The Washington Post‘s Lori Montgomery has what sounds like a pretty important story in today’s paper (3/25/11).
The headline:
Democrats Splinter Over Strategy for Reducing Deficit
Battle Lines Drawn as More Are Willing to Put Entitlements on Table
The piece leads off:
Democrats are sharply divided over whether to tackle popular but increasingly expensive safety-net programs for the elderly, particularly Social Security.
According to Montgomery, a “growing number of Democratic lawmakers say they are willing to consider controversial measures such as raising the retirement age and reducing benefits for wealthier seniors.”
That would be big. Who are they? She tells us who they aren’t:
But senior lawmakers such as Senate Majority Leader Harry M. Reid (Nev.) and Sen. Charles E. Schumer (N.Y.) are lining up against them, arguing that tampering with Social Security would harm the elderly–as well as the political fortunes of Democrats hoping to maintain control of the White House and the Senate in 2012.
OK–that’s not them. And then there’s this:
And House Democrats this week signaled their intention to use Social Security as a cudgel in next year’s elections by launching an ad campaign accusing 10 GOP lawmakers in swing districts of plotting to cut the program.
Not them, either. So where is this split, exactly?
Meanwhile, Third Way, the centrist Democratic think tank, plans to release a memo Friday arguing that the deficit has emerged as an uncommonly powerful political issue and that 2012 voters will reward the party that takes bold action to restrain government spending–including overhauling Social Security, Medicare and Medicaid.
Well, that’s not really noteworthy at all–it’s exactly the sort of thing a right-leaning, corporate-funded Democratic think tank would say. What else?
Democrats have traditionally defended the program, but even some liberal lawmakers now say changes in the benefit structure are required. Last week, 32 Senate Democrats joined 32 Senate Republicans on a letter in support of a broad-based deficit reduction effort that includes changes to entitlement programs.
That letter is a rather bland call for Obama to engage more forcefully on deficit reduction–certainly not evidence of a “sharp divide.”
She also adds:
Since the program’s creation in 1935, the cost of Social Security benefits has been entirely covered by payroll taxes paid by current workers. This year, however, payroll tax revenues are projected to fall $45 billion short of covering benefits, and the problem is projected to grow as the number of retirees balloons compared with the number of working adults.
As Dean Baker points out, there have been other years when taxes did not cover benefits; the suggestion here is that this is something new. And, of course, the program’s massive trust fund surplus, which is money the Social Security system loaned to the U.S. Treasury, was designed to deal with precisely this situation. By calling it a “problem” for the trust fund surplus to be used for its intended purpose, Montgomery is suggesting that it would be better if the Treasury didn’t pay back its debts–which is an odd position for the Washington Post to take.
Today’s Social Security recipients have paid into the system for about 40 years. So they certainly deserve to receive benefits for 15 to 20 years, on average. Why should it be so difficult to eliminate the annual salary cap on payroll contributions into the system? This would solve any year to year shortfall. The US treasury simply must not ever be allowed to escape it’s obligation to pay back the funds it has used to fund senseless wars, or to prop up dictatorial, non-democratic countries through foreign aid – money provided out of hard earned wages by people who can’t afford heating oil and groceries.
We paid into the system and the powers that be won’t even give us a cost of living increase.Don’t tell us the cost of living hasn’t gone up.
Doesn’t anyone who writes about Social Security know about the cap on Social Security taxes? In case you don’t, Social Security taxes are capped at $106,800 of earnings. Earn more than that, and the 5.6% FICA tax disappears. So for those who earn $1 million, they pay a Social Security tax only on the first $106,800 and they get a huge tax break after that point.
The cap was placed where it was at the time, so that the tax would be captured on 90% of all income, except that now it only reaches 80% of income. The wages / salaries of the very rich have grown so much, that it is out of reach of Social Security taxes. Once again they are rich because they are receiving tax free money.
I say raise the cap…eliminate the cap…and any suggestion of a shortfall in Social Security spending will be gone for as far as the eye can see.
Reducing the deficit? A no brainer. Start with the big breaks for the very wealthy. It will never happen. The very wealthy nest featherers who we elect to represent us will first feather their own nest and the nest of the big “contributors” who keep them re-elected. It’s simple, what’s left to cut? What helps people less fortunate than the nest featherers, of course.
Bob Krasen’s letter above brings up the larger point of SO many of the problems nowadays, which is: There ARE good, equitable, humane solutions to MANY of our domestic and international problems, but when these problems are being crassly manipulated by conservative forces for their own very narrow political purposes, even the best solutions will be rejected because — in many cases — these ‘problems’ are only a ruse, a tactic. If their God himself brought down a beneficent solution, they’d undoubtedly reject it as being ‘too elitist’ or some-such bogus reason. As we’ve seen here in Wisconsin and other states lately, the Republicans are taking budgetary problems that their previous policies (irresponsible tax cuts, irresponsible wars, NAFTA/CAFTA/WTO unemployment, World Bank restructuring, etc) CREATED, and using those as a faux reason to implement their chronic Neo-con agenda. The Republicans truly do NOT want good-government and good-answers to most problems because they don’t want government in anything but the military/police/prisons. Their agenda is to virtually destroy most government and all social-welfare programs. And I don’t believe this to be left wing hyperbole when I see — live on TV — Grover Norquist (along with Tucker Carlson & a third person) vetting candidates for the RNC position… the same Grover Norquist who infamously said that he wanted to reduce government “… to the size where I can … drown it in the bathtub”, and has been a major force in Republican affairs.
Over and over I see it in our society — good, coherent, humanistic answers are shouted down by hucksters & scammers from the Republican/fundamentalist community who want to gain some personal political/religious advantage, even though it may mean suffering (including injury and even death) to tens of thousands of others.
@Steve Massaro –
Why should it be so difficult to eliminate the annual salary cap on payroll contributions into the system?
Why is it difficult? Just think of who it would be who would be paying those extra taxes and the question answers itself.
Dems might not be in-fighting on this, but neither are they out there in solidarity with us. The weakening voice of the Dems, in my opinion, has everything to do with the President who actively embraces Republicans and their causes on so much. If “our” leader abandons us and his cronies follow how can we call him our leader. The only two that I see out there really fighting the incredibly backward agenda of the Right is Kucinich and Sanders. I hope at least one of them rises to the standard of true statesmanship and mounts a primary challenge. We desperately need leadership. The middle class is being destroyed and the poor are being openly mocked. Is this America’s future? I hope not.
The slogan obviously should be:
SCRAP THE CAP
SCRAP THE CAP
Eliminate the cap A N D increase the Social Security payout to 50%, up from the 39%. This is good for Twenty Something’s hope for their future and it could eliminate the so-called pension programs that we see failing. Another thing, expand Medicare to the 55+.
Reminder, the President and Republicans eliminated the FICA tax for two years, then complain about SS. Who are they kidding?
Now is the time to research the Reagan Plans; eliminate manufacturing and replace it with a service country, eliminate taxes, which are ordered by the Constitution, destroy government for the people and replace a government for the greedy aka, corporations and some wealthy. Read “Dishonoring Reagan,” in The Nation Magazine.
Slight amendment to above slogan–Scrap the Cap. Scrap the cap.
CUT THE CRAP–SCRAP THE CAP
Here’s the thing: according to the experts, the Social Security trust fund and the payroll tax are essentially fictions. Since money is fungible, in the end all of the government’s income goes into the same “pot” and all its expenditures come out of the same “pot.”
So, based on that point of view, you could eliminate Social Security entirely without paying people back for all the money they put in.
Reading material:
http://www.newdeal20.org/2010/12/16/cut-the-payroll-tax-to-save-social-security-30278/
http://www.newdeal20.org/2010/12/20/reality-check-why-truth-will-protect-social-security-30569/
I read it Maureen–good stuff. Cut the Crap–Raise the Cap. And raise taxes on the wealthy , and start taxing Corporations, penalizing them severly when they ship jobs overseas. And reward those who start businesses here and pay their employees well.
Oops! That’s “Scrap the Cap!”
Why not just tax everyone at 100%.Then we can roll up our tents and go home .Never work and just let government take care of all of us.I know i know but who will pay the blill?When was that a consideration?At least it will kill the rich, and replace them with a constant of mediocrity all going down the same hole.Then in the liberal tradition we can all celebrate that all men are created equal….as we all starve!
Read the Reagan bit.I laughed and laughed.Who would ever believe such a load of filtered crap?Scrap the crap!
I must shoot in the head the term nest featherers.As if the rich put it in their mattress.That is the problem with you libs.You believe that.So now the rich should not save….should not have money to spend…Should not be able to expand and build new buisinesses(that creates ALL jobs)….so who does that leave?WHY THE GOVERNMENT of course!Unless you mean to simply take the money and hand it out in breadlines.So the government will get the money.And my they have really shown us how well they do with money.They are a corporation to be emulated for sure.True almost nothing works they touch…but they will get it right ,someday,some century.Congress has its own bank that is always broke do to overdrafts by its members. Their in house restaurant went broke.I was looking recently at VP Bidons financial records.Had damn little in savings before he ran,and has never given much of anything to charity in his life.And he is one of the directors of the monetary re-boot ,and redistribution move in this country?But no fear when they run low…. they simply go in dept to the god damn Chinese or PRINT money.
ARE YOU ALL OUT OF YOUR EVER LOVING MINDS?This is what the election will be about.
As I’ve said many times: any working person who vote Republican is a complete fool! And I’m sorry to say President Obama is not my idea of a Democrat. Neither was President Clinton.
Instead of being concerned with tackling Social Security, why don’t these yoyos concern themselves with tackling with the billions that the corporations owe the IRS? They can start with GE, for example. Then move on to Bank of America. Then Chase. AIG…
I must say I am tired of the greedy who piss on all of us and call it rain- Ronnie was maybe the worse president we ever had- certainly in my lifetime!
Frank what do you mean by a working person?And as i have said before:Anyone who is not working or does not want to work and votes Dem is a complete fool.And who is your idea of a Dem?…..Dont tell me the ex speaker Mrs p?
Correction:”Does NOT vote Dem”
And Reagan was(as has been recently released in polls) an amazing president during a rebirth in this country after the total disaster named CARTER,
With figures from an article in the Nation about Wealth Tax by Leon Friedman, I did some calculating.
Net income of US: 54.6 trillion dollars.
Top 1%(3 million people) has(revised from 35% in the article to 40% in a later article by someone else) 40% or 21.84 trillion dollars.
Top 5%(15.5 million people) has 62%, or 33.85 trillion dollars.
Leaving only 20.74 trillion dollars to the 95% 294,500,000 population of the rest of us.
If the top 1% paid just $550,000 it would pay off the 1.65 trillion dollar deficit.
If the top 5% were to pay a temporary tax for two years of $500,000 each year, it would pay off a deficit of 1.5 trillion dollars and pay off a 14 trillion dollar accumulated debt. And in doing so they would still be millionaires and billionaires and feel no pain in paying off the debt and the deficit.(Though they may complain, they would still be in great financial shape, better than the rest of us.)
Incidently, the Chamber of Congress,(they are no longer the Chamber of Commerce) executive leadership: Navistar CEO Daniel Ustian was given a total compensation increase of 25% to $8.43 million in 2010 while slashing US jobs and opening a Mexican factory.
AT&T CEO Randall Stephenson made $20.3 million dollars in 2009 up 35% from 2008, in 2010 his company added $8.99 million dollars to his pension plan valued at $31 million dollars today.
John Deere & Company CEO Samuel Allen got $12.29 million dollars in 2010, 3 times his 2009 pay while slashing 367 jobs in East Moline, Illinois, 325 in Iowa, and 89 in South Dakota.
Wellpoint CEO Angela Broly was given a 51% compensation boost from $8.7 million dollars in 2008 to $13.1 million dollars, while the company laid off 1700 people and moved $86 million dollars to the Chamber of Commerceâ┚¬Ã‚¦.uhâ┚¬Ã‚¦ make that Chamber of Congress.
Some revised figures:
As of March 2011 the top 1% owns 43% of total financial wealth, next 4% owns 29% total wealth, next 5% owns 11% of total wealth, next 10% owns 10% of total wealth, while the rest of us, the lower 80% share a whopping 7% of total financial wealth.
Is there any good reason for this deficit hysteria except to push the notion that the poorest of us have to sacrifice and pay our share of the shared sacrifice? I say, with the info I just gave, we have a revenue problem, not a spending problem and if only the ones with most of the wealth just paid their fair share, we would have no debt and deficit problem. And the programs that help the poorest of us, children, the disabled, and the elderly, as well as low income women should not be cut, it is immoral for there to be an elite group with so much while most of us have zilch.