Friday, September 9, 2011

THE PAYROLL TAX CUT: Talk about a Ponzi Scheme!

Is President Obama trying to kill Social Security without explicitly saying so?  He put Social Security "on the table" for consideration by his Deficit Commission -- even though Social Security has not contributed to creating or sustaining the deficit/debt in the first place.  He kept Social Security on the table when he made a deal to delegate deficit reduction authority over entitlements to an undemocratic Super Committee.  Now, in a speech reportedly about jobs, he proposed to extend and increase the ill-considered FICA tax cut he embraced last December -- a tax cut that directly undermines the financial integrity of Social Security.

According to the White House Fact Sheet on "The American Jobs Act" (http://www.whitehouse.gov/the-press-office/2011/09/08/fact-sheet-american-jobs-act) the FICA tax holiday for workers will be increased to a 50% reduction, lowering it to 3.1%.  Under the 2010 tax deal, the payroll tax for workers was reduced from 6.2% to 4.2%.  In addition to expanding the tax cut for workers, the President proposes to extend the FICA tax holiday to employers by cutting in half the employer's share of the payroll tax through the first $5 million in payroll. 

Big questions about the wisdom, efficacy, and implications of a tax-based jobs strategy need to be debated.  Even bigger questions about the consequences of the payroll tax holiday in particular need to be answered.  These questions are not just about the relationship between payroll tax cuts and job growth.  They are about the future of Social Security.

The FICA/payroll tax goes into the Social Security Trust Fund.  This is a dedicated fund currently worth $2.6 trillion, which has been built up over time through employee and employer contributions, along with accrued interest.  Current and future Social Security beneficiaries receive benefits from this fund.  No general revenues are involved.

Under the payroll tax cut initiated in the 2010 lame duck tax deal, the revenue loss to the Trust Fund from the payroll tax holiday is made up through compensatory payments into the Trust Fund from general revenues. The President proposes to continue this scheme -- deepening a relationship between Social Security and general revenues (read deficit) that did not exist until the December 2010 tax deal.  This will make Social Security increasingly vulnerable to demands for "reform."

In the worst case, Congress could choose to enact the payroll tax cut without actually appropriating revenue compensation for the Trust Fund.  This would mean that the payroll tax cut directly depletes the Trust Fund, creating financial/actuarial problems far sooner than the currently anticipated shortfall date of 2036.

But even if the Trust Fund receives full revenue compensation -- for both employer and employee contributions -- Social Security will be jeopardized.  That's because the resources in the Trust Fund will be increasingly comingled with general revenue funds -- and, hence, increasingly connected to the deficit.

The government has borrowed from Social Security to pay for other things (through IOUs, bonds, etc). It does need to use general revenues to make good on borrowed funds. But this is a debt owed TO Social Security, not a debt caused by Social Security. This is a debt owed to the millions of workers who have contributed to the Social Security system through the payroll tax. However, now that general revenues are contributed to the Trust Fund to offset the cost of the tax holiday, some people will undoubtedly claim that Social Security has become a drain on the national treasury.

Also worth worrying about here is contagious political cowardice about "raising taxes."  The payroll tax holiday is framed as just that -- a holiday, ie, a short-lived break. But as we know from other tax cuts with built-in expiration dates, the planned end of a tax cut quickly becomes a "tax increase" in popular parlance.  There hasn't been much resolve to allow the years-long tax holiday for the rich to end.  When the time comes, will there be greater resolve to allow an end to the 2-year tax holiday for workers and 1-year tax holiday for employers?  Even when billed as a "middle class tax increase" and a "job-killing tax on business"?

Once the payroll tax basis of Social Security financing has been corrupted the future of Social Security will no longer be in doubt.  It won't have one.

Friday, September 2, 2011

Urge Your Congressmember to CoSponsor the Conyers Resolution Opposing Cuts to Medicaid, Medicare, and Social Security

Oppose Cuts to Medicare, Medicaid, and Social Security

Cosponsor H. Con. Res. 72
Clearly state that any legislative language approved by the Joint Select Committee on Deficit Reduction should not reduce benefits for Social Security, Medicare, and Medicaid recipients.
 Current Cosponsors (38):  Grijalva, Lee, Johnson (GA), Thompson, Al Green, Towns, Jackson-Lee, Woolsey, Schakowsky, Jackson, Clarke (NY), Richardson, Christensen, Honda, Waters, Davis (IL), Butterfield, Fudge, Lewis (GA), Cummings, Gonzalez, Kucinich, Filner, Wilson (FL), Bass, Stark, Hinchey, Clarke (MI), Cleaver, Bordallo, Frank, Gutierrez, Courtney, Nadler, Reyes, Olver, Cohen, Rush    

Dear Colleague:
As you know, the debt ceiling package that was recently signed into law by President Obama creates a Joint Select Committee on Deficit Reduction.  This committee is tasked with improving the short-term and long-term fiscal imbalance of the Federal Government by identifying at least $1.5 billion in additional cuts.

The creation of the Joint Select Committee on Deficit Reduction makes three of our country’s most vital safety net programs - Medicare, Medicaid, and Social Security - targets for cuts.  Such cuts would be highly unpopular with the public and would weaken the health of our social insurance programs at a moment when the economy is reeling.  

Congress needs to go on the record and state its intent to preserve America’s safety net and social insurance programs.  The Super Committee needs to prioritize the preservation of Medicare, Medicaid, and Social Security and focus on finding a means of balancing the budget that doesn’t harm working families. 

If you would like to cosponsor H. Con. Res. 72, please contact Michael Darner in my office at michael.darner@mail.house.gov.

Sincerely,
John Conyers, Jr.
MEMBER OF CONGRESS


CONCURRENT RESOLUTION
Expressing the sense of Congress that any legislative language approved by the Joint Select Committee on Deficit Reduction should not reduce benefits for Social Security, Medicare, and Medicaid recipients.
Whereas S. 365, the `Budget Control Act of 2011', creates a Joint Select Committee on Deficit Reduction tasked with providing recommendations and legislative language that will significantly improve the short-term and long-term fiscal imbalance of the Federal Government;
Whereas large majorities of Americans want to address the deficit in a way that preserves Medicare, Medicaid, and Social Security benefits;
Whereas the Medicare program reflects the Nation's commitment to the health and independence of older Americans and Americans with disabilities by providing health care coverage to 42 million people;
Whereas Medicare safeguards beneficiaries and their families from the ruinous costs of medical treatments and prevents individuals from spending unmanageable proportions of their incomes on medical care or being pushed into poverty by their medical bills;
Whereas Medicaid provides a safety net for both low-income and middle-class families who may have family members stricken with catastrophic illness or injury or face prolonged infirmity in old age;
Whereas cuts to Medicaid would severely impact low-income families and individuals with disabilities, and curtail access to critical services, including nursing home and community care services;
Whereas cuts to Medicaid would limit the program's ability to provide women without health care coverage with prenatal, maternity, and postnatal care and hamper the United States efforts to prevent infant and prenatal deaths;
Whereas Social Security provides essential financial support to almost 55 million people in the United States, including more than 35 million retired workers;
Whereas Social Security provides modest benefits averaging $14,000 per year for retired workers, based on contributions paid into Social Security over a worker's lifetime of employment;
Whereas Social Security can pay full benefits through 2035;
Whereas Social Security has no borrowing authority, currently has $2.7 trillion in accumulated assets, and, therefore, does not contribute to the Federal budget deficit; and
Whereas the citizens of the United States deserve thoughtful and fair Social Security reform to protect current and future benefits and to ensure ongoing retirement security for seniors, protections for persons who become disabled, and benefits for the young children and spouses of deceased and disabled workers: Now, therefore, be it
Resolved by the House of Representatives (the Senate concurring), That it is the sense of Congress that—

(1)    any deficit reduction plan put forward by the Joint Select Committee on Deficit Reduction should not balance the budget by eroding America's hard-earned retirement plan and social safety net;

(2)    Medicare's ability to deliver high quality health care in a cost-efficient manner should be strengthened and its benefits should be preserved for current and future retirees;

(3)    appropriate reform to strengthen Social Security's long-term outlook should ensure that Social Security remains a critical source of protection for the people of the United States and their families without further increasing the retirement age or otherwise decreasing benefits; and

(4)    Federal funding for the Medicaid program should be maintained so that senior citizens, poor and disabled children, and others with disabilities are able to gain and retain access to affordable health care.

Sunday, August 7, 2011

What Happened to Obama’s Passion? - NYTimes.com

From Drew Westen's Op-Ed: "Like most Americans, at this point, I have no idea what Barack Obama — and by extension the party he leads — believes on virtually any issue. The president tells us he prefers a “balanced” approach to deficit reduction, one that weds “revenue enhancements” (a weak way of describing popular taxes on the rich and big corporations that are evading them) with “entitlement cuts” (an equally poor choice of words that implies that people who’ve worked their whole lives are looking for handouts). But the law he just signed includes only the cuts. This pattern of presenting inconsistent positions with no apparent recognition of their incoherence is another hallmark of this president’s storytelling. He announces in a speech on energy and climate change that we need to expand offshore oil drilling and coal production — two methods of obtaining fuels that contribute to the extreme weather Americans are now seeing. He supports a health care law that will use Medicaid to insure about 15 million more Americans and then endorses a budget plan that, through cuts to state budgets, will most likely decimate Medicaid and other essential programs for children, senior citizens and people who are vulnerable by virtue of disabilities or an economy that is getting weaker by the day. He gives a major speech on immigration reform after deporting a million immigrants in two years, breaking up families at a pace George W. Bush could never rival in all his years as president." What Happened to Obama’s Passion? - NYTimes.com

And this is only a partial list of inconsistencies and doublespeak...

Monday, August 1, 2011

Bad Policy, Bad Process, Bad Faith -- Bad Deal

   
The Debt Deal certainly is better than the Boehner Bill, and better still than the Tea Party favorite, the Cut, Cap, and Balance bill.  But it is nonetheless bad policy, bad process, and bad faith. Arbitrary spending caps and across-the-board spending cuts are lazy, wicked, and destructive mechanisms that disguise glacial policy change. The proposed Super Committee and its fast-tracked decisions are anti-democratic and irresponsible -- both procedurally and substantively -- delegating plenary legislative authority from the many to the few.

The losers in this deal are the people -- especially the poor, the elderly, the medically vulnerable, and the jobless. This debt deal should put an end to Democratic excuse-making for President Obama's failure to end the jobs crisis and his willingness to put the social safety net at risk. In this debt deal, we have a Democratic President serving up to slaughter Medicare, Social Security, and Medicaid -- by the Super Committee, whose work must be approved as-is if across-the-board spending cuts or another default crisis are to be averted.

While the deal does not target Medicare, Medicaid, and Social Security for immediate cuts, it does offer up Medicare for across-the-board cuts should the Super Committee fail to report a deficit reduction package, should the Congress reject it, or should the Congress kill a Balanced Budget Amendment. The White House says Medicare cuts will affect providers, not beneficiaries. But in the absence of Medicare-for-All or some other single payer system, cuts to Medicare providers inevitably will impose costs on beneficiaries, increasing numbers of providers who refuse to treat Medicare patients.

    Social Security and Medicaid are to be exempted from across-the-board cuts triggered by failure of the Super Committee.  But before we even get to across-the-board cuts, the Super Committee will be empowered to cut ("reform") Social Security, Medicare, and Medicaid as part of its deficit reduction package.  

    This morning, a White House official reportedly lamented that some Democrats just don't see the need to reduce the deficit.  What a sad day when a Democratic White House snidely condemns policy makers who express legitimate dismay at a deal that will spread poverty and economic insecurity."

Don't Put the Future of Medicare, Medicaid, and Social Seurity in the Hands of a Super Congress!

Call your Congressmember and Senators today!

http://fdlaction.firedoglake.com/2011/08/01/whip-the-super-congress-call-and-ask-your-member-of-congress-if-they-like-their-job/

Wednesday, July 20, 2011

Gang of Six Plan Would Cut Social Security for Ordinary Workers While Cutting Taxes for the Rich

Center for Economic and Policy Research: Statement on the Gang of Six Plan | Press Releases

"The budget plan produced by the Senate’s “Gang of Six” offers the promise of huge tax breaks for some of the wealthiest people in the country, while lowering Social Security benefits for retirees and the disabled. Despite claiming that they will "reform" Social Security on a "separate track, isolated from deficit reduction," the plan includes cuts to Social Security that would be felt in less than six months, as the plan calls for a new inflation formula that will reduce benefits by 0.3 percentage points a year compared with currently scheduled benefits. The plan also calls for a process that is likely to reduce benefits further for future retirees."

For more information on the Gang of Six Plan see the CEPR Statement at http://www.cepr.net/index.php/press-releases/press-releases/statement-on-the-gang-of-six-plan

Stop the Cuts to the Social Safety Net!

Medicaid cuts will injure communities of color disproportionately.  11% of Asian Americans, 14% of Native Hawaiians and Pacific Islanders, 27% of Latinos, and 27% of African Americans gain access to health care through Medicaid.

Medicaid cuts will injure women disproportionately.  Women account for 70% of Medicaid participants.

Social Security is survival income for many older women, especially older single women.  Fifty percent of women over age 65 rely on Social Security for 80% or more of their income.  According to the Institute for Women's Policy Research: Unmarried women living alone aged 65 and older are three times more likely to be living in poverty than married women aged 65 and older (16.6 percent compared with 4.8 percent). Without Social Security benefits, more than two-thirds of these unmarried women would live in poverty.

An increase in the Social Security retirement age equals a cut in benefits.  The average benefit for women age 65-74 is $10,300; for men it is $13,400.  Neither men nor women can afford benefit cuts.

The "Chained CPI" is a COLA cut. It is a cut in benefits seniors cannot afford. According to the National Women's Law Center: For a woman who gets a benefit of $1,100 at age 65, replacing the current COLA with the chained CPI would mean $56 less per month and $672 less per year at age 80.  That may not sound like a lot to some members of Congress—but it’s equivalent to the loss of more than a week’s worth of food per month or 13 weeks of food that year.
 
Stop the Cuts -- Sign the Petition calling for Congress to RESPECT women, PROTECT Social Security, Medicare, and Medicaid, and REJECT any budget plans that threaten the economic security of women. http://salsa.wiredforchange.com/o/6405/p/dia/action/public/?action_KEY=4411

Monday, July 11, 2011

"Our bedrock social safety net programs should not be adjusted as part of some deal -- any changes to improve the solvency of these programs should stand on their own merits and be considered separately."

This weekend, nine Senators sent a letter to the President reminding him that Social Security does not contribute to the deficit and so should not be sacrificed in the name of deficit reduction.  In addition to Senator Bernie Sanders (I-VT), who sent a strong letter to the President last week, the signers included Senators Akaka (D-HI), Begich (D-Alaska), Blumenthal (D-CT), Franken (D-MN), Merkeley (D-Oregon), Stabenow (D-Mich), and Whitehouse (D-RI).

The letter reads:






Thursday, June 23, 2011

Single Mother Poverty Rates Remain Exceptionally High

single-mother-poverty-fs-eic.pdf (application/pdf Object)

According to a new report by Legal Momentum, single mother poverty in the US persists at a high rate, even when Food Stamps and Earned Income Credits are factored in.

Tuesday, May 24, 2011

Women's Issues and Voices Need to Be At the Table in Budget Talks

Low-income women have been invisible in budget deliberations thus far – yet they will be injured disproportionately by cuts to income programs like Social Security and TANF, as well by cuts to Medicaid, Medicare and Food Stamps.
 
Despite the prolonged recession, income assistance to low-income families has shriveled over the past decade, providing help to less than 40% of families who meet TANF criteria and to an even smaller fraction (27%) of all families in actual need.  For those who do receive benefits, the cash value has eroded so badly that TANF cash assistance does not bring a family up to the poverty line in any state. 
 
For low-income women and families who have fallen through the shredded TANF safety net, Food Stamps are a lifeline. But the Budget passed by the House in April slashes Food Stamps by 20% and caps spending. This would reduce the availability of Food Stamps to less than 40% of families who are eligible to receive it.

Efforts to weaken and roll back Social Security put low-income older women – especially older single women – at similar risk of economic insecurity. After a lifetime of low and unequal wages, half of all older women rely on Social Security for at least 80% of their incomes. For older single women – divorced, widowed, and never-married – the poverty rate is 20%.   Without Social Security, the poverty rate would be even higher.  Without Social Security, some 58 percent of all women over age 75 would be living in poverty. 

The economic precariousness of life in a shredded safety net needs to be a core consideration in deliberations to reduce the deficit.  Women need to be at the table and in the conversation to foreground and challenge budget decisions that will make low-income women even more economically vulnerable .

Thursday, May 19, 2011

Support Salon Workers Struggle for Workplace and Reproductive Justice

Every day, thousands of nail technicians and hair stylists risk their health in order to beautify their customers. Cosmetic products contain chemicals linked to cancer, reproductive and developmental harm, hormone disruption, and other health impacts, yet these products are allowed on to the market without any safety assessments. Join the National Healthy Nail Salon Alliance in asking your Congressmember to sign onto the Safe Cosmetics Act. For more information see: National Asian Pacific American Women's Forum

Monday, May 9, 2011

Unbecoming America

In the past week I've heard the President proudly report that the US killed an unarmed, if wicked, man (5/1 announcement); I've watched grown ups turn into frat boys and cheerleaders, celebrating the killing of the wicked, but unarmed, dead man (all week); and I've heard the President tell "anyone" who has qualms about the Kill Mission to "have their head examined" (5/8, 60 Minutes).

I've watched the mainstream media downplay the fact that the official story changed each day, each change making it more clear that the US either executed or assassinated the target.  The mainstream media seemed to forgive the shifting facts -- some reporters called it "normal" for official reports to be inaccurate.

I've heard people say that the stealth killing of Bin Laden was more efficient and cheaper than trying him, because he was widely reviled as a bad guy. I think it's this claim that most sticks in my craw.

The actions and the discourse of the past week raise all kinds of questions and are laden with implications -- about the constitution, the conduct of foreign and military policy, the integrity of alliances, and about ends justifying means.  All questions should be discussed and the possibility that sane Americans can disagree ought to be the value that guides the discussion.

Tuesday, May 3, 2011

Domestic Spending Accounts for only 15% of Deficit Problem

From the Washington Post, 4/30/11:

"Polls show that a large majority of Americans blame wasteful or unnecessary federal programs for the nation’s budget problems. But routine increases in defense and domestic spending account for only about 15 percent of the financial deterioration, according to a new analysis of CBO data.

The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years."

See full article: http://www.washingtonpost.com/business/economy/running-in-the-red-how-the-us-on-the-road-to-surplus-detoured-to-massive-debt/2011/04/28/AFFU7rNF_story.html

Tuesday, April 12, 2011

Gender Wage Gap, Current Threats to Economic Justice Linked - Statement of NOW President Terry O'Neill

Gender Wage Gap, Current Threats to Economic Justice Linked - Statement of NOW President Terry O'Neill

A Look at the Cuts in the New, Leaner 2011 Budget | FDL News Desk

A Look at the Cuts in the New, Leaner 2011 Budget | FDL News Desk

Equal Pay Day -- Still Nothing to Celebrate

Reminding us that Equal Pay remains an elusive goal, the Institute for Women's Policy Research released excellent data and analysis of the persistent gender wage gap.  Sadly, women continue to earn less than men across the board: whether they are employed in traditionally female occupations or in traditionally male ones, women earn less than men in the same jobs: women surgeons, women housekeepers, and women salespersons, for example, all earn less than men doing the same job.  Women also earn less than men in comparable, though not identical jobs, if those jobs are populated mostly by men.  In the labor market as a whole, women in general earn less than men.

According to IWPR: "The ten most common occupations for women employ 28.8 percent of all female full-time workers. Median weekly earnings for women range from $1,039 for ‘registered nurses’ to $427 for ‘nursing, psychiatric, and home health aides’ (Table 1). Women earn less than men in each of these occupations; the gender wage ratio ranges from 74.9 percent for ‘accountants and auditors’ to 95.4 percent for ‘customer service representatives.’... For men, the ten most common occupations employ 20.0 percent of all male full-time workers. Median weekly earnings for men range from $2,217 for ‘chief executives’ and $1,590 for ‘computer software engineers’ to $508 for ‘laborers and freight, stock, and material movers’ (Table 1). Women earn less than men in each of these occupations (although there are too few women ‘construction laborers’ to calculate a gender wage ratio there)." http://www.iwpr.org/publications/pubs/the-gender-wage-gap-by-occupation-updated-april-2011/

It's pretty embarrassing that 47 years after the nation pledged itself to pay women equally in the Equal Pay Act of 1963, work continues to be devalued if it is performed by women.  Lower earnings for women mean disproportionate economic insecurity and poverty for women.  So on this Equal Pay Day we should demand heightened governmental commitment to achieving equal or comparable pay in and between jobs.  Along with this, we need government to strengthen, not undermine, Medicaid, Medicare, and Social Security -- and all other programs that help women and their families survive despite a lifetime of unequal, low wages.

Thursday, March 17, 2011

Why Aren't Americans Giving More to Help the Victims in Japan?

So far, Americans have donated only 20% of what they gave for disaster relief in Haiti and less than 10% of what they gave after 9/11.

Both wingnuts and some in the mainstream media mock the Japanese with totalizing caricatures of Japanese culture -- and so douse our generosity and compassion. Whatever you think of the Japanese government or of General Electric (the designer of the Fukushima nuclear campus), the Japanese people are our brothers and sisters.

Please help the victims of this devastating, concatenating, unending disaster!

Here are some ways to give: http://www.huffingtonpost.com/2011/03/16/how-to-help-japan-earthquake-relief_n_834484.html?ref=fb&src=sp

Tuesday, March 1, 2011

The Racial Blame Game | Immigration Policy Center

The Immigration Policy Center lays out important data dispelling claims that immigrants "take away American jobs" or lower wages in the US labor market here:
The Racial Blame Game | Immigration Policy Center

Impact of FY2012 Budget Proposals.pdf (application/pdf Object)

Thanks to the Women of Color Policy Network, a very helpful summary review of budget cut proposals that will disproportionately harm women of color and their communities can be found here:
2011.PolicyBriefImpactofFY2012BudgetProposals.pdf (application/pdf Object)

Tuesday, February 15, 2011

Obama Sends Mom's Beloved Program to the Gallows

Among the many social programs the Obama FY 2012 Budget targets for elimination is the Women's Educational Equity Act.  This program historically has been underfunded -- and some years it has received no funding at all.  But it has remained on the books and as such has expressed the federal government's commitment to promoting gender equity in education.  In his 2012 budget, the President puts this program in the termination column.  This cut stings --  the savings it earns is a paltry $2 million, so it feels more like a slap in women's faces than a tough decision in favor of deficit reduction.

The fate Obama has assigned Women's Educational Equity also stings because my mother, the late Congresswoman Patsy Takemoto Mink (D-Hawaii), was the original sponsor of WEEA in 1974 and fought for it throughout her years in Congress. Her last effort to secure funding for WEEA was in 2001, a year before her death, when she fought for WEEA reauthorization in the No Child Left Behind Act. If I recall correctly, WEEA was reauthorized in No Child Left Behind, but was zero-budgeted.  In any case, WEEA has been funded since 2001 -- though always at levels far below its programmatic promise.

What my mother loved about WEEA was that it put government in a positive role, nurturing and supporting efforts at all levels of education to improve the educational context for women and girls. In contrast, Title IX, enacted in 1972 and named after my mother after her death in 2002, is a regulatory measure which promotes gender equality by prohibiting discriminatory practices. The two legislative innovations go hand in hand.  Title IX requires educational institutions to avoid and remedy discrimination.  WEEA gives educational innovators tools to eliminate cultural and ideological barriers (such as sex stereotyping in classroom materials and curricula) to the full participation of girls and women in educational processes  while also encouraging programs that advance the incorporation of girls and women into fields that historically have excluded them -- math, science, and engineering, for example.

White House documents that accompany the 2012 Budget state that WEEA objectives will be advanced in other programs.  I hope that's true.  But in my cursory reading of the itemized Department of Education budget, the word "women" appears only once -- with reference to terminating WEEA.

While the Budget saves a whopping $2 million by killing WEEA, notice that it wastes more federal money on Abstinence Education ($50 million) and on promoting marriage and fatherhood ($150 million).

New Bipartisan Consensus Against the Poor?

From http://www.accuracy.org/a-new-bipartisan-consensus-against-low-income-people/:   The president’s budget is a prosaic austerity plan that inflicts disproportionate pain on low income Americans. Fundamental questions about the costs of war and the fairness of tax cuts for the rich have been avoided by the decision to narrowly target non-security “discretionary” spending to bear the weight of deficit reduction. It used to be Republicans alone who sought to balance the budget on the backs of the poor. But Obama’s 2012 budget takes us to the brink of a new bipartisan consensus against low income people. Will progressives go along?

Monday, February 14, 2011

Social Security Is Not A Budget Issue

You can review the infectious, insidious discourse linking social security to our deficit problem here:
Social Security: It's All in the Adjectives | MyFDL

Meanwhile, much of the reaction to the President's just-released 2012 budget takes aim at the budget's failure to "tackle entitlements." The whipping boy, here, is Social Security. Legions of politicos and journalists who know better propagandize the claim that the deficit/debt cannot be resolved without cutting Social Security. Following the principle that if you say it often enough it becomes true, pundits and policymakers persist in pretending that Social Security is part of the general budget and is paid for from general funds. Just because you say the earth is flat doesn't make it so. Social Security is off-budget. It is self-financed, through the payroll tax. It has amassed a trust fund surplus, in fact, which provides a secure fiscal future for the program for some number of years (until 2037). Social Security will encounter solvency issues in a couple of decades, but these are not general budget issues and can be resolved by tweaking the program's financing mechanisms (such as by raising the income cap for the payroll tax).

The President himself fanned the hysteria about Social Security's role in the deficit when he appointed the Deficit/Debt Reduction Commission, selected enemies of Social Security as its chairs, and said everything was on the table, including Social Security. Today, he advances this idiocy further on the White House web page for his FY 2012 Budget. See http://www.whitehouse.gov/omb/budget, which offers an "Explore the Budget" tool that declares Social Security to be part of the budget -- 20% of expenditures, no less!

This is not mere misinformation. It is dangerous misdirection, fueling opportunistic assaults on Social Security.