Demonstration Outside Social Security Central Offices

From WBAL in Baltimore:

Employees frustrated with the federal government took their concerns to the Social Security building in Baltimore County on Friday, voicing anger about a possible freeze on federal pay and changes in Social Security.

WBAL-TV 11's Rob Roblin reported that the workers showed up in the snow at Social Security Administration headquarters in Woodlawn to let the government know that they want hands off Social Security.

"Hands off. the changes that they're proposing for Social Security (are) not good for anybody," said John Gage, national president of the American Federation of Government Employees. ...

U.S. Rep. Elijah Cummings, D-District 7, said he appeared at the gathering to show his support for federal workers, saying he opposes the proposed Social Security changes.

Camp To Be Ways And Means Chairman

Republicans in the House of Representatives have selected Dave Camp of Michigan to be the Chairman of the Ways and Means Committee in the new Congress.

Camp believes in fairy tales. From his website:

I support voluntary personal accounts for younger workers that would allow them to build a nest egg for retirement that they would own and control, and could pass on to their families. This will permanently strengthen Social Security, without changing benefits for those now in or near retirement, and without raising payroll taxes on workers. Inheritance rights in personal accounts would especially help widows who depend on Social Security and eliminate the need for cumbersome regulations that too often deny individuals from receiving their benefits in a timely fashion.

The truth is that if you divert money that would have gone into the Social Security trust funds into private accounts within only a few years you run out of money to pay current beneficiaries. But what difference does that make? Republicans have always regarded the Social Security trust funds as a fiction and Democrats are rapidly losing faith in their most basic convictions. Divert the entire FICA into private accounts, pay current benefits by borrowing money. Over a few decades Social Security disappears. It will only cost a few trillion dollars and destroy all retirement security but Wall Street will make even more obscene profits and Republicans will achieve the dream that they have had for the last 75 years. All Republicans may have to do is to threaten a default on our national debt.

ALJs Want More Security

From the St. Louis Post-Dispatch:

Mark Brown, a federal Social Security judge in St. Louis, recalls spending time in his courtroom with Russell Weston, the Southern Illinois man who later entered the U.S. Capitol and shot two police officers to death.

Brown cites the case to show that the nation's 1,400 Social Security judges can face potentially violent petitioners. He is pushing the federal government for more guards, better meeting rooms and other changes to improve the judges' safety. ...

Randall Frye, a Social Security judge in North Carolina and president of the association, said that besides additional guards, the biggest need was larger hearing rooms enabling more space between the judge and people pressing claims. He said that hearing rooms now averaged 300 square feet or less, about the size of a large bedroom.

Is Judge Brown giving the name of a claimant who appeared before him?

FICA Cut Likely To Pass

It appears that Congress will pass the tax cut compromise that will reduce the FICA tax "temporarily" while crediting the Social Security trust funds with the money they were supposed to receive.

There has been virtually no time for discussion of the long term Social Security consequences of this bill. This has been treated as a non-issue by almost everyone. There is every reason to be skeptical of the argument that this is only temporary. We are embarking upon a course that poses a grave long term danger to Social Security.

Update: I am not being paranoid. Congressional Republicans are making no secret of their plans:

Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. "Once something like this goes into place, a year from now, when it expires, it'll be portrayed as a tax increase," said Sen. Bob Corker (R-Tenn.). So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes." ...

"Once you bring a rate down, if it goes back up, people will feel that. They'll feel their paycheck being less and that argument" -- that letting it expire amounts to a tax hike -- "eventually is bound to be made," said Sen. Mike Johanns (R-Neb.).

"There's always a tendency to continue those things... Once something comes in, it's very difficult to change it," said Sen. George Voinovich (R-Ohio.) He then volunteered, without prompting, that "It would be detrimental to the Social Security system, especially when it's in bad shape." ...

Lamar Alexander, the Senate's number-three Republican, also said that reform of Social Security should be tied to moving that tax rate back up. "My personal hope is that it doesn't become permanent unless we deal with a way to make Social Security solvent over the long term ...

It also undermines the self-funding nature of the program, Bob Corker observed. "It really begins to break down the whole notion even further of a Social Security trust, when general fund money is going in," he said. "We've already abused the Social Security trust and there's no question that taking this action is just another portion of the camel nose under the tent."

Corker said he would have liked to see Social Security reform coupled with the tax cut.

GOP Thwarts $250 Checks

From the Associated Press:

House and Senate Republicans on Wednesday thwarted Democratic efforts to award $250 checks to Social Security recipients facing a second consecutive year without a cost-of-living increase.

President Barack Obama and Democrats have urged approval of the one-time payment, saying seniors barely getting by on their Social Security checks face undue hardships without the COLA increase.

But most Republicans contended that the nation couldn't afford the estimated $14 billion cost of the payment, and that the COLA freezes in 2010 and 2011 come after seniors received a significant boost in 2009.

The measure was brought up under a fast-track procedure in the House that required a two-thirds majority for passage. The 254-153 vote in favor of the bill fell short of that.

We cannot afford this but we can afford vastly more expensive tax cuts for the wealthiest Americans?

House Passes Appropriations Bill

The House of Representatives has passed the Omnibus Appropriations bill that would fund Social Security and most other agencies. It faces an uncertain prospect in the Senate.

NCPSSM Opposes FICA Holiday; AARP Sorta Opposes

A press release from the National Committee to Preserve Social Security and Medicare (no link available yet):

"Even though Social Security contributed nothing to the current economic crisis, it has been bartered in a deal that provides deficit busting tax cuts for the wealthy. Diverting $120 billion in Social Security contributions for a so-called 'tax holiday' may sound like a good deal for workers now but it's bad business for the program that a majority of middle-class seniors will rely upon in the future." Barbara B. Kennelly, President/CEO

Conservatives have long dreamed of a payroll tax holiday because it fulfills two ideological goals, lower taxes and weakening Social Security's finances. The White House claims the 2% payroll tax cut won't impact Social Security; however, we disagree.

There's no such thing as a "temporary" tax Cut. If Congress is unwilling to allow tax cuts for wealthy Americans to expire in the midst of economic crisis now, then why would it allow this so-called "holiday" to end in one year? The short answer--it wouldn't. Americans should expect that when this tax "holiday" ends, restoring Social Security's funding will be portrayed by those opposed to the program as a massive tax hike, rather than the legislated end of the "holiday". That leaves Social Security permanently dependent on general fund revenues rather than worker contributions which have successfully funded the program for 75 years. If extended, this payroll tax cut would then double Social Security's 75 year projected shortfall.

This 2% payroll tax cut is the beginning of the end of Social Security as we know it. Worker contributions have successfully funded the program for 75 years and that critical linkage between contributions and benefits is what keeps Social Security a self-funded program. Proposals like this threaten the program's independence, forcing Social Security to compete for limited federal dollars.

Cutting contributions to Social Security isn't the best way to stimulate the economy. The Tax Policy Center reports the wealthiest 40% of households benefit most from a payroll tax cut. According to The Center for Budget and Policy Priorities, extending the "Making Work Pay Tax Credit" is a much better and targeted stimulus.

For all of these reasons, the National Committee does not support proposals to cut the payroll tax. America's seniors understand the vital role Social Security plays during these difficult economic times and they're not willing to trade promises of possible short-term economic gains for real and measurable damage to this vital program which would impact generations of Americans to come.

The American Association of Retired Persons (AARP) seems to sort of agree but they do not seem ready to lead opposition.

Omnibus Hopes Still Live?

There is an attempt in the House of Representatives to go forward with a omnibus appropriations bill to cover almost all federal agencies. There is considerable reason to doubt that the Senate can pass anything. For what it is worth, the bill (page 115) provides $11.24 billion for Social Security's administrative expenditures, as I read it. I find appropriations bills to be quite confusing. The President had recommended $12.38 billion.