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The Social Security Sellout and an Interview

category_bug_politics.gif Back in 2005, President George W. Bush tried to sell Americans on the privatization of Social Security with a lie – that it was broke. Fortunately, most of the country knew better and the ploy failed. Nevertheless, it left many, particularly young people, believing the program will not be there when they retire.

Now, thanks to Republican hypocrisy, Democratic ignorance, presidential capitulation or all of the above in their various configurations, those young people may be proved correct after all. The so-called middle-class tax cut that is expected to pass in the Senate today includes a two percent payroll tax holiday for employees that is the first inroad to the long-term Republican desire to destroy Social Security.

“They make the claim that Social Security is in trouble despite the fact that the payroll tax has produced surpluses in 26 of the past 27 years — when it didn’t add a penny to the deficit,” writes Joshua Holland at Alternet.

“But if that 16-percent cut in payroll taxes remains the law of the land over the longer term, the program’s fiscal picture changes dramatically, and the argument that Social Security is in trouble becomes fact rather than fiction. From there, the claim that we have to cut benefits becomes much easier to make, and far more difficult to refute.”

Exactly. Further, two years from now, with the 2012 election cycle nearing its conclusion, the president and everyone in Congress (except Bernie Sanders) will be too frightened to let the payroll tax holiday expire as legislated when the Republicans are promoting the expiration as a tax increase. Holland again:

“[T]he best-case estimates for the jobs picture in 2012 is an unemployment rate of about 8.5 percent, and raising taxes on working people at that time is going to be a potentially insurmountable political challenge.

“For the next two years, the cut in payroll taxes would be made up out of general revenues - from deficit spending - and the Social Security system will be protected.

“But with a bipartisan fetish surrounding the federal deficit, it’s not hard to see that payroll tax reduction being baked into the long-term projections of the system’s finances in short order.”

There are many other things to dislike about the tax cut bill the Senate votes on today, but it will pass by a large majority. It then goes to the House which will undoubtedly cave on their earlier objections and the bill - adding almost $1 trillion to the deficit - will be the law of the land before Christmas.

Happy Holidays, everyone. For elders – you and me and young people who will, in due course, become elders – it is disaster.

Here is Senator Bernie Sanders on The Ed Show Monday:

ELDER INTERVIEW
As a result of having this blog, I am occasionally asked for an interview. The downside is how often there are questions I struggle to answer - things I haven't considered before, haven't thought through or just plain don't know.

The upside, is that sometimes it becomes much more than a Q&A.

Juliavalentine A couple of months ago, a lovely, smart, engaging young woman named Julia Valentine asked for an interview. She runs a company and website for and about elders, Joy Compass, which grew out of the profound differences in circumstances she witnessed as a child between her two sets of grandparents – one pair who suffered greatly as they got older and the other who accepted the changes that came with age and lived a happier elderhood.

If my memory hasn't failed me, Julia said the interview would take about 30 minutes. We were still talking 90 minutes later mainly because Julia is a gifted interviewer and turned what is usually a formal question and answer session into a conversation.

The results of our time together has now been published at Joy Compass. You can read the transcript or listen to the iTunes podcast there.

Thank you, Julia, for a wonderful time together.


At The Elder Storytelling Place today, Dolores Banerd: Telling Your Travel Stories


Comments

Nice summary of the disaster to Social Security that Congress is poised to pass, Ronni. As a lifelong Democrat deeply committed to the notion that government's responsibility is to use its power to make people's lives better, it pains me to say that I think the hypocrites in this case are the Democrats. Republicans have been clear about what they wanted to do; at least George W.'s assault on Social Security was in the open. Obama and the Dems who went along with this unsought payroll-tax cut are convincing me that the Democratic Party no longer stands for anything.

-Simply wonderful. Thank you both Julia and Ronnie....

It concerns me that political decisions are now based on blackmail, IMO, of what will be passed or not passed, regardless of the importance to the American people and how it will affect their lives and generations to come.

Republicans will not sign any thing unless they get their way first. Just one of my opinions.

Thank you for sharing the information on Julia as well.

Some thoughts that might comfort you are these.

The surplus money collected for the Social Security 'Trust' Fund since the 1980s was used for purposes other than SS payments, and the remainder of the funds were never deposited in the SS Trust Fund, which was issued government bonds instead.

The SS money could have been invested in the stock market and may or may not have been better invested. Many economists will tell you that is not a bad idea. Who really knows the answer?

Cutting the payroll tax will accomplish two things:

1. The SS payroll money can no longer be spent for non-SS purposes; The payroll tax is regressive anyway. Dividends and other sources of income are not subjected to the tax (insurance payment).

2. SS payments will continue to be funded from the general fund. Since Ethanol subsidies and other expenses come from the general fund and have NEVER been cut, SS has the same chance of continuing to be funded as before when the funds were really coming from the general fund because the SS money was spent long ago.

You are correct, the money should have been there, and both Democrats and Republicans broke faith with seniors and spent it, no doubt for worthy projects:~((.

On another note, I wish Mr. Obama had held out for a little more 'give' from the Republicans, but the fact that he got the unemployment funds extended is wonderful.

Since my writing is set in the era of the man who (along with his Frances Perkins) invented Social Security, I agree with the concerns here. I just read "The Mendacity of Hope," which is pretty discouraging, but I followed it with "Herding Donkeys," which is inspiring in its history of one of my heroes, Howard Dean. I will listen for his ideas on this issue.

Obama is definitely a big disappointment and a sell out as are all the weak kneed Democratic Caucus. Shameful. When I heard about the "Tax Holiday" I was just so angry and disgusted with my Mn. senators Klobuchar and Frankin because I have not heard a damn thing from them regarding this issue. You know the Republicans are so slick and deceitful and the Democrats so weak and clueless that they, the Demos, deserve what they get. Duped and powerless. Unfortunately we, the people, get harmed more than they will. This tax cut is just like the Bush tax cuts and both will be cemented in their current form never to change. Yup, we all lose this one. Too bad.

If both parties wanted to be responsible, they would have let the tax cuts expire for everyone and begun paying down the national debt which is a much greater threat to everyone’s well being. Every stimulus, (and I would consider this a form of stimulus,) Qualitative Easing (QE) done by the Feds, further weakens the dollar, devaluing everyone’s hard earned savings. Unlike the young who have many years ahead in which to accumulate new monies; retirees and those approaching retirement will find it very difficult to recover from these events.

I really enjoyed that interview with you Ronni. So many good nuggets in there. As a younger (45) person who reads your blog regularly, I wonder how many of us relatively young ones read your blog and look to you (and the other posters here) as models for ageing. I know I do.

I like to think that, were I in Obama's position at the helm, I'd fight a little harder. To do that, he'd have to stop worrying or thinking about getting re-elected. That's the crux of the problem for most politicians. They want to hold on to their jobs...they usually wind up pretty wealthy that way. I'm about fed up with all of them.

I share your concern about the intent to dismantle SS.

Good interview -- continue to like your discussion of language issues -- and the beat goes on!

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