UPDATE: 11AM PST - The co-chairs of the deficit commission have just released a draft report of recommendations. A number of the other 18 members of the commission have already indicated they will not vote for it. Talking Points Memo has posted the draft. Scroll down for Social Security and Medicare.
Did you see Steve Kroft's interview with President Barack Obama on 60 Minutes last Sunday? Here's what the president said about the budget and Social Security:
”[Y]ou're still confronted with a fact that the vast majority of the federal budget are things that people really think are important. Like Social Security and Medicare and defense.
“And so, you then have to start making some tough decisions about how do we pay for those things that we think are important. And you know, we're not gonna be able to balance the budget just by slashing the National Parks budget... “I mean, we're gonna have to, you know, tackle some big issues like entitlements that, you know, when you listen to the Tea Party or you listen to Republican candidates they promise we're not gonna touch.”
People think are important??? Tackle big issues like entitlements??? I was so stunned at this statement, I missed the next ten minutes of the interview. Richard Eskow, writing at Campaign for America's Future on Monday, confirmed that I had not overreacted:
“That doesn't just sound as if he's preparing to cut the Medicare and Social Security 'entitlement' programs,” wrote Eskow. “It almost seems as if he's taunting the Tea Party and the GOP for not being tough enough to cut them.
“When a Democratic President sounds like he wants to outflank the Tea Party by running to its right, we're in deep trouble.”
In exactly three weeks on 1 December, President Obama's deficit commission will issue its report. Thanks to commission co-chair Alan Simpson who, in August, compared Social Security to a “milk cow with 310 million tits” we already know what it's going to say.
Together with the president's 60 Minutes statement, that undoubtedly means we are in for an even tougher battle to preserve Social Security than during President George W. Bush's 2005 campaign to privatize it.
To be clear – for about the zillionth time – Social Security does not contribute a single penny to the deficit. It is self-funded by you and me and every other worker (with extremely few exceptions). Due to the rate of unemployment, for only the second time in history this year, Social Security paid out more than it took in, but there are funds to cover the shortfall.
According to the August 2010 Social Security Trustee's annual report, as reported in the Los Angeles Times,
“The old age and disability trust funds, which hold the system's surplus, grew in 2009 by $122 billion, to $2.5 trillion. The program paid out $675 billion to 53 million beneficiaries — men, women and children — with administrative costs of 0.9% of expenditures.
“For all you privatization advocates out there, you'd be lucky to find a retirement and insurance plan of this complexity with an administrative fee less than five or 10 times that ratio.”
Social Security still faces a long-term shortfall and the American public seems to understand better than Washington politicians how to fix it.
Across the political spectrum, Americans are opposed, in gigantic numbers, to privatizing or cutting Social Security benefits.
According to a 2010 Gallup poll, 67 percent would preserve Social Security by requiring all high-income workers to pay the payroll tax on all their wages – that is, remove the salary cap that is currently at $106,800.
Only 39 percent believe reducing benefits for people younger than 55 is a good idea and just 35 percent would increase the age of eligibility. And in opposition to their Washington leaders, a majority of the Republican rank-and-file agree: 60 percent like the idea of removing the salary cap; 39 percent in favor of reducing benefits for those under 55; and even fewer than the general population, 34 percent like increasing the age of eligibility.
In another poll [pdf], a whopping 81 percent of voters (71 percent “strongly”) reject cutting Social Security to reduce the deficit. Whatever the exact number, it's obvious that the deficit hawks out to gut Social Security are completely out of step with the public.
It's relatively easy to fix Social Security's long-term shortfall if you ignore the howling from the richest people in the country.
President Obama campaigned on raising the salary cap. It is the fairest way to secure the future of Social Security rather than further impoverishing the middle and working classes, and it is what the American public wants. The president should pay heed rather than caving to the Republicans. As Richard Eskow wrote:
“If the President and his party can be brought around again this year, Social Security can be a success story for them. More importantly, it can be a success story for the middle class, lower income, female, and minority Americans who would be hurt by benefit cuts.
"It's not too late for progressives to change hearts and minds in the White House and on Capitol Hill - but time is growing short.”
This is our job in the coming weeks and months.
At The Elder Storytelling Place today, Johna Ferguson: A Strange Sensation