congress on an expedited, “take-it-or-leave-it” basis.  No amendments to the Commission’s bill could be offered and it could be passed in both the House and Senate by a simple majority vote. Normally, Section 310(g) of the Budget Act and the Senate’s “Byrd rule” require 60 votes in the Senate to approve legislation which changes Social Security." - Max Richtman.

 

Congress Trades Bad Deal for Doctors for Bad Deal for Seniors in Medicare

The House has passed the so-called "doc fix" legislation replacing the flawed reimbursement formula Congress itself created years ago to cut pay to doctors in Medicare.  The formula has never worked and Congress has had to vote to replace it year after year.  We've supported the permanent replacement of this flawed formula and still do.  Unfortunately, the legislation that passed the House today merely trades one bad deal for another.  And this time it's seniors who take the hit. 

 “Contrary to claims by supporters, on both sides of the aisle, this ‘doc fix’ does not impact only ‘wealthy seniors’. Millions of beneficiaries who depend on a Medigap plan to help pay their health care bills – no matter their income -- will be hit with higher costs. Given that 46% of all Medigap policy holders had incomes of $30,000 or less, it’s clear this deal impacts far more than the wealthy, as the bill’s proponents have claimed.  What’s more, Medicare beneficiaries will be forced to contribute nearly $60 billion in premiums over the next decade to replace the SGR.

No doubt, we’ll hear today that this ‘compromise’ Medicare doc-fix plan must be a success because there are concessions from all sides.  Unfortunately, that political trope is just as flawed as the SGR itself because it ignores the financial reality facing Medicare beneficiaries just as the SGR ignored the reality facing doctors. Trading a bad deal for doctors for a bad deal for seniors is not a legislative victory and it is a surprising move from some in Congress who have previously vowed to protect Medicare from cuts and seniors from cost-shifting.

 It’s no surprise that anti-“entitlement” lobbyists on Capitol Hill and their allies in Congress are celebrating this deal for the benefit cuts they know will ‘grow like an avalanche over time’.  That avalanche will be headed straight for American retirees, current and future, as Congress continues to push Medicare down the slippery slope of means testing, raising costs for more and more seniors, including the middle-class.”...Max Richtman, NCPSSM President/CEO

Washington Fiction & Hollywood Fiction – More Political Lies about Social Security

Several years ago, we asked the question “What Will a Billion dollars Buy You?”  At that time, we were covering the billion dollar Wall Street campaign to cut Social Security and Medicare by those who want to protect tax breaks and the income inequality which has lined the pockets of America’s corporations and wealthy.  This week it appears the anti-Social Security propaganda favored by these Wall Street lobbyists has also now found a home in the popular political drama “House of Cards.”  Turns out that the show’s consultant runs one of the many groups funded by former Wall Streeter and anti-Social Security scold, Pete Peterson, who’s invested his own personal fortune to a national campaign to cut back benefits in Social Security and Medicare.

Richard Eskow at Campaign for America’s Future details the connection: 

“Episode One’s credits list Jim Kessler as a consultant. Kessler is, as his IMDB biography notes, the co-founder of Third Way. That’s a Wall Street-funded, so-called “centrist” Democratic organization with a mission: to promote neoliberal economics and make the world safe (at least financially) for its wealthy patrons.

Third Way has consistently misrepresented the financial condition of Social Security, misdirected the public debate about Medicare, and generally promoted the socially liberal but fiscally conservative worldview of its patrons.

Kessler and co-founder Jon Cowan carefully tiptoed their way through the minefield of public opinion for years, pretending to be technocrats rather than de facto lobbyists for powerful interests. They finally lost their balance last year. When confronted with the rise of Elizabeth Warren and the populist wing of the Democratic Party, they lashed out at Sen. Warren with an intemperate Wall Street Journal op-ed.”

We highly recommend you read Eskow’s entire post to see just how perfectly the Third Way, Pete Peterson propaganda is scripted into the characters of “House of Cards”.  Here’s just a sample:

“Underwood continues: “This (the number $32,781, displayed on a flip chart) is what the average senior gets in one year from entitlements …This money is a job we could be giving to a single mother or a student just out of school. Now at the moment, 44 cents of every tax dollar goes to pay for these programs. By 2030, it’ll be over half, 62 cents.”

“Entitlements are bankrupting us,” he concludes.

Except that they’re not. Social Security accounts for 24 percent of the federal budget, but it is forbidden by law from adding to the overall deficit. What’s more, its trust fund is currently holding $2.8 trillion dollars in reserves. The statement is meaningless.

In Episode Two, Underwood gives a “bold” speech outlining his plan. It begins:

“For too long, we in Washington have been lying to you. We say we’re here to serve you, when in fact, we’re serving ourselves. And why? We are driven by our own desire to get reelected …”

That’s another favored trope: that the corporate politicians are courageous (as if it’s brave to serve the wealthy and powerful!), while their opponents are cravenly pandering to the voters – by representing them.

“That ends tonight,” says Underwood. “Tonight, I give you the truth.”

There’s that idea again, that the corporate version of reality is “fact” or “truth.” We’re told that “the root of the problem” is “entitlements” – a favorite word in the corporate crowd because it has negative connotations. (We’ve written about that before.)

“Let me be clear,” adds Underwood. “You are entitled to nothing …”

Just like real-life Third Way types, Underwood is trying to cancel our nation’s social contract.

It’s easy enough to say “don’t worry, this is just fiction” but the problem is that a growing number of Americans don’t get their news from independent news sources anymore...they get it from everywhere else.  Comedy Central’s Jon Stewart continues to be among the nation’s most trusted “news sources” even as he hosts a comedy show.  It’s not that big of a stretch to believe that viewers hearing the fictional politician, Frank Underwood, recite the same propaganda they also hear constantly from the billion dollar anti-Social Security lobby and their real-world political allies on Capitol Hill only helps to validate this factually flawed view

This type of Wall Street messaging fits the very definition of propaganda and how best to use it in the real world of politics, not just the made-for-television variety:                        

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie.”...Joseph Goebbels

 

 

 

America’s Richest 1% Won’t Contribute Another Dime to Social Security All Year

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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