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.

SSI Regulations Advance

     Almost a year after it was submitted to them for review, the Office of Management and Budget (OMB) has finally approved proposed rules to omit food from in-kind support and maintenance SSI calculations. However, this does not mean that the proposed regulations will come into effect anytime soon. They must first be published in the Federal Register for public comment. Social Security must then consider the comments and prepare a final version of the regulations which must again be submitted to OMB for approval. This could easily take 24 months, especially if OMB is going to sit on it for a year.

A Poll

 

online polls

Raising Retirement Age Unpopular In France

     From the Associated Press:

An estimated 1.27 million people took to the streets of French cities, towns and villages Tuesday, according to the Interior Ministry, in new massive protests against the government’s key pension reform plans. ...

The nationwide strikes and protests were a crucial test both for President Emmanuel Macron and his opponents. The government says it is determined to push through Macron’s election pledge to reform France’s pension system. And strong popular resentment will strengthen efforts by labor unions and left-wing legislators to block the bill, which would raise the retirement age from 62 to 64. ...

Rail operator SNCF said most train services were knocked out in the Paris region, in all other regions and on France’s flagship high-speed network linking cities and major towns. The Paris Metro was also hard hit by station closures and cancellations.

Power workers also demonstrated their support for the strikes by temporarily reducing electricity supplies, without causing blackouts, power producer EDF said. ...

Appropriations Subcommittee Members

     I posted earlier about the members of the House Social Security Subcommittee of the House Ways and Means Committee. At least as important is the Labor, Health and Human Services, Education Subcommittee of the House Appropriations Committee (which also covers Social Security). They're the ones deciding how much money each agency under their purview gets to spend. Here are the members of that Subcommittee for this Congress:

Republicans

• Rep. Robert Aderholt (AL) – Chair
• Rep. Mike Simpson (ID)
• Rep. Andy Harris (MD)
• Rep. Chuck Fleischmann (TN)
• Rep. John Moolenaar (MI)
• Rep. Julia Letlow (LA)
• Rep. Andrew Clyde (GA)
• Rep. Jake LaTurner (KS)
• Rep. Jake Ellzey (TX)
• Rep. Juan Ciscomani (AZ)
  

Democrats 

• Rep. Rosa DeLauro (CT) – Ranking Member 
• Rep. Steny Hoyer (MD)
  
• Rep. Barbara Lee (CA)
• Rep. Mark Pocan (WI)
  
• Rep. Lois Frankel (FL)
  
• Rep. Bonnie Watson Coleman  (NJ)
  
• Rep. Josh Harder (CA)
  

    DeLauro is Ranking Member for the entire Committee. She was Chair of the entire Committee and its Labor, Health and Human Services, Education Subcommittee in the last Congress. In the past she hasn't seemed all that interested in funding for the Social Security Administration.

Some Listings Will Become Harder To Meet

     Social Security's musculoskeletal Listings will become harder to meet this November. As written many of these Listings require that all relevant criteria be present simultaneously or "within a close proximity of time." Because of the Covid-19 pandemic this became hard to prove since access to healthcare, particularly in person health care, became more difficult. In July 2021 Social Security adopted a temporary rule loosening these requirements until "6 months after the effective date of a determination by the Secretary of Health and Human Services under section 319 of the Public Health Service Act, 42 U.S.C. 247d, that the national public health emergency resulting from the COVID-19 pandemic no longer exists." Newspapers are reporting that the President plans to issue an order ending the public health emergency on May 11, 2023. Thus, the Listings will become harder to meet as of Veterans Day in November. 

    The musculoskeletal Listings have been too hard to meet even with the temporary rule in place suspending some of their worst aspects. They will become even more harsh. They need re-examination.

Ferguson To Be New Chairman Of House Social Security Subcommittee

     Congressman Drew Ferguson will be the new Chairman of the House Ways and Means Social Security Subcommittee. Ferguson was not on this Subcommittee in the last Congress. Apparently, he's a mainline Republican Congressman -- an election denier who wants to outlaw abortion and same sex marriage, for instance. He was very much opposed to blocking Social Security recipients who need representative payees from buying firearms. This is what he said in the press release on his appointment as Chairman of the Social Security Subcommittee:

... As a member of the Committee on Ways and Means and House Budget Committee, I am ready to roll up my sleeves and get our country back on track with responsible fiscal and pro-growth policies. For the last two years, the radical Left’s out-of-control, big government spending resulted in an economic crisis – causing hardworking Americans to suffer with record high inflation and putting our nation on the brink of a recession. 

“We will reverse course and enact policies to maintain American competitiveness and innovation, economic growth, and fiscal responsibility. As the Chairman of the Subcommittee on Social Security, I will be a leading voice for our nation’s seniors, and advance solutions to some of the most pressing issues facing our country today.” ...

    The problem is that for many Republicans in Congress the only solution for any Social Security issue is to cut benefits somehow, such as by raising full retirement age. I'm not saying that's his view or that he'd get anywhere if that is his view, but that's the milieu he's coming from. There's also the prevailing Republican viewpoint that since government is infinitely wasteful, cuts in agency operating budgets can have no effect upon agency service. The agencies will get by just by reducing waste. At least that's their viewpoint as to non-defense spending.

    Would he be interested in working on the more mundane problems at Social Security, such as getting their phones answered, where he might make a difference? We'll see but I'm expecting hearings asking why Social Security allows people to freely change their gender in agency records and why any Social Security employees are allowed to do any work from home.

 

    Below is the full list of Subcommittee members -- at least as announced so far. Since this list includes an equal number of Democrats and Republicans, I think there may be another Republican or two to be added.

 

Republicans

• Drew Ferguson, Chairman
• David Schweikert 
• David Kustoff
• Tom Rice
• Jodey Arrington

 

Democrats

• John B. Larson, Ranking Member
  
• Bill Pascrell, Jr.
• Linda T. Sánchez
• Brian Higgins
• Dan Kildee

Social Security’s Immigration Problem

      From the Motley Fool:

… Look at social media message boards, and you'll find one commonly repeated viewpoint: That undocumented workers receiving benefits are to blame for Social Security's financial shortcomings. Immigration into the U.S., in general, seems to be a regular scapegoat for why America's top retirement program is struggling.

But this school of thought couldn't be more wrong.

Social Security's problem isn't that too many immigrants are flocking to the United States. Rather, it's that net-legal immigration has been declining for a quarter of a century. Since 1998, the net migration rate into the U.S. has fallen every single year, and is down by an aggregate of 57%, according to data from the United Nations. 

Most people legally migrating to the U.S. tend to be younger, which is an extremely important point. These are people who will spend decades in the labor force contributing to Social Security via the payroll tax. The 12.4% payroll tax on earned income (wages and salary) was responsible for providing approximately $981 billion (90.1%) of the $1.088 trillion in revenue Social Security collected in 2021. 

The intermediate-cost model in the 2022 Trustees Report -- the "intermediate-cost model" is what the Trustees view as the outcome likeliest to happen -- is based on average annual total net immigration of 1,246,000 people.  Between July 1, 2012, and June 30, 2017, fewer than 955,000 total net migrants entered the U.S. annually, according to data from the World Bank.  If net migration into the U.S. continues to fall, or even steadies at these reduced levels, it's all but a certainty that Social Security's funding shortfall will grow. …