by Dale Coberly
GOP PLANS TO GUT SOCIAL SECURITY
The Republicans have opened a new assault on Social Security. At present all I know about it is what I read in a Talking Points Memo by Tierney Sneed Key House GOPer Introduces Bill With Major Cuts To Social Security .
The trouble with Sneed’s article is that she does not appear to know what she is talking about. She just wrote down what some “experts” told her with no idea what the words mean.
For example, she says,
“A 65 year-old at the top of the scale, a $118,500 average earner, would see his benefits cut by 25% when he retired, compared to the current law, and that reduction would grow to 55 percent compared to current law by the time the retiree was 85 years old.”
Well, which is he, “at the top of the scale” or an “average earner”?
The point is probably trivial but I point it out so you will be on your guard if you read her article.
Additionally she quotes Paul Van de Water, who is someone who actually knows that Social Security can be fixed entirely and forever by simply raising the payrolll tax one tenth of one percent per year until the balance between wage growth and growth in the cost of retirement is restored. But somehow she doesn’t bother to mention this, or maybe Van De Water forgot to mention it because he favors a “tax the rich” solution… without understanding that that will turn Social Security into welfare as we knew it, and lead to its ultimate destruction by those rich who would then be paying for it.
Social Security has succeeded because Roosevelt insisted it be paid for by the workers who would get the benefits, “so no damn politician can take it away from them.”
But the damn politicians keep lying and journalists keep repeating the lies without spending ten minutes thinking about them.
The basic “facts” about the Republican proposal, introduced by Texas Congressman Sam Johnson appear to be :
gradually raise the retirement age from 67 to 69.
This amounts to a benefit cut of about 10%, but that’s not the worst of it. Raising the retirement age is simply a death sentence for people whose health is not up to working another two years, or won’t live to collect benefits for more than a few years after they retire.
change the cost of living adjustment to reduce real benefits as the retiree gets older.
This is called a “technical adjustment.” They can pretend that the CPI is too generous and know that most people won’t understand the scam.
the size of initial benefits will be cut for most workers by catastrophic amounts.
This turns Social Security into a straight welfare plan. Most people will be paying for benefits they will never get. The very poorest are promised a larger benefit for awhile… until the bogus cost of living adjustment, and increased retirement age do their work. Moreover it is not clear what happens to “the rich” who lose their “side income” as they get older. And of course there is always the fun of going to the welfare office every month to prove that you don’t have any hidden assets.
Meanwhile, the CRFB (Committee for a Responsible Federal Budget). an organization dedicated to the destruction of Social Security by misrepresenting the facts, is playing cute games like “use our calculator to find out how old you will be when SS runs out of funds.”
But SS will never run out of funds as long as the workers are allowed to pay… in advance…for their own benefits. With no change at all in SS, SS will pay 80% of “scheduled benefits,” but this is 80% of scheduled benefits which meanwhile have grown 25% in real value. So the GOP “plan to save SS” is out and out theft.
CRFB has another cute game: “use our calculator to design your own plan to save social security.” But when I used their calculator it did not allow “increase the payroll contribution by one tenth percent (for each the worker and the employer) per year for twenty years.
There are other ways to accomplish the same end, but this seemed to be the simplest way to fit the CRFB “calculator.” Someone with more time and a newer browser might want to try seeing what they get. But look at small per year increases in payroll contribution. For example, I think a 0.4% increase (combined), about two dollars per week for each the worker and the employer, should solve the problem in ten years, but I haven’t done the numbers on that myself.
Meanwhile, something that calls itself “the Bipartisan Policy Center, says “Ultimately, we are going to need something that’s a little more balanced between benefits saving and revenue changes in order to get a proposal that could pass Congress and get approved by the president,” said Shai Akabas, director fiscal policy at the Bipartisan Policy Center.”
It’s hard to see how much cuts (“benefit savings”) make sense to balance a dollar a week increase in the payroll tax (revenue changes), but that’s the kind of thinking that “Bipartisan” gets you. “Hey folks, we can save you a dollar a week just by gutting Social Security so it becomes meaningless as insurance so workers can retire at a reasonable age.”
I am getting too discouraged. As long as no one is working to tell the people how this will work for them, we are just going to stand around like sheep and watch them cut our throats.