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Wednesday, 16 February 2011

Social Security and the President's Budget Proposal

category_bug_politics.gif Okay, we had a lot of fun yesterday discussing our disappearing derrieres. Now it's time to do some serious elder work. Stick around. This is crucial to you and to the future of your children and grandchildren.

President Obama released his 2012 budget proposal [full text here] on Monday. Pretty much nobody likes it. Predictably, Republicans object it on grounds that it is not draconian enough and doesn't cut "entitledments."

Others used words like “timid” and “it could be worse” and “falls short” and “flawed” and “unrealistic” - you get the idea.

Of course, it covers the entire federal government and I'm not qualified to comment on a lot of it. The Medicare section will take more study and thought (Saul Friedman, where are you now that I need you). But I do know a thing or two about Social Security.

In the overview, the budget states the president's overall position on the program:

“Although Social Security does not face an immediate crisis and is not driving our short-term deficits or long-term debt, it does face a long-term financing shortfall.

“Failing to strengthen Social Security will result in substantial benefit cuts for future retirees and will undermine the basic notion that a lifetime of hard work should be rewarded with dignity in retirement.

“If we address these long term challenges early, we can help ensure that Social Security’s compact remains strong and progressive for future generations.” [p. 26]

That is encouraging and I give the president a B+. But a few pages earlier, there is this in reference to wider issues including Social Security:

“Taking on many of these long-term funding issues will take months, if not years, of discussion and deliberation. The Fiscal Commission’s report opened a debate on many of these topics, such as tax reform and Social Security. The President hopes to build on the work they did to create space to discuss these issues...” [p. 23]

Hold on here. There is no official Fiscal Commission report, just some pages from a few of the Republicans on the Commission that couldn't get a majority of votes from the 18 members, and it decimates Social Security.

So that statement is worrisome. You gotta carefully watch every word of these politicians, including the president, all the time; they are good at leaving themselves loopholes to crawl through later.

This up-front portion of the budget also lists the president's “six principles” for Social Security reform. [pgs. 26/27]

  1. Any reform should strengthen Social Security for future generations and restore long-term solvency.

  2. The Administration will oppose any measures that privatize or weaken the Social Security system.

  3. While all measures to strengthen solvency should be on the table, the Administration will not accept an approach that slashes benefits for future generations.

  4. No current beneficiaries should see their basic benefits reduced.

  5. Reform should strengthen retirement security for the most vulnerable, including low-income seniors.

  6. Reform should maintain robust disability and survivors’ benefits.

I am most grateful for the unqualified number two and overall, I support these. But those “shoulds,” in the context of Washington politics, seem to leave a lot of wiggle room and number 3's “all measures...on the table” seems to counter the other statements.

In a later section on Social Security alone [pgs. 163-165], the president proposes

• Measures to reduce the backlog of disability claims

• New efforts to ensure payments are made to the right person in the correct amount to reduce waste

• A pilot program to improve outcomes for children

• And another pilot simplifying disability work rules that would no longer terminate benefits based solely on earnings.

Of course you know that the president's proposal is only the first salvo in what will be a long and brutal battle over the budget. There is no doubt that tea party and other Republicans (and a few Democrats) will do everything in their power to cut Social Security. Their real goal is to eliminate it.

The mainstream media, print and television, will be no help. Every time they mention the deficit – even those that are accused by the right of being leftwing - they lump in Social Security as one of the problems.

It is not. Social Security has never contributed one penny to the deficit. Over the coming weeks, I will be posting stories that in simple terms will give you the facts and the ammunition you need to do your part to hold the president to his principle to “oppose any measures to privatize or weaken the Social Security system.”

Personally, I want to change that “oppose” to “veto.”

You will find the entire budget here and there is a good interactive graphic of it from The New York Times.


At The Elder Storytelling Place today, Johna Ferguson: Me


Posted by Ronni Bennett at 05:31 AM | Permalink | Email this post

Comments

This has little to do with Social Security which is an insurance program, paid up out of FICA, but I think it catches something of our current situation. Somebody wrote: "We don't have a 'deficit problem." We have a revenue problem."

The people who could pay taxes are refusing to contribute to the common good. And the War (Defense) Department proposed only minor cuts under the President's budget. Those two areas are where action should be; the rest is smoke and mirrors for the rest of us suckers.

It seems that we have to keep fighting the same battles over and over again.

You are absolutely right; you have to watch out for the clever manipulation of words.

The one hopeful reality is that every time the Republicans attack Social Security it gets the attention of both young and old and they speak out. This has always forced the Republicans to crawl back under their rock to wait to fight another day. Let's hope it happens again.

Because we can't rely on that we must continue writing our representatives and spreading the word that the Republicans are at it again.

I was listening to NPR this morning - the cuts recommended/demanded for by the Republicans would be vetoed by the President.

What pisses me off is the stupid posturing by politicians; the Republicans don't really intend for all their demands to be met - they know that a lot of their constituents would scream.

They can get Brownie voter points for promoting radical and bad bduget cuts and know that via the presidential veto, these outlandish proposals will go nowhere, BUT they get to strut like a peacock and say "See what I tried to do!" come elections.

Politics disgust me.

Get real; speaking first of the most politically sensitive entitlements, we long ago abandoned Social Security in anything but name only. All entitlements and taxes need to be reset under a single program with no loopholes, and which all can readily understand. I have spent a few years, off and on, putting together; if you think this would inadequately address the needs of those now receiving entitlements, figure the tax rate will be 40% (that's the budget as a % of GDP) and see item 7.


TAX AND ENTITLEMENT REFORM


1. All persons residing in the U.S. shall come together in households for the purpose of reporting all income from any source, each item to be identified by payer's and payee's tax number, and for receipt of federal and state benefits. Members of a household need not be related, need not reside together, and a household may consist of as few as one person.
2. Each year congress shall set by legislation a "minimum wage" and a "tax rate".
3. The following income shall not be subject to taxation:
• An amount equal to a year's earnings at the minimum wage rate, for each adult (age 20-65) member of the household, decreasing 10% per year to 50% at age 15, and increasing 10% per year to 150% at age 70.
• All payments for what is classified as necessary health care for all members of the household including medical care, any pharmaceuticals prescribed by a recognized health care professional, vision and hearing aids, and membership fees for health-enhancing entities such as gyms or other exercise facilities. Health care insurance premiums may be deducted but not health care expense paid for by such insurance.
• All educational expenses including day care for young children or legally incompetent persons, that portion of state and local taxes identified as spent on education, that portion of parochial school tuition, fees and other expenses identified as going for non-sectarian education, tuition, fees and educational materials for private school education at any level, and a per-diem allowance for students traveling more than 50 miles from primary residence for education.
• All income saved into an identified account from which investments may be made. All withdrawals from this account for the benefit of any member of the household shall be reported as income to that member.
4. The "tax rate" shall be applied to any income over and above the deductions listed above, regardless of amount.
5. At the request, by legislation duly enacted by any municipality having greater than 100,000 inhabitants or any state, a surtax may be imposed on citizens of that municipality or state which shall be applied in a manner exactly as applied for the Federal tax.
6. For households whose deductions exceed total income, the Federal Government shall make payment equal to the tax rate multiplied by the shortfall in income, as shall municipalities and states.
7. There shall be no federal tax on corporations or other business entities.
8. The Office of Management and Budget shall compute revenues to be expected using the newly set tax rate and minimum wage, applied to the previous year's reported incomes. No expenses in excess of that amount may be authorized or made by the federal government without approval by 75% of each house of Congress.

I'm sure the President realizes unlike the GOP that the deficit and Social Security shouldn't even be discussed in the same breath. Social security does not impact the budget unlike other non-discretionary spending because it is self-sustained with its own tax. The only concern is to keep it fully vested after 2037 by making some tweaks with the system to accommodate a booming elder population.

But it is worrisome that he makes comments that indicates he feels a need to do stupid things like raise the age of beneficiaries who are primarily low-income people that die off due to poor health before they even reach the current age of 66. It's asinine for republicans to combine SS with budget cuts too; their whole modus operandi is to privatize it so the wall street financial institutions can their greedy hands on our money.

I'd like to see the SS payroll tax ceiling raised to infinite and leave all else alone. I would then attack fraud and waste in Medicare. Lastly, I'd put a comprehensive spending freeze in place. This is all that I would do.

I agree with john -- and further add that I'd be glad to help ferret out Medicare fraud since obviously there are either not enough people now doing that or they are too dumb to figure out that one patient does not need 25 wheelchairs. I realize that I'm exagerating how easy it would be to find fradulent claims, but after watching the 60 Minutes segment on the subject, I can see that more needs to be done to find and prosecute those who perpetrate fraud against the system.

Medicare is fully funded to pay all benefits fot the next 27 years. The deficit is caused by 2 wars, bailouts to the banks, an unfunded prescription drug benefit, written by and enrching drug companies, and continuing to cut taxes on the very rich. 25% of the richest companies, Exon Mobile at the top, pay no taxes. So we cut funding for public broadcastng, heating for the poor and cut grants to college students.God help us all!

Who do you think pays corporate taxes? You. dummy ! Every tank of gas you pump includes some profit to that nasty "big oil". So they make a gross profit, and its taxed. Sure there's loopholes, but if they want to raise money for exploration et al to keep that pump full, they have to net something. That plus those taxes plus the cost of getting the pump full, is what you pay. Eliminate tax breaks is a great idea, but it will raise your gas bill. So let's eliminate all corporate taxes, with the savings passed on to you due to competition. Then increase your individual taxes to make up the revenue lost. Guess what? You'd see what you have been paying for government services. I suspect you'd quickly become one of those budgetary hawks.

Gas taxes are a user tax designatd for highway improvements and projects.

I've been working since I was 15 and that's some 40+ years now of paying into Social Security, so I'd consider it fraud if I don't get to use all that I'm due when I (hopefully) retire at 67. Really ticks me off.

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