15 December 2010 By Stephen
Lendman Planned is death by a thousand
cuts - aka "creeping normalcy," defined as a way to
make major changes seem normal if happen slowly,
incrementally like boiling a frog unaware it's dinner
until cooked. Social Security and Medicare are
dinner. Yet both are insurance, not welfare, programs
funded by (worker-employer) payroll tax deductions.
They're contractual federal obligations to eligible
recipients who qualify. You'd never know it the way
both programs are publicly discussed, explaining
everything but the truth. More on that below. On August 14, 1935, the Social
Security Act became law, known as the federal Old-Age,
Survivors, and Disability Insurance program (OASDI).
It provides retirement, disability, survivorship, and
death benefits. It's still America's most effective
poverty reduction program that's worked remarkably
well since inception. It exists to provide secure
inflation-adjusted retirement or disability income,
unlike risking personal savings to create private
wealth that may end up losing it. Despite bogus claims, it's not
going bankrupt. When properly administered, it's sound
and secure, needing only modest adjustments at times
to assure it. On July 30, 1965, Lyndon Johnson
signed the Social Security (Medicare) Act into law,
enrolling Harry and Bess Truman as its first
recipients. Medicare.gov calls it "the
nation's largest health insurance program," covering
40 million Americans. It's a "Health Insurance program
for people age 65 or older, some disabled people under
age 65, and people of all ages with End-Stage Renal
Disease (permanent kidney failure treated with
dialysis or a transplant)." America's aristocracy wants
Medicare and Social Security ended, citing the
nation's burgeoning debt and enormous unfunded
liabilities for both programs. The web site
usdebtclock.org lists them as follows: (1) the US National Debt: nearly
$14 trillion; (2) Social Security Liability:
nearly $15 trillion; (3) Prescription Drug Liability:
nearly $20 trillion; and (4) Medicare Liability: nearly
$78 trillion. Total: nearly $113 trillion plus
the National Debt. Most important is that future
liabilities mask today's soundness that can stay that
way if current programs are properly administered.
That's omitted from hyped scare tactics to convince
future recipients to make unjustifiable sacrifices.
Like them or not, they're coming, major media reports
promoting the idea as well as politicians from both
parties. On August 9, 2010, for example, a
New York Times editorial headlined, "The Latest on
Medicare and Social Security," saying: "Of course, neither program is
sound for the long run. (Yet there's) time for
lawmakers to reform and strengthen both (for) the long
haul. (Required is) a combination of benefits cuts and
tax increases, which could be distributed fairly and
phased in over decades." A May 13, 2009 Wall Street
Journal report headlined "Social Security, Medicare
Face Insolvency Sooner," saying: Medicare "will be depleted by
2017," Social Security by "2037." In fact, neither
program is endangered as explained above. Yet the
report continues: "Any attempt to address long-term
fiscal problems will require big changes to the way
entitlements are funded or paid out." False, but don't expect major
media reports to explain or side with recipients about
programs too important to be weakened or lost. Yet in his January State of the
Union address, Obama announced plans to "freeze
government spending for three years," starting in
2011, saying he'd form a bipartisan fiscal commission
to cut the deficit and tackle entitlements by imposed
austerity at a time massive stimulus is needed. Called the National Commission on
Fiscal Responsibility and Reform (NCFRF), it's
co-chaired by two deficit hawks, former Senator Alan
Simpson (R. WY) and Erskine Bowles, former Clinton
White House Chief of Staff. They headed an 18-member
team, stacked with like-minded members, elitists
knowing their futures are secure. Their mandate: slash Medicare,
Medicaid, Social Security and other social spending,
continuing a decades long process of transferring
wealth to America's super-rich. On November 10, they
issued their proposal. An earlier article addressed
it, accessed through the following link: http://sjlendman.blogspot.com/2010/11/obama-teams-deficit-cutting-proposal.html Among other recommendations
were: -- ending or capping middle class
tax breaks, including deductions for home mortgage
insurance and tax-free employer provided medical
insurance; -- lowering income taxes
dramatically to 9, 15 and 24%, down from six brackets
ranging from 10 - 35%; -- slashing corporate tax rates
from the top 35% to 26%; -- making deep Medicare cuts as
well as increasing Medicaid co-pays; and -- raising the Social Security
retirement age to 69 by 2075 as well as reducing
annual cost-of-living increases. A second Bipartisan Policy Center
(BPC) commission co-chaired by former Senator Pete
Domenici (R. NM) and Alice Rivlin, former director of
the Office of Management and Budget and the
Congressional Budget Office, issued its own proposal
called "Restoring America's Future." Its recommendations include: -- indexing Social Security
benefits to life expectancy to reduce them as
longevity increases; -- eliminating annual
cost-of-living adjustments, bogusly claiming inflation
is overstated, especially for retirees facing costly
medical expenses; -- instituting a one-year payroll
tax holiday for workers and employers to save $650
billion, supposedly to be replenished from future
general revenues; in fact, it's a way to help kill
Social Security as discussed below; -- sharply cutting Medicare and
Medicaid benefits; -- simplifying the tax code to
two brackets (15 and 27%), favoring the rich; -- eliminating home mortgage and
most other deductions and credits; -- taxing employer provided
health insurance; and -- instituting a 6.5% national
sales tax, hitting ordinary people hardest. An earlier article providing more
details, including on Obama's planned austerity, can
be accessed through the following link: http://sjlendman.blogspot.com/2010/11/destructive-neoliberal-austerity.html Nancy Altman is co-director of
Social Security Works (strengthensocialsecurity.org),
an "American coalition (representing over 50 million
Americans) united around the simple proposition,
Strengthen Social Security...Don't Cut It." Its seven principles include: (1) Social Security didn't cause
the federal deficit; it shouldn't be cut to reduce
it; (2) it shouldn't be privatized; (3) it shouldn't be
means-tested; (4) future revenues should come
by raising the payroll tax ceiling, requiring those
earning more to pay their fair share; (5) the retirement age shouldn't
increase further; (6) benefits shouldn't be cut,
including by reducing annual inflation-adjusted
increases; and (7) benefits "should be increased
for those who are most disadvantaged." In short, Social Security
(Medicare and Medicaid) should be strengthened to
provide greater, not lower, future benefits. The proposed 2% worker earnings cut for one year is a stealth indefinite extension scheme to drain hundreds of billions from the Social Security Trust Fund. Doing so will irreparably weaken its ability to pay future benefits, the idea being to destroy the program altogether, perhaps first by privatizing it. Social Security Works explained how the tax holiday "could unravel" the whole system as follows: (1) "It's easy to enact tax cuts - it's very hard to end them." (2) Doing so results in a substantial tax increase - $2,000 on $100,000 a year earners, $400 for those making $20,000. (3) "Restoring the 2% lost....would be a nearly 50% tax increase (for) 94% of all Americans...." (4) House and Senate Republicans oppose any increases. So do many Democrats, especially in election years or when economic conditions are weak. (5) Obama's proposal undermines Social Security's long-term solvency. Repaying what's lost from general revenues is greatly impeded by the size of the deficit and planned austerity coming to reduce it. (6) Maintaining the 2% cut indefinitely will cause massive benefit cuts and eliminate any chance for improving them, notably for society's poor and disadvantaged. (7) Middle class households will also be harmed, violating Franklin Roosevelt's pledge that: "We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren't a matter of economics, they're straight politics." FDR never met Obama or congressional Republicans and Democrats. What he gave, they'll end, violating a government-mandated right. (8) A payroll tax holiday is another step toward privatization, a sure way to kill it, the way 401(k)s destroyed private pensions, leaving workers at the mercy of marketplace uncertainties that can wipe out life savings during hard times. Social Security Works concluded, saying: "There are better ways to provide stimulus to the economy - and that do less harm to Social Security - than a tax holiday." According to the Center for Budget and Policy Priorities (CBPP), one way is by extending the 2009 Making Work Pay Tax Credit, adding much more stimulus than a payroll tax holiday. It gives workers a refundable tax credit, increasing the size of the paychecks. At 6.2% of earned income, it provides maximum $400 for working individuals, $800 for married taxpayers filing joint returns. A payroll tax holiday is a bad idea any time, besides doing little to stimulate economic growth. "The most efficient way to boost consumer spending is to put money into the hands of people who will spend it quickly rather than save it." It's most effective when given to low and middle-income workers, not high-end ones who'll save, not spend, their windfall. "A payroll tax holiday does not score well on this front - too little of the benefit goes to lower-income households struggling to make ends meet and too much goes to higher-income taxpayers, who are likely to save a significant (portion) of any new resources they receive." Besides killing Social Security, that's the whole idea, of course, transferring more wealth to the rich, what Republicans and Democrats endorse, including Obama. In contrast, the Making Work Pay Tax Credit poses no threat to Social Security. The payroll tax holiday may destroy it. Republicans signing on as a concession masks their real intent, the same one they've had since Social Security's enactment, a program they strongly opposed as well as Medicare in 1965. Now both parties oppose them. A Final Comment Obama's payroll tax holiday will drive a stake into Social Security's heart, or as Hall of Fame former baseball announcer Bob Prince used to call Pittsburgh Pirate home runs: "Kiss it goodbye." Fans cheered. Deathly silence will greet Obama's proposal once recipients know they've been scammed. Republicans and Democrats plan it unless an aroused public stops them.
Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening. http://www.progressiveradionetwork.com/the-progressive-news-hour/. Comments 💬 التعليقات |