From the monthly archives: October, 2011
We are pleased to present below all posts archived in 'October, 2011'. If you still can't find what you are looking for, try using the search box.
The Washington Post
continues its campaign against Social Security with an especially slanted, error-laden and opinion-filled story posing as a front page “news” story.
There are so many errors in this piece, even beyond the inherent bias of its approach, loaded language and slanted interviews, it would take a 5,000 word opus to highlight them all here. As a start, here is our President/CEO, Max Richtman’s letter to Washington Post editors (which will of course never be published so you will only see it here):
On behalf of millions of Americans who have worked for and earned their Social Security benefits, I take strong exception to Sunday’s front-page piece by Lori Montgomery titled “Social Security adding billions to U.S. budget woes.” This story is so riddled with factual inaccuracies and biased rhetorical flourishes it has no business in the news section of a major, or that matter, any newspaper.
The entire premise of the piece is built on a foundation of falsehoods that have been perpetrated for decades by those who oppose Social Security with virtually no balance provided for the reader. Bias reported as fact is the hallmark of this story. For example, Social Security’s short-term shortfall is not a “treacherous milestone,” but indeed a natural consequence of the programs’ funding mechanism. Surpluses have been built up in Social Security since the last major reforms in 1983 precisely so funds would be available to pay benefits of the baby boom generation as they began retiring. This is also not the first time Social Security has paid out more in benefits than it is collecting in payroll tax revenues – similar situations occurred in 1958, 1959, 1961, 1962, 1965, 1975, 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983 and in 2009. The world obviously did not come to an end on any of those occasions.
Social Security’s Trust Funds, which Ms. Montgomery so cavalierly dismisses, are invested in U.S. Treasury bonds. Redeeming these bonds to pay benefits will require precisely the same choices the United States faces whenever any bond holder opts to cash in their bonds. In such cases, the government “must raise taxes, cut spending or borrow more heavily from outside investors” – there is nothing unique about these alternatives as they apply to Social Security. And if Social Security sells some of its bonds and this money is used to pay benefits, it does not raise the debt subject to the federal borrowing limit by a single penny. Claiming that somehow using Trust Fund assets to pay retiree’s benefits adds to the deficit shows a lack of understanding of fundamental economic concepts that borders incompetence.
I do not have the space to identify the myriad other errors in Ms. Montgomery’s story. However I feel compelled to make one final point. The “upper-income workers” who would suffer benefit cuts in the Bowles-Simpson deficit reduction plan (not the Commission they headed, which failed to adopt their recommendations) are people with average lifetime earnings of only about $40,000 a year. Labeling these hard working middle class Americans “upper-income” in a Social Security discussion while at the same time the Washington Post questions whether someone earning $500,000 a year is truly “wealthy” in the tax context seems especially hypocritical. I should also point out that the Bowles-Simpson plan requires the draw-down of the Trust Funds, thereby leaving Social Security in the same “cash negative” situation Ms. Montgomery criticizes for the next half-century.
I strongly urge the Washington Post to limit its editorializing to the appropriate editorial pages and stop disguising opinion as news reporting.
Max Richtman, NCPSSM President/CEO
There have also been a number of good rebuttals and fact-checking responses online today. Richard Eskow
reminds us how the Washington Post helped drive us to war with similar PR pieces, short on facts and high on political rhetoric posing as news. Now, it appears seniors are the target:
The piece's author sits us down by the campfire, holds the flashlight up to her chin, and spins a yarn filled with quotes from right-wing ideologues from both parties. Most of her "sources" have a long history of trying to gut Social Security, often under the employ of billionaire former Nixon Cabinet member Pete Peterson (whose own organization, Fiscal Times, provides financial journalism services for the Post. Coincidence? You decide.)
How many quotations are included from the organizations and groups defending Social Security? None.
How many quotations from economists like Paul Krugman, Joseph Stiglitz, and Dean Baker, who have a proven record of accuracy of domestic economic matters? None.
How many quotations from truly nonpartisan observers like Harry C. Ballantyne, the Chief Actuary for Medicare and Social Security appointed by Ronald Reagan who co-authored a report that put the lie to many of these claims? None.
A director of the AARP is quoted, but only so that he can be characterized as the spokesperson for an "interest group" conducting a "public relations campaign."
Reporting like this makes Judy Miller look like John Peter Zenger.
Eskow also provides a point-by-point breakdown of the Post errors here
CEPR Economist Dean Baker
and New York Times contributor and Nobel Prize winner Paul Krugman
also provide excellent descriptions of just how wrong this Post article truly is.
The new deficit reduction plan being proposed by some Democrats on the Super Committee proposes even more
Medicare and Medicaid cuts than the draconian Bowles-Simpson plan and even less
in revenue increases. Yes, you read that right…this is a Democrat’s plan. The Center on Budget and Policy Priorities has this analysis
The new deficit-reduction plan from a majority of Democrats on the congressional Joint Select Committee on Deficit Reduction (the "supercommittee") marks a dramatic departure from traditional Democratic positions — and actually stands well to the right of plans by the co-chairs of the bipartisan Bowles-Simpson commission and the Senate's "Gang of Six," and even further to the right of the plan by the bipartisan Rivlin-Domenici commission. The Democratic plan contains substantially smaller revenue increases than those bipartisan proposals while, for example, containing significantly deeper cuts in Medicare and Medicaid than the Bowles-Simpson plan. The Democratic plan features a substantially higher ratio of spending cuts to revenue increases than any of the bipartisan plans.
And just to show you how dysfunctional Washington has become--even with some Democrats serving up middle-class Americans to take an outrageous $475 billion in cuts to healthcare programs, billions more in Social Security benefit cuts through a changed COLA formula, and fewer revenue increases than other so-called “bi-partisan” plans--it’s still not enough
for Republicans who want seniors programs cut even more and no new revenue.
All this leads many to wonder, what are these Super Committee Democrats thinking? Richard Eskow wrote this on Huffington Post
These proposals aren't just destructive. They're self-destructive. Pick a poll, any poll, and you'll see how unpopular these ideas are. Overwhelming majorities of Americans - including a majority of Republicans - oppose cutting Social Security or Medicare to fix the deficits. And strong majorities want higher taxes on the wealthy, a topic which the Super Dems are waffling about.
It's a political kamikaze stunt for Dems to adopt the GOP's "less government" theme. Ask yourself: If you want some government-cutting done, are you going to hire a Democrat or a Republican? If you want to fire government workers, are you going to hire Mitt Romney - who has a long track record of firing people - or Barack Obama? Every minute spent bragging that "we'll cut more" is a minute spent convincing people to vote for your opponent.
The President's repeating the mistakes he made during the healthcare and financial reform debates, and he's turning negotiations over to the same failed crowd. He's considered the leader of his party, but once again he's letting the party lead him instead. And when it's all over the GOP will run the same play it used last year, positioning itself as the party that defended Medicare. These Dems are helping them do it.
Which brings us back to the question: Who are they trying to impress? The big-money donors who have pivoted back to the GOP, but will still throw them a few bucks now and then? Billionaire Pete Peterson and the other foundations and think tank benefactors who might them offer sinecures after they retire? Their fellow inhabitants of a warped Washington culture that views Grandma-sacrifice as a totemic act of courage?
So, in spite of all the lofty rhetoric about shared sacrifice and finding a “balanced plan” from Super Committee members in both parties, it appears cutting benefits for middle-class Americans is -- so far-- all they can agree on. As for promises that program cuts also wouldn’t hurt current retirees? Those are just as empty. The Super Committee seems to believe that changing the cost of living adjustment formula will fly under the public’s radar enough to allow cutting trillions in benefits to future and
current retirees. Here’s NCPSSM President/CEO, Max Richtman’s, reaction to the Chained CPI
“America’s seniors want fiscal sanity returned to Washington; however, there is no justification for cutting Social Security and Medicare benefits as part of deficit reduction. It’s been reported that some Republican and Democratic members of the secretive Super Committee support a plan that would change the way the cost of living adjustment is calculated in order to cut Social Security benefits for current and future retirees. For two years, during the worst economic times of recent history retirees received no cost of living adjustment at all. Yet, apparently even that is considered too much by Washington’s fiscal hawks. Describing billions of dollars in benefit cuts as a simple ‘formula adjustment’ is just the kind of Congressional smoke and mirrors Americans are angry about.
Voters of all ages and political persuasions—82% of Democrats, 73% of Independents, and 58% of Republicans--do not support cutting Social Security and Medicare to reduce the deficit. They know there are ways to reduce the deficit and address the real causes of this fiscal mess without slashing the benefits hard-working Americans have contributed to their entire working lives.” Max Richtman, President/CEO
The Chief Actuary of the Social Security Administration
estimates that this reduced COLA, called the Chained CPI, would result in a decrease of about $130 per year (0.9 percent) in benefits for a typical 65 year-old. By the time that senior reaches 95, the annual benefit cut will be almost $1400, a 9.2 percent reduction from currently scheduled benefits. The cumulative effect of these reductions means that the disproportionate impact will be felt by Social Security's oldest beneficiaries. These are often women who have outlived their other sources of income, and rely on Social Security as their only lifeline to financial stability.
A Joint Committee on Taxation
report prepared for Congress states that these increases would fall mainly on lower and middle-income taxpayers. For example, the tax liability for those with incomes between $10,000 and $20,000 would increase by 14.5 percent, and 3.5 percent for incomes between $20,000 and $30,000, while those with incomes of $1 million and above would see an increase of only 0.1 percent.
Switching to the chained CPI would impact all current
So much for shared sacrifice.
According to news from the Centers for Medicare & Medicaid Services
today, beneficiaries over 65 who have been paying $96.40 a month in Medicare Part B premiums, will see their premiums rise next year to $99.90. This is significantly less than the increase predicted by CMS for 2012. New Medicare enrollees who have been paying $115.40 a month will actually see their premiums go down. The Part B deductible decreases as well, by $22, and premiums for Medicare's Part D prescription benefit will remain unchanged for 2012.
Today’s Medicare announcement follows news last week that seniors will receive a 3.6% Cost of Living Adjustment (COLA) in their 2012 Social Security checks. That means the average retiree will receive a nearly $40 per month increase in their Social Security checks even including the Part B premium increase.
“Today’s Medicare announcement is truly welcome news for millions of seniors worried that healthcare costs would once again eat away at this year’s COLA. For the first time in many years, most retirees can count on actually seeing an increase in their monthly check. We’ve said all along that healthcare reform was vital to strengthen and improve Medicare for seniors and that given time the benefits would be undeniable. Today’s announcement is further proof of exactly that.
Rather than trading away benefits in a so-called ‘grand bargain’, Congress should heed the lessons provided in today’s announcement. Instead of cutting seniors’ benefits in the name of deficit reduction, we should be building on the successful reforms already passed to continue improving Medicare efficiencies while reducing costs. The Affordable Care Act has shown we don’t have to cut benefits to seniors to save money in Medicare. The question is -- is the Super Committee even paying attention?” Max Richtman, President/CEO
Last week House Majority leader Eric Cantor dismissed protestors who are tired of a nation that puts profits ahead of people as nothing more than an angry “mob”
. Then on Friday he cancelled a scheduled speech
at the Wharton School of Business in Philly after it was clear Penn would not restrict the audience
as Rep. Cantor preferred.
NCPSSM’s Hands Off-No Cuts
activists were in Philly on Friday and just to set the record straight—they are angry but they’re not a mob. They’re hardworking middle-class Americans who know that cutting Social Security, Medicare and Medicaid in the name of deficit reduction is anything BUT fiscal responsibility. In fact, they represent the view of the vast majority of Americans
of all ages and political persuasions.
Here are just a few of the faces at Friday’s Wharton School event who wanted to deliver that message to Leader Cantor and his friends in Washington.
Do they look an unruly mob or average Americans who are just fed up?
Photos courtesy of the Daily Pennsylvanian
One of the most cynical approaches used by those who’ve been advocating Social Security benefit cuts for decades has been to argue that as long as we don’t touch current retirees’ benefits (ie, protect the politically active senior voter) slashing Social Security would be an easier sell politically. Problem is…that view may sound good tossed around in a think-tank boardroom but it just doesn’t wash out in the real world.
American seniors want
Social Security protected for their children and grandchildren too. President Bush learned that the hard way during his privatization push.
However, in spite of this, politicians of both political parties continue to wrap their “everything’s on the table” deficit rhetoric with a promise that America’s current retirees wouldn’t be hurt by cuts being discussed in the Congressional Super Committee. Now it’s clear even this is yet another empty promise. According to the House Ways and Means committee, new analysis provided by the Chief Actuary at the Social Security Administration shows:
“Three-quarters of all Social Security payments between 2012 and 2021 the 10-year period in which the Select Committee is required to generate deficit reduction will go to current recipients, while an additional 21 percent will go to Americans who are very close to retirement-age and will start receiving benefits between 2012 and 2019, according to the Actuary’s analysis.
The analysis highlights that there is virtually no way for the panel to use Social Security cuts to meet its target without harming current beneficiaries. Current retirees have struggled in recent years because there was no cost-of-living adjustment (COLA) in 2010 or 2011. The Social Security Administration yesterday announced a 3.6 percent COLA for 2012.”
In short, current retirees will be
impacted by Social Security cuts being proposed by members of the Congressional Super Committee regardless of empty promises to the contrary.
This provides yet another reason to join our “Hands Off – No Cuts” Campaign
. Write a letter, join a rally, send an email. Tell Congress once and for all-- cutting middle-class programs serving generations of Americans to solve a crisis they didn’t create is not fiscal responsibility.
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