Trying To Undermine Social Security From The Inside

     From Alex Lawson, writing for Common Dreams:

Mitch McConnell and his fellow Republicans have a problem. They hate Social Security, because it is popular, effective, and doesn’t make any money for their billionaire donors. But their voters love Social Security. Ninety-four percent of Republicans oppose benefit cuts.

McConnell understands the political dangers of being openly hostile to Social Security. So instead, he is plotting to sabotage it from within. The latest instrument of that sabotage is Andrew Biggs, a senior fellow at the billionaire-funded American Enterprise Institute. Biggs is McConnell’s pick to serve on the Social Security Advisory Board (SSAB) ...

Biggs served as an associate commissioner of Social Security under former President George W. Bush and was instrumental in Bush’s push to privatize Social Security. ...

Biggs supports raising the retirement age, and has testified before Congress that people should work longer. ...

Biggs also wants to turn Social Security from an earned benefit into a poverty-level flat benefit. That means huge cuts for middle class workers who’ve been paying into the program their entire lives. It would destroy Social Security’s political popularity by turning it into a welfare program—a sitting duck for Republicans to make even larger cuts. ...

     Biggs came under serious criticism at the hearing on his nomination.

    The good thing about this nomination is that the SSAB isn't much of a platform from which to launch attacks on Social Security. For better or worse, it's pretty obscure. Also, while Republicans like to talk about privatizing Social Security, raising the retirement age or turning it into something they can deride as "welfare," they have virtually no interest in actually doing anything along these lines.

Privatized Chilean Social Security System Not Working So Well These Days

     From Michael Hiltzik at the Los Angeles Times (emphasis added):

Promoters of privatizing the U.S. Social Security system have never tired of holding up Chile’s privatized program as an example of how this can make workers rich. The trick is that they never ask ordinary Chilean workers and retirees how they feel about it.

That may be because they know what the answer would be. It was visible last month in the streets of the capital, Santiago, where crowds estimated at 100,000 to 200,000 marched to demand reform. ...

The Chilean program was promoted relentlessly by its creator, Jose Pinera, who got himself a sinecure at the Cato Institute [a right wing think tank in the United States, not Chile] out of the deal. From there he fed American conservatives’ fantasies of “an obvious free market solution that works,” he wrote for a Cato audience in 1997. (In that same article he declared that “America’s Social Security system will go bust in 2010.” Umm, no.) He boasted of how he single-handedly “decided to undertake a structural reform [of Chile’s bankrupt retirement system] that would solve the problem once and for all.” ...

Pinera and his fans talked up the Chilean workers’ apparent gains during the system’s early years, when it seemed to be delivering double-digit returns and lavish pensions to its lucky beneficiaries. What the promoters never much emphasized was how the program actually had been made to work. As I explained in a 2005 book, everyone entering formal employment after 1981 was required to deposit 10% of earned wages into individual accounts managed by a handful of investment companies appointed by the Pinochet regime. Workers enrolled in the old system were goaded into abandoning it by cuts in existing benefits. Chile financed the transition by draining its large government surplus. An unprecedented bull market in Chilean stocks did the rest. 

But the seams soon showed. The World Bank determined that fees charged by those favored investment firms consumed fully half the pension contributions of the average worker retiring in 2000. The government surplus disappeared, and those outsized stock market gains faded away.

Andrew Biggs Is Still Annoying -- And Wrong

     When George W. Bush campaigned for the partial privatization of Social Security, Andrew Biggs, a Social Security employee, was at his side. That rankled me. I felt it was deeply inappropriate for a Social Security employee to take on such a politicized role. Bush later nominated Biggs to become Deputy Commissioner of Social Security. Senate Democrats blocked that nomination, suggesting that I wasn't the only one rankled by what Biggs did.
     After his stint at Social Security, Biggs landed a job at the American Enterprise Institute, a Koch brothers front organization.
     Biggs has a blog at the Forbes website on which he's posted a response to the Social Security discussion at the Democratic Presidential debate Tuesday night. The ideas of expanding Social Security and lifting the cap on wages covered by FICA both came up in the debate. Biggs makes the point that lifting the FICA cap wouldn't generate enough revenues to fund an increase in Social Security benefits. This is accurate but it's also rich coming from someone who campaigned for completely undermining Social Security's finances. President Bush never released a plan for partially privatizing Social Security but he was promising to keep paying benefits to everyone already drawing benefits or near retirement age, to not increase the FICA tax and yet to divert much of the FICA tax receipts to private accounts. Put all of that together and it would cost trillions of dollars. Did Biggs and Bush ever put forward a plan for paying for this? Of course not. Republicans never have to pay for their Social Security plans. Only Democrats have to pay for their plans.

     Biggs points out that raising the FICA cap wouldn't be enough to assure that no further change would have to be made anytime in the next 75 years to protect Social Security's funding. He seems to believe that means there's no point in raising the FICA cap. Right. Lifting the FICA cap would only assure program funding until 2080 so obviously that idea is worthless. In fact, if you remove the FICA cap, you could do some modest benefit increases and still assure the future of the Trust Fund well into the future. That was what the Democratic Presidential candidates were talking about.
     I think that Biggs will have to come up with some better arguments to convince the American people that it's a bad idea to raise taxes on the wealthy in order to give higher Social Security benefits to many.

Republican Candidates On Social Security -- I'm Noticing A Wedge Issue

     Take a look at the views of the Republican Presidential candidates on Social Security:

• Jeb Bush: Increase full retirement age, possibly to 70
• Ben Carson: Wants people who don't need the money to opt out of receiving Social Security
• Chris Christie: Increase full retirement age to 69 and means-test benefits
• Ted Cruz: Partially privatize Social Security, increase full retirement age and cut cost of living adjustment 
• Carly Fiorina: Increase full retirement age 
• Jim Gilmore:  Put a cap on benefits; praised George W. Bush for proposing partial privatization of Social Security
• Lindsey Graham: Increase full retirement age to 70 and cut benefits for some recipients
• Mike Huckabee: Does not favor Social Security changes.
• Bobby Jindal: Partially privatize Social Security
• John Kasich: Partially privatize Social Security 
• George Pataki: Increase full retirement age
• Rand Paul: Increase full retirement age to 70 and means test benefits 
• Marco Rubio: Increase full retirement age by one year; also believes that benefits should "grow more slowly" 
• Rick Santorum: Privatize Social Security, increase full retirement age, means test benefits
• Donald Trump: Does not favor Social Security changes
• Scott Walker: Increase full retirement age

     Every Republican Presidental candidate other than Carson, Huckabee and Trump supports either raising full retirement age or partially privatizing Social Security. Carson may want such changes but he hasn't yet spoken on Social Security issues in any meaningful way. Encouraging people to voluntarily forego their Social Security benefits? Few people can afford to do so and far fewer would do so. I think he'll be asked specific questions about Social Security in the near future.

     What's going to happen when the Republican race starts narrowing down? If Trump remains the front runner, we can expect to see negative ads from his opponents. How does Trump respond? Social Security seems to be a wedge issue he could use to attack almost any of his Republican opponents. Raising full retirement age and partially privatizing Social Security may be popular ideas with big Republican donors but these ideas are unpopular with rank and file Republicans. The polling we have shows 62% of Republicans in favor of increasing Social Security benefits and 74% of Republicans willing to preserve Social Security even if it means raising taxes. Only 26% of Republicans favor increasing full retirement age to 70. An intra-party debate on Social Security could be devastating for Republicans.

Glad We Got Solutions To Those Problems!

     The Cato Institute, a right wing "think tank", has issued a set of what it calls "essays" on "downsizing" Social Security (lots of quotation marks here but they're all merited):

Social Security Retirement: Social Security faces a huge financing gap because of its pay-as-you-go structure and the aging of the U.S. population. It should be transitioned to a system of personal savings accounts, which would increase individual financial security and help to avert future tax increases.   

Social Security Disability Insurance: Growing numbers of Americans are receiving disability benefits, and the system is subject to major abuses. Policymakers should tighten eligibility for the program and explore ways to move it to the private sector.   

Supplemental Security Income: This program for low-income and disabled individuals suffers from similar abuses and overspending problems as Social Security Disability Insurance. The financing and administration of Supplemental Security Income should be devolved to the states.

We're Movin' In!

     From Social Security Works:

Oh, the sweet irony.

Pete Peterson is the conservative billionaire who is a major financier in the effort to dismantle, cut and privatize Social Security, Medicare and Medicaid. Recently he and his foundation held a contest asking folks to submit videos on why it is important to “fix” the national debt of which, he and his foundation falsely claim, Social Security is a major contributor.

Sometimes the best-laid plans for a propaganda campaign can go awry. The winner of the $500 grand prize determined by popular vote on the website came from the completely opposite side of Peterson’s cut Social Security argument.

What A Deal!

     From the National Journal (emphasis added):

With an anxious eye toward the coming debt-ceiling negotiations, House Republicans are drafting what members call a “menu” of mandatory spending cuts to offer the White House in exchange for raising the country’s borrowing limit.

This menu is more a matrix of politically fraught options for the Obama administration to consider: Go small on cuts and get a short extension of the debt ceiling. Go big – by agreeing to privatize Social Security, for example – and get a deal that will raise the ceiling for the rest of Obama’s term.

     For a more modest medium range extension of the budget ceiling, all Obama would have to agree to is ending Medicaid.

Cato Isn't Expecting Privatization

     Giving us an idea how the right wing views their chances of privatizing Social Security, Daniel Mitchell of the Cato Institute writes that that Australia's privatized Social Security system would be a great model for the U.S. All it will take for such a thing to happen in the U.S. is "some sort of Greek-style fiscal meltdown that led to a societal collapse." In a footnote, Mitchell says he doesn't think the U.S. is heading for such a collapse. I guess that means he thinks privatization of Social Security isn't going to happen.

    By the way, Australia never had anything like the U.S. Social Security system. What they had was a means tested program like the U.S. Supplemental Security Income program. That program never went away. They just added a mandatory retirement savings plan on top of it. Basically, Australia uses means tested programs a lot more than the U.S. If you try to compare Australia and the U.S.on income security, I think you're going to find far more indicia of government dependence in Australia.

George W. Bush Campaigning For Partial Prizatizaton Of Social Security

Like Moths To A Flame

From the Associated Press:

Most of the top Republicans running for president are embracing plans to partially privatize Social Security, reviving a contentious issue that fizzled under President George W. Bush after Democrats relentlessly attacked it. ...

Former Massachusetts Gov. Mitt Romney has a version. Reps. Michele Bachmann of Minnesota and Ron Paul of Texas have said younger workers should be allowed to invest in alternative plans. Texas Gov. Rick Perry has raised the idea of letting whole groups, such as state and local government workers, opt out of Social Security.

Unrealistic Views About Social Security Contributions

From a press release:

According to a newly released Stony Brook Poll conducted in association with Left Right Research, a Long Island based Marketing Research supplier, more than 81 percent of approximately 7,000 people surveyed believe that they had contributed enough to Social Security to support themselves in retirement, or more than they will receive during their lifetime. ...

When asked about how much they believed they had contributed to ... Social Security during their best paid year, more than 2 in 5 individuals surveyed were wrong by 50 percent or more regarding Social Security contributions ...

One of the reasons that many people believe that Social Security is a bad deal is that they believe that they have paid far more in FICA than they actually have. They think that if they had just invested this money for themselves that they would be wealthy. FICA is not high enough for that to be possibility.

The Koch Brothers Echo Chamber

I am told this video is blocked for those on Social Security's network. This is the first time I have heard of this happening. Are they blocking all videos or just this one?

By the way, notice that octopus image. Anybody know who that image was used for many decades ago?

You Want A Fight?

“You want a fight? ... If anybody in this building wants to take on Social Security — privatize it, change the benefits by altering the consumer price index or by any other method — know this: You’ve got a fight on your hands.”

Rep. John Garamendi (D-Calif.) quoted in The Hill

Zombie-Nihilists

From the Crooks and Liars blog:

Good grief, this nonsense is just exhausting. Nothing is ever settled with these people, they have been coming after Social Security for 75 years, and they just don't quit, no matter how many times they get chased down with walkers and eaten alive by gray panthers. It's like they are programmed or genetically manipulated, like one of those creepy super-soldiers from science fiction that can't stop fighting after the war is over, even though they recognize the reality. 

Nah, I give them too much credit in that scenario. They are just zombie-nihilists and Social Security is the brain they are driven to eat.

Republicans Plan To Privatize Medicare

Republicans are not currently proposing to privatize Social Security but it appears that they are set to propose what amounts to privatizing Medicare, converting it to a program where those eligible for Medicare would receive a voucher which they could use to buy private medical insurance -- if such insurance is available and if they can afford it

Biggs Taking A Bizarre Turn

Andrew Biggs, the former Social Security Deputy Commissioner during the Bush Administration who may be the biggest promoter of Social Security privatization, now thinks that privatizing Social Security just might be unconstitutional.

Social Security Facing Waterloo In The Spring?

From Dean Baker, Co-Director of the Center for Economic and Policy Research, writing at the Huffington Post:

Sometime in the spring the government will run up against its debt ceiling. This will prevent the government from any further borrowing.

Since the government has a substantial deficit, with spending exceeding revenue, hitting this limit would mean that the government would not have sufficient funds to pay for all its programs. It also would mean that the government could not pay interest or principle on debt that is coming due; in effect requiring it to default on its debt.

The prospect of the U.S. government defaulting on its debt creates the sort of end of the world scenario in which Congress rushed to pass the TARP in 2008. Back then, President Bush, Fed Chairman Ben Bernanke and all sorts of other luminaries told members of Congress and the public that we would have a second Great Depression if the Wall Street banks were not immediately bailed out, no questions asked. And the money flowed.

The prospect of defaulting on the debt will create a similar outbreak of shrill warnings of disaster. This would likely to lead to scenario in which President Obama signs whatever debt ceiling package House Republicans hand him, even if it includes the privatization of Social Security and Medicare and major cuts and/or elimination of other important programs. The argument from the administration will be that they have no choice.

I do not buy that this is going to happen, especially since any form of privatization would increase the deficit dramatically, but Baker is not the only one sounding the alarm.

Not On My Watch

President Obama speaking in Milwaukee today:

And to those who may still run for office planning to privatize Social Security, let me be clear: as long as I'm President, I'll fight every effort to take the retirement savings of a generation of Americans and hand it over to Wall Street. Not on my watch.

The Last Word On Social Security's 75th Birthday

A Blast From The Past -- And Some Of Us Haven't Forgotten

From the Arkansas News:

U.S. Sen. Blanche Lincoln’s re-election campaign has adopted a line of attack against Lt. Gov. Bill Halter that was first advanced by a group she previously said had no connection to her campaign.

Lincoln, locked in an increasingly bitter struggle with Halter for the Democratic nomination for her Senate seat, said previously she had no connection to the group Arkansans for Common Sense, which ran an ad accusing Halter of trying to privatize Social Security when he ran that agency under President Bill Clinton. ...

“When corporate millionaire Bill Halter was a commissioner of the Social Security Administration in 2000, he wanted to invest Social Security revenues in the stock market, claiming his plan would strengthen Social Security,” the mailer reads, adding that this would have endangered over 600,000 Arkansans who receive Social Security benefits.

In a statement today, Halter’s campaign said again, as it did in response to the Arkansans for Common Sense ad, that Halter’s comments in 2000 were in reference to a proposal by Clinton to invest a small portion of the Social Security Trust Fund in the stock market.

You may not remember Halter as Commissioner of Social Security. That is because he was Acting Commissioner of Social Security from January 20 to March 29, 2001. Before that he was Deputy Commissioner.

I can give a much better reason for criticizing Halter for his work as Acting Commissioner. He did nothing as the Hearing Process Improvement (HPI) debacle was causing Social Security's hearing process to collapse. HPI was only being implemented as the Clinton Administration was ending. It was immediately apparent that HPI would be a calamity. Halter was only Acting Commissioner after the inauguration of George W. Bush but how was the Bush Administration going to punish him for taking action on HPI -- fire him? The Bush Administration has much responsibility for the hearing backlog that Social Security has now but so does the Clinton Administration. Social Security was in free fall during the transition between Clinton and Bush. In an emergency, real leaders take action. That was an emergency and Halter sat on his hands.