Gracias, Indeed

      From the New York Times:

A private equity investor who is one of Elon Musk’s closest confidants has taken a new role in the Social Security Administration, a development that could be politically combustible given the program’s popularity with voters and Mr. Musk’s apparent intent to make major changes at the agency.

The investor, Antonio Gracias, who has served on the boards of Mr. Musk’s businesses Tesla and SpaceX, has started a job at the administration as part of the Musk-led cost-cutting effort known as the Department of Government Efficiency, according to documents seen by The New York Times and two people informed about his appointment.

Of the more than 50 people who have joined Mr. Musk in Washington, almost none have as extensive a history with him as Mr. Gracias. The men met around two decades ago and in that time, Mr. Gracias has become one of Mr. Musk’s most trusted advisers. ...

The involvement of such a close ally with the Social Security Administration suggests that Mr. Musk has made overhauling the agency a priority; in recent weeks, the tech billionaire has regularly talked about supposed fraud inside the system. Two weeks ago, he referred to Social Security as “the biggest Ponzi scheme of all time,” and this week he claimed that fraud in the program and other major entitlement spending was “the big one to eliminate.” ...

    Trying to privatize Social Security was such a big success for George W. Bush, why shouldn't Trump go for it?

This Won't Get Enacted But It Shows You Where The GOP's Heart Is

     From The New Republic:

Republicans have claimed over and over again that they are not trying to cut Social Security and Medicare. Heck, Joe Biden got them to agree they would not make cuts to the programs in a memorable verbal maneuver during his State of the Union speech earlier this year.

And yet, the Republican Study Committee (of which some three quarters of House Republicans are members of) just released its desired 2024 budget in which the party seeks to, you guessed it, cut Social Security and Medicare. ...

The proposed budget would effectively make cuts to Social Security by increasing the retirement age for future retirees.  The document seeks to assure people that there would only be “modest adjustments,” but does not list what Republicans think the new retirement age should be.

On Medicare, Republicans propose requiring disabled Americans to wait longer before getting benefits and turning Medicare into a “premium support” system, a long-floated Republican idea that essentially turns the government program into a voucher scheme. ...

Biden Is No Fool

    From Fox News:

One of the leaders of a bipartisan Senate working group focused on extending Social Security accused President Biden of "not engaging" with them as they scramble for a way to keep the vital program solvent past its expected expiry in nine years.

Sens. Bill Cassidy, R-La., and Angus King, I-Maine, said this month that "conversations are ongoing" to reform the Social Security program ...

Cassidy indicated to Fox News Digital on Thursday that Biden’s apparent unwillingness to meet is what’s holding the group from publicly moving forward. ...

 "President Biden has never made himself available to hear about the Cassidy-King proposal to save Social Security from impending 24% benefit cuts," Cassidy said. "Biden calls himself a deal maker; we can’t make a deal without him. By not engaging, the president is choosing that current retirees’ Social Security benefits are cut by 24%."

 A Senate aide told Fox News Digital, "there have been multiple requests from both sides of the aisle to meet with President Biden, and those have not been met." They stressed that the group was bipartisan, and its membership is in "the double-digits." ...

    Yeah, right. The President is supposed to go out on a limb to promote a wildly unpopular plan to cut Social Security benefits and raise taxes even though it's hopeless because no Republican will vote for it anyway. This smacks of bad faith. It's just an attempt by Republicans to immunize themselves from the entirely accurate accusation that they want to cut Social Security benefits.

Sound And Fury, Signifying Nothing

     From Reuters:

A Republican U.S. senator's accusation on Thursday that Treasury Secretary Janet Yellen had lied during a tussle over the future of the Social Security program obscured behind-the-scenes talks between the White House and lawmakers that have been underway for months, according to sources. 

The war of words came in a Senate Finance Committee hearing when Republican Senator Bill Cassidy asked Yellen if Democratic President Joe Biden was aware that Social Security funds will run out within the next decade unless Congress shores up the popular retirement program with 66 million beneficiaries.

When Yellen responded that Biden "stands ready to work" with lawmakers, Cassidy shot back, "That's a lie because when a bipartisan group of senators has repeatedly requested to meet with him about Social (Security) ... we have not heard anything on our requests."

For several months now, Cassidy and independent Senator Angus King, who caucuses with Democrats, have tried to address Social Security underfunding as approximately 10,000 baby boomers retire every day. ...

 Cassidy and King are leading a group of workhorse senators that include Republican Mike Rounds, Democrat Tim Kaine and independent Kyrsten Sinema. ...

"It's going to be tough. I don't think we should sugarcoat it. But there are serious conversations in the Senate ... on a package that would improve Social Security's finances," said Shai Akabas, economic policy director at the Bipartisan Policy Center, a centrist think tank in Washington. ...

    The Republican plan is to have a very few Republicans work with a very few Democrats to come up with a wildly unpopular plan that includes an increase in full retirement age. Republicans will provide only a few votes to pass the plan. It will only be passed if Biden strong arms Democrats and probably not even then. Republicans will then run against Democrats on the issue.

    Biden won't fall for this.

    By the way, I'm sure that the Democrats involved with these negotiations are well intentioned but they're fools. This is a dead end.

We’re Not This Easily Fooled

      Yuval Levy of the right wing American Enterprise Institute has written a op ed piece for the New York Times that starts out with a beautifully phrased defense of Social Security and Medicare as “an act of intergenerational gratitude and generosity” that he regards as laudable and necessary but then ends by endorsing a plan to end Social Security as we have known it and substituting a universal benefit set just above the poverty line. He doesn’t even suggest the possibility of survivor and disability benefits. The right wing never discusses survivor and disability benefits. They don’t fit into their Social Security “reform” schemes. Levy goes on about how a universal benefit set just above the poverty line plan lifts a few seniors out of poverty. He doesn’t mention that this plan would mean a dramatic cut in benefits for most. His idea for a voluntary defined contribution plan on top of his version of “Social Security” hardly changes things. At best, that’s a retirement crap shoot compared with the actual “security” in Social Security not to mention that a vast number, probably most, workers wouldn’t make the voluntary contributions. 

     In its own way this may be the most disgusting piece of right wing anti-Social Security propaganda I’ve ever seen. He must think that we’re all fools. This idiotic plan would destroy Social Security and lead to riots in the streets. Levy can dress up his rhetoric with paeans about intergenerational obligations all he wants but his hostility to the very concept of Social Security is obvious. The plan is simple. Transform “Social Security” into something that is widely despised, then end it. That’s the aim of every right wing plan for Social Security “reform.”

A "Bipartisan" Plan?

     From Semafor:

A bipartisan group led by Sens. Angus King, I-Maine, and Bill Cassidy, R-La. is considering gradually raising the retirement age to about 70 as part of their legislation to overhaul Social Security, Semafor has learned from two people briefed on their efforts.

Other options on the table include changing the existing formula that calculates monthly benefits from one based on a worker’s average earnings over 35 years to a different formula that’s based instead on the number of years spent working and paying into Social Security.

The plan also includes a proposed sovereign wealth fund (as previously reported by Semafor) that could be seeded with $1.5 trillion or more in borrowed money to jumpstart stock investments, the people said. If it fails to generate an 8% return, both the maximum taxable income and the payroll tax rate would be increased to ensure Social Security stays on track to be solvent another 75 years. ...

Sen. Mike Rounds, R-S.D., a member of the group, previously said that raising the payroll tax cap was under discussion. Only the first $160,000 of employees' earnings are currently subject to payroll taxes, which help fund Social Security. If Congress fails to step in, retirement benefits will be cut roughly 20% for seniors starting in 2032, per the Congressional Budget Office.

    Are there any real Democrats on this "bipartisan" group? I know that Angus King caucuses with Democrats but he's not a Democrat. 

    None of this has any hope of passage in this Congress.

 

Sounds Good To Me

     From Marketwatch:

Social Security should be able to pay out full benefits until 2035 without any intervention, but a proposal by Sen. Bernie Sanders would extend the life of the program for 75 years, chief actuary Stephen Goss said.  ...     

The Social Security Expansion Act aims not only to pay out full benefits but, as the name implies, to bolster the program. Under the proposal, Social Security would provide an additional $2,400 in benefits to each beneficiary every year. The program would also be linked to the experimental price index for the elderly, or CPI-E, instead of the consumer-price index for urban wage earners and clerical workers, or CPI-W. The switch would change the cost-of-living adjustment to align more closely with older Americans’ spending. 

 The proposal calls for two new taxes: a 12.4% tax on investment income for individuals earning $250,000 or more per year, and a 16.2% net-investment-income tax for specific business owners, including active S-corporation holders and active limited partners. The proceeds of the latter tax would be divided between the retirement and disability trust funds and the general Treasury fund. ...

     This isn't happening, at least not now. There wouldn't be a majority in the Senate for this and the House is under the nominal control of the GOP. I mention it because it's an honest attempt to deal with the problem, unlike ridiculous Republican claims that they want to "reform" Social Security, without raising taxes or cutting benefits.

    What I love seeing in response to proposals like this is the cynical argument that it does no good to raise taxes on the wealthy. They'll just use tax tricks to avoid paying the tax. Sure. So why do these wealthy people employ shills to spread the cynical argument in forums like this? Who else but shills would spread that sort of garbage? Of course the wealthy would pay more under Senator Sanders' proposal. That's why they fight it with such vigor.

We're All In Agreement, Right?

     From USA Today:

Rep. Marjorie Taylor Greene, R-Ga., stood up from her seat in the back of the House chamber to heckle President Joe Biden after he said during his State of the Union address Tuesday that “some Republicans want Medicare and Social Security to sunset” while discussing the need to raise the debt ceiling in order to avoid a US default.

“Liar!” she said. Other lawmakers in the chamber booed him. House Speaker Kevin McCarthy, seated behind Biden, shook his head in disapproval.  ...

As boos continued, Biden turned toward the House gallery to address an audience member not seen on camera. 

"It's being proposed by individuals," he said. "I'm politely not naming them, but it's being proposed by some of you."  ...

As the camera landed on individual lawmakers, it captured a shot of a stunned Sen. Mike Lee, R-Utah [who has openly talked about his desire to 'phase out" Social Security], who looked around the room with his mouth wide open. 

“So folks, as we all apparently agree, Social Security and Medicare is off the books now,” Biden said. “They're not to be touched? All right. We've got unanimity!"

Cheers erupted in the chamber.

"Tonight, let's all agree, and apparently we are — let's stand up for seniors," Biden said, raising his fists in the air. Speaker McCarthy took to his feet. ...

Why Does Anyone Think That Private Accounts Could Replace Social Security?

     From Michael Hiltzik at the Los Angeles Times:

Former Vice President Mike Pence dipped his toes into the presidential campaign waters Feb. 2 with a proposal that would mean the death of Social Security. ...

Pence unearthed the old Republican idea of privatizing Social Security wholly or partially. ...

Pence didn’t say outright that he advocates killing Social Security. Instead, he took the course I reported on just last week. That’s the Republican and conservative habit of employing plausible-sounding jargon and economists’ gibberish to conceal their intention to hobble the program. ...

But make no mistake: Diverting any significant portion of Social Security taxes into private accounts would make the program unworkable, funnel untold wealth into the hands of Wall Street promoters and leave millions of families destitute. ...

[Pence] whined about “this trajectory of massive debt that we’re piling on the backs of [our] grandchildren” and attributed most of it to Social Security and Medicare (the “entitlements”). Never mind that well more than $1 trillion of that debt was incurred when his party passed a massive tax cut for the rich in 2017. ...

He promised, as Social Security “reformers” always do, that he would hold seniors harmless: “To everyone that’s got hair the same color hair as me, nothing’s going to change for you,” but younger Americans would face a changed landscape, “better choices that would also be better for the country.”

This is also a cherished Republican stunt — guaranteeing that their “reforms” won’t harm current retirees and the near-retired. It’s pure politics because they know that seniors would slaughter them at the polls otherwise. But if their ideas are so great, one must ask, why not impose them on everybody? ...

    I won't repeat it here but Hiltzik goes on to eviscerate every premise that has ever supported the notion of private accounts to replace Social Security. No, they're not a pathway to wealth for Americans. No, they're not at all safe. No, they wouldn't begin to replace the protection against disability and early death contained in the Social Security Act. No, they can't replace the inflation protection of the Social Security Act. As Hiltzik concludes:

It’s a crap shoot. And in craps, like any other gamble promoted as a sure thing, it’s the house that wins. Pence is carrying water for the Wall Street firms that will be circling small investors to suck up their assets. When they’re done, there will be nothing left of Social Security.

GOP Wants To Cut Social Security

     From the Washington Post:

...  Only weeks after taking control of the chamber, GOP lawmakers under new Speaker Kevin McCarthy (R-Calif.) have rallied around firm pledges for austerity, insisting their efforts can improve the nation’s fiscal health. ...

So far, the party has focused its attention on slimming down federal health care, education, science and labor programs, perhaps by billions of dollars. But some Republicans also have pitched a deeper examination of entitlements, which account for much of the government’s annual spending — and reflect some of the greatest looming fiscal challenges facing the United States. ...

In recent days, a group of GOP lawmakers has called for the creation of special panels that might recommend changes to Social Security and Medicare, which face genuine solvency issues that could result in benefit cuts within the next decade. Others in the party have resurfaced more detailed plans to cut costs, including by raising the Social Security retirement age to 70, targeting younger Americans who have yet to obtain federal benefits ...

GOP lawmakers have been counseled by a wide array of right-leaning groups, including the Heritage Foundation, that the new majority should consider significant changes to entitlements as part of their commitment to cutting spending and balancing the budget — but not tax increases. ...

    "Special panel" to recommend Social Security cuts. Is that like a death panel? 

    Republicans are living in a fantasy world if they really think they can cut Social Security. Forget the Senate and the White House. They couldn't come close to passing Social Security cuts in the House of Representatives. Get real.

Who Is Naive Enough To Believe This?

      From Roll Call:

If Republicans take one or both chambers of Congress in November, don’t be surprised if shoring up Social Security’s finances becomes an area of bipartisan focus.

Pronouncements like that have been made before only to die on the next election campaign’s vine. But the spirit of compromise that animated discussions around last year’s bipartisan infrastructure package appears to be creeping into nascent talks about finally, really, this-time-we’re-not-joking doing something to stave off Social Security insolvency.

The prospects look brighter now in the Senate, where veterans of previous bipartisan “gangs” have begun talking about the need for fixes. ...

     What are the chances that Democrats agree to benefit cuts? Nearly zero. What are the chances that Republicans agree to tax increases? Nearly zero. Spirit of compromise? Are you kidding? Nothing's going to happen until there's a gun to their heads.

The Grand Compromise Fantasy Never Goes Away

     Some excerpts from a piece by Paula Span in the Health Section of the New York Times:

We’ve long heard warnings that the Social Security program that 52 million Americans rely on for their retirement benefits could one day run out of money.

Analysts say that’s not going to happen — if only because older people are such a powerful voting force — but this year the system has hit a worrisome milestone: the Social Security Administration reported that the retirement benefits paid out each month exceeded the tax revenues and interest that fund the program. ...

Making adjustments to keep Social Security solvent, crucial as that is, represents only one of the issues confronting Congress. It could also correct outdated aspects of a program that serves nearly 90 percent of Americans over 65. ...

The fixes will likely include changes designed to bring more money in and pay less out. Imposing a higher payroll tax or raising the level of earnings subject to Social Security taxes (as of January 1, they will apply to the first $132,900, already an increase) would bolster revenues.

Money-saving measures could include reducing benefits for high earners and trimming the number of years that workers collect benefits by raising eligibility ages. ...

Working longer and claiming benefits later — trends already well underway — pay off in ways that extend beyond Social Security itself. “It’s good for people, it’s good for government tax revenues and it could fuel economic growth,” Dr. Johnson [of the Urban Institute] said.

But as his report points out, living longer doesn’t always mean people can work longer. Higher-income professionals may opt to stay on the job, he said, but “health problems are increasingly concentrated among less educated workers and they’re falling further and further behind” economically. Moreover, even those who could work often discover that “employers don’t seem eager to hire 62 year olds.”

By their early sixties, his analysis of national survey data found, a quarter of high school graduates and 37 percent of those without a high school diploma report work limitations related to their health. Many say their jobs require substantial physical effort. ...

While some think tanks and congressional staffs are exploring ways to strengthen Social Security financially, others are looking into outmoded provisions that penalize beneficiaries, primarily women.

Senator Bob Casey, Democrat of Pennsylvania, has introduced legislation intended to help widows, widowers and divorced spouses qualify for higher payments and receive benefits earlier if they’re disabled. ...

Speaking of women and Social Security, another effort would award work credit for those who temporarily leave the labor force because of caregiving responsibilities. ...

     Let me make it clear. I oppose raising full retirement age or any other cut in Social Security. Raising full retirement age would have a devastating effect on working men and women who often can't make it to the current full retirement age which never should have been raised from 65. I have zero trust in any scheme dreamed up to alleviate this problem. Not only can this country easily afford the Social Security benefits currently available but this country can easily afford enhancements to those benefits. The cap on the payroll tax can be raised. Other tax revenues, such as an enhanced estate tax, can be devoted to Social Security. Solving the financing problem is easy if you really want to. If Democrats control Congress and the White House after the 2020 election it's a fantasy to think that they're going to push for some great compromise that cuts Social Security benefits. The Obama Administration's efforts to compromise with Republicans on health care are a vivid memory. GOP Senators stalled and drug out negotiations in bad faith. They never had any intention of voting for health care reform. No Democratic president will make that mistake again any time soon. Social Security reform will have to be accomplished solely with Democratic votes and on Democratic terms.

They Don't Give Up; Neither Can We

     It won't surprise anyone familiar with the publication but the National Review has posted a piece calling for Social Security disability "reform." The "reform" they have in mind is ending Social Security disability and letting the states handle disability benefits, if they choose. You know the same people arguing for letting the states handle it would then argue that the states shouldn't handle it.

     Don't worry. This wouldn't have happened even with Republicans in control of Congress and it's definitely not happening with Democrats gaining control of the House of Representatives in a few weeks but the right wing doesn't give up. They keep coming back with the same bad, hugely unpopular ideas.

Social Security Disability Critic Appointed By Trump

     Richard Burkhauser has been appointed to the President's Council of Economic Advisers (CEO). I mention this because Burkhauser  has been a proponent of outlandish ideas for "reforming" Social Security disability benefits, such as forcing employers to pay disability benefits for the first two years and experience rating employers for the disability experience of their workers. These ideas would have devastating effects upon manufacturing,  construction, mining and other fields where there is a high incidence of disability. We need to help U.S. manufacturing, not place unnecessary burdens on it.

     I would not expect Burkhauser's appointment to have any effect upon Social Security. The ideas he has espoused in the past are complete non-starters with both Republicans and Democrats. Even if he had a plan that could conceivably be enacted, the CEO doesn't give him much of a platform for pushing his views on Social Security. It's not likely that the White House chief of staff would want him even trying.

I Wonder Why Mick Mulvaney Thinks Trump Didn't Mean What He Said

     From The Hill:

President Trump scrapped potential reforms to Social Security and Medicare while preparing his first budget request, according to Office of Management and Budget Director Mick Mulvaney. ...

“I laid to him the options that Mick Mulvaney would put on a piece of paper,” Mulvaney told CNBC in an interview that aired Tuesday. “And [Trump] looked at one and said, ‘What is that?’ And I said, ‘Well, that's a change to part of Social Security.’ He said, ‘No. No.’ He said, ‘I told people I wouldn't change that when I ran. And I'm not going to change that. Take that off the list.’ ”

Another Sign That The American Right Has Lost Its Mind

     The Wall Street Journal seems disappointed that Donald Trump doesn't share their zeal for "Social Security reform." Of course, "Social Security reform" to them is code for cutting Social Security. It's hard to believe that any sophisticated person would think that any major party Presidential candidate would campaign on cutting Social Security. This is a sign of just how far the American right has departed from political sanity.

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.

This Discussion Should Really Set The Stage For The Disability Trust Fund Debate

      From the Atlanta Journal Constitution:

Roswell [GA] Republican U.S. Rep. Tom Price intends to tackle big-ticket entitlement programs as the new chairman of the House Budget Committee — including Social Security.

In a speech at the Heritage Action for America “Conservative Policy Summit” on Monday, Price said he was excited to work with a GOP-led Senate to end the “muddled mess” of the last few years. ...

“So all the kinds of things you know about – whether it’s means testing, whether it’s increasing the age of eligibility. The kind of choices — whether it’s providing much greater choices for individuals to voluntarily select the kind of manner in which they believe they ought to be able to invest their working dollars as they go through their lifetime. All those things ought to be on the table and discussed.”

 Price consistently framed entitlement changes as Republican desires to “save, secure and strengthen” the programs, given their rising costs that are a big driver of future deficit projections. ...

He said Republicans should not fear the politics of such changes — pointing out that the Romney-Ryan ticket won seniors in 2012, despite Democrats’ “Mediscare” tactics around the Ryan proposal for a voucher-like premium support program for Medicare. ...

Comparing Disability Benefits In US To Other Countries

     Below is a chart showing average growth rates in disability benefits by decade across several countries from Disability Benefit Growth and Disability Reform inthe US: Lessons from Other OECD Nations by Richard V Burkhauser, Mary C Daly, Duncan McVicarand Roger Wilkins in the IZA Journal of Labor Policy. The authors say that the United States must "reform" its disability benefits policies but the chart seems to me to dramatically undermine their argument.

What A Blindingly Obvious And Blindingly Stupid Idea

     From the Washington Post's Wonkblog:

Reps. Tom Cole (R-Okla) and John Delaney (D-Md) introduced a bill Friday that would create a bipartisan commission to improve Social Security. 

Cole, a senior Republican on the House Appropriations Committee, is partnering with Delaney, a junior member of the House elected in 2012, to propose a 13-member Social Security Commission that would have a year to come up with a list of recommendations for improving the program. As it stands, the Social Security Administration has enough funds to pay full benefits through 2033, according to the latest trustees report.

     I call this a blindingly stupid idea because there is zero chance any such commission could reach a consensus and zero chance that this Congress would approve the recommendations of a divided commission. All this could produce is pointless controversy. No Democrat will vote for benefits cuts. No Republican will vote for either tax increases or benefits cuts. And that includes these two Congressmen who apparently believe some magician can come up with another way. They may even be dumb enough to think that private accounts will save Social Security! Any diversion of Social Security revenues to private accounts just makes whatever funding problems there are worse. Anyone who studies the matter for more than 30 seconds realizes that.