Republicans Are Killing Social Security One Tiny Service Cut at a Time
Nancy Altman reminds us that Social Security is NOT off the table for Republicans via this post Republicans Are Killing Social Security One Tiny Service Cut at a Time at Slate:
Republicans have made no secret of their long-standing desire to destroy Social Security as we know it. Indeed, Sen. Marco Rubio revealed just before Christmas that congressional Republicans plan to go after Social Security yet again.
Their strategy includes both direct and stealthier efforts—death by a thousand cuts to services. And Republicans are poised to plunge the knife in again soon.
Republican politicians are making it increasingly difficult, time-consuming, and aggravating to access our earned Social Security benefits, in the hope of undermining support for the extremely popular program, and eventually ending it as we know it.
…
Since 2010, when Republicans took back control of the House of Representatives, SSA’s operating budget has been cut by 11 percent. For 2018, the Republican-controlled Senate Appropriations Committee has proposed limiting Social Security’s administrative budget even more, this time, by another $492 million—4 percent of SSA’s operating budget, on top of an already enacted 16 percent cut, after inflation, since 2010.
…
Republicans like to say that government should be run like a business. Any private business as successful and popular as Social Security would be opening branches, not closing them. If congressional Republicans simply allow SSA to spend just another one- or two-tenths of a percent of Social Security’s large and growing surplus, the agency can provide the exemplary, first-class service for which it has always been known.
If we enact smart legislation the SS surplus will never be anything but large and growing. If Nancy Altman wants to convince right leaning voters to get Republicans to change their policies, she needs to choose her words more carefully. People will ignore the important points if they can find trivial points to use as a reason to reject everything she says.
“Social Security’s large and growing surplus”
Social Security does not have a surplus. Using modern day accounting there is a liability of accrued Social Security benefits due that offsets the cash/cash equivalents held by SSA.
You keep discrediting yourself by using cave man cash-basis accounting (PAY-GO) to evaluate social security. That worked out sooooo well for pension funds prior to ERISA.
“Using modern day accounting there is a liability of accrued Social Security benefits due that offsets the cash/cash equivalents held by SSA.”
And a modest increase in SS taxes over the next decade would fix that. Of course, Republicans oppose *any* tax increase. They’d rather cut the benefits that older Americans have paid for already. Shame.
So how is the rest of the public going to hear about this? What is the Democratic Party going to do to make every American over 50 thoroughly pissed at the Republican Party?
@Joel
“And a modest increase in SS taxes over the next decade would fix that.”
Again, your definition of “fix” is to get the cash flows right. You are correct that raising FICA tax will create a situation where current tax collections from the work force will cover the cash outflows to the Baby Boomers, but remember that benefits are a function of how much you contribute. So raising the tax on today’s workforce will increase their benefits due 10-40 years from now.
The Treasury can print dollar bills. This isn’t about cave man cash-basis accounting, it is about getting the actuarial math right and NOT wasting excess cash on government boondoggles (both sides of the aisle are good at that).
Social Security is doing like the banks and moving a lot of stuff online. For example I applied for SS online, and only had to go in to the office because they do not yet handle withholding on SS online. I went about 11 am to the local office and was the only person there, So just like banks are closing branches SS is doing the same as things move online. Today the office visit is really needed for exceptional cases or areas the online system can not yet handle.
@Lyle
Left-wingers are a bunch of Luddites. See their high opinions of the USPS. I can’t tell you the last time I went to a physical USPS or bank branch.
I paid off a pretty low interest rate auto loan many years ago solely because the bank didn’t have a way to pay online. And I didn’t want to be bothered once a month to walk a block, buy a stamp, and send a check in the mail to the bank. Now I take a picture of the front and back of a check and make a deposit (with one of those evil big banks).
Jay
I assume you are simply ignorant and not deliberately shaping the “facts” to suit your ideology.
I also wish Ms Altman had not referred to a “large and growing surplus.” She knows, and everyone else knows by now that the large and growing is only temporary. But apparently shaping facts to fit your ideology is not only a disease of the Right.
I also wish Ms Altman had pointed out that the money the Congress is cutting from the administrative budget of SSA is actually money that belongs to the Social Security Trust Fund… that is, the administrative expenses of Social Security come out of the FICA taxes and not the general taxes, so it is only one of those perversities of the law written by Congress that Congress has the power to control SSA’s budget.
I guess that means that even if the “promised benefits” were fully funded for the infinite future, Congress could still starve SSA of the funds to administer the program.
And Jay, some day when you are old and can’t really manage “on line”… especially given the clumsiness with which the “on line” is programmed… you will have the pleasure of not knowing what to do to collect your Social Security. Though I suppose you will always be too rich and too smart for that ever to happen.
Urban Legend
“How is the rest of the public going to hear about this?”
They won’t. I have talked to my Senators and Congressman about the fact that Social Security can continue to pay for itself forever… that is the workers can continue to pay for their own benefits… by raising the payroll “tax” one tenth of one percent per year for a few years. One tenth of one percent is about a dollar per week per year in today’s terms (value of dollar and average wage).
Nancy Altman knows this and is president of something called Social Security Works, which claims to be a defender of Social Security.
I suppose they are. But they have decided to “defend” Social Security by “demanding the rich pay” for it.
This is contrary to Roosevelt’s intention. He made SS worker paid “so no damn politician can take it away ” from the workers. Altman knows this too. In fact she explained it very carefully in a book, The Battle for Social Security.
I believe Altman has good intentions, but doesn’t think very clearly.
Meanwhile I’d be glad to hear your ideas for “telling the people.”
I left a dangling thought.:
i talked to my congressmen (all liberal Democrats)…. and got blank looks. they only know what their advisors tell them. and their advisors only know what the “non partisan experts” tell them. and the non partisan experts all work for Peter Peterson directly or indirectly.
I did get an acknowledgment from SSA Deputy Chief Actuary that one tenth of one percent increase in FICA per year would indeed pay for the SS actuarial deficit as far as the eye can see…. whether Jay’s “modern accounting” (something like Enron accounting)… can understand that or not.
But I have not been able to get anyone who has a forum to “tell the people.”
Jay
just to be clear…
you may or may not know something about “modern accounting”
but you don’t know a damn thing about Social Security financing.
or the difference between Social Security and ERISA.
Unfortunately you can use words that sound like you know what you are talking about. And others, some of whom may know the same words… and be similarly ignorant about how they do and do not apply to Social Security… will be fooled. But they want to be fooled.
Your contribution to the discussion here is exactly the same as that of the big boys in the back of the class who make loud belches and think they are clever.
If Social Security is so good, then why is it a mandated
with police powers ??
There are the elderly, whom are not married or disabled, who
will receive a Supplemental Social Security Benefit.
“If Social Security is so good, then why is it a mandated
with police powers ??”
To protect the rest of us from stupid people.
Bill Billson
If speed limits are good, why are they mandated with police powers?
SSI has nothing to do with “Social Security” (OASDI) It is administered by SSA but funded by general taxes.. It is a welfare program. Social Security is an insurance program paid for by the people who expect to get the benefits.
Sorry if this confuses you.
@Coberly
So here is Coberly’s idea of accounting….
When the government collects a FICA tax:
Debit Cash $X
Credit Retained Earnings $X
When the government pays SS Benefits:
Credit Cash $X
Debit Retained Earnings $X
Here is how GAAP would tell you to do the accounting.
When the government collects a FICA tax:
Debit Cash $X
Credit Payable Due $X
When the government pays SS Benefits:
Credit Cash $X
Debit Payable Due $X
“To protect the rest of us from stupid people.”
Jerry, that protection cost each recipient a
substantial monthly benefit; not to mention those
who die prior to receiving any payments.
Coberly, thanks for the correction !
Bill
That protection provides each of us with a substantial monthly benefit when we retire, become disabled, or die with dependents.
It’s an insurance policy. It has to be mandatory because people like you can’t understand what it does for them. Then the rest of us would end up paying for their needs out of taxes as welfare.
I guarantee that if you die before receiving any benefits you won’t miss them.
Bill
I am reasonably sure you live in a state with MANDATORY auto liability insurance.
And most states require some businesses to carry insurance in case they inadvertantly cause someone harm in the course of doing their business.
Get over it. You are not two years old any more. Some coercion is part of the human condition, and at least some of it is beneficial.
Social Security essentially ended poverty among old people in this country… where poverty in old age was the norm prior.
The people who tell you the Big Lie about Social Security actually don’t like the idea of poor people being able to live without working… even if the poor people paid for their own retirement. I would go so far as to say they hate you, but then people would think I have gotten a little crazy myself. But listen to what they say when they forget you are listening.
The problem with SS is it has not covered the discretionary budget cash deficits the past 5 or 6 years.
Excess SS receipts have been spent on things like building al Nusra….. and star war because it cannot work!
The SS net positive balance represents “special treasuries”!
That are debt instruments of the US government.
Should the millionaires who are now billionaires against SS (per Ike) attempt to weasel……..
I would worry more about the cash found each year to pay OPM retiree and DoD retires which has no money at all behind the “assets” in thise federal debt accounts. Being a military retiree on SS that is!
@Coberly
“Bill I am reasonably sure you live in a state with MANDATORY auto liability insurance.”
This is such a retarded argument most people usually don’t bother to retort it, but you are such a retard it requires a response. States require automobile drivers to carry insurance to cover damages they might impose on others. It is a false equivalency to compare this mandate to purchasing insurance to cover damages to yourself. If state’s required automobile drivers to purchase insurance to cover oil changes, state emission inspections, damage to your own vehicle, etc then you might be able to claim equivalency to mandated retirement income insurance, health insurance that covers annual (read predictable) doctor wellness visits, birth control, etc.
But Coberly is too stupid to handle NUANCE.
Jay:
You are beginning to grate on me.
@Ilsm
“Excess SS receipts have been spent on things like building al Nusra….. and star war because it cannot work!
The SS net positive balance represents “special treasuries”!
That are debt instruments of the US government.”
Resident moron Coberly doesn’t realize the irony of his “Enron” retort he made at me above. The SSA is in fact an SPV of the US Federal Government that has $10 trillion plus liability that is hidden off balance sheet and ignored by the majority of fools out there analyzing US government finances. Read a SSA financial report and notice how much space, effort and import is focused on the entities liabilities – hint it is like they don’t exist.
Bill,
That’s the way insurance works.
Jay is right. The real problem with Social Security is not the cash flow differential, but the $2.8T Trust Fund that has to be turned into cash over the next 15 or so years. The reason everyone, except coberly, ignores the Trust Fund is that it is considered “intra governmental” debt, rather that “debt owed to the public” and thus can be wiped out with a keystroke with virtually no negative ramifications.
In the next Social Security reorg, probably in the second Trump administration, if there is one, the Trust Fund will be zeroed out in favor of a clean slate.
coberly fancies himself an expert on Social Security, and that the fixes are easy based on “First start out with $2.8T cash, then……..”
Sammy:
Coberly does not fancy himself as anything. SS and many economists consider Coberly an expert with his solution to SS. Jay is an idiot and his tenure here grows shorter by the day with the language he uses.
Much of the population loaned the TF to the US government. That it was used to lower corporate tax rates and provide other tax breaks is not the fault of them of SS. The nation still has to pay those special treasuries back with interest till the last one in twenty – thirty -something. Do not follow idiots Sammy.
Sammy and Jay
I am pretty sure you have reached the point where I don’t have to worry about anyone taking you seriously.
Ditto . . .
coberly,
“I don’t have to worry about anyone taking you seriously.”
Actually, no. Jay and I are in the overwhelming mainstream of thought on this. Being math, there is very little wiggle room. Virtually no one anywhere else takes your Social Security analyses seriously, because you insist on ignoring the real issue.
Nowhere except this blog….. why they choose to endorse your nonsense is a mystery, and probably to their detriment.
@Sammy
We have to keep in mind that Coberly and the rest of their ilk preferred the USPS continue to ignore its liability for employee post-retirement health insurance benefits. Being a champion of the worker is to let the employer make a promise but not financially account for it until the year that it comes due. The old USPS financial statements were actually worse than Enron, because at least Enron footnoted in fine print where you could go to find the liabilities not consolidated to balance sheet. They also lack the financial acumen to understand why the adjustment would flow through income statement. And even after that strongly urged that the pro-worker choice was to not fund this liability with cash in a segregated legal entity but instead leave it all with the company.
You got your 401(k) 100% invested in your company? No, but I got my retirement health insurance invested 100% in company stock!
-USPS worker
Coberly,
I’m with you. I’ve gotten to the point where I don’t even bother to read their posts. It is a waste of time.
Run,
“Do not follow idiots Sammy.”
I am one of the lone voices on AB trying to stop the blog from plunging into the abyss on Social Security issue. Following coberly is following an idiot.
“The nation still has to pay those special treasuries back with interest till the last one in twenty – thirty -something.”
No they don’t. It’s money owed to itself, like your front pocket owing your back pocket $2.8T.
It’s likely that the Trust Fund will be eliminated with a dry erase marker in an overall restricting that will take care of Social Security recipients as best as possible as they are a large voting bloc.
But the overall tax increase, debt increase, and/or spending cuts required to accomplish this are magnitudes greater than the whatever pittance Coberly claims. This is not just me, Sammy, claiming this, but every other serious analyst on Social Security. The longer AB endorses the “Coberly Plan” the less the blog will be taken seriously on the issue, and the less competent it appears, to the point of laughingstock.
If you want coberly to be taken seriously, tell him to turn his analytical skills to develop a plan that includes redemption of the special treasuries, rather than just insult anyone who disagrees.
Then the blog can have a positive and notable contribution to the debate.
Sammy:
That was a loan to the US by us. Default on those special treasuries and the nation will be in deeper trouble. Again we are one of the top 100 economics blogs in 2018. I have no problem with what Coberly and Bruce say on SS. Coberly’s NW Plan was accepted.
Run,
I AM TRYING TO HELP YOU. I don’t want Angry Bear to be known as the blog that claimed, over and over, that $1 per week is all that is needed to save all Social Security benefits. If I were a casual browser and I read that, or if the blog became known as advocating that, I would spit in my beer and move on.
Sammy:
Stop or spit in your beer and move on.
Sammy
the Deputy Chief Actuary of Social Security agreed that one tenth of one percent of payroll, from each the employer and the worker, each year would fund Social Security as far as the eye can see.
Did you not read that on this blog? Or did you just forget it? Or are you just hoping that if you repeat your lies again and again other people who have not read the Deputy Chief Actuary will not know you are lying?
One tenth of one percent of a 50k per year wage is one dollar per week.
Raising the payroll tax one tenth of one percent per year turns out to eliminate the need to redeem the special treasuries. That was explained to Sammy many times, but he chooses to not see it, or not remember it, or just lie about it many thousand more times than i can hope to answer him.
As for the famous cartoon of Uncle Sam borrowing from one pocket to lend to his other pocket, it is a cartoon. The money in the Trust Fund was lent by the PEOPLE paying the payroll tax… that is, putting their money in trust, their savings for their retirement… into Social Security, a separate leal entity from “the budget”, and Social Security lent the temporary surplus TO “the budget” (congress) relying on the “full faith and credit of the United States” to pay it back to the people who paid it in due time.
Full faith is not something Sammy understands. Nor does he know anything at all about Social Security funding, but he keeps telling the same lies again and again hoping you won’t notice that he has been answered again and again.
It’s a game I can’t keep up. II you let Sammy “win” you will end up robbing tens of millions of people in each generation people of the best chance they have of not dying in poverty when they can no longer work.
Social Security is not the postal system.
Different things, but the special technique of the professional liar is to talk fast and make you think one thing is the same as another, even though they are fundamentally different.
I never talked about the postal system because I didn’t know anything about it.
Not knowing anything about Social Security does not prevent Sammy from talking about Social Security.
IF you have to get your “understanding” from “every other serious analyst” you ought to at least find out who the “serious analyst” is working for.
Hint: these days he has shaved his horns and hides his tail. Not fashionable, you see.
“Coberly
January 28, 2018 5:34 pm
Bill
That protection provides each of us with a substantial monthly benefit when we retire, become disabled, or die with dependents.
It’s an insurance policy. It has to be mandatory because people like you can’t understand what it does for them. Then the rest of us would end up paying for their needs out of taxes as welfare.
I guarantee that if you die before receiving any benefits you won’t miss them.”
It substantial only if one lives longer than expected. Yes, I understand what is does
to self-employed folks like me – taking one out every eight dollars I earn.
If the program is so good, then it should be market based – join if you like it
and not if you don’t. Of course the left realizes that most people would find
a much better way of funding their retirement, with many more options and
higher levels of income.
If you want a substandard return on your retirement funds, then by all
means, feel free to reduce your standard of living but why should other
follow your folly ??
It reminds me of the mob’s racket protection – your subscription is required
whether you like it or not .
“Coberly
January 28, 2018 5:41 pm
Bill
I am reasonably sure you live in a state with MANDATORY auto liability insurance.
And most states require some businesses to carry insurance in case they inadvertantly cause someone harm in the course of doing their business.
Get over it. You are not two years old any more. Some coercion is part of the human condition, and at least some of it is beneficial.
Social Security essentially ended poverty among old people in this country… where poverty in old age was the norm prior.”
========================================================================
One can avoid buying auto insurance several ways, however there is only a single
way to not pay payroll taxes and that is by not working.
If you wish to accept coercion as a lifestyle then by all means indulge yourself. Yes, FDR’s
welfare retirement plan did greatly reduce elder poverty but at the expense of everyone else.
https://www.washingtonpost.com/news/federal-eye/wp/2015/04/10/puerto-ricans-who-cant-speak-english-qualify-as-disabled-for-social-security/
“According to the article’s research, the acceptance rate of Social Security Disability cases in Puerto Rico is currently 63.4%, whereas the average in the U.S. is usually under 40%. The nation has seen a rise in unemployment, as well, and many of these are probably drawing Social Security Disability.”
Here is another of many example as to why the sun is setting on SS.
“Puerto Ricans are eligible for federal disability payments, for example, through Social Security. Ms Enchautegui and Mr Freeman point out that, in the territory, federal disability allowances are much higher than the United States average as a share of wages and pension income. Unsurprisingly, therefore, one in six working-age men in Puerto Rico are claiming disability benefits.”
If you love liberty, you shall not infringe upon others. If you want to dominate
others with your dogma, then you are nothing but a tyrant.
Bill:
If you do not like the message Angry Bear has, no one is twisting your arm to read the posts or comment. There are places such as Breitbart where you may find some of your own ilk. Hicks article starts out with a title “Puerto Ricans who can’t speak English” giving us a clue as to his leaning. If you love prejudice, then this is an article for you. Puerto Rican people speak Spanish and having worked there I had no problem with it. We tried once before to change the lives of a people by forcing them into our ways. It did not work.
The qualifications for disability are the same as the mainland. Unemployment has always been an issue of the island which is why many companies located there especially medical device companies. The people are industrious and I served with many of them. The same as the US with the lack of jobs, those with disabilities applied for disability.
If you live in this country Mr. Libertarian, you have to contribute. You are not a self sustaining island on to yourself. That you have to pay double the rate in SS tax is your choice. You could always work for a company and avoid 50% of the tax which you get to deduct from income tax now. Live with it.
Bill Billson
I have some sympathy for your position. When I was young I believed much as you do. By the time I got old I could see where I was wrong.
I think I see where you are going wrong now, and I know nothing I can say will change your mind. Only experience (more knowledge) can (might) change your mind.
I hope that by then it will not be too late.
Here are a couple of hints: worship of money is dangerous to you. “freedom” can become a self defeating obsession, and unlimited freedom simply does not work in any country… or situation.. known to man.
this is a democracy and you have a part in the creation of the laws that limit your… and my… freedom. you will never get all that you want and by insisting upon it may well end up with a great deal less than you have now.
that one eighth of your income is far, far less important than you think it is. i don’t think you realize that you want to be a free-loader. taking what the country gives you without paying for it.
dismissing what social security gives you because you only make a profit if you live longer than the average life expectancy is, in the first place, not quite true, in the second place fails to understand the whole point of insurance. you only get your money back from fire insurance if you have the fire. most people think it’s worth the price.
In any case, you have not been telling any lies here that i noticed. you have, however, been listening to lies, the Big Lie, in other places, and, I am afraid, repeating it to yourself without actually trying to think it through. all the way through.
but thank you for reminding me how easy it is to think the way you do.
Run,
thank you for schooling Billson about Puerto Rico. I would have tried, but I know less about it than you.
Jerry Critter
thanks for the moral support. i needed it.
Bill
well, even when I was young and stupid i did not think EXACTLY the way you do.
Good ideas tend to gain support. Bad ideas do not, and end up with the proponent baying at the moon that a bunch of evil doers are conspiring against him. Which sounds like coberly?
What is your point Sammy. Coberly proposes a solution that the Social Security actuaries say does the job…political success is a different matter. Political selling and messaging cary little content, so I don’t get your criticisms…the consequences of one approach over another is a matter of strategy and such…it appears you are simply spitting….
Coberly – Can you provide us a link that confirms what you said above?
“the Deputy Chief Actuary of Social Security
agreed that one tenth of one percent of
payroll, from each the employer and the worker,
each year would fund Social Security as far
as the eye can see.”
BK:
This is the type of stuff I love, Here is the complete statement:
“Your (coberly [I inserted coberly’s name]) proposal would increase the payroll tax rate gradually, by 0.2 percentage point per year beginning in 2018 (a 0.1-percent increase for employees and employers, each). Based on the tables you provided, it appears you would propose an “automatic adjustment” to the rate in the future, allowing the tax rate increases to stop and then resume, applying a 0.2 percentage point increase whenever the 10th year subsequent would otherwise have a trust fund ratio (TFR) less than 100 percent of annual cost. The intent appears to be that TFR would not fall below 100 percent. If we are understanding your proposal correctly, this type of adjustment would very likely maintain trust fund solvency for the foreseeable future, based on the Trustees’ intermediate assumptions.”
Karen P. Glenn
It is on Angry Bear in the month of January 2018.
http://angrybearblog.com/2018/01/social-security-and-conversation.html
Dear Mr. Coberly,
Representative DeFazio’s office forwarded your letter of August 5, 2017 to our office and asked that we respond to you. Your understanding of the financing of the Social Security Trust Funds is on target, including the implications for borrowing and debt. We appreciate your careful attention to the Trustees Report and the projections we develop for it in order to show policymakers the magnitude of any shortfall they will have to address.
We have looked at your thoughtful and detailed proposal for increasing the scheduled payroll tax rates for Social Security. As I’m sure you are aware, we have scored numerous comprehensive solvency proposals and other individual options for making changes to Social Security. These analyses are available on our website at https://www.ssa.gov/OACT/solvency/index.html and https://www.ssa.gov/OACT/solvency/provisions/index.html.
Your proposal would increase the payroll tax rate gradually, by 0.2 percentage point per year beginning in 2018 (a 0.1-percent increase for employees and employers, each). Based on the tables you provided, it appears you would propose an “automatic adjustment” to the rate in the future, allowing the tax rate increases to stop and then resume, applying a 0.2 percentage point increase whenever the 10th year subsequent would otherwise have a trust fund ratio (TFR) less than 100 percent of annual cost. The intent appears to be that TFR would not fall below 100 percent. If we are understanding your proposal correctly, this type of adjustment would very likely maintain trust fund solvency for the foreseeable future, based on the Trustees’ intermediate assumptions.
Also, based on our rough estimates, a 0.2 percentage point increase in the payroll tax rate each year from 2018 to 2035, reaching an ultimate rate of 16.0 percent in 2035 and later, would eliminate the actuarial deficit and keep the TFR above 100 for each year thereafter. An increase to 15.8 percent in 2034 would fall just short of both goals. Note that these rough estimates do not include any additional “automatic adjustments” such as the one you propose.
We hope this information is helpful. Please let us know if you have further questions. We are also copying Rina Wulfing from Rep. DeFazio’s office on this email.
Karen P. Glenn
Deputy Chief Actuary
Office of the Chief Actuary
Social Security Administration