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Posts Tagged 'privatization'

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Paul Ryan Peddles Dangerous Fictions on "60 Minutes"

House Speaker Paul Ryan perpetuated dangerous falsehoods about Medicare on CBS “60 Minutes” Sunday night.  In an interview with correspondent Scott Pelley, Ryan hauled out the myth that “Medicare goes bankrupt in about 10 years.”  He continued, “The trust fund runs out of money.  So we have to make sure that we shore this program up.”  Really? 

To Ryan, “shoring up” Medicare means privatizing it, creating what we at the National Committee call “coupon care.”  Seniors would have to fend for themselves in the private insurance market with government-provided vouchers that wouldn’t fully cover their premiums or out-of-pocket costs.  Traditional Medicare would be left to wither and die.

Ryan’s plan is based on a fake crisis.  Contrary to the Speaker’s claims on “60 Minutes,” Medicare does not go bankrupt in 10 years.  It’s true that – without increasing payroll taxes – the Medicare Hospital Trust fund (which finances Medicare Part A) will become depleted in 2028.  However, as the Center for Budget and Policy Priorities (CBPP) points out, “incoming payroll taxes and other revenue will still cover 87% of Medicare hospital insurance costs.”  That’s a far cry from bankruptcy, Mr. Ryan.

Any shortfalls, CBPP notes, could be covered by “raising revenues, slowing the growth in costs, or most likely both,” without wrecking traditional Medicare - options that Ryan doesn’t seem inclined to consider.

The other fiction that Ryan perpetrates in his “60 Minutes” appearance is that his Medicare “reforms” wouldn’t “change the benefit” for anybody who is in or near retirement – only Gen X’ers (like Ryan himself) and subsequent generations. This is simply untrue.  Our own analysis at NCPSSM indicates that privatizing Medicare could adversely impact anyone 55 and older (including people currently enrolled in traditional Medicare) because of potentially higher premiums, benefit cuts, and higher out-of-pockets.  Neither seniors nor their children and grandchildren should believe Ryan’s false assurances.  There is simply too much at stake.

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The Wolves of Wall Street, Hillary Clinton and Social Security

The Democratic primary campaign is not over and already there are media rumblings about who is working the inside track to become Hillary Clinton’s Treasury Secretary, if she’s elected President.  Normally, this is the kind of story we read and then move on to the next one (it is only March, after all).  However, David Dayen’s story in The Intercept suggesting that Wall Streeter, privatization supporter and Pete Peterson-connected, Larry Fink, is positioning himself for the Treasury job stopped us dead in our tracks.  Dayen reports:

“Larry Fink, BlackRock’s CEO, has assembled a veritable shadow government full of former Treasury Department officials at his company. Fink has made clear his desire to become Treasury Secretary someday. The Obama administration had him on the short list to replace Timothy Geithner. When that didn’t materialize, he pulled several members of prior Treasury Departments into high-level positions at the firm, which may improve the prospects of realizing his dream in a future Clinton administration.”

Now, considering someone from Wall Street to serve as Treasury Secretary is hardly shocking.  However, what is alarming is Fink’s views on Social Security including raising the retirement age and shifting Social Security funding to private accounts:

“Fink has also promoted the privatization of Social Security, while mocking the idea of retiring at 65, which is easy for a business executive who sits at a desk all day to say, rather than working on an assembly line or as a waiter. Fink owes his initial backing at BlackRock to Pete Peterson, the former commerce secretary who has been at the forefront of the campaign to cut or privatize Social Security. He sat on the steering committee of the Campaign to Fix the Debt, a stalking horse for Peterson’s ideas.

Fink’s claims that all Americans are living longer and thus should work longer is classic boilerplate language offered by the GOP and the billion dollar anti-Social Security lobby (funded by Pete Peterson) to justify cutting benefits for average Americans by raising the retirement age.  It ignores that fact that it’s wealthy white men who’ve benefited most from any longevity increases, while communities of color, women and low income workers do not see the same benefits.

“Men at the top of the economic ladder saw an eight-year increase in life expectancy, while men at the bottom saw virtually no change.” National Academy of Science 

For perspective, let’s remember that there will be a lot of political tea leaves to read between now and November. It has been welcome news to the National Committee to Preserve Social Security and Medicare that Hillary Clinton’s positions on Social Security have already seen some shifting during this campaign...in the correct direction.  She has restated her long-held opposition to privatization.  Raising the retirement age, cutting the COLA and benefit cuts are non-starters for her.  She recently gave her support for boosting benefits in a more limited way than Senator Bernie Sanders, with her focus on elderly women and caregivers.  Clinton also has softened her position on lifting the payroll tax cap while proposing raising revenue by taxing unearned income for Social Security. 

There’s a lot for retirees, people with disabilities, survivors and their families to like in both Democrats’ campaign approach to Social Security.  However, seniors expect more than just campaign promises.  Appointing a Treasury Secretary who believes Americans must work longer with some of their payroll taxes diverted into private accounts would deliver a very different message about what a Clinton administration could mean for Social Security. 

“While Clinton has adamantly pledged not to cut or privatize Social Security benefits, Fink’s track record would cause concern among advocates, were he to obtain a cabinet post. And having a ready-made team of trusted advisers who know their way around the Treasury building and the players in a potential Clinton West Wing can only help Fink in that campaign.”...David Dayen, The Intercept

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What If Your Social Security Was Riding the Wall Street Roller Coaster too?

Today might be a good day for a financial exercise...

Chances are if your retirement savings are in a 401K or countless other market-based products, you may have seen what the latest Wall Street downturn has done to your balance. If not, go ahead and bite the bullet and check it.  After you get over the shock, check your Social Securitystatement.  Take some solace in knowing that while your market savings have taken a hit, the good news is your estimated Social Security benefit today is the same it was on Wednesday. 

That’s why Social Security exists.  That’s why it works.  That’s why it’s beyond reason that so many in the GOP still support sending your Social Security to Wall Street and destroying the stable income protection (it’s not an investment) Social Security provides. 

“In June, presidential candidate Jeb Bush said that he thinks the next president will have to try to privatize Social Security. Others have gotten behind the idea as well: Sen. Rand Paul (R-KY) drafted a plan in 2013 that included partial privatization, and Sen. Ted Cruz (R-TX) is in favor of using private accounts. Rep. Paul Ryan (R-WI) has included privatization in his budget blueprints.

The market drop, and ones before, expose the dangers of such a plan, which usually entails diverting some or all of the money workers contribute to Social Security through their paychecks into private investment accounts.” Think Progress

Governor Mike Huckabee also prefers a privatized Social Security system but says he opposes benefit cuts.  The problem is benefits would have to be cut to create private accountsJohn Kasich has also supported privatizing Social Security.

No doubt, conservatives will remind us that over the long-term the market has been good to us.  Maybe so, but as previous market collapses have shown, retirees don’t have the benefit of the long-term to rebuild savings now lost.  

“Look at successive 45-year periods, as I did for my 2005 book, "The Plot Against Social Security," and you find huge variability. The average worker who invested $1,000 every year in the stock market starting at age 20 in 1954 would have $470,000 when he or she was ready to retire in 1998. But the worker who started just five years later, in 1959, would end up with only $234,000 at age 65--half as much--despite investing exactly the same sum over the same time span. 

Market crashes could destroy a nest egg that took a lifetime to nurture. A near-retiree with, say, a half-million in stock in 2007 had just over $300,000 a year later, following a 37.22% plunge in 2008. Those who held fast managed to recover their losses, but that took five and a half years--and what about those who didn't have the luxury of time?”...Michael Hiltzik, Los Angeles Times

Trading Social Security’s guaranteed benefit for a ride on Wall Street makes no sense for Americans who need to be secure in their retirement.  That’s true whether the market is up or down.  

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What Do Swatting Mosquitos and Cutting Social Security Have in Common?

John Nichols at The Nation has this week’s must-read story on Rep. Paul Ryan’s never-ending quest to cut Social Security benefits.  Nichols has read Ryan’s new book (so we don’t have to) and provides this analysis:

The well-regarded second-term congressman met with Vice President Dick Cheney, who was at the peak of his co-presidency powers. Like Cheney in his younger years, Ryan was a former congressional aide who had worked the conservative think-tank circuit before getting himself elected to the House. The Washington insiders should have gotten on famously.

But the vice president was not buying what the man, who is now described as “the intellectual leader of the Republican Party,” was selling.

Ryan recalls the meeting this way:

“The surplus has given us a huge opportunity,” I explained. “If we dedicate the Social Security surplus to reform, we can shore up the program and end the raid on the trust fund.” I talked about the opportunity to create a real ownership society, how workers could actually own a piece of the free enterprise system through these reforms. As soon as I finished my pitch, Vice President Cheney said, “Yeah, we’re not going to do that.” Then he looked at the person sitting next to me, signaling that he was ready to hear the next idea. His terse reply was the verbal equivalent of someone swatting an annoying mosquito from his face.

Of course later the Bush administration did in fact try to privatize Social Security with a famously failed national town-hall blitz in which the more they talked, the more the American people rebelled against Bush’s plans to send workers' Social Security to Wall Street. Cheney also supported the privatization of the Pentagon; however, Nichols points out that the politically astute Vice President at least understood one truism that Paul Ryan still seems oblivious to:

Cheney recognized then, as he appeared to again in his 2001 “annoying mosquito” conversation with Ryan, that domestic political calculations require at least some deference to the wisdom of the American people.

Today that wisdom says that the United States need not, and must not, slash the social safety net in order to advance reforms that will be very good for Wall Street but very bad for Main Street. Until Paul Ryan accepts this reality, he will remain stuck on the same questions. Indeed, if the Republicans nominate the ambitious young congressman for president in 2016, and if he runs on the agenda Dick Cheney swatted away fifteen years earlier, Ryan will again find himself asking, “Why did we lose? How did it happen? Why does the Republican Party seem to keep losing ground.”

We recommend you read the whole story here.

 

 

 

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Wall Street vs. Main Street – They don’t need their Social Security so why should you?

The Business Roundtable has presented the latest CEO/Wall Street attempt to convince Washington that slashing Social Security and Medicare benefits for the average American is the brave thing to do to cut our deficits. Their proposal is nothing more than a knock-off of the Bowles Simpson and the Ryan plan – two plans that have been soundly rejected by a majority of Americans in poll after poll and at the ballot box in November. Incredibly, this plan doubles-down and includes virtually every bad idea Washington has considered over the past decade all rolled into one proposal.  In short, America’s CEO’s say raising the retirement age to 70, cutting benefits immediately for seniors, the disabled and veterans, turning Medicare into CouponCare while also raising the Medicare eligibility age, really isn’t too much to ask from millions of middle-class American families still reeling in this economy.

Now maybe if you were a millionaire or billionaire, you might think these were good ideas too. But most Americans are living well below what these CEOs earn, explaining why preserving and strengthening Social Security and Medicare benefits is so vitally important for the middle class. It’s clearly not a priority for America’s corporate class. But there’s also another explanation for this disconnect between Wall Street and Main Street. The dirty little secret the Business Roundtable doesn’t want to talk about is the vested interest that corporate and Wall Street CEO’s have in convincing Congress we can’t afford Social Security and Medicare. 

The Business Roundtable is fighting to protect more than $1 trillion dollars in tax giveaways—paid for with working American’s tax dollars. Roundtable leaders portray their plan cutting benefits to millions of American families as “practical.”  What’s “practical” about spending a trillion dollars in tax expenditures to pad corporate bottom lines and executive bonus checks while telling an average senior receiving only $14,000 a year in Social Security income to live on less?  While they decry the high cost of providing healthcare to seniors and veterans they conveniently ignore the fact that tax code spending is up 60% since 1986 and is a bigger part of the budget than SS, Medicare, Medicaid or national defense. 

The Business Roundtable’s so-called  “practical” approach also shows that “shared sacrifice” really just means middle-class families should sacrifice so corporations and wealthy CEO’s can share the gains of a trillion dollar tax giveaway. If these captains of industry are truly concerned about the future of Social Security then why not why not lift the payroll cap and subject all income such as deferred compensation to FICA? Or how about limiting just two of those massive tax breaks for the wealthy & corporations, which saves much more than raising the retirement age?

·         Limit some  itemized deductions for high earners  ($114 billion)

·         Eliminate Corporate meals and entertainment write offs ($84 billion)

These two common sense changes save $198 billion over just 5 years while raising the retirement age to 70 saves $120 billion over the next decade.

Surely, writing off expensive business dinners for multimillionaires isn’t a higher priority for our nation than providing enough income so the average senior can afford to buy groceries.

This debate really is about America's priorities for generations of middle-class families.  Unfortunately, America’s CEO’s have made their priorities perfectly clear.

 

 

 

 

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