- The House Republican leadership is putting extraordinary pressure on its members to accept its debt ceiling hike bill, pressure that included an order to "get your ass in line." This is not sitting well with some prominent Republican supporters. The pressure may allow the House to pass the bill sometime today, although that is not assured.
- The Dow Jones Industrial average was down 199 points yesterday. and was down 378 points on the week as of yesterday's closing bell. The market is up a bit this morning on good home sales news.
- The Onion has a preview of the change that debt ceiling pressures may bring to Social Security.
- Ezra Klein, who is an astute observer, says that the Democrats may not be able to win this one but that they will have their chance in December 2012 when the Bush tax cuts are set to expire.
- The New York Times has a story on what the U.S. Treasury will do in case the debt ceiling isn't raised. According to the Times "Officials have said repeatedly that Treasury does not have the legal authority to pay bills based on political, moral or economic considerations" and is likely to pay bills in the order in which they come due.
- What is the difference between the debt ceiling bills in the House and the Senate? According to TPM they are pretty similar except the House bill would give authority to borrow $900 billion now and another $1.6 trillion next year but only "if and when Congress passes, and [the President] signs, legislation to reduce the deficit by $1.8 trillion." The point of this is to force dramatic cuts in Medicare and Medicaid and also to deflect attention away from the Ryan budget plan which would effectively end Medicare and Medicaid.
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Jul 28, 2011
Roundup Of Debt Ceiling News
Today's news on the debt ceiling impasse that threatens to delay Social Security payments:
I have a few honest questions for the conservatives who follow this blog: Are you really ready for the significant cuts you want to make in social programs? Do you or will you have enough saved in retirement to live off of even less than the current average of $1,100/month for Social Security? Are you ready to pay significantly more for your out-of-pocket Medicare costs in your old age when you will actually be using health care services the most? If you unfortunately become disabled or unemployed, are you ready to live off of even less? Or how about if you need care in a nursing home and you have spent down all of your assets to pay for that care but now Medicaid does not have the funds to pick up the remainder of the costs -- are you ready to be a burden on your family?
ReplyDeleteAnon 2:05
ReplyDeleteIt's not a matter of wanting these cuts, these will either be made now, or when things really go bust.
http://www.market-ticker.org/akcs-www?post=190845
You do not have to gut the Social Security program to put it on sounder financial footing. SSA long ago forgot that one of its missions is protecting the integrity of the trust fund; instead, SSA sees its goal as paying as many people as possible regardless of the facts.
ReplyDeleteTo improve the Social Security program, in particular the disability program:
1). Actually perform CDRs on the scheduled time-frames
2). Be more diligent in pursuing overpayments
3). Do a better job of identifying work-related overpayments quickly; if SSA is increasing the benefit amount retroactively because of earnings the prior year, SSA ought to be smart enough to check to see if the earnings rendered the claimant ineligible for benefits in the first place. The financial information is available, but the different parts of SSA do not put forth the effort to cross-check the information
4). Eliminate child SSI benefits -- they serve no useful purpose and are waste of time for the agency to process and a waste of general funds that could be used for other government programs, including other social programs -- such as food stamps or unemployment
5). Get rid of the GRIDs, especially the inappropriate age-based presumptions for older workers that form the basis for paying many older workers, especially at the ALJ level -- it is supposed to be a disability program, not an unemployment program. SSA is not designed to address unfair hiring practices.
http://www.washingtonpost.com/opinions/why-are-we-in-this-debt-fix-its-the-elderly-stupid/2011/07/28/gIQA08LtfI_story.html?hpid=z3
ReplyDeleteAnonymous 10:54
ReplyDeleteExcellent article.
Here is my favorite sentence, which sums up a lot of the fiscal problem for Social Security:
"Past taxes were never saved to fund future benefits."
That is a direct contradiction of Roosevelt's vision for a self-supporting program.
And, according to the Social Security web site, this has ALWAYS been the way Social Security has been financed.
Don Levit
That is an insightful article in the Washington Post. My concern, however, is that if we make entitlement programs means-tested, there will be less incentive to save for retirement. Or wealthy retirees will still look for ways to hide their assets in trusts, annuities, gifts, etc. to be able to maintain full benefits.
ReplyDeleteI also notice a few fallacies in the article. It mentions that 25% of current retirees have home equity of $132,000, which may be slightly misleading with the continual decline in home values in most areas. And even for those with any equity in their home, home equity loans or reverse mortgages are generally not a good deal due to interest and fees. We also have to keep in mind that today's older adults come from a different generation in which they worked in the same job, stayed in the same home, and paid off their mortgage before retirement. I would imagine that if we looked at people approaching retirement now, say the 50-64 age group, we would see an entirely different story. I know I have read statistics about how many in this group will still have a mortgage to pay in retirement or will be forced to rent their whole retirement because of losing their homes during the housing crisis.