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Mainstream thought on Social Security

The NYT offers an editorial on what is becoming mainstream thinking on What’s Next for Social Security? Of course the writing is still short on pointing to the thoroughly researched possibilities for adjusting the program for changing circumstances.

The trustees of Social Security recently reported that the retirement system can pay full benefits until 2035, when it will be able to pay about three-fourths of promised benefits. That is not a crisis. It is a manageable problem.

The system needs to be restored to long-term health, but policy makers must realize that broad-based benefit cuts are not really a viable option.

The focus on benefit cuts also conveniently ignores the fact that benefits are already shrinking. Under current law, benefits are being reduced by the higher retirement age, which has been gradually rising from 65 to 67 for those born in 1960 or later. That translates into lower monthly benefits for those who retire at 65 or fewer years of benefits for those who work until 67. For example, a worker entitled to a $1,000 monthly benefit upon retirement at age 67 will get only $867 if he or she retires at 65.

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Sooo … Akhil Reed Amar and Neal Katyal confuse the IRS and TSA with the FBI. I mean … really, profs??

Update: Link at Scotus blog http://www.scotusblog.com/2013/06/wednesday-round-up-187/.

As prosecutors, police agencies and civil libertarians consider the ruling’s implications, Justice Scalia’s stark dissent — and the fact that President Obama’s two appointees to the court so far agreed with it — makes it worthy of scrutiny, even if he was on the losing side. His argument is deeply flawed, because he did not get his history quite right.

Justice Scalia summarized his scathing dissent from the bench — a rare act that signals sharp disagreement. His opinion opened with these lines: “The Fourth Amendment forbids searching a person for evidence of a crime when there is no basis for believing the person is guilty of the crime or is in possession of incriminating evidence. That prohibition is categorical and without exception; it lies at the very heart of the Fourth Amendment.”

But the Fourth Amendment’s text is not nearly so simple as he makes it out to be. It merely requires that all searches and seizures be not “unreasonable.” Its words do not distinguish between intrusions seeking “evidence of crime” and other sorts of intrusions — say, to collect revenue, or preserve public safety.

Why the Court Was Right to Allow Cheek Swabs, Akhil Reed Amar and Neal K. Katyal, New York Times,* today

Oh, dear.  Looks like we should all take the Fifth instead of filing income tax returns.  Now that we can no longer take the Fourth.

The referenced ruling, whose implications prosecutors, police agencies and civil libertarians are considering, is yesterday’s 5-4 Supreme Court opinion in a case called Maryland v. King.  Lyle Denniston of SCOTUSblog explains:

Treating the solution of unsolved crimes as a legitimate part of routine police station “booking” procedures, a divided Supreme Court on Monday upheld the power of government at all levels to take DNA samples from every person legally arrested for a “serious” new crime.  What a suspect may have done in the past, the Court majority ruled, is a part of the profile that police may constitutionally begin to assemble at the time of arrest for a separate offense.

Justice Anthony M. Kennedy, writing for a five-four majority, insisted that the ruling in the case of Maryland v. King (docket 12-207) involved little more than what happens when police take a suspect’s fingerprints or mug shot.  But Justice Antonin Scalia, writing for the dissenters, said the Court had validated the use of scientific evidence taken without a warrant not to make an identification but to gather evidence to solve cold cases — something he said the Court has never allowed before.

Whether or not Scalia got his history right, at least he, unlike these these two eminent law professors, recognizes that, as a matter of both fact and the Fourth Amendment, solving an already-committed crime is not the same as requiring the filing of tax returns or thwarting an attempt to carry out a crime.  Or, well, at least until yesterday there was a difference as a matter of both fact and the Fourth Amendment.  Now I guess there’s only a factual difference, not a legal one.

But these two writers think there’s no factual difference. Or maybe they just think Scalia thinks there’s no factual difference.  Or maybe they just didn’t notice the words “for evidence of a crime” in that sentence they quote from Scalia’s dissent: “The Fourth Amendment forbids searching a person for evidence of a crime when there is no basis for believing the person is guilty of the crime or is in possession of incriminating evidence.”

Hard to tell.  And rather than clear up that mystery, they just go on to enhance their weird conflation of past and present, and of crime and regulatory compliance:

Justice Scalia failed to identify even one source from the founders articulating the ultraprecise rule that he claims is the central meaning of the Fourth Amendment. And his version of the Fourth Amendment would lead to absurd results.

The government, for example, permits searches at the border to prevent contaminated livestock and plants from entering the country — is such authority permitted only because these searches are not seeking “evidence of crime?” If so, if what happens if the government at some point criminalizes the intentional introduction of diseased animals and vegetables? Why should these searches magically now become unconstitutional?

The title of Denniston’s piece is “Opinion recap: Solving ‘cold cases’ made easier.”  Maybe that refers to handling of refrigerated containers of meat and produce by the Border Patrol and the Agriculture Department.

What exactly is the ultraprecise rule that Scalia claims is the central meaning of the Fourth Amendment?  That livestock and plants trying to enter the country should be forced to submit to a DNA swab in case they plan to violate the tax code when they file their tax returns with the IRS? That certainly is ultraprecise.  Not to mention deeply flawed and historically inaccurate. As is the claim that a statement that the Fourth Amendment forbids searching a person for evidence of a crime when there is no basis for believing the person is guilty of the crime or is in possession of incriminating evidence has anything to do with mandatory filing of tax returns, or airport security, or livestock and plants crossing the border.

My own reaction to the opinion was more along the lines of revulsion than relief that the country’s food supply will continue to be relatively safe from foreign contamination; that I won’t be planting poison tomato seeds imported from Timbuktu; and that Mitt Romney and the Koch brothers won’t have new Fourth Amendment grounds for tax avoidance.  And judging from similar sentiment expressed overwhelmingly in comments threads I’ve read about it, I think this opinion will prove to be the Fourth-Amendment/criminal-law Citizens United–a watershed moment of awareness of the chasm between the Supreme Court justices who think it’s forever the days of the Reagan presidency and the substantial majority of the public who think it’s 2013.

Yes, the Fourth Amendment’s text merely requires that all searches and seizures be not “unreasonable.” Which itself is a distinction between intrusions seeking “evidence of crime” and other sorts of intrusions — say, to collect revenue, or preserve public safety.  Or so I and others, including Scalia, Ginsburg, Sotomayor and Kagan, had thought.

Then again, Amar and Katyal must know what they’re talking about.  They’re eminent law profs, after all, who by virtue of their eminence get anything they submit published anywhere they submit it.

Anything they submit. Even this.

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*“Akhil Reed Amar is a professor of law and political science at Yale. Neal K. Katyal is a former acting solicitor general of the United States, a professor of national security law at Georgetown and a partner at the law firm Hogan Lovells.

 

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“Per qualche dollaro in più” or For A Few Dollars More . . .

Having helped quite a few younger people rearrange student loans from the private sector to Direct Loans or consolidate loans to achieve lower interest rates or payments; I just find this market-place-staging by some politicians offensive. July 1st the rates are expected to double (3+% to 6+%) for subsidized and unsubsidized Stafford loans and probably Perkins loans which all typically go to students who can least afford the “few extra dollars” as suggested by this newly minted Congressman from Indiana who appears to not be able to tie a decent knot in his tie. Student debt is on the upswing and appears to be the next bubble in which to contend. The rising deficit as suggested by Congressman Luke Messer is not increasing but is in a steady rate of decline and the economy is mediocre with slow job growth slow but is still far better than 1,2 or 3 years ago although it could use a shot of stimulus again. What is also insidious about this foray of increasing interest rates for those who can least afford it is there is “almost” no-way-out of it once students sign up for a loan. Those who have defaulted on ninja-style mortgages or did not pay hospital bills might understand the relentless pressure brought to bear; however, student loans have the official distinction of being cast in stone by Congress once a student signs his name. With only death, disability, or a lack of income over 20-or-so years being reasons for discharge can a person escape a student loan. We would not tolerate such for a mortgage or healthcare; but yet, we have locked our youth into such an arrangement.

Read or listen in to a few comments Indiana Congressman Luke Messer makes:

Visit NBCNews.com for breaking news, world news, and news about the economy

The real threat to a college education today is not a few more dollars on their student loans today, it is the fact of the explosive growth of debt; the fact the jobs in this economy for young people entering this economy have been the people most hurt by Obama’s policies

The bottom line is, what you’re saying is the president’s an effective politician. He does a good job of distracting people from things that they ought to be focused on, and sometimes focusing them on things that while important, listen, none of us want to see student-loan rates spike, are only part of the larger problem.”

“I think, as Republicans, we’ve got to do a better job of explaining how our ideas apply to young people. Sometimes it sounds like he’s selling ice cream and we’re selling spinach. But I think personal responsibility is pretty cool. There is nothing out of date about freedom, and we need to have the policies that get this budget back in line, stop the explosive growth of spending — spending that will be paid for by this generation. And we’ve got to do a better job of explaining that.”

Student debt as a result of high interest student loans is becoming more of a threat than the mortgage market ever did as there is no simple discharge. If one wanted to see the financial rats flee the commercial student loan business ship which this Congressman evidently supports, the president should propose simple interest for student loans.

http://maddowblog.msnbc.com/_news/2013/05/31/18660880-house-goper-sees-student-loans-as-trivial-distraction?lite “House GOPer sees student loans as trivial ‘distraction’

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2013 Social Security Report

Well I am back at Angry Bear and just getting my feet wet with WordPress, so this first post won’t be ambitious.

 

The 2013 Annual Report of the Trustees of Social Security was released today Friday the 31st of May. The short take-aways are ‘not much change’ and ‘no news is good news’: date of Trust Fund depletion remaining at 2033 and the 75 year actuarial gap going up from 2.66 to 2.72 which is precisely the structural amount due to the change in actuarial period. (On the other hand the numbers INSIDE that number would repay examination, an exercise for the diligent student.)

For now I am just putting this up for comment, consider this a Social Security open thread.

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Is the IRS Inspector General Himself Partisan, Or Is He Just Stupifyingly Clueless About the Law?

After the tax agency was denounced in recent weeks by President Obama, lawmakers and critics for what they described as improper scrutiny of at least 100 groups seeking I.R.S. recognition, The New York Times examined more than a dozen of the organizations, most of them organized as 501(c)(4) “social welfare” groups under the tax code, or in some cases as 501(c)(3) charities. None ran major election advertising campaigns, according to the Campaign Media Analysis Group, the main activity of a small number of big-spending tax-exempt groups that emerged as major players in the 2010 and 2012 elections.

But some organized volunteers, distributed pamphlets and held rallies leading up to the 2010 elections or the 2012 presidential election, as conservatives fought to turn out Mr. Obama.

A report issued this month by the Treasury Department’s inspector general, J. Russell George, found that inappropriate criteria, including groups’ policy positions, were used to flag some cases and that specialists in the I.R.S. office in Cincinnati, which reviews all tax-exemption requests, sometimes asked questions that were irrelevant to the application process.

And agency officials have acknowledged that specialists inappropriately used keywords like “Tea Party” and “Patriots” in searching through applications.

But some former I.R.S. officials disputed several of [I.G. J. Russell] George’s conclusions, including his assertion that it was inappropriate to ask groups about their donors, or whether their leaders had plans to run for public office. While unusual, the former officials said, such questions are not prohibited if relevant to an application under consideration.

“The I.G. was as careless with terminology as the Cincinnati office was,” said Marcus S. Owens, who headed the I.R.S.’s exempt organizations division until 2000. “Half of those questions have been found to be germane in court decisions.”

Groups Targeted by I.R.S. Tested Rules on Politics, Nicholas Confessore and Michael Luo, New York Times, May 26

I had planned to post on the Times story but haven’t had the time this week, and Linda Beale’s terrific post this morning would make an in-depth one by me redundant.  But I do want question, explicitly, the inspector general’s own competence, and maybe even his own political biases.  What struck me most about the Times story is its indication that the I.G. himself apparently is ignorant of the relevant law, particularly of some relevant court decisions; that his report apparently does not attempt to reconcile the specific actions of some of these groups with the law’s limiting of 501(c)(4) status to groups that do not electioneer; and that the investigation (apparently) did not attempt to determine whether groups with conservative-sounding names were “targeted” for further inquiry at a higher rate than groups with with liberal-sounding names.

If there were a significantly higher number of applicant conservative groups than applicant liberal groups, or if applicant conservative groups more often use political-sounding names than applicant liberal groups do, then–in light of the body of actual law pertaining to 501(c)(4) status–these statistics, it certainly seems to me, should have been featured in the report, and then widely reported by news organizations.

But instead, the I.G. started–and therefore finished–with the mistaken legal premise that political groups, groups whose very purpose was to electioneer, were entitled to 501(c)(4) status. This itself is stunning. From time to time, there are indications that an inspector general has deliberately skewed an investigative report or an investigation itself.  But I’ve never before heard of an inspector general who appeared unknowledgeable about the law relevant to the agency or department that his or her office was charged with inspecting upon receiving triggering information.

It would be nice now if Obama, having already expressed his outrage at the indication of political targeting by that IRS division, would now fully explain to the public what the relevant law actually is; that Democratic-leaning electioneering groups were targeted, too; why the groups that were targeted were targeted; what some of these groups actually do; and the real reason that these groups, whether Republican-leaning or Democratic-leaning, applied for 501(c)(4) status: to be able to hide the identity of the electioneering organization’s donors.

Obama, of course, won’t do that.  His primary goals throughout his presidency have been to please centrist pundits and try to tamp down on the virulence toward him from the right.  But any self-styled centrist pundit who would attack him for explaining the law and mentioning what the targeted organizations really do–that is, what exactly “targeting” meant here–is, by definition, no centrist.  And it’s painful to think of how much more successful this administration would have been all along, and how many serious mistakes it would have avoided, had Obama not dedicated himself so thoroughly to trying to assuage the unassuageable.  And that includes the political pundits of the studiously-centrist variety.

But the Senate Democrats should hold a hearing to make the points about the Times article makes.  The Times article provides a good starter witness list–including Inspector General George–and the names of some of the political organizations, Republican-leaning and Democratic-leaning, that inappropriately filed 501(c)(4) applications, and whose officers should be subpoenaed to testify.

The purpose would be to clarify for the public what the law is now and why–why–groups whose raison d’être is openly partisan want the 501(c)(4) designation, and, in doing so, enlist public support for a new campaign-finance law with specific guidelines concerning public disclosure of donors to political-campaign groups irrespective of their IRS tax status.  And along the way maybe we would learn why, pray tell, the inspector general thinks current law permits (requires?) the IRS to authorize these overtly partisan groups to keep their donors’ identities secret.  That alone would be worth the trouble.

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31 Million Uninsured Under the PPACA . . .

Over at “Economists View,” Anne and Muses are having a discussion over why some 30-something million will be uninsured under the PPACA Paul Krugman: The Obamacare Shock. The conversation goes back and forth citing references without giving any real explanation of what the 31 million is composed of and why they will not be covered. For some reason today, I can not log-in and add to the conversation with an explanation of the 31 million.

Perhaps it is a little known fact; but states today can, if they so choose to do so, qualify Medicaid coverage for everyone. States can also cover beyond 100% of FPL which some states do. The majority of states do not cover certain single adults as determined by each state’s rules for Medicaid coverage.

“Currently, few states cover non-disabled, non-pregnant parents up to 138 percent of FPL in Medicaid, and even fewer states cover such adults without dependent children. At present, only 18 states provide comprehensive Medicaid coverage to parents at or above 100 percent of FPL ($18,530 for a family of three in 2011), and the median state covers working and non-working parents up to only 63 and 37 percent of FPL, respectively. The majority of states do not cover non-disabled, non-pregnant adults without dependent children at any income level, and many low-income women only qualify for Medicaid coverage when they are pregnant. As has been noted, ‘it’s a very common misconception that Medicaid covers all poor people, but that’s far from the truth.'”

“Nationally, just over half (53 percent) of the uninsured who would be newly eligible for Medicaid are male. This is not surprising, since, as indicated above, Medicaid has historically had much broader eligibility for parents than for adults without dependent children, and a high proportion of these parents have been single mothers. ‘Overall, 47 percent of the uninsured who would be made newly eligible for Medicaid under the ACA are women.” Opting into the Medicaid Expansion under the ACA: Who Are the Uninsured Adults Who Could Gain Health Insurance Coverage?.

The expansion of Medicaid to 138% of FPL under the PPACA would have mandated state coverage for single adults not qualifying for the PPACA and its subsidies. The SCOTUS decision to allow states to back out of the expanded Medicaid coverage up to 138% FPL was previously mandatory under the PPACA with the threat of the removal of Medicaid subsidies. States not expanding Medicaid coverage will maintain the status quo and many who would have been covered under Medicaid may now go uninsured as they will not qualify for the PPACA. The state exclusions for which many blogs, politicians, and conservative think tanks such as Cato blame the PPACA as causing is the result of states not expanding Medicaid and accounts for 15.1 million uninsured of the potential 31 million. Another estimated 11.2 million are considered to be illegal residents of the US who will not be covered by the PPACA. Treatment of Non-Citizens under the PPACA and do not have healthcare insurance. The balance of the uninsured is made up of those exempt from being insured, those opting out and paying the penalty, those who may not understand how to apply for Medicaid, etc.

Without a doubt, Republicans hope the constituency will not understand the issues and blame the PPACA for the lack of coverage of single adults by using the 31 million as a political numeric. It is also doubtful whether there is a real concern by politicians for the coverage of illegal residents. I also believe it to be ironic when Republican-lead states are concerned a Republican-controlled House may pull the carpet out from under them by negating funding for the expansion of Medicaid in the future.

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What Reinhart and Rogoff should do now

Carmen Reinhart and Kenneth Rogoff wrote an angry open letter about how Krugman has been uncivil to them.  Krugman’s reply strikes me as being convincing even devastating.

Update: My full fisking here.

I want to focus on one sentence in the R&R letter

 

politicians may float a citation to an academic paper if it suits their purposes.  But there are limits to how much policy traction they can get with this device when the paper’s authors are out offering very different policy conclusions. “ 


The claim that there are such limits is not supported with any historical evidence.  I think it is plainly false, unless the limits are say thta the  politicians can’t travel faster than light by distorting academic work.

 

The example of R&R and the alleged 90% critical level of debt to GDP is proof that their claim is false.  Politicians have gotten huge policy traction citing them and Herndon had a significant impact on the policy debate.

update: The huge traction is documented here

Also note the case of Kenneth Arrow whose first welfare theorem and impossibility theorem have been used for decades to argue that markets are superior to political processes and who is a democratic socialist.  His view on that rather important issue has had no impact on the debate, while misuse of his mathematical results has had a huge impact. Phillips made no claim that the scatter he plotted was a structural relationship.  He expressed horror over how it was used.

 

R&R’s claim about history is plainly utterly false and they should know it.

 

But there is something they can, and really should, do.  If politicians are misusing their work, they can denounce those politicians by name.  Consider

 

The 90% debt-to-GPD ratio was sighted by many as proof of the necessity of austerity in fiscal matters. Paul Ryan’s 2012 “Path to Prosperity” budget plan cited the paper and specifically cited the 90% figure. European Union Economic and Monetary Affairs Commissioner Olli Rehn cited the study when urging EU member nations to cut their budgets, saying, “Serious empirical research shows that public debt above 90% of GDP acts as a permanent drag on growth.”

Reinhart and Rogoff could and should have said “Paul Ryan, you know nothing of our work” (obligatory Annie Hall reference).  They did not.  They still can.  I think they should.  His claims have no basis in the evidence and all reality based people should say so.

 

 

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What Obligations Do Mainstream Media Editors (e.g., The Washington Post’s) Have to Bar Their Regular Political Columnists (e.g., Michael Gerson) From Stating Bald Misrepresentations of Fact?

Compare:

When people realize that their most personal, sensitive, intimate, private health-care information is in the hands of the IRS that’s been willing to use people’s tax information against political opponents of this administration, then people have pause and they pull back in horror.

— Michele Bachmann, on ABC News/Yahoo, May 20 (H/T Glenn Kessler, in a spot-on takedown today)

And:

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The Internal Blue Cross/Blue Shield Revenue Service. Awesome!

“Since the I.R.S. also is the chief enforcer of Obamacare requirements, [Michele Bachmann] asked whether the I.R.S.’s admission means it ‘will deny or delay access to health care’ for conservatives. At this point, she said, that ‘is a reasonable question to ask.’ ”

— Bob Unruh, Why Obama Released Embarrassing IRS Bombshell, WND Exclusive, May 13

Yes, that’s right.  You read the title of this post correctly.  Obamacare turns out to be a single-payer healthcare insurance program, after all!

Or so says Michele Bachmann, anyway.  And she certainly would know.

This is great news, in my opinion.  But, I mean, who knew?  I’d thought until now that the only role that the IRS plays in Obamacare was to collect the penalty, via the tax apparatus, from individuals who aren’t insured through their (or a family member’s) employer and who choose to pay the penalty rather than buy insurance in the private market.  In other words, that the IRS role concerns only people who don’t have healthcare insurance, not people who do.

But apparently I was wrong.  I haven’t actually read the statute, which is infamously long, and somewhere in it, it requires all healthcare insurance premiums to be paid to the IRS.  The  name of which, once the full law kicks in next year, will be the Internal Blue Cross/Blue Shield Revenue Service.

Yes, the agency will still collect ordinary income taxes as it does now.  But it also become our healthcare insurer. Unless you are a conservative, in which case it will still require you or your employer to pay your insurance premiums to that agency. Or maybe just through that agency; I’m not sure which.  As I said, I haven’t read the statute, so I don’t know whether this will be like the Medicare system, or instead the agency will forward the premiums to your chosen private insurer, at least unless you’re a conservation, in which case the agency might use your premiums to pay for daycare for the young children of liberals.

Or maybe I’m misunderstanding completely, because of wishful thinking on my part.  Maybe instead, the statute requires the private insurance companies to get the agency’s approval before agreeing to pay a policyholder’s medical bills.

Yeah, that must be it.  The statute requires the private insurance companies to get the agency’s approval before agreeing to pay a policyholder’s medical bills. It’s odd, though, that three years after the statute’s enactment, this has never been mentioned before. By anyone.  Which makes that report about the Bachmann interview truly an exclusive.

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