2008… Let me be clear: I will not do either. Candidate Obama
Via Business Insider:
While campaigning for President in 2008, candidate Barack Obama promised to not alter the way that cost of living adjustments were calculated for Social Security, a policy that is now a key feature of his 2014 White House budget.
Addressing the AARP in September 2008, then-Senator Obama drew a major contrast between his policies and those of his Republican rival John McCain:
John McCain’s campaign has gone even further, suggesting that best answer for the growing pressures on Social Security might be to cut cost of living adjustments or raise the retirement age. Let me be clear: I will not do either.
But things have evidently changed. A critical element of the President’s new budget involves cutting cost of living adjustments through the adoption of chained CPI — a policy that will result in compounding benefit cuts for current and future retirees:
Beginning in 2015 the Budget would change the measure of inflation used by the Federal Government for most programs and for the Internal Revenue Code from the standard Consumer Price Index (CPI) to the alternative, more accurate chained CPI, which grows slightly more slowly.
Here’s the video of Obama addressing the AARP in 2008:
Well we could look on the bright side.
During Campaign 2008 Obama’s top retirement security expert was the author of a ‘Bi-Partisan’ Social Security Plan that relied on Price Indexing initial benefits rather than changing CPI formula, a change that would have been much more burdensome than the change to Chained-CPI and Obama never ruled THAT out.
I was never an Obot or a PUMA and obviously supported Obama over McLame McSame but his position on Social Security was always so screwy that he could plausibly hide behind a spiral staircase (hat tip to P.G. Wodehouse from whom I stole it). It got so bad that I piggybacked on an effort with my friend and economist Barkley Rosser to get a position paper on SS into the hands of the Obama campaign in summer 2008 that at least seemed to get them to back off (see the post by Barkley called “How Bruce Webb and I saved Social Security” from EconoSpeak. Google being your friend here.)
Well that temporary success, if such it was, did not persist, and it turned out that Obama c. 2009 and maybe c. 2013 was just the same squish on SS that Obama 2007 and 2008 was. The whole thing did and does baffle me, I mean I WANT to be an Obot. But Man Oh Man he has a Neo-Lib Econ blindspot the size of the Full Moon on certain topics. Decidedly including this one.
But hell at least Chained-CPI is better than Price Indexing. Though both are terrible and unnecesary.
“Though both are terrible and unnecesary.”
And does not solve any perceived (and most likely fictional) problem.
The supporters of Social Insecurity will continue to cut and trim this program to keep it alive, because it is so much easier than to tell people this is their own responsibility…
When the end comes, it will be means tested with the following question:
did you work all your life?
If you answer yes, you will be denied with the explanation that you worked all of your life and should have saved for your retirement…
To raise a few from poverty many are reduced to it…It is the perfect Socshevik model…Just think of Stalin’s Collective Farms – great on paper, poor on harvest.
Hans such posts are better with data and actual references.
As it is you are basically doing a stream of consciousness schtick here.
Signed Socshevik Libtard.
Obama has always been squishy on social security and has basically been a center right politician on all economic issues. Herbert Hoover was more progressive than Obama in terms of the approach to economic calamity. I guess the gays are happy with him and those people who have been medically uninsured, but I put him right up there with Jimmy Carter. The harm that has been done to all but the 1% on his watch is incalculable. An entire generation has been written off and the country’s future has been put in doubt by his feckless “leadership”
Unfortunately, Obama was, by far, the better choice for president.
Obama has always been “squishy” period. My take on “chained CPI:
Chained CPI ought to be called cascading CPI because when we give people less money because they have substituted cheaper goods in their purchases (altering the basket of measured goods) — then — they substitute EVEN cheaper goods — then — we give them EVEN less money — then — they substitute EVEN cheaper goods, etc., etc.
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Reminds me of the Republican plan — “hedonics”; should have been called “headonics” — to give Social Security retirees less money to eat because they were getting a better deal every year on computers and such — same overall value in their stipend (also same hidden value in the taxpayers’ left over money, so no real unfairness).
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Want to get money FLOODING into Social Security? Get the labor market straightened out.
Productivity doubles every two generations — twice as fast as population — so why should there be any funding problem? Only because wages haven’t nearly kept up.
It’s the labor economy stupid!
My (perhaps paranoid) fear has been that every president has been after the social security trust fund–as in, how to never pay back the funds banked to pay for the boomers’ retirement, either 1. to keep it funding the government, or 2. to turn it over the Wall St.. Presumably Clinton was going after the fund, but Monica/impreachment got in the way, and we know Dubya was going to “pivot” to tackle social security after his reelection. In sports terms, I think of Obama as a cocky pitcher, telling the manager, gimme the ball, I can strike ’em out, I can win this game, I’m the one who can “free” the fund from those entitlements.
CW,
In the 1980s (I think I got the years right — but not important) the FICA Tax brought in more money that Social Security paid out — and the FICA surplus went to pay for things the Income Tax is normally expected to pay for (army, USDA, etc.).
Somewhere along the line (soon?) the FICA Tax INcome and Social Security payOUT should even off.
Soon after, the FICA Tax will fall short of Social Security payouts. At that point Income Tax will begin to pick up the slack by cashing Social Security Trust Fund bonds.
At some point in the future when the Trust Fund bonds are all cashed Income Tax can be lowered because no more bonds need to be cashed — and FICA Tax can be hiked to pay for the Social Security gap. RAISING THE FICA TAX GRADUALLY ALL ALONG (since the 1980s) AS PAYOUTS GRADUALLY WENT HIGHER WOULD HAVE TAKEN CARE OF ALL THIS BUSINESS IN THE FIRST PLACE.
To my mind, the trust fund is just a gimmick for politicians to set the FICA tax once and for all for 60 years in advance — too high at first, and too low later on — so they don’t have to face raising it every year or every so often as the greater need arises. Overall the exact same amount of money comes from the taxpayers — if not exactly the same taxpayers (see next).
One catch being: in the early years (when average income in the nation will be lower than later years as economic growth factors in) the setup is less progressive (flat FICA tax going to pay for things that should be paid with a graduated tax) and in later (presumably richer years) the setup becomes more progressive (progressive Income Tax paying for Social Security that is supposed to paid for with a flat tax) …
… people who have less pay less progressively; people who have more paying more progressively …
… until the bonds run out and FICA takes over all Social Security again, pure and simple (like it should have done all along?).
PS. There is a realistic need for a five year type trust fund so that temporary FICA Tax shortfalls — when the rate needs to be raised to catch up with increasing outgo — will be automatically covered by Income Tax while Congress takes its time getting around to raising FICA (happened a couple of times) — just as a smoothing out mechanism, that’s all.