Offering frequent news and analysis from the majestic Evergreen State and beyond, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Thursday, January 05, 2006

It's SS, Social Security, not BS

I'm probably too defensive to make a good blogger. I hate it when ignorance leads with its mouth. Recently I pointed out that the real danger to Social Security is not its own internal financing, but the $500 billion deficits the renegade Right that is planting like land mines on the road ahead.

Some folks decided to comment. Before I answer those comments (and while I cool down a bit), let's find one that resonates with many and hit a few high points on the social programs front. (If you must, you can join me in the mud at the end.)
"Social Security, Medicare and Medicaid consume nearly half of all federal spending, and within the foreseeable future could consume the entire federal budget."
[Note: So when you hear "smaller government," please understand it is code for gutting these programs.]
Because the population that is served by these great social programs is growing, the programs themselves are growing. They are, excepting Bush's Medicare drug boondoggle, well-designed and well run. Social Security is impeccably financed. Even critics during the recent privatization campaign pointed to complete solvency until 2030, and some even granted 2050. The operating budget is insolvent today by the same measures.

The high points:
Point 1: Social Security is well run, costing 1% in administration for benefits to hundreds of millions of Americans.

Point 2: The Medicare Part D drug benefit program is, as Sen. Tom Harken D-IA put it, "a debacle." The giveaway to the drug companies costs too much and its creating confusion, anxiety and anger among seniors.

Point 3: President Bush, in mid-December, became the first and only president in the fifty-year history of the White House Conference on Aging to dodge the event. Preferring not to get feedback on his misbegotten privatization plan for social security or on the Medicare drug fiasco, Bush instead met in closed session with a hand-picked group of oldsters in a high-end gated community in suburban Virginia. (see NPR coverage)

Point 4: Only single-payer health care can cut the costs, bring corporate profiteering to heel, and deliver the services everyone needs. Such a system could be a boon to strapped state and local governments whose budget projections are blown up by ever-expanding health care costs.
Financing advice to George II: When faced with easily anticipated costs (after all, the boomers weren't born yesterday), balance the books, shed debt and program efficiently.

Now for those pot-shots that missed the pot:
"The Social Security program is the epitome of our (selfish) generation saying a fiscal "F-You" to our grandchildren, and always has been. Despite the fact that the US Government has outlawed pyramid schemes, they have allowed this largest of all pyramid schemes to continue for almost 70 years."
Listen to yourself, "pyramid scheme .... 70 years."

It is an intergenerational contract. We've supported it with patently regressive payroll taxes only because we like the program. Prior to the New Deal, retirement security was bought by having lots of kids and hoping they liked you when you got older. When social security arrived, children had the assistance of the government. Everybody's children supported everybody's parents. Instead of a room in the back, oldsters kept their own places. (Is this really so hard?)

From the same commenter:
"Contrary to Alan's statement in this article that Social Security "raised millions of seniors from poverty and humiliation almost immediately when it was enacted. Later revisions lifted even more. Its financing is impeccable in terms of internal sufficiency", Social Security started paying out very slowly - because no money had been paid in. And its financing is NOT impeccable, because it depends on contributions from a workforce that is increasing at a MUCH lower rate than are the ranks of those who will receive benefits."
Please see the SSA's history. A program of this scale had never been tried. It was passed in 1935. By 1937 people were registered, and the program began. In March, the first lump-sum benefit was paid (albeit only 17 cents). In the first year $1.25 million was paid out to 53,000+ beneficiaries. By 1940 $35,000,000 was paid out to 222,000 beneficiaries. Dependents and survivors were added in 1939, disabled workers were added under Eisenhower, and SSI was established by Nixon.

Yes the workforce is increasing slower than beneficiaries. That's why we've been paying into the trust fund. And don't tell me we haven't been paying. The trust fund will continue to run $200 billion surpluses into the next decade.
"Had Congress never been allowed to tap the SSI Trust Fund, the program would be OK. But because Congress has spent all Social Security moneys collected since the 1950s, and all that is in the Trust Fund is a series of IOUs, the program is somewhat of a joke to begin with, and is definitely on shaky ground. This did NOT start with GWB; it started with the 40 years that Congress was controlled by the Democrats, starting in the 50s."
Bull. These "IOUs" are government bonds. Until George II, US bonds were considered the safest investment in the world. These are not IOUs.

Bull 2 Reagan and the two Bushes built the debt that bleeds the trust funds, not Democrats. Democrats are the party of fiscal responsibility. Democrats have produced the only balanced budgets, under Truman, Johnson and Clinton. Only Eisenhower among Republicans produced responsible budgets.
"The revisions to the program that Alan speaks of so reverently will ultimately be the downfall of SSI. It was never intended to be a retirement fund for everyone, or a social safety net for spouses or children of those who died before retirement. The selfish members of Congress over the last 50 years made changes to please their constituents that they knew would put more weight on future generations - to whom they would not have to be accountable.
It's very thick in here. It WAS intended to be "a retirement fund for everyone and a social safety net for spouses and children." That was the explicit, loudly proclaimed and applauded function.

[The commenter confuses OASDI - Old Age Survivors and Dependents; Disability; and SSI. Not a big point.]

Social Security is solvent. It is the operating budget that is in disarray. And Medicare and Medicaid may not be in good shape. They are being exploited by people who pay themselves poor and used to funnel money to Bush's pharmaceutical donors, but these are not Social Security.

Another says,
"On one hand the liberals want to cut the deficit and on the other hand they want more spending. I don't get it!"
This is the distillation of the crap. Is it liberal to want to cut the deficit? No, it is just responsible. Is it conservative to sabotage the government? I don't think so. Maybe.

Okay, that's it for the year. I won't do it again. I promise.

<< Home