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Obama’s “mess of pottage”

9:45 am in Uncategorized by Eric Laursen

Barak Obama is the first Democratic president to advocate cutting Social Security benefits. Whatever happens next, this is a historic change of direction for his party and an ominous turning point for the American social/economic compact.

Esau Selling His Birthright

In the Bible—Book of Genesis, to be precise—Esau returns, exhausted and famished, from working in the fields, and sees his brother Jacob eating. He asks if he can share, and Jacob says yes—but as the price of his “mess of pottage,” he must give Jacob his birthright. He agrees, and thus is inaugurated the prosperity of the descendants of Jacob and the impoverishment of Esau’s.

This ancient tale is being repeated today in Washington, where the first months of the second Obama administration are shaping up as a historic disaster for American working people. It’s also a momentous turning point for the Democratic Party, now led by a business and professional elite convinced that to survive as a brand, the party must serve as executioner of the social contract that created that brand to begin with.

First, the Obama administration, and congressional Democrats, agreed to a deal to end the artificial “fiscal cliff” crisis that made the vast majority of the Bush tax cuts permanent—in fact, rescued them from imminent expiration. In return, they got a temporary extension of unemployment benefits, a two-month delay of sequestration, and extension of child care and tuition tax credits. All of which are quite nice in their own way, but small potatoes—nothing that Washington couldn’t easily scuttle at some point in the near future, just as it cast aside Obama’s signature anti-poverty measure, the Making Work pay tax credit, when that one became inconvenient.

The president, in other words, received a “mess of pottage” in return for surrendering something of inestimable value to the Republicans, something the GOP had been fighting for a decade to consummate. Crucially, only nine of the 77 members of the House Progressive Caucus voted against the bill, encouraging the White House that it could go further and making clear to voters from working households that their ability to hold their alleged champions in line is fading. The fiscal cliff drama served notice that less and less of an effective countervailing force exists to the Washington consensus, deepening the chasm that separates The Village from any meaningful connection with the 99%.

Now, it’s happening again, via the president’s budget. This time, the deal is for another $680 billion-some in revenues over 10 years by limiting tax breaks. This is calculated to please the deficit hawks by raising Obama’s 10-year deficit reduction total to $4.3 trillion, topping the $4 trillion that the center-right cargo cult has touted as its magic number. In return, the White House proposes, quite literally, to surrender the Democratic Party’s birthright—its stewardship of Social Security, the capstone of the New Deal and the foundation of working Americans’ party loyalty—what remains of it, that is.

By beginning the process of redefining Social Security downward, the Obama administration is taking the first major step toward dismantling the Democratic “brand”—its commitment, never perfect to begin with, to provide a social underpinning to American capitalism. For the vast majority of Americans, the “Democratic Party” label means less and less. Read the rest of this entry →

ALEC’s bigger target: Social Security

11:06 am in Uncategorized by Eric Laursen

The low-key “legislative exchange” group has been in the news a lot, promoting right-wing bills in state governments. But it seeks a role on the national level as well. One of its longtime targets is one of the biggest: Social Security.

Jeb Bush in 2003. Photo by Marion Doss.

The American Legislative Exchange Council is taking some flack – and burnishing its conservative credentials – due to the remarkable success of some controversial initiatives. Model bills that have made it onto the books in multiple states thanks to ALEC members of those state’s legislatures include laws mandating stringent new voter ID rules and “stand your ground” laws that helped create the poisoned atmosphere accompanying the tragic gunning down of Trayvon Martin.

What’s sometimes overlooked is that part of ALEC’s goal is for its work at the state level to have a cumulative effect – leading, wherever possible, to legal changes in Congress as well.

One of ALEC’s oldest and most consistently pursued causes has been
the dismantlement of public-employee pension systems. It won a major victory in this fight in May 2000, when the Florida State Legislature passed a bill setting up a 401(k)-type savings plan alongside the traditional, defined benefit pension plan for state workers. The new law allowed state employees to opt out of the existing system and move their assets to a new Public Employee Optional Retirement Program (PEORP). It was the product of an intense fight that brought more lobbyists – mostly from financial services vendors – to Tallahassee than the state capital had ever seen before.

Read the rest of this entry →

What’s the Matter with Chisago County?

5:28 pm in Uncategorized by Eric Laursen

The solid middle class citizens of our economically beset nation are sorry that their growing dependence on government handouts is bankrupting the federal government. If they could possibly send the money back, they would. But they can’t, and so the poor get less. That seems to be the message of a major New York Times feature on the American social safety net. Reading between the lines, it tells us something quite different, and more interesting.

The New York Times ran an informative, engrossing, and very long front-page feature last Sunday on who gets the most from the social safety net. The basic, though muddled, message was that middle class households are sopping up more of what were intended to be anti-poverty programs. In so doing, they’ve become a danger to the nation’s future solvency. But they need the money and don’t know how to stop.

The article misrepresents these programs in a variety of ways – quite a few, in fact. For one thing, it lumps in Social Security and parts of Medicare, which are fully paid for by workers’ contributions, with programs like school lunches, food stamps, and Medicaid, which are not. It presents alarming numbers about the growth of Medicare and Medicaid, but fails to note that the rising cost of these programs is driven by the overall health care delivery and payment system they are part of, not by some inherent fault in government.

More fundamentally, the reporters, Binyamin Appelbaum and Robert Gebeloff, misunderstand the nature of programs like Social Security and Medicare – social insurance that benefits people in all walks of life, and was intended to – and those geared specifically to help the poor.

The government safety net was created to keep Americans from abject poverty, but the poorest households no longer receive a majority of government benefits. A secondary mission has gradually become primary: maintaining the middle class from childhood through retirement.

No. Social Security and Medicare were always intended to help “maintain” the middle class. This was never a “secondary” goal. By relieving working people of the fear that they would end their years in the poor house, they helped create the postwar American middle class and made it easier for more people to take the kinds of risks in business and their careers that conservatives mistakenly think social benefits dissuade them from. Read the rest of this entry →

Demanding the Possible from Social Security

2:28 pm in Uncategorized by Eric Laursen

Social Security Card from 1946 (photo: tbcave, flickr)

Social Security Card from 1946 (photo: tbcave, flickr)

The dead-end debate over Social Security’s solvency has long stymied any discussion of how to improve the program for its participants. Now may be the time to break that logjam. Here’s a way that progressive lawmakers can help to do so.

Hard as it is to conceive, the last time a significant improvement was made for a broad swath of Social Security participants was almost 30 years ago. Enacted as part of the 1983 Amendment to the Social Security Act, those changes – four modest benefit boosts for widows and divorced spouses – were swamped in the news coverage by the larger effort to keep the program funded. Thus has it been ever since.

The result, tragically, is that the national conversation over Social Security has been bottled up in a never-ending wrangle over how best to “save” the program. If it’s true – per Clausewitz, Jack Dempsey, or Mao Zedong, depending on your source – that “a good offense is the best defense,” then perhaps it’s time for progressive friends of Social Security to go on the offensive.

I tend to dislike military metaphors, but the essence of that adage is that if you can’t win on the front where you’re currently engaged, you should open another front where you can. The facts as to Social Security’s solvency lend plenty of support to those who argue that it doesn’t need to be restructured, privatized, or phased out – that there’s nothing wrong with the program that rising wages, full employment, and a sane national health care system can’t cure.

But even opening that conversation is a loser, since when it comes to government “promises,” most people tend to believe the worst. Better, perhaps, to open a new front in the Social Security wars by demanding long-needed improvements in the program.

In Washington-political terms, I’m suggesting that progressive Democrats in Congress set the terms for any changes to Social Security, even is those changes are intended to strengthen the program for the long run. The terms are, first, that these must not include means-testing, downward adjustments to the benefits formula, a hike in the retirement age, or payroll tax carve-outs for private accounts. Second, they must include significant updating and improvement of Social Security benefits.

The fundamental problem with the current Social Security discussion is that it proceeds with hardly any reference to the needs of the people the program actually serves – and who are its owners by all rights, since their payroll taxes fund it. By demanding that any package of changes to Social Security contain significant benefit improvements, Democratic lawmakers can restore that linkage and frustrate conservative and center-right efforts to define the program as a fiscal problem rather than a social necessity. Read the rest of this entry →

Newt Gingrich Can’t Get With the Program

9:17 am in Uncategorized by Eric Laursen

Why is the Republican Party leadership so scared of Newt Gingrich? Putting aside his generally abrasive personality, his loud streak of megalomania, and his tendency to self-destruct – OK, that’s a lot! – it’s hard to think of much in the way of substantive policy matters that sets the former House speaker apart from the rest of the Republican presidential field.

Oh yes, there’s one thing.

Early last month, when it still seemed that Mitt Romney’s anointment as GOP nominee was a matter of course, the editors of the Wall Street Journal took Gingrich for his position on, of all things, Social Security. The Journal has been pushing for Social Security privatization for decades, but strangely, Read the rest of this entry →

How Much Do We Care About the Elderly?

10:03 am in Uncategorized by Eric Laursen

That’s the real issue behind the Social Security debate – and the deficit fight as well. But it’s almost impossible to have a constructive public discussion about the elderly and the share of the economy they occupy so long as deficit hysteria continues.

Don’t go to Pete Peterson’s Fiscal Times for balanced reporting on Social Security and the federal fisc. That would be like asking Col. Qadaffi for news and analysis on Middle Eastern populism. But every now and then, the miscreants raise an important issue. Perhaps inadvertently, but there it is.

Eric Schurenberg, who purveys politically palatable news to the business community as head of BNET and, published an op-ed in the Fiscal Times last week that purported to demolish the “myths” bolstering “that fiscal fun-house mirror, the Social Security trust fund.” The piece is full of misconceptions that are nicely demolished elsewhere.

But Schurenberg raises an issue that’s been almost entirely left out of the current debate about reducing the deficit and “reforming” entitlements like Social Security and Medicare. “The most destructive myth of all,” Schurenberg writes, Read the rest of this entry →

Fixing Social Security: Ted Nugent Speaks Truth to Power

12:54 pm in Uncategorized by Eric Laursen

Ted Nugent, the “Motor City Madman” of ’70s hard rock, has a plan to fix Social Security: Eliminate it. And make workers under 45 pay to wind it up. With enemies like this, does Social Security even need friends?

At this point in his demented career, The Nuge – Tedly, Uncle Ted, what have you – is an American institution, a living, breathing parody of contemporary rugged individualism that Glenn Beck and the Tea Party would have to invent if he wasn’t already roaming the Upper Midwest.

As occasional readers of our right-wing op-ed pages know, he’s also a political scientist of sorts. This month, he’s challenging the Republican Party to put its money where its mouth is on Social Read the rest of this entry →

Social Security: It’s All in the Adjectives

9:55 pm in Uncategorized by Eric Laursen

People who want to cut Social Security benefits to lower future budget deficits are “reasonable” and “serious.” Moreover, economists have reached a “consensus” that this should be done. People who oppose balancing the budget on the back of Social Security recipients are “denialists” whose views are “maddening,” “crackpot,” “strident.”

The cartoonist R. Crumb once advised a young protege that to be good at the craft, he needed to draw his subject accurately – but then exaggerate it just a little bit. In polemical writing, adjectives are that little bit of exaggeration. Sprinkled sparingly through an otherwise competently argued piece, they create a slightly distorted view of the writer’s opponents without making the writer sound too angry or confrontational. The cumulative effect is stark: those on the same side as the writer are intelligent and reasonable. Those on the other side are not.

The adjectives applied to defenders of Social Security, quoted above, aren’t from Fox News, the Cato Institute, or a Rush Limbaugh broadcast. They are drawn from Read the rest of this entry →

Social Security: What’s in It for Wall Street?

2:30 pm in Uncategorized by Eric Laursen

photo: Fabricator of Useless via Flickr

What do Wall Street financial advisers tell their clients about Social Security? That they shouldn’t count on it. In fact, ex it out of your planning altogether. But behind the scenes, brokers and advisers eagerly use Social Security as a marketing opportunity – even bringing in experts from the Social Security Administration itself to educate them on the ins and outs of the program.

On Wall Street is an online magazine for Wall Street brokers and financial advisors. A feature in the January issue offers a fascinating look at the Street’s convoluted but always opportunistic thinking about Social Security.  Author Matthew Leung notes,

While the branch managers we interviewed believe that there is still a strong need for education on the topic of Social Security, many noted that today’s message is different. Top branch managers indicated that their financial advisors are significantly downplaying the role of Social Security in an effort to manage their clients’ expectations and present alternative income solutions.

“In our retirement planning analysis, we run projected cash flows and income needs with and without Social Security, due to the uncertainty of exactly how it’s going to get paid, when it’s going to get paid, or if it’s going to get paid at all,” one branch manager says. Another branch manager concurred, stating: “In all of our retirement projections, we discount the value of the client’s projected social security income and encourage clients to assume that Social Security will not provide much, if any, income throughout their lifetime.”

In other words, the people who many Americans – at least those with some assets to manage – rely on to plan their retirement savings strategy have internalized the message that Social Security benefits will have to be slashed. So much so that there’s little point in even considering them a factor. Indeed, investment firms have built models that discount all or most of the benefit that makes up the majority of income for two out of three retirees. . . . Read the rest of this entry →

Paul Ryan’s Hammock

9:59 am in Uncategorized by Eric Laursen

How stands the Social Security discussion in Washington following State-of-the-Union night? More or less where it was before. Which, for defenders of the program is mostly not good.

President Obama honored his pledge to congressional Democrats over the previous weekend not to endorse cuts to the program. In fact, he went a bit farther, rejecting any plan that would include “slashing benefits for future generations.”

There’s more to say about that. But first, what about Paul Ryan and that Michele Bachmann? Neither of them mentioned Social Security. TV’s talking heads, both before and after the SOTU and the two response speeches, couldn’t stop repeating themselves that the Republican leadership had a big problem: the Tea Partiers were out of control and embarrassing the party with their obstreperousness and their fringe views.

Nonsense. Bachmann’s speech was if anything less of a fire-eating act than Ryan’s, mostly confined to self-congratulation at the Tea Party victories in November, statistics about unemployment and the national debt, and an invocation of the raising of the flag at Iwo Jima (more than 65 years ago). Her actual policy positions were completely unsurprising: repeal Obamacare, pass a Balanced Budget Amendment, cut spending to create a “leaner” government.

Nothing Bachmann said veered even slightly from the official position of the Republican leadership. If anything, the party benefited from her speech, since it allowed them to use prime TV airtime to appeal directly to Tea Party voters who were perhaps turned off by the leadership’s propensity to make deals with the administration during the recent lame-duck session. She’s not a rebel. She’s a bridge to the new wave for Boehner, McConnell, and company. . . . Read the rest of this entry →