Wednesday, June 29, 2005

National Restaurant Association comes out for Social Security Phase Out

Dave Johnson Seeing the Forest reports on the lobbying groups coming out for
" payroll tax increases; solvency for the program to provide a government safety net for all retirees; and, an opportunity for workers to invest a portion of their payroll taxes in voluntary individually-owned and directed personal retirement accounts that can be used to enhance benefits."
This action is supported by other lobbyists:
"Miller was joined by 16 other chairmen or high-ranking members of boards of directors representing some of the largest and most influential trade groups in Washington, including: National Mining Association; American Chemistry Council; Society of the Plastics Industry, Inc.; American Bankers Association; Aluminum Association Board; Financial Services Forum; Securities Industry Association; Grocery Manufacturers of America; Business Roundtable; Bond Market Association; American Forest and Paper Association; Alliance of Automobile Manufacturers, Inc.; American Insurance Association; Edison Electric Institute; and National Retail Federation. For more information about the Association's position on Social Security reform or its other pro-employee/pro-employer public policy issues, visit
Dave points out that this is a result of the Republican's K-Street Project, in which Republican political leaders (especially Tom DeLay) have moved Republican activists from their staffs into lucrative lobbying jobs.

Once there, the activists who owe their jobs and paychecks to the Republican politicians have become an activist arm of the Republican Party rather than representatives of the business organizations that pay their bills. When the Republican Party leaders need an organization or activity funded they call the lobbyists.The lobbyists then call the companies they lobby for and tell them where to send donations. This is called "buying access." When a company wants some legislation passed, killed or modified, they call the lobbyist. The lobbyist then gets them an appointment with the appropriate Congressional leader. The leader knows who arranged the appointment, so he knows this is one of his supporters.

While there is no formal quid pro quo normally (what was Randy "Duke" Cunningham Thinking?) the money has bought a rewrite of the legislation. Unless, of course, you are an Alabama Coushatta Indian and the lobbyist was Jack Abramoff. Since the system works on trust instead of careful quid pro quo, that trust is easy to abuse. [Apparently Abramoff had financial difficulties funding his many charities and abused the trust he had built up.]

People and groups who defend Social Security are up against this well-funded tightly-controlled and highly ideological machine. While you are here, click through to Americans United to Protect Social Security, the umbrella group defending Social Security, and kick in a few dollars.

Tuesday, June 28, 2005

Why Social Security will soon be destroyed!

Josh Marshall has a compelling story posted on TPM Cafe.

Read it. Then go over to the right side fo this blog and click through to Americans United to Protect Social Security and send them some money.

Then go back and read the comments to Josh's story. Those comments provide a revealing look at how weak the organization of progressive and Democratic causes is. With all the emotion and excitement of and the Deaniacs prior to the 2004 election, there is No Staying Power!

People who are throwing all their energy on their pet project simply have no time to work for the overall Democratic Party organization, but that particularism kills the Democrats at the polls. No matter how important any particular issue is, if it doesn't make a lot of money so that the proponents can fund lobbyists then the Republicans will not buy in. If Democrats don't win elections then progressives will be on the outside looking in and America will continue down the tubes the way the Republicans are taking us.

Tuesday, June 21, 2005

AP gets it wrong. Dumb or bought?

Josh Marshall surfaces an AP article that is pure Republican propaganda. He provides an interesting deconstruction of the lede.

The news tonight on CBS TV was that Bush was dropping his requirement of "private accounts." Think Progress tracked that down and shows it is not true. Rather sad that CBS didn't do decent journalism.

The most important thing about this AP Story is to understand how very misleading the verbiage from Bush's White House really is.

Joseph Goebbels would be proud of these Republicans.

Thursday, June 16, 2005

NY Times provides honest report on future of Social Security

I missed this from Josh Marshall earlier. He caught the New York Times committing an act of truth-telling.

It makes you wonder if the Grey Lady will be firing some reporters because they have learned too much and actually reported it honestly.

Social Security reform - stalled but not dead. A Republican dilemma.

The Presidents' Social Security phase out campaign has gone aground in rough waters, and the Republican congressional leadership is looking for a way out of the whole thing.

This from today's Washington Post.

"Democrats are united in their opposition, and the Finance Committee does not have the Republican votes to approve a Social Security plan that would divert some payroll taxes to private investment accounts. But the committee, which has jurisdiction over the issue, also does not have the votes to pass a plan that would preserve Social Security's solvency without the personal accounts because too many GOP conservatives want them.

"President Bush has responded by dispensing his cautious calls for bipartisanship in favor of far tougher rhetoric that blames the Democrats for the stalemate. "On issue after issue, they stand for nothing except obstruction," Bush said at a GOP fundraiser Tuesday night. "And this is not leadership. It is the philosophy of the stop sign, the agenda of the roadblock."

But the united opposition of the Democrats is only the beginning of Bush's problems. The Republicans in the House and Senate cannot come to a unified position, either.

"Finance Committee Chairman Charles E. Grassley (R-Iowa) has held 14 meetings with the panel's 11 Republicans to reach a consensus just on achieving solvency, he said, but they have yet to produce a deal. He has not even broached the idea of personal accounts, which he acknowledged to be the harder piece of the puzzle.

Sen. Olympia J. Snowe (R-Maine) has been unwavering in her opposition, and at least three other Republicans have questioned the wisdom of moving forward. "We are stuck," Sen. Lindsey O. Graham (R-S.C.) said.

House Republican leaders believe House Ways and Means Committee Chairman Bill Thomas (R-Calif.) could put together broad retirement legislation that could clear his committee with private accounts. But aides and GOP lawmakers say House Speaker J. Dennis Hastert (R-Ill.) has told his members he remains averse to a floor vote on such a plan if the Senate cannot act.

"There is absolutely no way is he is going to put his members on a roll call where they fall on their sword on a bill with no chance of going anywhere," said one Republican House member, who spoke on the condition of anonymity for fear of crossing White House political officials."

"They're frustrated, they're disappointed, and they're getting the feedback from up here that, on the one hand, we can't get Democrats' support unless we exclude personal accounts, but on the other hand, if we exclude personal accounts, we can't get Republican support," said the senior GOP aide in the Senate."

So as of right now, Bush's Social Security initiative is stalled. Stalled, but not dead. Any opportunity, any Democratic weakness, and the Republicans are poised to jump and take advantage, but unless something changes, this is where it will remain until next years' elections. The controversial Social Security Reform initiative is another problem they will have to deal with along with the unresolved war in Iraq and the ethical problems of Tom DeLay and other members of Congress as they go into the 2006 elections. A lot of Republicans in Congress don't want the Social Security reform package unresolved that long.

The source of their dilemma lies in the ideological and political roots of the Social Security reform initiative. The fiscal conservative Republicans have wanted to kill Social Security since it was first initiated. They have never accepted that providing economic security for retirees is a legitimate function of government. With control of both houses of Congress and Bush's reelection as President they felt that for the first time in six decades they were in a position to kill the program. This is an ideological effort first and foremost, brought to the front of the agenda because of an unusual opportunity to wield power.

It was Bush's reelection as President and the Republican control of the Congress that caused Bush to announce his plan to reform Social Security immediately after he was reelected. Any projected problems in the system are fodder for the political effort already decided on to phase out Social Security. They are to be used as political tools to stampede the Congress into inacting his proposed privatization plan.

Data suggesting problems in Social Security is no more Bush's motivating force than was weapons of mass destruction the reason Bush invaded Iraq. Bush wanted to get rid of Saddam before he became President in 2000. The as the Downing Street Memos have shown, the sketchy evidence that Iraq might possess WMDs was merely a pretext for Bush to push his desired invasion through Congress. The projections of problems with the Social Security System are similar political tools for him to take actions based entirely on conservative ideology.

The Bush administration has cherry-picked through the projections for the future of Social Security and pulled out all the uncertainties and possible failures they can find. They have then woven those tentative uncertainties into a public relations campaign consisting of predictions of doom and bankruptcy for Social Security unless Congress and America buy into his privatization scheme. Used car and door-to-door salesmen across the nation will be proud of the masterful use of underhanded and dishonest sales tricks, and political wonks will discuss his methods for years to come with a mixture of disgust and admiration.

The privatization plan to replace the currently well run and highly efficient program will cost trillions of dollars up front - money which will have to be borrowed up-front, in addition to the already massive increases in federal debt Bush is presiding over. Then, as even Bush himself has acknowledged, privatization does not address the various problems that he (falsely) claims are going to "bankrupt" the current Social Security System.

The real "solution" Bush has offered to the various possible problems in the distant future is to cut benefits and turn Social Security into a welfare system for the poorest workers, while removing the elements of security that middle and upper income workers currently get from the system. As FDR recognized in the beginning, such a welfare system is not politically sustainable over the long term. Bush and the rest of the conservative Republican ideologues know this. So their proposed "solution" to the vague distant problems in Social Security is to set it up for easier political elimination in the future.

But there has to be some solution to the twin problems facing Social Security. It is clear that the best projections show that within two decades Social Security will have to start drawing back the money the trust fund has loaned the federal government and in four decades, even the trust fund may run out. Right?

The Social Security actuaries and trustees will always point out that what is being presented is "projections", not "predictions". A projection is a model of the possible future based on a set of assumptions of things like inflation, productivity, birth rates, immigration, and a number of other things. Conservative estimates for the assumptions are the safest, as they provide the earliest warning of possible problems in the future.

The projections then are presented as most pessimistic, most likely, and most optimistic based on those conservative assumptions. Remember that all of those projections are based on conservative projections of the assumptions. If the estimates for the improvement in American economic productivity and immigration were increased to numbers that have been normal over the last fifty years, the projections of a shortfall of revenue with which to pay benefits in four decades completely disappear.

The problem of the revenue dropping below that required to pay benefits, forcing Social Security to start cashing in the bonds in the trust fund is a little different. That is not a problem with Social Security! That is a problem of a financially mismanaged federal government. In essence the federal government under the Republicans has gone on a massive credit card financed spending spree. They are borrowing money from China, Japan, South Korea and the Social Security system while spending money as fast as they can and still cutting taxes for the most wealthy. But if they can "reform" social security, maybe they can push back the date that the credit card bills have to be repaid by cutting benefits on retirees.

The Republicans running the federal government are abusing their credit privileges and want the the lenders to just give them to money. They want the Social Security System to accept the equivalent of a declaration of bankruptcy.

This is what the American credit card issuers claimed credit card users were doing, so they had the Bankruptcy laws revised to prevent deadbeat creditors from running up big bills and walking away without paying them off. It is strange that Bush and the conservative Republicans want the federal government to do what they have just declared individual credit card abusers will not be allowed to do.

The solution for the repayment of the Social Security trust fund is for the Federal government to get its' financial house in order and quit handing out its revenue as political payoffs to the wealthy and pay for what it is spending. This is not a problem for Social Security taxpayers and beneficiaries to solve. They have already done what was required. If Bush and the Republicans intend to bankrupt the federal government, that is a separate issue from the relatively minor possible projected problems in Social Security.

The solution to the possible problems if the trust funds run out are already set into the Social Security Law. Any year that revenues fall below those required to pay full benefits, the benefits paid will be reduced to a level that the revenues can support. We don't need to massively cut benefits now to solve a problem that may or may not come to pass in four decades. That does nothing except lower benefits while loaning the spend-thrift federal government more trust fund money to waste.

So for now we have the Democrats holding firm against private accounts, the congressional Republicans split between ideologues who demand private accounts or nothing and the realistic Republicans who don't want to vote for a plan the ideologues push through and then find themselves threatened for reelection over a failed plan, and Bush who is accusing the Democrats of being nothing but "negative objectionists" because they won't lay down and die in front of his poorly thought out conservative idiocy.

Poor Republicans. They WON the Congressional and Presidential elections in 2004. It was supposed to be so easy to rape American after that. So why are so many of the losers being so negative?

Wednesday, June 15, 2005

Cashing in the Trust Fund. How will it work?

The plan in 1983 was that the baby boomers would prepay a part of their Social Security and that the excess would be saved in government bonds in the trust fund. Then, when benefits started to exceed revenue, the trust fund would cash in those bonds to maintain the benefit level.

This may become a problem since the Bush administration has been giving away revenue in tax cuts and still overspending, so that the total debt the U.S. government has is sharply increased. Current projections suggest that the trust fund may start asking for its money back in about 2018. The question arises about how the government will redeem those bonds when needed.

NYCmoderate has an interesting discussion at TPM Cafe that covers how the government can possibly pay the bonds back and what the ramifications of each method are.

I am not sure that I agree with everything he says, but he has a lot to say that is very valuable to understanding the Social Security issue and what G.W. Bush is saying (and not saying) as he discusses the problems as he sees them.

Monday, June 13, 2005

NY Times: Amazing that no one thought of this before!

The New York Times rather breathlessly takes on the absolutely new issue (to them, I gather) that the amount needed for Social Security retirement depends on the expected life span of the retirees.

Gadflyer points out (as the NY Times article does not) that expected life span of retirees is and has been a basic part of the projections that Social Security depends on since the program began.

Nothing new here, people, keep moving. Just the N.Y. Times attempting to weigh in on the Social Security issue and failing to understand what is really happening. Ignore the people in clown suits with NYT written on them.

Anyone who has regularly read my blog here or Talking Points Memo and Kevin Drum on Social Security has a better understanding of the Social Security program than do Robin Toner and David E. Rosenbaum who wrote the N.Y. Times article.

[Thanks to Josh Marshall of Talking Points Memo for pointing this out.]

Saturday, June 11, 2005

Social Security Solution - Let's increase retirement age.

College graduate policy-types consider this a minor, not too expensive option for solving the (theoretical) problem of the revenue shortfall which might possibly afflict Social Security in a few decades. For some reason, polls show that it doesn't go over as well with most working people.

Kevin Drum has a good discussion of this.

New book on the Bush Social Security Phase Out program

The new book is The Plot against Social Security: How the Bush Administration Is Endangering Our Financial Future by Michael A. Hiltzik and is listed on the right side of this blog.

Here is what Publishers Weekly says:

"A Pulitzer Prize-winning financial journalist for the Los Angeles Times, Hiltzik gathers arguments made by a plethora of economists and skeptics into a comprehensive, biting critique of the privatization agenda and what he calls the "astroturf" alliance of right-wing ideologues, Wall Street opportunists and Republican political operatives that "aims to propagate, and then exploit, public ignorance." Prophecies of the Social Security trust fund's bankruptcy, he finds, are based on dubious and politically biased forecasts; more realistic projections have the trust fund growing nicely over the next 75 years. Even if doomsayers' predictions come true, he notes, the system's solvency can be safeguarded by straightforward fixes; simply lifting the cap on Social Security taxes-thus taxing high-income workers at the same rate as everyone else-would make up Bush's projected shortfall and then some, he says. Hiltzik also reads the fine print of privatization schemes, unearthing what he sees as hidden costs, risks, benefit cuts, bureaucratic pitfalls and wildly optimistic market return predictions for private accounts. The real issue, he contends, is whether the pension system will be a get-rich-quick scheme for the powerful or a collective guarantee that the elderly, the poor, the disabled and the unfortunate will be shielded from the vicissitudes of life. (June) Copyright 2005 Reed Business Information."

I haven't read it yet, but I just ordered it.

What is the Social Security phase out program really all about? Social Security is a program that provides benefits to replace a part of income lost by people who retire, become disabled, or provide similar income to the families whose wage earner dies. These are all events mostly beyond the control of the wage earners who earn the benefit.

The right-wingers object to the government acting to spread individual risks of loss of income over the mass of the working population. They want to make each individual totally responsible for their own outcome - regardless of how much actual control those workers have over that outcome!

As the Great Depression demonstrated, a great many workers do not have that indivudual control over their income. When death, retirement or disability occur a great many workers will not be prepared. a great many workers will not be prepared because they are not in a position of prepare, or their preparations will fail. In that case society will have to step in the assist them.

For individuals those events are mostly unpredictable, but for the government using the Law of Large Numbers, it is a certainty that a set percentage of the population will face those events. It is less expensive and more reasonable for the government to have a plan for those events than to have to step in with some form of personally degrading and excessively expensive welfare system.

The right wingers also want to get access to the massive amounts of money flowing through Social Security so that they can make money themselves. It is my opinion that for most conservatives the ideological reasons are uppermost, but they have no hesitation to use the individuals who want to profit by skimming a portion of those Social Security funds.

This is the core purpose of the right-wing attack on Social Security. Have you heard the government make the argument that the government has no reason to protect the people? Not much, you haven't.

Instead the argument they have made (while giving away tax revenue to the undeserving wealthy) is that the government can't protect the people. This is an argument presented in the face of six decades of the success of the Social Security program.

This book will, I hope, be an antidote to the "Fear - Uncertainty - Doubt" program that the White House and the Republicans have made the center of their Social Security phase-out program.

From the looks of the Publisher's weekly review, Michael A. Hiltzik is exposing the right-wing lies and astro-turf politics.

[Thanks to Josh Marshall for pointing me to this book.]

Friday, June 10, 2005

Senate Repubs to craft Social Security Bill - no privatization

Thursday several Senate Republicans huddled together to develop a Social Security bill they can pass through the Senate Finance Committee. It drops Bush's private accounts and the worst part of the Pozen plan he offered in his infamous press conference a couple of months ago.

Josh Marshall summarizes the report rather well. The Associated Press report by David Espo is found here - GOP Leaders Weigh Raising Soc. Sec. Age.

Josh Marshall's summary as usual describes the key features of the report. "The devil would very much be in the details on this. But according to Espo, the plan under discussion would involve a gradual increase in the retirement age and a freeze, or near-freeze, in the annual wage-linked rise in benefits at retirement for upper-income earners."

The danger is, as always, that the Republicans are still looking for another way to phase out Social Security rather than to fix it. Bush realized at the end of his "60 Days - 60 Stops" propaganda blitz that his private accounts were highly unpopular, so he came up with his Pozen Plan ideas in his Press Conference (also discussed here.) In the Pozen Plan the benefits are cut for middle and high wage workers but protected for the low income workers. This didn't get a very good reception, either.

Whatever they propose needs to be compared to the plan offered by Robert Ball and discussed in The Easy fix to Social Securities' minor problems.

Watch for the details. This is still Republicans attempting to slip through as many destructive changes to Social Security as they can.

Thursday, June 09, 2005

Universal American Healthcare

Social Security is the main plank of the (inadequate) American safety net, but in addition to Social Insurance, Americans need Health Insurance. Right now there are 44 million Americans without insurance, and another 40 or so million who go without health insurance for part of each year. That is 30% of all Americans.

Kevin Drum at the Political Animal (from Washington Monthly) and his guest blogger, Ezekiel Emanuel are discussing universal healthcare for Americans. Ezekial has an interesting proposal that would cover everyone, and the rest is discussion of whether it would work and what the problems (both administrative and political) are. It is a series of comments and comments. Read the comments also.













Read these together with the comments and you will have a reasonably good idea of the issues involves in providing a universal heathcare in the near future.

Addendum June 10, 2005




What does Bush really want about Social Security?

Is Bush really giving up on private accounts? Maybe. But he is not giving up what he wants.

Josh Marshall has the issue pegged.

"What President Bush wants is to phase out Social Security. That isn't just rhetoric or words designed to put the other side off their footing. It's really the truth of the matter. Social Security is a social insurance program with guaranteed benefits for Americans when they retire -- benefits of a level to provide a baseline of support in old age. The very concept offends the president, as it does many of his supporters. The key is guarantees, which are the essence of security.

"Privatization was the first and most obvious way to phase out Social Security. If privatizing doesn't work, he may try just going at it directly -- not just by cutting benefits, per se, but by cutting the rate at which Social Security keeps up with the actual costs of living in the United States. And that distinction is key since over time it will be whittled down to nothing."

Bush has gotten his head handed to him on private accounts. It was a conservative "neat idea." It is clear now that it won't fly. He will simply go to other, less obvious ways of phasing out Social Security, as Josh goes on to describe.

At its base conservatives what to phase out Social Security to shift risk from the government to the middle class and poor. By doing this they can reduce the expense to government and permit the wealthy to face lower taxes. It doesn't matter to them that many of the poor and middle class will end up worse off because of this abdication of government responsiblity.

This is oddly exactly the opposite of their arguments why laissez faire capitalism is good for society and government intervention is bad. The essence of that argument is that unfettered business is much more capable of quickly responding to changes in the market. So what do the conservatives want to do?

They want to remove uncertainty and risk from businesses and the government by shifting it to labor. Yet it is businesses and government which are large enough to deal with unpredictable changes in the markets by spreading the risks over time and larger numbers of people. Individuals are much less capable of dealing with those changes.

Labor cannot efficiently deal with the all of the risk and uncertainty in society and the market. The safety net, including Social Security, is necessary to allow labor to focus efforts on their jobs instead of simply survival. It allows labor to get the benefit of spreading risk to many people.

But that is my attempt to get to the basic reasons why Bushs' desire to destroy Social Security guarantees is bad for society. Go read Josh Marshall for his excellent analysis of the current political tactics Bush appears to be using to phase out Social Security.