Posts Tagged Social Security
The Emergency Debt Plan That Would Put U.S. Citizens Second
Updated: January 7, 2013 | 6:00 p.m.
January 7, 2013 | 5:23 p.m.
AP PHOTO/BRADLEY C. BOWER, FILE
If the government hits its borrowing limit, Social Security checks, above, could be delayed.
In just a few weeks, the federal government won’t be able to pay all its bills on time. If that happens, the nation could start paying its lenders, many of them foreign, before its citizens.
At some point no later than March 1, the government will reach what the Bipartisan Policy Center has ominously named the X-Date, “the day on which Treasury no longer can pay the debts of the United States except with money that is coming in on that day,” according to Steve Bell, the center’s senior director of economic policy and a former longtime senior Capitol Hill staffer. Unless Congress intervenes to raise the country’s borrowing limit, the U.S. will default on its debt. There might be one way for the government to avoid defaulting, however. Treasury could pick and choose which bills to pay, with a preference toward paying interest on U.S. debt, much of it held by foreign investors.
Between Feb. 15 and March 15, the BPC predicts the nation will collect just $277 billion to pay $452 billion in obligations, including payments related to tax refunds, Medicare and Medicaid, Social Security, debt interest and more. In other words, Treasury will only collect enough to meet about 60 percent of its obligations.
The process of paying off the interest on the debt before other obligations is called “prioritization,” and it was proposed during the last debt-ceiling fight in 2011 and more recently by Pennsylvania Republican Sen. Pat Toomey. The reasoning behind it is simple: The United States’ reliable payment on its debts is crucially important, not just to the nation but to the world, which uses U.S. debt as a basic benchmark for all kinds of other financial instruments. If the nation were ever to stop meeting its debt obligations, the ripple effect would be devastating.
“We’re talking about the reserve currency of the world, we’re talking about the deepest and most liquid markets in the world … and we’re talking about the possibility of that country not meeting its financial obligations,” said the BPC’s Bell, who in a Monday meeting with reporters described how prioritization could work, though neither he nor the group endorses it.
So how does the government maintain its debt obligations, even if lawmakers fail to raise the debt ceiling? Simple: End, reduce, or delay other payments, such as those to Social Security, Medicare or Medicaid beneficiaries or to government contractors.
“Projects would be postponed, some vendor payments would be delayed, certain programs would be suspended, and many government employees might be furloughed,” Toomey wrote in a Wall Street Journal op-ed two years ago, describing the effects of prioritization. “Default would easily be avoided, but these cuts would certainly be disruptive.” Toomey sponsored a bill (which went nowhere) that would have provided Treasury with the authority to prioritize its bills just in case a potential default scenario was reached.
But whether Treasury currently has authority to decide the order it pays its bills is up for debate. The administration and Treasury Department have argued that it doesn’t. “Legislation to ‘prioritize’ payments would simply represent default by another name,” according to Treasury. And one official at Standard & Poor’s, which downgraded the government after its last debt-ceiling fight, told The Wall Street Journal that the debt could be downgraded with potentially damaging consequences for confidence and the economy even if prioritization were employed.
On March 1 alone, the BPC’s outside estimate of when the nation will truly hit its debt ceiling, the government is expected to collect only one-fourth of the amount it needs to pay out — enough to cover Medicare and Medicaid payments, but nothing else.
Treasury is currently using so-called “extraordinary measures” to postpone hitting the debt limit, but has yet to release an official estimate of when the borrowing limit will be reached.
- The 14th Amendment is Obama’s Best Option on Debt Ceiling – Bloomberg (bloomberg.com)
- This is what would happen if we breach the debt ceiling (washingtonpost.com)
- Debt Ceiling Crisis: Will Obama Just Create A Trillion Dollar Coin? (etfdailynews.com)
- UBS: U.S. Debt May Rise as D.C. Dysfunction Draws Downgrade (bloomberg.com)
- U.S. Treasury To Run Out Of Money By Feb. 15, Study Says (forbes.com)
- Debt ceiling deal tied to tax refunds (rep-am.com)
- U.S. Debt Ceiling: Costs and Consequences (pbs.org)
- Geithner Tells Congress U.S. Reaches Debt Limit (bloomberg.com)
- ‘Can a $1 Trillion Coin End Debt Ceiling Crisis?’ (cryptogon.com)
- Rep. Eric Cantor Will Profit in Stock Market if U.S. Goes into Default (opposingviews.com)
Cagle Post – Political Cartoons & Commentary – » Tax Avoidance On the Rise: It’s Twice the Amount of Social Security and Medicare
The wealthiest Americans save $3 trillion dollars a year through a system of subsidies and tax avoidance schemes, which totals three times more than our annual deficit. That’s enough for a full-time job for every middle-class household in America. Here are the distressing details:
1. Tax Expenditures: $1.25 trillion
These subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes are estimated to be worth 7.4 percent of the GDP, or about $1.1 trillion. They largely benefit the richest taxpayers. Business subsidies bring the total to $1.25 trillion.
Jimmy Margulies / The Record
But there’s so much more.
2. Tax Underpayments: $450 billion
According to the IRS, 17 percent of taxes owed were not paid in 2006, leaving an underpayment of $450 billion. The largest share of that came from underreporting of income.
3. Tax Havens: up to $250 billion
(a) It’s estimated that between $21 and $32 trillion is hidden offshore, untaxed.
(b) 40 percent of the world’s richest individuals are Americans. That’s $8 to $12 trillion of the total.
(c) The historical annual stock market return is 6 percent. That’s a return of $480 to $720 billion.
(d) The 20 percent to 35 percent tax loss amounts to a minimum of $96 billion, a maximum of $252 billion.
4. Corporate Taxes: $250 billion
For over 20 years, from 1987 to 2008, corporations paid an average of 22.5 percent in federal taxes. Since the recession, this has dropped to 10 percent — even though their profits have doubled in less than ten years. The missing 12.5 percent on $2 trillion in profits amounts to $250 billion a year.
5. Financial Transaction Tax (FTT): $500 billion
The absence of an FTT constitutes tax avoidance. Not a penny of sales tax is paid on U.S. financial transactions, which have been estimated at about three quadrillion dollars annually, or three thousand times the deficit. No sales tax is paid despite the high-risk nature of “flash trading” that can lose entire pension funds in a few seconds.
Just a half penny from every dollar of total U.S. financial transactions would pay off the national debt — not just the deficit, but the whole $15 trillion debt. More conservative estimates by the Center for Economic and Policy Research and the Chicago Political Economy Group suggest FTT revenues of a half-trillion dollars annually.
6. Payroll Tax: $300 billion
This extremely regressive tax costs the richest Americans only a small fraction of what everyone else pays. If the 12.4 percent tax (half employer, half employee) were assessed on the full $3.84 trillion claimed by the richest 10 percent in 2006 (instead of on $1.43 trillion: $110,000 times 13 million payees), an additional $300 billion in revenue would have been realized.
7. Estate Tax: $100 billion
A repeal of the estate tax, which is designed to impact only the tiny percentage of Americans with multi-million dollar estates that have never been taxed, would cost the nation about $100 billion per year.
The total surpasses $3 trillion. The figures may be on the high end, and there may be some overlap, and wealthy Americans may argue that much of it is legal. But the system of loopholes and deductions and exclusions is a statement by the rich that they don’t have to pay for their lopsided share of benefits, and that middle-income Americans should give up their own earned benefits to pay the country’s bills.
And if tax avoidance is legal it’s because the people with money have redefined ‘legal.’
- Tax Avoidance On the Rise: It’s Twice the Amount of Social Security and Medicare (nationofchange.org)
- Morning Bell: 10 Facts on the Fiscal Cliff, Debt, and Spending (heritage.org)
- The 12 Days of a Capitalist Christmas (talesfromthelou.wordpress.com)
- Dems Eye $1 Trillion Tax Hike (12160.info)
- The price tag: $4 trillion added to deficit (politico.com)
- Ten Facts about Spending and the Fiscal Cliff (usdailyreview.com)
- How Good is the Fiscal Agreement? Becker (becker-posner-blog.com)
- 10 Heritage Facts on the fiscal cliff, debt and spending (illinoisreview.typepad.com)
- The 12 Days of a Capitalist Christmas (alternet.org)
- Shocker: Dems Want $1 Trillion More In Taxes! (sweetness-light.com)
SATURDAY, JANUARY 5, 2013
The Real News Network has conducted a series of interviews on the fiscal cliff deal, and the two most recent are worthwhile in and of themselves, and are also good tools for persuading those who fallen for the idea that Obama got a good deal to reexamine their view. With the Vichy Left now trying to soften up the public for Social Security and Medicare “reform,” it’s particularly important to keep an accurate scorecard on what has already gone down.
The newest chat, with economist James Henry, focuses on how the deal on estate taxes allows the rich to pass on wealth to their children, allowing inequality to persist across generations. And he reminds us that a lot of Congressmen are rich enough that this provision will benefit their families.
Gerry Epstein of UMass Amherst minces no words in his overview of the pact. He calls it a debacle for middle class families because it preserves nearly all of the Bush tax breaks for the rich.
- Yes, Virginia, The Rich Did Very Well With the Fiscal Cliff Deal (nakedcapitalism.com)
- Cagle Post – Political Cartoons & Commentary – ” Waiting for the Sequel (mbcalyn.com)
- Rep. Hurt Explains His Vote Against Fiscal Cliff Deal (newsplex.com)
- Fiscal cliff deal raises taxes on 77% of Americans (myfox8.com)
- Hope and less change: Americans cringe at first paychecks of 2013; Stunned lib asks, ‘What happened?’ (twitchy.com)
- Why They Want to Go Over the Fiscal Cliff (politicalwire.com)
- What Does the Fiscal Cliff Mean for You? (slate.com)
- Higher Taxes for 77% (money.cnn.com)
- Sen. Franken Weighs In On Fiscal Cliff Deal (minnesota.cbslocal.com)
- Fiscal-cliff deal: Who are the winners and losers in the bargain? (slate.com)
Making Sense by Michael Reagan
The latest horror movie from Washington — “The Fiscal Cliff” — finally came to an exciting end in the early hours of 2013.
But after two years did its climax — more taxes, more spending and more chicken-livered can-kicking by our politicians — really shock any of you over the age of six?
Jeff Parker / Florida Today
Didn’t think so.
Spinning the budget deal as a last-minute victory for the American people, the White House and Congress are saying that all the actors knuckled down, did the right thing and created a compromise budget deal that kept the country from going over the fiscal cliff.
Bull. As usual.
The Washington In-Crowd didn’t save the country from going over the fiscal cliff, which of course they created in the first place. They just shoved the edge of the cliff a couple of months down the road.
After two years of arguing over taxes, the federal debt, government spending and how to fix the ticking fiscal time bombs of Social Security and Medicare, the professional politicians solved nothing.
They merely did the easy, politically painless stuff.
They raised tax rates from 35 percent to 39.6 on the so-called rich who make more than $400,000 individually or $450,000 as a couple. They extended unemployment benefits for a year.
They extended the Bush-era tax cuts and made them permanent, something even President Obama secretly favored because he knows that ending them would throw the economy into another recession.
But the Washington In-Crowd failed the American people yet again. They didn’t reduce the deficit by a single dollar. They didn’t create a single job. They didn’t cut or cap federal spending. They did nothing about Social Security or Medicare.
The revenues they’ll bring into federal coffers with their higher taxes on the rich will be spent by the end of the week. They were so busy doing the easy stuff they never even got around to passing a bill to help the victims of Hurricane Sandy.
Meanwhile, while everyone was watching the chessboard to see how high taxes were going to be jacked up on the rich and successful, Congress shafted the middle class and the working poor by voting to let President Obama’s two-year-old, 2 percent payroll-tax cut expire.
The Obamamedia won’t be making a big deal out of it, of course, but nearly everyone who earns a paycheck was given a tax hike. According to the Tax Policy Center, about 77 percent of households making between $50,000 and $200,000 will be paying higher FICA taxes in 2013.
On average, starting this week, about $1,600 of an individual’s income will again be taken from his or her paycheck annually and sent directly to the bankrupt coffers of Social Security.
President Obama and the advocates of Bigger Government were the winners in our latest fiscal melodrama. Obama set the agenda and he got what he wanted. Republicans who wanted real spending cuts or some semblance of fiscal responsibility got rolled.
In two months, it’ll be time for Congress to vote on raising the federal debt ceiling. We’ll hear the same arguments and scare stories from the White House and the media about what will happen if we don’t allow the Washington In-Crowd to borrow a few more trillion dollars to keep their borrowing-and-spending racket going.
America will find itself being forced to watch another Washington horror flick. And unless voters wake up and the GOP gets its act together, “Fiscal Cliff, Part 2″ is going to have the same unhappy ending for conservatives as the original.
- Fiscal cliff deal raises taxes on 77% of Americans (myfox8.com)
- Payroll tax cut ends Jan. 1: Get ready now for smaller paychecks in 2013 (dontmesswithtaxes.typepad.com)
- Five Post ‘Fiscal Cliff’ Facts to Consider (forbes.com)
- Fiscal cliff deal means paychecks will be smaller (mercurynews.com)
- Fiscal Cliff Deal Cuts Average Workers’ Paycheck By $1,000 (jobs.aol.com)
- Despite fiscal cliff deal, Americans facing tax increase (charlotte.news14.com)
- Ron Paul Statement on Fiscal Cliff (economicpolicyjournal.com)
- Fiscal Cliff Deal – Winners and Losers (wallstreetpit.com)
- Taxes to go up in 2013 regardless of ‘fiscal cliff’ deal (rt.com)
- How the fiscal cliff deal will hit your taxes (nbcnews.com)
Don’t Cut Social Security — Double It
Fiscal cliff chatter about slashing the venerable program ignores its fundamental potential and underlying strength.
December 27, 2012
As the nation tiptoes closer to the fiscal cliff, a frightening number of leaders on both sides of the political aisle seem ready to push poor, beleaguered Social Security over the edge. Not only would that be a huge mistake for the nation’s future, but these leaders show a dreadful misunderstanding of the new challenges faced by the U.S. retirement system. Particularly in the aftermath of the largest economic collapse since the Great Depression, none of the proposals on the table are grappling with some stark economic realities. How we settle this New Deal legacy will decide fundamental questions about what kind of society America will be for generations to come.
Here’s the dilemma that the United States faces. Since World War II, individual retirement has been based on a “three-legged stool,” with the three legs being Social Security, pensions, and personal savings (the latter primarily centered around home ownership). But two out of three of these legs have been chopped back to blunted pegs, leaving the retirement stool as an unstable, one-legged oddity.
Pensions have always been the least broadly distributed asset, with only a third of elderly Americans (those 65 and over) earning pension income, a percentage which has been declining dramatically in recent years. A bit over a majority of these older Americans have income from personal savings, most of that residing in the value of their homes. But 86 percent receive Social Security payments (see Figure 1).
Even before the Great Recession, 40 percent of middle-income and 53 percent of lower-income Americans already were at risk of having insufficient retirement funds. But the economic collapse has taken its toll on two out of three of Americans’ primary retirement resources: pensions and savings/investment in a home.
Already Off the Cliff: Pensions, Private and Public
American pensions were some of the hardest hit in the world by the Great Recession, falling in value by over a quarter in 2008, with only modest recovery since then. But private pensions already had become a less steady leg of retirement security prior to the recent recession. Since the early 1980s, businesses have gradually shifted responsibility for pensions onto workers, with predictable results. In 1981, approximately 60 percent of private sector workers were covered by a pension with a guaranteed payout. Today only about 10 percent of private sector workers have guaranteed payout pensions. Meanwhile, 401(k)-type retirement contribution plans have gone from covering only about 17 percent of the private workforce to about 65 percent today (see Figure 3).
401(k)s and other defined-contribution plans have turned out to be an unreliable pillar of retirement security, not only because they don’t provide as secure a net but because many Americans are pretty lousy at managing their investments. A study by the National Bureau of Economic Research found that more than one-quarter of baby boomer households thought “hardly at all” about retirement and that financial literacy among boomers was “alarmingly low.” Half could not do a simple math calculation (divide $2 million by five) and fewer than 20 percent could calculate compound interest.
In the public sector, most workers still are covered by guaranteed payout pensions, but the number of public sector workers has declined dramatically in recent years, accelerating as a result of the Great Recession. There are now a million fewer federal employees than when Ronald Reagan left office, and public sector employment is at a 30-year low.
In addition, states have funded only about 80 percent of their pension liability, leaving a $3.32 trillion funding gap. Ohio and Rhode Island are in the worst shape, having underfunded their pensions by almost 50 percent of their gross state product. Other liabilities, such as retiree health and dental insurance, also are underfunded. City governments similarly are plagued by underfunded pensions, with Los Angeles underfunding its public pension liabilities by $3.53 billion, with an additional $2.43 billion owed for other employment benefits such as healthcare. As of June 2009, New York City public pension programs had liabilities that exceeded their assets by $39.9 billion with an additional $65.5 billion owed for other benefits.
So both the private and public components of the U.S. pension system are under severe strain, as the Great Recession combined with pre-recession patterns of rising inequality and a diminishing social contract have taken their toll. With fewer workers covered by pensions, this leg of the three-legged stool of retirement security is too short — and growing shorter.
Already Off the Cliff II: Home Ownership and Personal Savings
Now let’s examine the second leg of retirement well-being, personal savings centered around homeownership. For tens of millions of Americans, security in their elderly years has been directly linked to the value of their homes. Yet the rupture of the housing bubble illustrated in dramatic fashion the danger of over-reliance upon ever-rising home values for retirement security.
The Federal Reserve has estimated that homeowners lost approximately $8 trillion in home equity during the Great Recession, a 53 percent drop in the overall value of the national homeownership stock. About 14 million Americans — about 28 percent of all homeowners — are still underwater today, owing more on their mortgage than their home is worth. These homeowners are, in effect, flat broke if they have no other accumulated savings or retirement vehicle (see Figure 6, which shows the percentage of mortgages that are underwater).
This has been devastating for Americans’ retirement well-being because home ownership accounts for a large proportion of assets for so much of the population. As of 2008, only the top two income quartiles had accumulated enough equity from financial assets and pensions to weather the bursting housing bubble. The bottom 50 percent had not saved enough outside their homeownership to avoid severe wreckage to their retirement plans.
Thus, the second leg of the three-legged retirement stool has been broken down to a nub. And with home prices unlikely to recover soon, this loss in equity has significantly reduced the economic security of the lower and middle classes, which are less likely to have pensions and other assets such as private savings (beyond homeownership) to sustain them. Indeed, the bottom two income quartiles for those aged 65 and over depend on Social Security for at least 80 percent of their income, but even the second richest quartile still depends on Social Security for over 50 percent of its retirement income (see Figure 7).
In short, the collapse of the housing bubble when combined with the slow erosion of America’s pension system has hacked away two of the three legs of the retirement stool. In the future, the vast majority of baby boomers and other retirees will be almost completely dependent on the single leg of Social Security for their retirement. The retirement stool no longer is stable and secure, and suddenly Social Security, which always has been viewed as a supplement to private savings, is the only leg left for hundreds of millions of Americans.
Financial experts say it will take a monthly retirement income of about 70 to 80 percent of pre-retirement income levels — as well as $200,000 to $300,000 in personal savings — for the average American to have a secure retirement. Yet most older Americans have saved only a fraction of that. In 2010, 75 percent of Americans nearing retirement age had less than $30,000 in their retirement accounts. About half of all Americans are at risk of not having sufficient retirement income, and three-fifths of low-income households are at risk of not having sufficient income to maintain their pre-retirement standards of living at age 65 (see Figure 9).
A single legged stool might be sufficient if that single leg was robust enough to stand on its own. But Social Security currently provides much less than the 70 to 80 percent of pre-retirement income needed to maintain pre-retirement standards of living. It is estimated to replace only about 33 to 40 percent of pre-retirement income for the average wage earner, compared to other nations like Germany or France where it replaces 70 percent (see Figure 10).
So the one-legged stool of the U.S. retirement system is looking like a rather odd piece of furniture, one that is increasingly unstable. For more and more Americans, the dream of a secure retirement is threatened. New solutions are needed to provide security to retiring Americans, both now and in the future.
The Solution: “Social Security Plus”– Expanding Social Security
An expansion of the Social Security retirement system — one of the most successful and popular social programs in American history — that converts it into a more robust retirement system would build upon the most stable component of the current system. Social Security already provides the major means of support for two-thirds of America’s retirees. Since its New Deal inception in the 1930s, and gradual expansion in subsequent decades, Social Security has become a mainstay of retirement security, firmly rooted in America’s cultural and economic landscape (as leaders like President George W. Bush discovered when he tried to privatize it).
The real problem with Social Security is not, as its critics say, that it is underfunded. Contrary to gloomy predictions, the program is on solid financial footing, with the Congressional Budget Office projecting that Social Security can pay all scheduled benefits out of its own tax revenue stream through at least 2037. The bigger problem is that Social Security’s payouts are so meager — far too low for the program’s new role as America’s de facto national retirement system. It only replaces about 33 to 40 percent of a retiree’s average final wage, which is simply not enough money to live on when it is your primary — perhaps your only — source of retirement income.
The gritty reality that the Obama administration and House Republicans must face is that the vast majority of America’s retirees cannot afford to watch them hack off part of the only leg that remains of the three-legged stool. Quite the contrary, we should make that leg more robust by doubling the current Social Security payout, and turning it into a true national retirement system called “Social Security Plus.” Doing so not only would be good for American retirees, but also would be good for the greater macro economy.
Doubling Social Security’s individual payout would cost about $650 billion annually for the approximately 53 million Americans who receive benefits. Here’s how to pay for it.
Step 1. Lift Social Security’s payroll cap that favors the wealthy.
Currently Social Security only taxes wages up to $106,800 a year, and any income earned above that is not taxed. The net result is that poor, middle class, and even moderately upper middle class Americans are taxed 12.4 percent (split between employee and employer) on 100 percent of their income, but the wealthy pay a much lower percentage. Millionaire bankers effectively pay a paltry 1.2 percent.
Making all income levels pay the same percentage — which is how Medicare works — is popular with Americans according to opinion polls, and would raise about $377 billion toward the $650 billion needed to double the Social Security payout. As a candidate in 2008, Barack Obama stated that he supported raising the cap on the Social Security tax to help fund the program.
Step 2. Cut out the business deduction for employees’ retirement plans.
With all Americans receiving Social Security Plus, employer-based pensions would be redundant, so businesses no longer would need the substantial federal deductions they currently receive for providing employees’ retirement plans. These deductions total a substantial $126 billion annually.
These two steps alone would provide three-fourths of the revenue needed to double Social Security’s payout.
Step 3. Cut or reduce other deductions that disproportionately benefit top income earners.
Other possible revenue streams should include ones that would reduce or eliminate unfair deductions in the tax code which currently allow the top 20 percent of income earners to reap generous deductions that barely help most low and moderate income Americans. These include deductions for private retirement savings, health care, homeownership and education.
Only higher income individuals have enough earnings to divert for savings or investments that allow them the luxury of enjoying considerable tax deductions for their 401(k)s, IRAs and pensions. The poor and middle class rarely can take advantage of these sorts of deductions because they don’t make enough income to benefit from itemizing deductions on their tax returns. As Josh Freedman pointed out recently in The Atlantic, in 2011 less than 30 percent of all filers itemized their taxes, and more than 80 percent of the benefits from itemized deductions went to individuals in the highest income quintile.
The same goes for the much vaunted home mortgage interest deduction. Those with annual incomes over $100,000 dollars received nearly 75 percent of the benefit from the home mortgage interest deduction in total dollars. Most middle class individuals would not see any increase in their taxes if the mortgage interest deduction were eliminated. Instead of buying a home as part of their retirement plan — which we now realize can be a risky undertaking — more people could put their money into Social Security Plus. Eliminating the mortgage interest deduction would raise another $100 billion to pay for Social Security Plus, and eliminating the other deductions would bring us close to the $650 billion mark.
An expansion of Social Security not only would be good for America’s retirees, it also would be good for the broader macroeconomy. It would act as an “automatic stabilizer” during economic downturns, keeping money in retirees’ pockets and stimulating consumer demand, especially since low and middle income people are more likely to spend an extra dollar on goods and services than are affluent individuals. Social Security Plus also would help American businesses trying to compete with foreign companies that don’t have to provide pensions to their employees, since those countries already have national retirement plans.
Moreover, unlike private pensions, Social Security benefits are portable when changing from one job to another. Every worker could contribute to her or his own retirement pension no matter where she or he worked. Those savings could be directed into a Social Security Plus system with investments restricted to Treasuries, instead of handing it over to mutual or pension fund managers who gamble on the volatile stock market with future retirees’ money (there is no evidence that the typical investment fund manager consistently beats the average return on Treasuries). And this system would be broadly fair, since even those higher income Americans who are having some of their tax deductions reduced would see part of it returned to them in the form of a greater Social Security payout.
In short, Social Security Plus would provide a stable, secure retirement for every American and contribute greatly toward a solid foundation from which to build a strong and vibrant 21st century economy. All Americans should have retirement benefits they can count on, not the crumbling casino of retirement overseen by the same Wall Street bankers and financial managers who drove the U.S. economy off the cliff.
- Stories of the Elderly Remind Us of the Pain of Cutting Social Security Payments | Alternet (mbcalyn.com)
- 6 Reasons the Fiscal Cliff is a Scam | Alternet (mbcalyn.com)
- Don’t Cut Social Security — Double It (alternet.org)
- Orcs v. Goblins: Crazed Republicans Turn on Each Other in Ugly Fiscal Cliff Battle | Alternet (mbcalyn.com)
- 3 Things You Have to Know About the Bogus ‘Fiscal Cliff’ | Alternet (mbcalyn.com)
- Social security told not to suspend pension payments (antiguaobserver.com)
- Look who wants to curtail Social Security (prairieweather.typepad.com)
- A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts (ips-dc.org)
- The Giant Lie Trotted Out by Fiscal Conservatives Trying to Shred Social Security (nakedcapitalism.com)
- What You Should Know about the Campaign to Fix the Debt and the CEOs Involved in Deficit Talks (jonathanturley.org)
Orcs v. Goblins: Crazed Republicans Turn on Each Other in Ugly Fiscal Cliff Battle
The little people look on as evil threatens the land.
December 23, 2012
Fear gripped Middle Earth. The little people looked nervously toward the horizon, wondering if their few remaining possessions would be snatched away by marauding bands of goblins and orcs. For years the simple, honest folk had suffered as the twin forces of greed and hatred darkened the land. But this time, maybe there was hope; maybe the goblins and the orcs would turn their fury upon each other as they battled on the edge of a cliff over which both might fall….
And so things appear as Americans watch the fiscal cliff deadline draw near. There’s just a week to go for lawmakers to make a deal to avert automatic tax increases and spending cuts. Last week, negotiations broke down as Speaker Boehner failed to get enough votes to pass a bill that would have required the wealthy to pay a minuscule increase in taxes at a time when income inequality is crippling the nation’s future. With the House gridlocked, attention turns to the Senate, where some Republicans appear to be in favor of Obama’s call for a partial deal that insulates most Americans from the tax increases but defers a resolution on spending. A deal may yet pass, but it’s getting very ugly in the GOP.
Goblins v. Orcs
The Republican Party, particularly in the House of Representatives, is so blinded by greed and stupidity that factions are turning on each other.
One group, let’s call them the goblins, is just plain greedy, but not completely crazy. These are the folks who favored Mitt Romney for president and simply want to continue shovelling money toward the one percent as they have been doing very successfully for the past three decades. They are willing to make a deal because they know that any deal, particularly one that will shred the social safety net with cuts like those Obama has proposed to make to Social Security (the widely condemned chained CPI adjustment), will work out very nicely to their advantage. They are thrilled that instead of focusing on the jobs crisis, the country has been railroaded into premature deficit-reduction deals that serve as a cover for conservative wealth redistribution schemes. They also know that many Americans are catching on to their scam, and so they tend to rely on subterfuge and the appearance of moderation or “centrism” to get what they want, which is, in essence, more of your money.
President Obama is comfortable with goblins, and is often secretly thought to be one of them, as Bruce Barlett recently explained in the Fiscal Times. They like him okay, too.
Then there are the orcs. These are the lunatics who favored your Santorums, Gingrichs, Bachmanns, Herman Cains and so on — the assorted nuts in the GOP who are willing to fight ideological warfare with the battle cry “no taxes” and the battering rams of bad math and Ayn Rand-style social theory to send the land into total chaos. It’s not enough for them to cut Social Security at a time when the retirement of hard-working Americans has not been so vulnerable since before the Great Depression. These monstrous right-wingers would rather see every American’s taxes rise than increase taxes on a single millionaire by a nickel. The orcs have got the upper hand in the House and it is they who have blocked a deal on the fiscal cliff. They were last seen dancing around a bonfire made from Econ 101 textbooks and an effigy of John Boehner.
The Money Wizards
Part of the problem is that the goblins and the orcs are acting on behalf of different money wizards.
The orcs are associated with the Club for Growth, which has a large PAC; Americans for Prosperity and FreedomWorks; Heritage Action for America; and contributors to ex-Senator DeMint’s PAC. These orc-friendly elements want no deal, and their battle philosophy is summed up in Club for Growth spokesman Barney Keller’s recent comments: “We are pleased that the Republicans did not vote to raise taxes. We need to get real about our problems and stop playing political games.”
The orcs are for all-out war.
The goblins, on the other hand, dance to the tune of different money wizards. They are painfully aware, as Rep. Steve LaTourette (R., Ohio) explained, that failure to make a deal “weakens the entire Republican Party” and makes it appear to be a “bunch of extremists that can’t even get a majority of our own party to support policies we’re putting forward.” The goblins are close to the Business Roundtable, many of America’s largest corporations, and a fair number of Wall Streeters. Haley Barbour and Karl Rove are on the goblins’ side. Even Grover Norquist, the anti-tax man himself, seems to fear the price of a take-no-prisoners goblin/orc war; he recently signaled peace with the goblin faction in hisendorsement of Boehner’s “Plan B.” It was all to no avail. The orcs are battle-crazed and eager to attack the goblins again.
As political scientist Thomas Ferguson succinctly put it: “Inside the GOP, all the little piggies go to market. Just not the same market. That’s the party’s problem.”
The spectacle of the Republican Party diminishing itself with nasty internal battles is certainly a welcome sight for the little people. But there are still plenty of ways they can get squashed. The goblin-backed theft of their retirement money appears to have the president’s support, a great victory for the Dark Side. Coming debt ceiling negotiations will offer goblins and orcs another chance to rob the honest folk and enrich themselves. But maybe, just maybe, the goblins and the orcs will exhaust themselves enough fighting each other that the little people can mount a counter-offensive. Hope springs eternal. At least in the movies.
- Orcs v. Goblins: Crazed Republicans Turn on Each Other in Ugly Fiscal Cliff Battle (alternet.org)
- As Plan B Fails, GOP Imperils Fiscal Cliff Deal, Boehner’s Speakership – The Daily Beast (mbcalyn.com)
- Stories of the Elderly Remind Us of the Pain of Cutting Social Security Payments | Alternet (mbcalyn.com)
- In ‘fiscal cliff’ fight, Obama gets better marks than Boehner – Christian Science Monitor (csmonitor.com)
- Poll: 53% say Republican policies are too extreme (dailykos.com)
- In ‘fiscal cliff’ fight, Obama gets better marks than Boehner (democraticunderground.com)
- Obama’s Last Stand and the Republican Strategy of Fanaticism (proglib.newsvine.com)
- GOP Not in Position of Strength on Fiscal Cliff (politicalwire.com)
- Obama, Congress set for one last effort on “fiscal cliff” (news.yahoo.com)
- Fiscal Cliff: Obama Will Return To Washington From Hawaii To Work On Deal (huffingtonpost.com)
Stories of the Elderly Remind Us of the Pain of Cutting Social Security Payments
Altering the formula for Social Security payouts is not innocuous, it will have grave human costs.
December 19, 2012
When I was a young organizer for Iowa Citizen Action Network, we were doing a lot of work on utility rate hikes. I met an elderly woman, maybe late 70s, who was living on her Social Security check. As utility prices went through the roof, her cost of living increase in that check wasn’t coming anywhere close to covering the costs she had. She was extremely worried, because as frugal as she was she couldn’t figure out how to keep her heat on, pay her rent, and buy a few meager groceries. She thought the utilities might end up shutting her heat off. I suggested a social services agency she could go to, and that she might check with neighborhood churches to see if they had funds that could help. And I promised that I would do everything I could to fight for her. I pushed hard on the local utility companies to try and shame them away from turning the heat off the dead of an Iowa winter, which didn’t work very well because the utility companies had no shame. And my organization pushed in the legislature to get a bill passed that would prohibit utility shutoffs in the wintertime, which didn’t pass the first year but did the second year we worked on it. But it didn’t pass in time to save the woman I met. Reading the Cedar Rapids Gazette one day that winter, I saw that the woman I met had been found dead in her apartment of hypothermia after the utility company had turned off her heat.
When we got the bill passed in the next session, I thought of her. I was proud that no one would die in the coming years in Iowa because of having their heat turned off, but I was also mourning that we were too late to save her. And I vowed to keep my promise to her as long as I lived, that I would keep fighting for her and people like her.
It’s 30 years later, but I still have promises to keep, as do all Democrats who claim to be on the side of the middle class and poor. As Dean Baker makes clear, if the President’s apparent offer of changing the CPI formula is part of the budget deal, it will be a very hard blow for generations to come for seniors who will be unlikely to have decent pensions or much in the way of savings to cushion the blow of these cuts. And with prices for necessities (utility prices, gas, groceries, health care) tending to go up more than the inflation rate in general, this is the absolute worst kind of cut to be making.
I have been having some interesting conversations with Democrats over the last 24 hours about what being a loyal Democrat means with the President seeming likely to go forward with this deal. The point has been made that the Republicans are far worse than Obama on these issues, as all they want to do is to gut Social Security, Medicare, Medicaid, and other programs for the poor, and that is definitely true. The fact that the President is, according to the Washington Post, proposing to exclude SSI disability payments and provide a bump-up in benefits for those 85 and older is a good thing and much appreciated. People have said to me that the President’s heart is in the right place, and that he is working hard to get the best deal he thinks he can get, which may well be true- I gave up judging politicians’ motives long ago. And I have been told I should be a loyal Democrat, that the President is our party’s leader, and we should be unified in supporting him.
But here’s the deal: I didn’t get into politics to help the Democratic party. I came to the Democratic party because they more often wanted to help the people I cared about helping- the poor, the disabled, the middle class folks fighting for a decent life for them and their families. When forced to choose, as it looks like I will in this case, I will choose the people I got into this work to fight for.
My first loyalties are to my middle class family, who will depend heavily on Social Security because they mostly won’t have lots of savings or generous pensions; to the kids I grew up with in a working class part of Lincoln, NE, who are getting ready to retire and mostly don’t have those savings or pensions either; to the people like my late brother Kevin who have lived with serious disabilities, who may or may not be taken care of depending on what is negotiated away next; and to the poor people and seniors who I got to know as a young organizer, like the elderly woman I made a promise to that I would keep fighting for her.
If the President decides to give into Republican demands to cut this kind of deal, thinking that launching a civil war with people like me who were part of his winning coalition in the election is better for the country and worth the trade-off, he will do what feels like he should. The DC pundits will be ecstatic (“the President is so brave to take on those seniors and cut Social Security”). Wall Street will be thrilled, they have been wanting to cut middle class benefits and the Social Security system for years. But on behalf of those people to whom I owe my first loyalties, I will do whatever I can to fight the kind of plan being described in news accounts today. I hope the rest of the progressive movement that has pledged to fight this kind of deal will fight the good fight along with me. The President will do what he thinks is best. The rest of us need to as well. If the deal goes down, it will be quite a way to start the President’s second term, an ugly fight with the people who fought by his side to elect him. We’ll see what’s ahead.
- 6 Reasons the Fiscal Cliff is a Scam | Alternet (mbcalyn.com)
- 6 Reasons the Fiscal Cliff is a Scam | Alternet (johnny99america.wordpress.com)
- 3 Things You Have to Know About the Bogus ‘Fiscal Cliff’ | Alternet (mbcalyn.com)
- Many older Californians rely on Social Security (sacbee.com)
- New Poverty Statistics Show Need for Bigger, Not Smaller, Social Security Benefits (news.firedoglake.com)
- Who’s Not Bargaining in Good Faith? (realclearpolitics.com)
- Don’t let Republicans Cut Your Social Security! (point4counterpoint.wordpress.com)
- Did you hear … that some memebers of Congress plan to cut Social Security? (point4counterpoint.wordpress.com)
- Senators Caucus Vows To Protect Social Security, Medicare (crooksandliars.com)
- Don’t Eliminate the Link between Social Security Contributions and Benefits (economistsview.typepad.com)
When it comes to marriage, I’m no romantic. (Just ask my husband.)
My generation of women doesn’t have to be married. Our mothers fought for this choice. In the 19th century doctors would prescribe different (think more painful and degrading) treatment for unmarried women with the same illnesses as their married counterparts. The laws were different for single women; their standing in the community was lower, their prospects fewer. Basically, you were either married, living with your parents or considered a prostitute.
David Fitzsimmons / Arizona Daily Star
The fight for gender equality now means daughters of the Baby Boomers have the option of being single (if they want) and having the same social/legal/moral standing as one who marries.
Any plea for “traditional marriage” glazes over the plural marriages in the Bible and idealizes the McCall’s magazine advertisements of the 1950s. In the real 1950s you could not, in the eyes of the law, rape your wife. Women were akin to children, only there were laws protecting children from abuse by the man of the house.
Yes, feminism and women’s liberation, as promised, allowed women to forgo marriage (or not). It’s feminism and women’s liberation that should get all the credit for destroying traditional marriage.
Traditional marriage was limping along way before anyone thought of mass-producing cake toppers with two grooms.
The first cut was women’s suffrage. The near thousandth was the Lilly Ledbetter Fair Pay Act.
Yes, traditional marriage is dead.
So naturally, marriage numbers are down for my generation. Wives used to be considered property. Who would want to enter a union with slavery undertones? Only 51 percent of American adults as of 2011 (down 5 percent), according to the Pew Research Center are married.
How is it even that high? Who brought marriage back into the national dialog as something Americans should want to do? Who made something old, ugly and weird suddenly desirable? In one word: Gays. An entire swath of Americans who would have otherwise not cared whatsoever about marriage were unexpectedly forced to examine the idea of matrimony.
I include myself in this category.
As women were asking why they would want to be married since they no longer had to be, same-sex couples began wanting to be married even though they couldn’t.
Marriage, all of a sudden, was worth fighting for. Homosexuals made the case for why they wanted/deserved to be married. It was about rights: next of kin, Social Security, power of attorney, taxes, insurance.
The institution of marriage, as told to us by same-sex couples who still can’t get married in most places, is a partnership. A contract between two people recognized by the state. This is not the marriage of the Bible. As long as women are considered equal under the law, marriage as we knew it a century ago, or 1,700 years ago, is gone. Their movement, after all, is called Marriage Equality.
Gays saved marriage. They put a new spin on what for women of my age was an antiquated notion. They made Americans think about marriage. We discussed spousal privilege and what it means to be a husband/wife. They made marriage less of a wedding dress fantasy and more of a pragmatic way to build a life with someone you love.
The Supreme Court has agreed to hear two cases about same-sex marriage. One is a challenge to Prop. 8 in California, the other hinges on the federal Defense of Marriage Act signed by President Clinton. It means homosexual couples could have the federal government recognize their unions by June.
- Gays, In Fact, Saved Marriage (ukprogressive.co.uk)
- Marriage Tip: You are Married So Act like It (christinehammondcounseling.wordpress.com)
- ‘The View’ schooled on traditional marriage (wnd.com)
- Is Marriage for White People? How the African American Marriage Decline Affects Everyone (Book Review) (mixedamericanlife.wordpress.com)
- Ipsos: Kenyans want come-we-stay legalised (capitalfm.co.ke)
- Poll: Marriage Equality Support Improved 21 Points Over 8 Years (thinkprogress.org)
- An historic five days for same-sex marriage (thetimes.co.uk)
- Gay marriage & the court: Right to be let alone (triblive.com)
- Marriage, children, and tradition (scienceblogs.com)
- Letters: gay marriage (utsandiego.com)
On December 3rd, the editors of the Washington Times got all baked on kine bud and allowed Ted Nugent to write an article for their right-wing propaganda rag which pretends to be a newspaper.
It was beyond hilarious.
Monte Wolverton / PoliticalCartoons.com
In it, the Nuge blasted welfare recipients (the poor ones) and called for their right to vote to be taken away. “Let’s … stop the insanity by suspending the right to vote of any American who is on welfare,” he said.
I previously wrote about the Nuge in this column when he won the coveted Dork of the Month Award in April 2012, which was a long time ago. Every month, though, the Nuge says or does something stupid. He’s even better than Palin or The Donald. I could have been writing about him this whole time. The guy really is playing footsie in another dimension, to put it lightly.
I have a few questions for the Nuge and his call to disenfranchise so many people who live in red states:
What about your Party’s future? Don’t you realize, Nuge, that the Republican Party is a delicate balancing act between three groups? It’s a tripod, basically, of Pharisaical Fundie Christians, the super rich, and poor white people. What happens when you kick out one of the legs of a tripod? That’s right: CRASH! Admittedly, these three groups combined no longer contain enough people to win national elections, but by eliminating the poor white people pod, it will contain even less people. Of the top ten states which receive the most welfare, eight of them are red. Imagine if Mississippi, Louisiana, Alabama, and Kentucky suddenly became swing states, Nuge. Just imagine it.
And which welfare recipients are you talking about, Nuge? In your article, you said “any American who is on welfare”. Obviously, as a Republican, you are talking about poor welfare recipients who are all lazy, scum-sucking peasants, especially if they’re black, but what about rich welfare recipients? Logically, wouldn’t we have to get rid of their right to vote also? What about all the free stuff and handouts they get? What about all the corporate welfare, the farm subsidies, the oil subsidies, the comically low taxes which are really just a form of welfare, too? What about all the tax breaks we give companies so they will build their big box stores in our towns, destroying all the mom-and-pops? Logically, Nuge, you would have to disenfranchise the super rich, whose status is maintained and whose pockets are lined by welfare and entitlements. I am rich, therefore I am ENTITLED to not pay a tax rate as high as a school teacher.
There goes another pod of the tri, Nuge.
That leaves us with the Pharisaical Fundie Christians. Their snake oil hallucination of Christianity isn’t bought by the vast majority of Americans anymore, but they are still your best recruiting wing, Nuge. They make Fox News, Rush Limbaugh, and that propaganda rag you’re writing for look like dog-and-pony shows. These churches are like Republican factories. Millions are indoctrinated from birth. And they are tax-exempt! Talk about a free ride from the government. Wow.
So what do you call a tripod without any pods, Nuge? I call it gone, nonexistent, the sound of one hand clapping.
Of course, we all know you’re a joke and no one takes you seriously. I mean here you are, a man who pooped his pants to avoid the draft, lecturing us on what this country needs. Damn, though, are you fun to write about!
See you soon, sweetie.
- Ted Nugent: Welfare recipients shouldn’t vote (politico.com)
- Ted Nugent: Let’s Take Voting Rights Away From Welfare Recipients (alan.com)
- Wingnut Hero Ted Nugent: People On Welfare Shouldn’t Be Allowed To Vote (joemygod.blogspot.com)
- Ted Nugent Wants to Take Away the Vote (politicalwire.com)
- Ted Nugent: People On Welfare Shouldn’t Be Allowed To Vote (mediaite.com)
- Ted Nugent: If You’re on Welfare You Shouldn’t Be Allowed to Vote (littlegreenfootballs.com)
- Nugent: Budget deal should suspend welfare recipients’ voting rights (kaystreet.wordpress.com)
- Ted Nugent’s Budget Deal: Suspend Vote For Welfare Recipients (mediamatters.org)
- 5 groups who shouldn’t be able to vote, according to Ted Nugent (salon.com)
- “Poor” Households Getting $168 in Welfare Per Day from Taxpayers (conservativeread.com)
We’ve all become cliff dwellers, clinging to the rocky face while, above us, President Obama and Congressional Republicans are locked in an embrace heading toward the precipice which will plunge them – and us — into… just what exactly?
Well, depends whose prediction you’re willing to accept.
There are those who are convinced the fiscal cliff issue is a manufactured crisis, constructed by liberals and aided by a compliant media to scare the bejesus out of Americans and convince them that their only salvation lies in increasing taxes on the most wealthy among us. It’s at most a fiscal speed bump, not a cliff, they say.
On the other side is the body of opinion which holds that, unless a deal is struck, taxes will go up automatically on Jan. 1, taking more money out of the pockets of all Americans — money which consumers would normally spend on goods and services and continue to help the nation’s economic recovery.
The higher taxes, combined with some $500 billion in automatic across the board cuts in government spending will produce a severe recession from which it could years to recover, they say.
President Obama doesn’t want what Congressional Republicans want and they don’t want what he wants, turning the entire situation into a public relations war rather than a sober, good faith effort to negotiate a settlement.
Both sides have decided that the struggle for hearts and minds can best be carried out on Sunday morning television talk shows, repeating the same stale, hackneyed talking points which, in truth, only reinforce the public perception of governmental insincerity and ineptitude, a theater of the absurd acted out by individuals who don’t give a damn about the effect on the audience.
The President has succeeded in framing the debate around his belief that wealthy Americans — the top two per cent of wage earners — should pay more in income taxes while characterizing Republican opponents as fighting to the death to protect the rich and curb spending by chipping away at Social Security, Medicare and Medicaid — programs which disproportionately benefit low and middle income individuals.
For Republicans, it’s been a losing hand so far. Even conservative leader Bill Kristol, giving vent to his frustration, said raising taxes on multi-millionaires — most of whom were Obama donors and supporters in any event — wasn’t such a bad idea and Republicans wouldn’t be punished for agreeing to it.
While there is an anti-tax strand in the DNA of many Republicans in Congress, there is an equally powerful political survival strand as well, one which signals that refusing to act and allowing taxes to increase on all Americans threatens that survival.
It is on this easily understood point that the President’s argument hinges. The decision is in Republican hands whether to extend tax cuts for 98 per cent of Americans or allow them to rise while safeguarding the personal wealth of the remaining two per cent.
Republicans are certainly correct in criticizing the President for his refusal to come to grips in any significant way with the need to cut spending as well as implement critically needed changes in the so-called entitlement programs to assure their long term survival.
They deserve credit as well for their openness to increasing revenues largely through revisions in the tax code to limit or eliminate deductions, rather than through a rate increase.
But, by continuing to include as a significant part of their proposal some $600 billion in reductions in entitlement programs, Republicans are playing into Obama’s hands and giving him repeated opportunities to relentlessly drive his wealthy-versus- the-rest-of-us argument.
National polls have been unanimous in popular support for requiring the wealthy to pay more and the President and his surrogates in the Congress have made the point repeatedly that the presidential campaign was fought in large measure on that premise and that Obama won both the election and the argument.
Republican reaction to the President’s initial proposal to raise taxes, spend billions on a stimulus package, give him the authority to raise the national debt ceiling without Congressional approval and promise to consider spending cuts at some vague, undefined point in the future was understandable outrage.
A more appropriate and politically wise response would have been to say, okay, keep the tax cuts for 98 per cent of Americans, raise the rates on the wealthy to pre-George Bush levels, no stimulus, no debt ceiling giveaway, and declare victory by pledging to take up spending cuts and entitlement reform after returning from enjoying the holidays.
As the year draws to a close the eventual outcome may, indeed, come down to something similar.
In the meantime, all us cliff dwellers will dig our fingernails in a little deeper in the crevices of the rock face and keep our eyes turned upward at the dance taking place at the cliff’s edge.
- Analysis: Obama could risk going over ‘cliff’ (sfgate.com)
- Bill Kristol: Republicans look like they ‘don’t care about the middle class’ (rawstory.com)
- Bill Kristol: GOP Runs ‘Real Risk’ Of ‘Looking As If They Don’t Care About The Middle Class’ (mediaite.com)
- The rich will pay more taxes, Boehner says (cnn.com)
- Ohio Advocates Worry About Medicaid: Fiscal Cliff Discussion… (justspititoutalreadyenterinform.com)
- Barack Obama warns against another debt ceiling fight (newsday.com)
- The White House’s Fiscal Cliff Irresponsibility – Bloomberg (bloomberg.com)
- Obama: No deal on ‘fiscal cliff’ without higher tax rates for the wealthy (newsday.com)
- Analysis: Obama could risk going over ‘cliff’ (newsvine.com)
- Poll: Nearly Half of Americans Think U.S. Will Go Over the ‘Fiscal Cliff’ (blogs.wsj.com)
- Teen's invention could charge your phone in 20 seconds - NBC News.com
- Layer 8: Hypersonic test aircraft pealed apart after 3 minutes of sustained Mach 20 speed
- Gasoline prices
- Obama Scandals
- How Lotteries Are Bad For Players, Winners, And States
- IRS Targets The Right
- Beating a dead horse
- Anti-Tax Tea Party
- Hero Woman Changes In Front Of Open Window | The Onion - America's Finest News Source
- A Comparison of The Great Depression and The Great Recession | Scoop News