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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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Social Security & Medicare as Bargaining Chips?

Only time will tell whether the "reforms" President Obama offered up again in last night's State of the Union are the standard Washington formulation of reforms = benefit cuts for seniors or something more meaningful.   And on the payroll tax, we've repeatedly said the White House stimulus strategy is just plain wrong.  Here's what he said about Social Security, Medicare & Medicaid in last night's speech followed by our reaction:

Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay. When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now, we’re poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary. Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else – like education and medical research; a strong military and care for our veterans? Because if we’re serious about paying down our debt, we can’t do both. The American people know what the right choice is. So do I. As I told the Speaker this summer, I’m prepared to make more reforms that rein in the long term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors. But in return, we need to change our tax code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes. Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up. You’re the ones struggling with rising costs and stagnant wages. You’re the ones who need relief.
Our President/CEO, Max Richtman responded:
“We share President Obama’s belief that we must rebuild our economy in a way that rewards Americans’ hard work and re-instills fairness into an economic system that too often rewards the rich and punishes everyone else. Ironically, these core American values of hard work, fairness and compassion are also the tenets of the programs most often targeted by Washington for cuts—Medicare, Medicaid and Social Security. If offering more reforms leads to benefit cuts for seniors in these vital programs then seniors program will once again become a bargaining chip traded in exchange for tax breaks millionaires don’t need in the first place. The President’s support for providing a middle class tax cut to help spur the economy is the right policy, but reducing Social Security payroll taxes is the wrong way to do it.  Extending the payroll tax cut further endangers Social Security's financial integrity and could undermine our efforts to defend the program from benefit cuts or privatization.  If seniors are required to pay for the payroll tax holiday -- which most would not benefit from – through Medicare cuts as some lawmakers have suggested, that would also be contrary to the President’s stated goals of fairness. We urge President Obama to safeguard the middle-class by drawing a clear line in the sand, promising the American people that this so-called ‘holiday’ will end this year. Restoring Social Security’s successful self-funding model is the only way to preserve its independence for future generations.” Max Richtman, NCPSSM President/CEO
Meanwhile Republicans are poised and ready to make a "deal" that demands benefit cuts and privatization, coupon care and work til you die.  Here's the GOP response to the President's State of the Union, replete with dire warnings and fear-mongering the facts, claiming there are only two options for Social Security and Medicare--do nothing (which NO ONE supports) or radical reforms that destroy the programs in their current forms.  False options and the same song---102nd verse, taken from the Cato playbook written more than 25 years ago:
"We can preserve them unchanged and untouched for those now in or near retirement, but we must fashion a new, affordable safety net so future Americans are protected, too. [...]
“The mortal enemies of Social Security and Medicare are those who, in contempt of the plain arithmetic, continue to mislead Americans that we should change nothing Listening to them much longer will mean that these proud programs implode, and take the American economy with them. It will mean that coming generations are denied the jobs they need in their youth and the protection they deserve in their later years."
Just a reminder:  according to the Social Security Trustees the  Social Security Trust fund currently has a surplus of $2.6 trillion. This surplus is projected to grow until 2022. At that time the balance in the trust funds are projected to be $3.7 trillion.  The skyrocketing costs of healthcare system wide have posed a greater threat to Medicare; however, healthcare reform added  years of solvency to the program.  While there's more work to be done conservatives are now working to undo the progress already made by repealing the Affordable Care Act and reversing the savings already seen in Medicare.

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Here We Go Again- GOP Offers Social Security Privatization Legislation

Republican members in the House have introduced legislation which would take your Social Security contributions and give them to Wall Street. For those in Congress who routinely target safety net programs, like Social Security and Medicare, this Social Security plan is the perfect companion legislation for the GOP/Ryan Budget.  Ryan’s CouponCare plan would put insurance companies in charge of seniors’ healthcare while the so-called “SAFE” act would put Wall Street in charge of your retirement savings.  Do you feel safe? “This Social Security proposal is political opportunism at its worst.  Supporters use the current fiscal crisis--which Social Security has not contributed to in any way-- as an opportunity to defund a program many of these members do not support in the first place. The privatization of Social Security does not have support among any age-group or political affiliation once you step outside the Beltway but it remains goal #1 for those who want Wall Street in charge of billions of hard-earned American tax dollars. Max Richtman, NCPSSM Executive Vice President/Acting CEO These privatization  proposals aren’t about fiscal responsibility because neither will save the federal government money.  The transition costs for converting Social Security into a privatized system would cost trillions of dollars while the GOP/Ryan plan for Medicare adds $13 in waste for every dollar saved. Meanwhile, millions of Americans lose their guaranteed benefits in exchange for a ride on the Wall Street roller coaster and coupons for their healthcare. Let’s not confuse what this debate is really all about because privatization is a political goal not fiscal responsibility. For so many House Republicans who worked hard last fall (before Election Day of course) to convince American voters they haven’t and weren’t proposing Social Security privatization, this legislation certainly now destroys that claim.  It’s only been six months since the GOP regained control of the House and they’ve wasted no time pushing to privatize both Medicare and Social Security, at a time when millions of Americans are still suffering in an economic crisis these programs did not create.

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The Campaign Against Social Security

So far this week, we’ve talked about the upcoming Presidential Fiscal Commission meeting, debt, deficits, and Social Security.  At this point, it’s fair to ask, why would Social Security become the primary target for this commission? While Fed Chairman Ben Bernanke says, “That’s where the money is” we also looked to history for the answer. 

The promise of secure benefits is a “hoax”, the taxes paid into the trust fund are “wasted” by the government rather than prudently invested and “the so-called reserve fund…is no reserve at all”. 
Sound familiar?  That’s because it is.  You’ve heard the same core argument made most recently by  President George Bush, now multi-billionaire and fiscal hawk Peter Peterson, David Walker, and countless other conservatives on Fox News and Capitol Hill.  However, this particular statement was made by Republican presidential hopeful, Alf Landon, in 1936 before the first Social Security check had even been delivered. Regardless of the decade or the specific approach, the underlying message continues to be the same.  “Social Security won’t be there for you”…“Social Security is flawed” and the newest deficit-hawk incarnation…“we can’t afford Social Security”.  This, in spite of the overwhelming facts to the contrary.  Creation of a fiscal commission has been a top priority for those leading the anti-Social Security clarion call, namely David Walker and the Peterson Foundation.  Wealthy financier and former Nixon Commerce Secretary, Pete Peterson has invested $1 billion dollars of his personal fortune to convince the nation that Social Security and Medicare are to blame for our current fiscal woes. This time the same-tried and true “Social Security won’t be there for you” message is wrapped in a cloak of fiscal responsibility.  Peterson is no stranger to the battle against America’s retirement safety net.  He’s called the current cost of living increases in Social Security, which provide adjustments of roughly 3% a year, “one of the greatest fiscal tragedies of American history” because he considers them excessive.  At the same time, Peterson steadfastly defends a controversial private equity tax break that benefits America’s wealthiest investors. So much for fiscal responsibility.   So what do these “fiscal hawks” really want for Social Security?  Robert S. McIntyre, Director of the Citizens for Tax Justice offered this analysis:  
“Along with tax cuts for the rich, he explicitly endorses tax increases for the poor and the middle class as well as sharp reductions in what average families receive from the government. But because Peterson cloaks his goals in the rhetoric of progressivity, the press has fawned over him. The misleading notions that entitlements are running up the deficit, stealing from future generations, and maintaining the elderly in affluence while young people suffer, have become received wisdom for many.”
Peterson's also a long time advocate of turning Social Security over to Wall Street, and he said this before the last major Social Security reforms were enacted:
“...even if Social Security were able to survive indefinitely, the time would be ripe to re-examine its premises...If we were starting fresh today, a different system would deserve serious consideration—one in which each generation of workers, individually and through public taxes and funds, saved amounts that were adequate to support its own needs during retirement.” “Social Security, one of the principal legacies of the New Deal, must be rescued and transformed during the next few years. Otherwise it will visit upon our children the same conditions of economic chaos that attended the system's birth.” 
So when someone tells you “we can’t afford Social Security” remember the countless Washington think-tankers, Social Security foes and their allies in Congress who have spent their careers and millions (eventually billions) of dollars selling us that exact message. Ultimately, American workers and their families must sort the facts from the fiction and in the end we must not Buy the Lie we’re being sold on Social Security.

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Scrub Out the Seniors

So much for beginning a civil and open dialogue on our debt, deficit, Social Security, Medicare and taxes.  Presidential Fiscal Commission co-chair, former Senator Alan Simpson, told CNBC just days after his appointment that seniors over 60, and the organizations who represent them (including ours) should be “scrubbed out” of the equation.    

“You remember the last time we corrected Social Security, and people calling me.  Let me tell you, everything that Bush and Clinton or Obama have suggested with regard to Social Security doesn’t affect anyone over 60, and who are the people howling and bitching the most? The people over 60.  This makes no sense.  You’ve got scrub out (of) the equation the AARP, the Committee for the Preservation of Social Security and Medicare, the Gray Panthers, the Pink Panther, the whatever.” 
But he didn't stop there.
“Those people are lying when everything that was proposed last year, year before, year before didn’t affect any over 55. Now, anything I’ve heard so far doesn’t affect anyone over 60. Where does the howling come from? These people don’t care a whit about their grandchildren...not a whit.” 
Unfortunately, the Senator missed a critical fact from the 2005 debate to privatize Social Security.  America’s seniors understood very well what President Bush’s privatization scheme would and wouldn’t do. They opposed it because they want their adult children and grandchildren to have the same retirement protections afforded to current beneficiaries.  That’s a fact, not a lie. You can watch the full interview here:            

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