The opponents of Social Security and Medicare are getting in high gear. After all, it makes perfect sense that after the collapse of a housing bubble has just destroyed the life savings of near retirees that we would cut their Social Security and Medicare. Okay, at least in Washington that makes perfect sense.
President Obama’s deficit commission is moving forward with Social Security and Medicare explicitly in their sights. They got a dry run for how this effort is likely to sell with the public on Saturday as the Peter Peterson funded group America Speaks sponsored a series of 19 "21st Century Town Meetings." It seems that events didn’t quite go as planned.
The exercise was intended to convince people that there were no options other than large cuts to Social Security and Medicare to hit their deficit targets. To ensure this result, the America Speaks crew put together a booklet that exaggerated future budget problems (the exercise was for the year 2025) by assuming a worse budget path than the country is currently facing.
America Speaks also excluded the possibility that the Fed would buy and hold more debt, in effect continuing its current course. This would substantially reduce the interest burden facing the country in 2025. While in normal times this could cause inflation, that is unlikely to be a problem in the foreseeable future. In comparable circumstances, Japan’s central bank has bought an amount of debt nearly equal to the country’s GDP (the equivalent of $14 trillion for the U.S.) and its economy is still facing deflation. There is no reason that the Fed could not follow the same path, unless the goal is to force cuts in Social Security and Medicare.
The America Speaks folks also denied participants the option of reducing public sector health care costs by reforming the U.S. health care system. As they say at America Speaks, everything is on the table, except reforms that would hurt powerful industry lobbies. The America Speaks crew also neglected to mention the Social Security trust fund and that it would have enough assets to pay all benefits through the year 2043, according to the Congressional Budget Office.
Given this stacked deck the participants rose up in revolt. They demanded the option to vote on a single-payer type health care system. The idea being to reduce costs by making health care more efficient rather than just cutting services in Medicare and other public sector programs. They also voted overwhelmingly for defense cuts and for every progressive tax option in the book, even though many had been seriously mischaracterized. For example, they listed the potential revenue from a financial speculation tax in 2025 as $30 billion a year even though there is good reason, based on the experience of other countries, to believe that we could raise close to ten times this amount.
Remarkably, even after spending more than 6 hours with the America Speakers, participants were still very poorly informed on several key budget issues. For example, more than 80 percent of the participants thought that the country had large budget deficits in the years immediately before the recession. (The budget deficits were less than 2.0 percent of GDP in the two years prior to the downturn.)
Less than a quarter of the participants realized that average wages are projected to increase substantially over the next three decades. The fact that real wages are projected to be more than 30 percent higher in 2040 would be an important consideration in an issue like increasing the payroll tax. And, less than a quarter of participants realized that the Social Security trust fund is projected to be fully solvent for more than 25 years into the future.
All in all, this was a good day for democracy. The America Speaks gang tried to shove their agenda down the public’s throat and the public pushed back. Let’s hope that the deficit commission gets the message.



34 Comments







All it would take for “defense cuts” to go the way of the dodo is a terrorist attack. Just something to keep an eye out for.
It’s “class warfare” and the “shock doctrine” in action. (Karl Marx and Naomi Klein were right on the mark.)
I doubt, given the way corporations are given unfettered power to do as their owners please, that wages will rise significantly to keep up with inflation. Still, that even with all the lies being told people were ready to dump war spending in favor of things like single-payer is heartening.
See Saturday’s book Salon: ie, the wages/riches of an almost perpetual war. Very troubling.
Democratic congressman Alan Grayson has proposed a new bill HR 5353, “The War Is Making You Poor Act,” which would carve out $159 billion of pork from the defense budget and give 90 percent of that money back to taxpayers. The remaining 10 percent would go toward trimming the national debt.
I think the military can afford it.
Grayson better get it passed soon. He will not have a job after November.
Where were the 19 “meetings”? And how can we find out where more of them are being held.
Here is their website with links to meeting sites
Mornin’ All
dean, I have a real problem with how the politicians take middle class assets from social security and use those to give our wealth to the wealthiest people on the planet
ss really has to be fixed, that cannot be allowed any longer
OT: Is there to be a Kagan confirmation hearing liveblog? I need to express my annoyance with Jeff Sessions!
“Let’s ‘hope’ that the deficit commission gets the message.” There’s that word again. I’ve pretty much had “hope” beaten out of me. The Corporate Party owns the damn country, and that’s just the way it is.
America Speaks is such a despicable organization. They are living proof of why there should have been a “lockbox” for the Social Security funds instead of allowing the American plutocrats and warmongers to feed at the federal trough for all these years, and then, in effect, sending the bill to the taxpayers. What they are spinning to everyone, is that well all of us rich folks put your payroll taxes up our noses, and now, that it is time for you to retire, there is no money. Crap!
In our current economic conditions, not only is Social Security vital, perhaps we should be thinking about lowering the age to benefits rather than raising it. While this flies in the face of conventional thinking, it would be a pretty effective way to start forcing the transfer of funds to those in need and away from our imperialist adventures, plutocrat figfests and other favored groups. Others such as James Galbraith have argued for lowering the Medicare age to 55 to help combat our economic woes, why not Social Security as well? We could not do it forever, but during the period of high unemployment, perhaps this should be an option on the table.
Maybe a dumb question, but what is the status of these town hall group(s) who “voted” on the presentation? Do they have any clout to change anything? Is the vote simply an expression of rejection or will it mean something?
don’t have a specific answer to your question, Molly.
Here is David Dayen’s account of his participation at the L.A. event
and here’s how participants voted:
They were sponsored by Pete Peterson, a multibillionaire who has set aside a billion dollars to sponsor an effort to repeal the New Deal and the Great Society, which we call our social safety net and he calls entitlements. Peterson has the ear of President Obama and was the primary influence behind the establishment of his “catfood commssion.” See this by Jane, from Feb 2009 (i.e., a month after Obama’s inauguration).
So IOW if the pushback continues, the commission and Obama may have to pay attention? (Color me not hopeful…)
I begin SS and Medicare in September, so I am paying lots of attention.
The two things totally intolerable would be reductions in SS or medicare and giving the money to Wall Street. The programs are not broke. Projections into the future can be almost whatever you want – like the cone ahead of a storm. If we believe there is a bad trend it can be reversed by increasing the cap, the tax or the retirement age. None of those require a reduction in benefits. We are NOT Greece or any other European country that may or may not be living beyond their means. It is not relevant to us. This panic with deficits has got to be stopped, especially in the midst of a recession or things will get worse. BTW have you seen what is happening in Ireland since they went on the austerity program two years ago?
you have to love the way these organizations give themselves fancy names
“AMERICA SPEAKS” they really should have name themselves “WE HATE AMERICANS”
the American Speak crowd will return, you can bet on it.
the real terrorist are not in Iraq, Afghan, they are our neighbors, who call themselves “AMERICAN SPEAKS”
welcome to the bad days
That’s absolutely amazing. I’m so happy to hear that people saw through this sham of democracy. For too long, both parties in Washington have been to the far right of mainstream America. It’s time for the United States people to push for single payer healthcare and economic policies that work for everyone. You don’t speak for us, America Speaks.
The fed holding more debt is a bad idea but I’m with you people. Don’t go messing with my SS benefits. After all, tinman is due to start drawing them in a matter of months. Along that line I’d like to ask you the favor of finding gainful employment for those now drawing unemployment. When you receive unemployment no SS taxes are due. That’s lead to the fact less is going into the system than is being drawn out. That worries the tinman. If you would all go out and work, you would pay into the system and help tinman and Mrs tinman take out what I estimate would be a cool million dollars out before we go to the junk yard in the sky.
Thank you.
Wow! Looks like the first time in your life you disagree with your hero, Rush Limbaugh! And you know what happens to Republicans like yourself who disagree with Limbaugh?
Go ahead, apologize to the big gas bag and get it over with.
You’re correct that people on Unemployment are not paying into Soc Sec. So when there’s more jobs – rather than US businesses holding onto their cash and not hiring – then more will be paid into Soc Sec.
OTOH, if the regressive cap on the Soc Sec deduction from income is raised or abolished, why then – face-palm! – there’d be even more money going into Soc Sec. What a thought! But, gah!, we simply cannot ask people making $50million a year (and there’s lots out there making just that) to pay any more into Soc Sec than I do. Why, that would be simply outrageous to expect someone obscenely wealthy to pay a little more into Soc Sec.
I know! Let’s blame it all on poor people!! Yeah, that’s the ticket. It’s all the fault of people who don’t have a job. Now there’s an original thought. And let’s just sit around victimizing ourselves to poor people. A worthwhile past-time. Thank you, Rush Limbaugh, for those endless daily talking points, where your listeners (aka dittoheads) never have to THINK at all, question reality, or, oh I dunno, have an original thought of their own. Plus: never ever question our wealthy overlords, like Rush.
I would have a large smile if the wage cap was removed and million dollar benefit checks were paid to billionaires – because I would know that their “overpayment” (the benefit calculation for money over 100,000 is very very little increase – but they do get an increase) makes for the equivalent of a 2% of payroll decrease for the rest of us – or for a very very strong SS system, or some combination of these two.
Meanwhile Pete has backed off of his age 70 normal retirement goal – and is now going for age 69! Doesn’t mean the final recommendations will not screw us totally – but we are having a bit of an impact for now.
If the only change is from Reagan’s 67 to Pete’s 69 phased in from 2026 to 2050 (which is actually justified actuarially) we will have won! If the wage cap is gone, the first pot of tea is on me! :-)
Does anyone know of any mainstream media pickup regarding the revolt Dean writes about? Or is all the rejoicing limited to the blogosphere and on-line comments buried deep in the web sites of news organizations?
Because the Petersen PR apparatus is going to swamp any off-message results from these meetings, unless the news hook of the revolt gains mainstream purchase.
Americans have been seduced and hypnotized by the pablum on their tv sets.
I really find it hard to believe that Washington can get the tone of the people so wrong. Maybe if they got out among the people and talked to random people without being chosen by their political correctness monitors they call consultants, they would find out what the real people think. These are the people that do not go to foolish political rallies. They are too busy trying to stay above water.
Move the tax structure back to the way it was in the ’50s and sit back and watch America become America again.
The repuks are so interested in abortion that they created and abortion of a government and the dems have done damn little to change that. Even the dems are more republican than democrat.
Pardon me for yelling, but sometimes Washington people forget the change the batteries in their hearing aids, so I will yell…..WAKE THE FUCK UP AND SEE WHAT THE PEOPLE THAT VOTED FOR YOU WANT….M O V E L E F T. No, you fool, your other left.
I saw this last year in Philadelphia when the Mayor convened several “town hall workshops” to decide what service4s we’d cut and which we’d save.
None of the progressive ideas, like payment in lieu of taxes (PILOT0 for large nonprofits like UPenn and Blue Cross made the list; nothing about tax restructuring; nothing except what the choices the Mayor and his allies had come up with for us.
and yes, there was rebellion. a lot. and now we’re back fro another round in 2010….
Have you ever noticed that these “the sky is falling” types are basically dishonest?
Instead of starting the thought process with an empty plate and selecting items which might help to alleviate the problem in question, they start by making the assumption (and remember what “assume” does) that if it isn’t generating a PROFIT for one of their ilk, it’s a BAD program.
Ultimately, in order to accomodate that “profit” into a situation where no profit previously existed, they have to do one of two things:
1. increase the total cost of the program to accomodate said profit; or,
2. lower the wages of the people who make the program work by roughly the
amount of the profit.
For at least thirty years I have contended that there are three words in the
English (or American) language which are dangerous to our democracy:
1. de-regulation;
2. self-regulation; and,
3. privatization.
You can thank Ronald Reagan for those three bits of horse manure along the pathway of life !!!!
That’s not an assumption, that is a given (to their way of thinking).
From The Hill:
I don’t think so.
The Democratic Party….or whatever group replaces it…needs to coalesce around a SINGLE PRINCIPLE: that any government program MUST rely on maintenance and governance BY DEDICATED GOVERNMENT EMPLOYEES (and NOT “privatized” in any way, shape or form).
The very idea of the American people being FORCED to purchase anything from private, profit-making sources is anathema! “Private contractors” are nothing but syphillitic scabs on the back side of progress.
The words “de-regulation”, “self-regulation” and “privatization” need to be enshrined in the Hall of Infamy and SPAT ON REGULARLY by loyal Americans.
Lacking that, I fear that the day draws near when those same “loyal Americans” will find it necessary to assert their rights by means other than “peaceable assembly”; meanwhile, a “Lynch the Ghost of Ronald Reagan” campaign seems like a first step to returning our once-great country to it former grandeur when my old WWII “boss”, Franklin Delano Roosevelt, led us upward out of the Great Depresion (whose twin may now be upon us) and onward to victory over the most formidable forces ever faced.
I say that I can probably afford to have a few more dollars taken out of my check every week to help keep SS alive. Also I feel that if the gov. makes money from the payback of the TARP loans from banks and other people we helped bail out then some of that interest should go into the SS fund. At least We the people can see some kind of return for the risk the taxpayers took to help the ones that almost murdered our economy. At least, at the end of the day, they are still rich. Think long term for once. Over time we can salvage this program. So say we the people.
There are an awful lot of people in those “top brackets” who can afford to have MANY more dollars taken out of their checks [or dividend payments, or capital gains proceeds] to keep SS alive.
That’s where we should be fishing.
Raise both the “cap” on wages subject to ss withholding [you don't have to make all of those corresponding extra contributions "count" in calculating future benefits -- just treat 'em as a tax] and the “initial amount” /wage level at which folks are subject to withholding.
The withholding rate is so onerous for those at the bottom of the scale, it really shouldn’t kick in until after the first $20K.
Dean Baker and Mark Weisbrot’s book “Social Security, The Phony Crisis” is a great way to prepare for the assault on our benefits that isn’t going to stop any time soon. It’s like everything else the rich has accomplished. They have the money and the politicians to push and push for what they want and when people are distracted by something else, say endless wars, a housing crisis, an economic catastrophe, they slip their ideas into the conversation using deceptive language trying to benefit from the fears people have about government deficits.
Another book that’s relevant is “Report From Iron Mountain” published in 1967. It’s always been said that the book is fiction, but following the trajectory of our country from the time this book was published and looking at what the group in the book was deciding, everything in it is fact and the people who formed this commission has been following its decisions.
I’m really glad Dean is on our side.
Q. How many Cat Food Commissioners rely, or will rely, on Social Security as an income source for their retirement(s)?
Q. How many people connected with America Speaks, in an executive capcity, rely, or will rely on Social Security as an income source for their retirement(s)? (I exlcude secretaries, clerks, janitors and the like.)
I thought everybody was going to get a seat at the table in the Obama administration. Looks as if some of the seats are empty and the people are missing.