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Education Social Security
Richard Eskow of the Center for the American Future, posted a very good one a couple of days ago. He used the old union meme “which side are you on” to beat up the President and Congress about Social Security being placed on the negotiating table. I thought his writing on it was striking. Here’s some of it:
“This is a moment of moral clarity. Right now there are only two sides in the Social Security debate: the side that says it’s acceptable to cut benefits – in a way that raises taxes for all income except the highest – and the side that says it isn’t.
“It’s time to ask our leaders – and ourselves – a simple question: Which side are you on?”
“Nancy Pelosi says she can convince most Congressional Democrats to “stick with the President” as he pursues his gratuitous and callous plan to cut Social Security benefits as part of a deficit deal – even though Social Security does not contribute to the deficit.”
I certainly hope that Nancy Pelosi cannot convince most Democrats to risk their seats and prepare the way for a Republican sweep in 2014 by voting to cut SS. The Republicans will respond to this by casting themselves as the protectors of SS, and while this is ridiculous, the Democrats will not be credible in claiming that they are its protectors, and they will lose their identity as the protectors of the safety net, a very high price to pay for the sake of raising taxes on the rich by an amount that is insignificant in the greater scheme of things. Eskow goes on:
“Excuse me: Stick with the President? What about sticking with our seniors and our veterans? What about sticking with our disabled fellow Americans? What What about sticking with the more than 4,000 children on Social Security who lost a parent in the Iraq War?
“If you want to “stick with” Americans on Social Security, it’s time to call everybody who represents you in Washington – your Representative, your Senator, your President – and tell them that they’ll lose your support if they do this deal.
“It’s time for an end to the Orwellian doublespeak. Cutting benefits won’t “strengthen” Social Security, as Nancy Pelosi claims. Cuts of 6.5 percent for a 75 year old and 9.2 percent for a 95 year old aren’t so small that “folks won’t even notice ‘em,” as President Obama claimed. They’re not a “technical” adjustment, as his press secretary argued, nor do “most economists believe … this about getting a proper measure of inflation.
“The smart economists know that even today’s cost of living formula isn’t enough. It undercounts the things older and disabled people use the most, like health care and public transportation. Some other people know the formula’s inadequate, too: Seniors. They live with the costs every day.
“So let’s stop all the double-talk and get down to the real question at hand: Which side are you on?”
The framing is “which side are you on”? Will you stick with the President and the people, who will do a deal at any costs, or will you stick with seniors and the American people. This reminds me of the frame Randy Wray recently used in one of his posts on re-framing MMT. That framing came from Bruce Springsteen:
We take care of our own
We take care of our own
Wherever this flag’s flown
We take care of our own
And it’s amplified by Randy Wray this way:
“. . . We don’t let old folks sleep on the street. We take care of our own. We don’t let children go hungry. We take care of our own. We don’t exclude the 47%. We take care of our own.
“We’re all stakeholders in this great nation. We take care of our own. White, black, brown, yellow and red, we take care of our own. Young or old, healthy or sick, we take care of our own. . . .
“We need a good government to help us take care of our own. We need good public services and infrastructure to keep our country strong so that we can take care of our own. Our government spends to keep our country strong so that we can take care of our own. . . .
“Sovereign government cannot be forced into involuntary insolvency. It can always afford to make all payments as they come due. It can always afford to buy anything that is for sale for its own currency. It can always financially afford any spending that is in the public interest. It can always afford to take care of its own.
“Anything that is technologically feasible is financially affordable for the sovereign issuer of the currency. It comes down to technology, resources, and political will. We’ve got the technology to take care of our own. We’ve got the resources to take care of our own. All that is missing is the political will.”
So, which side are you on? Are you on the side of most of us who want to take care of our own, wherever our flag’s flown; or are you on the side of people who believe that the US Government’s fiat money financial resources are necessarily constrained, so that we must choose between taking care of our own and making sure that our wealthy people and large corporations don’t have to risk any of their wealth by giving their due to our country?
Don’t get me wrong, I know the Federal Government doesn’t need tax revenue from the wealthy or anyone to fund anything, because it’s false that the Federal Government must spend only after it taxes or borrows. But there are still at least three good reasons to tax. First, the value of our fiat money is driven by the need to have enough to pay taxes. Second, taxing is needed to regulate and manage inflation. And third, taxing is needed to lessen economic inequality so that political inequality does not become so extreme that it poses a danger to democracy. All three reasons are ultimately about taking care of our own.
Eskow ends with:
“Tell the President you’re against the chained CPI. Tell your Senators and your Representative to declare their unequivocal opposition to it like Grijalva and Ellison and the others did, and to vote accordingly.
“And ask them that simple question: Which side are you on?”
I agree, and I’d also add:
Tell them that SS, Medicare, and Medicaid are litmus tests for them. Vote to cut them and you’re gone after the next election. It will be “Bye Bye Marjorie” or whatever your name happens to be, for you!
More and more of us know the dirty big secret that there is no debt/deficit crisis. That the Government isn’t constrained in the amount of fiat financial resources it can create.
So, we know that we can afford the cost of the social safety net, and even a lot more generous one than we have today. We also know that the Government has the financial capability to underwrite full employment, Medicare for All, a first class educational system, alternative energy development, infrastructure reinvention, programs to counter and reverse climate change, and whatever else we need to do to solve our problems.
So, don’t you go telling us any longer about the fiscal constraints that excuse your not doing your jobs. We know those don’t exist. We know you have no excuses.
So, get off it, and represent us! Help us take care of our own and each other, or resign from public office!
And that goes for the most junior Congressperson and also for the President of the United States! If you’re not on our side and you don’t want to help us take care of our own, then get out of our way and give somebody else a chance who’s patriotic enough to serve!
(Cross-posted from New Economic Perspectives.)
Picture from StockMonkeys.com licensed under Creative Commons
84 Comments
Yeah, You slime ball Democrats. Start understanding that perpetually SUICUIDING the elected officials with “D”‘s after their name by making them take unpopular sides is foolish, and that people are catching on.
Of course, right now the current meme being handed out to eh Dem loyalists is that see – Boehner was made to cry and go away, so The President was more brilliant at negotiating than the rabble would give him credit for.
Some of the commentators at Daily Kos are certainly pulling out that old theme. Like what Obama did was a “masterful head fake” and so forth. Gag! They are even already gearing up to blame Progressives for the 2014 Republican sweep that is inevitable if Democrats support this pos en masse.
Good morning Margaret.
This is a great post and way to frame the issue by Richard Eskow about the Ds. This past election, I held my nose and voted for Obama because the other guy was just to horrific a choice in my mind, but if the Ds cave on any of the entitlement issues, they will never ever have my vote again.
Durbin is my Senator and i do not trust him one bit on the issues.
Another thing that’s most shameful about this whole charade is that social security has NOTHING to do with the budget deficit that’s the claimed motivator for all of this.
Cuts to social security [and other social programs] are merely bargaining chips that Obama [and many Democrats] are using to persuade the Republicans to accept tax increases. Those tax increases — and some cuts to programs that REALLY affect the deficit — are what they should be talking about if they’re genuinely concerned about this whole fraud.
But please, we need to repeat again and again, for those whose hair is on fire over the supposed “deficit,” that cutting social security will NOT deal with the issue itself at all.
And we should all take a moment to contact our House member and Senators to remind them that most of THEM will be on the ballot in 2014, while Obama will not.
Thanks for the “Whose Side are You On?” meme.
In this rare case, don’t blame Congress, at least not Democrats in Congress.
Obama put “entitlements” on the table before his inauguration.
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/15/AR2009011504114.html
And, very shortly after he signed Obamacare into law….
And then….
At a press conference held by members of the House Out of Poverty Caucus Rep. John Conyers (D-Mich), the second most senior member of the U.S. House, was pointed in his criticism of the White House regarding jobs and cuts to Social Security the President put on the table last week.
“We’ve got to educate the American people at the same time we educate the President of the United States. The Republicans, Speaker Boehner or Majority Leader Cantor did not call for Social Security cuts in the budget deal. The President of the United States called for that,”Conyers, who has served in the House since 1965, said. “My response to him is to mass thousands of people in front of the White House to protest this,” Conyers said strongly.
Of course, we’re all good little sheeple, I mean, of course, good little soldiers. Therefore, we ignored Conyers’ plea for massive demonstrations against Obama’s proposals to cut Social Security and Medicare.
At this point, Obama might be wearing down some Democrats, while other Democrats who are as DLC as he is might even agree with him. But there is still a contingent of Democrats in Congress who are vowing to vote against his cuts, even though he is the leader of their party. I hope to heaven they stand strong.
Won’t the Democrat always be “the lesser of two evils?”
Romney was not as horrific a choice as most other Republicans. Massachusetts survived him. The worst thing he did was saddle Massachusetts with Romneycare, but he had Democratic legislative help with that, just as Obama had with Obamacare.
Is changing the index absolutely unacceptable regardless of whether meaningful mitigating provisions are provided to protect low income seniors?
You do understand, don’t you, that the worst part of cutting Social Security is sending millions of senior citizens into poverty, NOT the loss of seats by Democratic politicians, don’t you? If not, shame on you.
Loved this Eskow article. Though, if you didn’t know, these cuts in SS and Healthcare have been in the works since Bush/Cheney. Regardless of the Obama move on healthcare entitlement reform had to be rejiggered to pay for the tax cuts to the top earners. *Of course, to our great surprise, the Tea Party came to the rescue and saved the country with their principled stand against all dissenters, foreign and domestic. So, let’s hope Tea Party Patriots can save us from the big, bad govmint we all never, ever voted for. Thanks, wigwam ( snark )*
I am doing thisw. I’m calling all the pols, signing petitions, whatever I can. I hope everyone is doing their part. Talking about it among ourselves.
It seems to me rather late in the game for the question to be asked of Democrats as it is crystal clear which side they are on as they are merely the capitalist’s “B” team. They are on the same side they have always been on.
The Democratic Party plays an indispensable role in society’s political machinery. This doesn’t mean it has any power, in terms of controlling the state or setting policy. It means that without the existence of the Dem Party, the US could no longer maintain the pretense that it’s a “democracy.” If the Dem Party disintegrated, the US would be revealed for what it really is — a one-party state ruled by a narrow alliance of business interests.
The party’s true function is thus largely theatrical. It doesn’t exist to fight for change, but only to pose as a force which one fine distant day might possibly bestir itself to fight for change. Thus the whole magic of the Dem Party — the essential service it renders to the US power structure — lies not in what it does, but in its mere existence: by simply existing, and doing nothing, it pretends to be something it’s not; and this is enough to relieve despair & to let the system portray itself as a “democracy.”
As long as the Dem Party exists, most Americans will believe we have a “democracy” and a “choice” in how we are ruled. They will not despair, and will not revolt, as long as they have this hope for “change within the system.” From the system’s point of view, this mechanism serves as the ultimate safety valve — it insures against a despairing populace, thus eliminates the threat of rebellion; yet guarantees that no serious change to the system will be mounted, because the Dems weren’t designed to play that role in the first place.
For the Democratic Party to even begin to serve as a vehicle for opposing the absolute rule of capital, it would at a minimum have to be capable of acknowledging the conflict that exists between the interests of capital and the rest of the population; and of expressing a principled determination to take the side of the population in this conflict.
A party whose controlling elements are millionaires, lobbyists, fund-raisers, careerist apparatchiks, consultants, and corporate lawyers; that has stood by prostrate and helpless (when not actively collaborating) in the face of stolen elections, illegal wars, torture, CIA concentration camps, lies as state policy, and one assault on the Bill of Rights after the next, is not likely to take that position
Where’s John Reed when we need him….
Ahh he just walked in.
“There are only two classes, the bourgeoisie and the proletariat. And whoever isn’t on one side is on the other.”
Ten Days That Shook the World
VII. The Revolutionary Front
John Reed (1887–1920)
Whatever, from any currently serving politician, from the US House to the US Senate to President Obama, makes you think any of them capable of assuring any changes will include “…meaningful, mitigating provisions…” of any sort, much less protections for those least able to get a voice?
The chained CPI is designed to kill Social Security. When someone pays in their entire life, say from age 20 until age 67, the compounding effect of a reduced CPI is dramatic. If the chained CPI falls .5% below the current CPI, as it has for the last 12 years, the average young person today would see a reduction in benefits of approximately 26%. However, they paid in the same tax rate and same total tax amount, so their return is much worse. The 26% reduction is what they would see at the start of their retirement. Over the remaining years of their lives, their benefit would be reduced even further. Once young people see what a poor return they are going to get with the chained CPI, the almost universal support for Social Security will be forever lost.
Yep, the Democrat and Republican Party ruse is merely a game to separate people while the plutocrats that own them loot and pillage.
At least this framing concentrates on the problem as an issue instead of plays the usual simplifying into Democrats good, GOP bad game.
It makes no difference what letter you have next to your name, what matters is where you stand on the issue.
Yes, changing the CPI is entirely unacceptable, unless it is increased to reflect the actual cost of living seniors face. Realize, for the middle class with good incomes, their social security taxes subsidize the working poor. There is a far better rate of return for those who barely quality for social security, as opposed to those who pay in the maximum. So the slightly upper middle class subsidize the poor through the social security tax. The truly wealthy love this, as the middle class pays for the welfare for the retired working poor, but they do not have to. To further reduce the rate of return the middle class get, while maintaining the same CPI for the working poor, would remove popular support for social security. Even now, the people who pay the maximum into Social Security would come out far ahead with a privatized retirement system. Someone else would then have to pick up the tab for the poor.
Here is an example: E.I.C. Or, the provisions connected with taxing Social Security.
I post at Kos too, and btw, I have two videos in the post there that don’t appear here because the interface wouldn’t take my code. Anyhow, there’s a lot of fighting going on there over SS and plenty of favorable commenter for a position in favor of the one I’m taking. Here and here are two posts that also aren’t friendly to the President’s positions. Those posts have gotten a lot of support.
“The chained CPI is designed to kill Social Security.”
Most of the young people I know already assume Social Security won’t be around for them in a meaningful way.
Heckuva job pols.
Yes, he is in Obama’s pocket!
“social security does NOT contribute to the deficit, asking people to give up the benefits they’ve invested all their lives so the wealthiest people on the planet can have it IS THEFT from the middle class”
that’s what I plan on saying to my critter
As I understand it, the “chained CPI” reduces benefits by roughly a third of a percent each year, which figures out the 10% every thirty years. So a sixty-five year old retiring today would see their benefits drop by 10% by the time they reach 95, i.e., they’d lose 5% of the benefits they would otherwise have collected over that 30-year period, which I’m told computes to a total of $28,000 that this “little bit of strengthening” will cost them.
But what about today’s 35-year old? He’d be retiring, just as today’s 65-year old reaches 95. He’d enter the SS system at a point where it pays 10% less than it would if Obama didn’t “strengthen” SS and he’d reach 95 at a time when the benefits would be down by 20%. On average he’d get 15% less, i.e., he’d lose three times as much as today’s 65-year old, i.e., $84,000 during that 30-year period.
As Cenk Uygur put it: “That’s not a Grand Bargain; that’s grand larceny!”
Hey, LGID. Great stuff. Thenks. Rec’d of course.
Thanks, but just as important is the “We Take Care of Our Own” theme. The original version of this post has videos of Pete Seeger and Springsteen. The youtubes are here and here.
Me too, especially since every one of them caved on ACA, didn’t they?
Which is something that entered the tax code decades ago. I say again, what from a currently serving politician makes you think this can happen?
Even if someone was in congress when the EIC first passed, I doubt their willingness to do such a thing today.
My understanding is that the index change would not impact the amount an individual would initially receive.
Do you have information indicating I am incorrect about this?
BTW, I posted at MyFDL yesterday, expressing appreciation for the GOP radicals who blocked Grand Bargain 2011 and have temporarily derailed Grand Bargain 2012. At least, they are willing to stand up for their principles (such as they be), which is better than I can say for most Demnocrats.
IMHO, it will take a coalition of righteous Democrats and Republicans willing to vote their principles to defeat this corporatistic nightmare that Obama is trying to inflict on us.
The E.I.C. has been repeatedly tweaked.
You might also be interested in the recent Medicare tax surcharges for high wage earners and large capital transactions that go into effect January 1.
Yes, because they can’t be trusted to protect low income people. What they will do id put in something that sounds good and is subject to inflation erosion through the chained CPI. That is, they will protect low income people from cuts resulting from the chained CPI; but the protection will become less effective over time because the very assessment of what is low income will be related to the chained CPI. Btw, of course, a change in the index would be a good thing if it were changed to reflect the greater percentage of income older people have to spend on housing and medical care. However, that CPI-E which is what should be used right now to compute the SS COLA isn’t even on the table because it would cost a Government that can create new money at will, “too much.”
Look this is all BS. We have to fight the whole attitude. not pretend that there’s anything reasonable about their concern. There’s no justice in what they’re doing. It’s all about neoliberalism which kills.
Right. It reduces benefits by .31%-per-year per year. The first year you get .31 percent less than you would otherwise. The second year it’s .62 percent. The tenth year its 3.1%. The 30th year, you get 9.3% less than you would have otherwise. According to statistics I’ve seen, the average 30-year loss to someone retiring today is $28,000. But to someone retiring 30 years from now, i.e., today’s 35-year old, it would be three times that much, i.e., $84,000.
Of course, I realize it. That’s why I wrote the piece, which makes that very clear. But,the point just above, is that even from a legislator self interest point of you. If you’re a Democrat and are planning to vote for it, then you’re walking the plank for a President who is no real Democrat.
Heh
I’m betting the bar on what qualifies as high wage gets lower and lower until they can call it a welfare program and eviscerate it.
But hey let’s cheer about the fact that some of the rich will pay more for a program that is the most effective means to control costs.
Raise the cap.
What am I missing? It’s and insurance program and premiums should be linked to benefits. It’s a program that’s worked well. Keep it intact according to it’s principles.
Me too! Now’s the time to persuade them that doing this will threaten their careers.
Also, Obama was already in bed with Pete Peterson in 2008 and has been working cheek-by-jowl with him ever since, as Jane Hamsher amply documents here.
I do not follow you. If I am right, your calculations do not add up.
The cap is being raised annually.
Well, it’s up to them, isn’t it! If they want SS to be around, then all they have to do is vote that way instead of for Ayn Rand politicians.
OK, cool.
Go ahead, but also tell him that the iea that we have a debt/deficit crisis is a fairy tale, and that he needs to learn some MMT economics. He can start with this.
It’s cumulative. So while the first year the cut you take may mean a few dollars, the next year the program cuts include you losing those dollars AND some more dollars. Next thing you know after a decade the individual has lost hundreds and if they are unfortunate enough to be a 40 year old or under they’ll be looking at losing thousands while still be forced to pay the same as what they pay now.
As someone above said, Raise the stinkin’ cap.
Raise it more. The program is not drowning, so whatever is need to keep it healthy. If that means that folks over $113k/yr have a bit less disposable income, let them start screaming about supplementing the system from all the potentially lost revenue of those folks who are able to dodge w-2 and earned income taxes by structuring their income and wealth.
If you want a couple easy and equitable adjustments which would enrich the Social Security and Medicare coffers, here are two
End the outrageous earned income tax break allowed sub-S corporations. Tax them like partnerships.
Disallow depreciation/179 write-offs in computing earned income. Or, at least recapture the lost Social Security and Medicare taxes, as is done with ordinary income taxes, when a depreciable asset is sold above its adjusted basis.
More like a boogey-man story, something with which to frighten young children and naive journalists.
I understand it cumulative.
That is not my question. My understanding is that it does not impact the initial amount of Social Security you receive. That it only impacts subsequent adjustments. My inquiry is whether anyone has information that my understanding is incorrect
Yes, you have incorrect information. Wigwam is correct. You make an interesting point though. Once income brackets for tax purposes are adjusted with the chained CPI, people will be boosted into higher income tax brackets more quickly than they would with a conventional CPI. Also, if the social security cap is adjusted with a chained CPI, there would be less revenue coming into social security. I think it would be politically impossible to use one CPI for benefits, and another for adjusting the cap. So over time, the cap would be coming down very substantially, which I wonder if anyone pushing the chained CPI has taken into account.
Actually it hasn’t. This year it will go up 3.27% but there have been years where it hasn’t gone up at all.
Not sure why there is a cap at all. Our tax system is set up to be progressive, so why shouldn’t there be a tax on all income earned, not just income up to an arbitrary amount?
And also, there’s no need for any of it. We can afford twice the SS benefits we provide now without any FICA increases. How long will it take everyone to accept that we don’t need to tax and borrow in order to spend on what we think is valuable. Our deficits aren’t high enough now, our output gap is $3.3 Trillion annually, and we need not have any publci debt if we don’t want to have it. See here.
Time to lend a hand
http://acmeartscollective.com/acmerecords/2011/09/16/civlian-conservation-corps-demo-of-lend-a-hand/
Time to understand – we are here to help our fellow man
Per Nancy Altman:
“Not sure why there is a cap at all.”
I presume it’s linked to the benefits formula, but I’m not really sure.
Thanks wigwam!
I was OK with Reagan’s SS tax increase and the creation of the trust fund at the time. It always had this bomb in it, though: it’s time to start drawing the trust fund down. That means net $100B/yr for 25 years will be going out to SS recipients.
The financial elites look at that hard fact, and they have several discomforting thoughts: SS receipts are below Reagan/Greenspan projections because the elites have managed to keep working wages below inflation for 3 decades. The elites know they have taken the money, and they sure as hell don’t want to give any of it back. The Treasury notes held in the SS trust fund will be redeemed at the $100B/yr rate, and somebody will have to put up that cash, either in the form of taxes or in the form of additional borrowing, or in the form of inflation. None of those alternatives make sense to the elites.
What does make sense to them is to reduce the $100B/yr number by cutting benefits. That shifts the burden away from them and back onto those of us who have been paying our parents SS benefits our entire lives, and pre-paying our own benefits for the past 29 years, and now will see those benefits reduced so as to avoid ever redeeming the trust fund.
All this is a sleight of hand to take our eyes off the fact that the wage depression has left the 99% without the wealth to pay back the trust fund, and the elites have the money (Willie Sutton), so it comes down to pay back the trust fund versus reduce the drawdown of the trust fund.
Non-MMT economists look at that $100B/yr as coming out of the private sector economy and going to non-productive government spending, thereby reducing GDP. But really it is GDP-neutral, and in their model should be thought of as a transfer payment from the elites to the working class, and a delayed payback at that. It’s just that Pete Peterson doesn’t plan to ever give it back — he stole it fair and square.
Letsgetitdone- Remember the old checkoff on the tax forms for publicly financed elections? ( Some states and cities had them. ) I hope everyone blogging here checked that box. I did. For what we have now is the fruit of what enough of us didn’t do then. And, who could of seen this coming is as bogus today as it was over 3 decades ago. Just sayin.
great summary. Thanks
I’ll check it out. I generally follow your posts, but I was probably writing this one at the time. In any event, I certainly agree. If Obama and the hawks lose out it will be because of the tea party and the progressives voting their principles. The thing is, if they do that then the Wall Streeters will accept any settlement before too long because the sequester will scare them enough for that. They’ll be back at debt ceiling time however.
What pisses me off the most are the same buttholes that don’t want to pay those treasury notes back are the same group of people who have the audacity to argue that only “income taxes” are real taxes and that 47% of the country are a bunch of freeloaders.
You’ll hear them argue that we need to pay back China but it’s just fine to steal from American hotel workers, janitors, Burger King cashiers all while saying that they contribute nothing and deserve nothing.
Exactly!
And the way he hope to steal it is by making sure that the Special Treasury Bonds in the SS Trust Fund can never be redeemed. And they can only be redeemed to cover SS deficits. So, if SS can be strengthened to the point that it never runs a deficit, those bonds can never be redeemed, and the inter-class theft becomes a fait accompli. (But you probably knew that already.)
Thanks. I’d very much appreciate your comments, because I tried to explain deficits and reducing them in a different way.
I suppose you could be correct. But, my understanding is different than yours. I do not believe initial baseline payments would be impacted by changing the index.
Krugman recently said this:
Wouldn’t real dollar value mean the chained CPI is going to affect the new retirees even if the baseline were to stay the same?
In imaginary world we can substitute ad nauseum but as it is RIGHT NOW there are far too many elderly skipping medication to pay for things.
I really don’t understand this administration. They actually did studies and changed the poverty guidelines so they could see how much of the population was reliant on government so they KNOW that seniors are already vulnerable. What they are proposing is just plain cruel.
Right. If I understand correctly, it’s like acceleration. It starts out at zero and keeps building up, year upon year. 0.31% the first year. 0.62% the second. … 0.93% the third. Ten times 0.31% (i.e., 3.1%) the tenth year. And so on.
Here is an example.
If you are currently 60, at the time you eventually retire, say 2020, your initial baseline Social Security payment would be based on your earnings and would not be impacted by this change to the index. The first impact on your Social Security payment would be in 2021, when your cost of living adjustment would be approximately 0.3% less. And, yes, each year thereafter, this smaller annual adjustment would have accumulative effect.
IIUC, in 2020 there will be a single COLA that applies to all retirees, and it will be roughly six percent less than it would have been had the chained-CPI proposal not been adopted.
Yes.
The cap should be eliminated. Period.
Here is a quote from Dean Baker:
He is saying pretty much what I said earlier. But, he doesn’t quite make the point that those retiring 10, 20, or 30 years from now will start out with initial benefits that are 3, 6, or 9 percent lower than the would if we stayed with the current CPI.
Perhaps Daily Kos should change its name to Daily Kop(Kult of Personality).
That is not what Baker is saying.
He only speaks as to what occurs after an individual retires.
It is all kabuki.
“Bottom line: Don’t believe the headlines. Both Obama and Boehner, the Democrats and the Republicans, are using the mythical “debt crisis” to do the bidding of the upper .1% income group. Their “good cop, bad cop” act is just that: An act.
Had they merely come out and said, we are going to cut the spending that benefits the lower 99.9%, you would have been outraged. But by making the results a “grand bargain,” a hard-fought “compromise” to “solve a serious problem,” they make you feel all is fair — grateful even.”
from
http://rodgermmitchell.wordpress.com/2012/12/18/are-you-enjoying-the-good-cop-bad-cop-kabuki-theater-of-the-absurd/
Here is another way to look at it. Lets say you earned $50,000 in 2010. To maintain a constant value of that money you are credited for, it has to be multiplied by the inflation rate, lets say 2%. However the government is only going to multiply it by something like 1.7%, or 1.5%, depending on the chained CPI. So the amount of your earnings is being depreciated every year from the year you earn it, as you earn it.
I think Mr. Baker missed a very important point. What he is saying is true for someone who is already retired, or going to retire in 2013. He missed the impact of whats happens to younger workers. Mr Baker has answered my emails, maybe we should ask him.
Yes. Anything that cuts Social Security in any way is unacceptable and not least because SOCIAL SECURITY HAS NOTHING TO DO WITH THE DEFICIT! It’s like spraying water in Seattle to put out a fire in Atlanta and makes about as much sense.
Spot on.
Ah yes, the C-CPI:
Steak -> Hamburger -> Hamburger Helper -> Dog Food -> Cat Food*
And thus, with a deft slight of accounting hand, the Cat Food Commission achieves it’s goal!
Go Team Dems!
*With apologies to smearing any particular food product as a means to starve poor people.
Your logic is impeccable.
Unfortunately, logic might not rule the day as this messy deal is brokered.
As far as the eliminating the cap, it has been rightfully done for Medicare, but to do it for Social Security may not be where wisdom lies.
Well said!
We may not eventually win, but we must continue to fight.
THIS post is also from Eskow.
“The Liberal Scrooges.”
What are we willing to give, if anything,in the negotiations? Do we hold fast and let all the tax rates go up ? No need to negotiate anything if that is the position. But the rates on the middle class will also go up? When we come to the debt limit what then? Don’t say platinum coins or 14th amendment. The administration has no interest in either of them from all appearances. Is there any place where we will give up cola? I suppose one way around it all is to leave the tax rates where they are. That way loses me. The differnce in income in this country will destroy us.
go over the “speed bump” on the 31st, then in the new session of congress they can vote to cut taxes on everyone under $250,000 –that’s legislation that senate already approved. tea party will vote in favor of tax cut. The bill that goes into effect 31st exempts socsec, medicare and vets benefits.
If that passes its over except for the debt limit.
PP may think PP stole fair and square — but PP is just another USian who seems to like piling up lots of $$ and then using those piles of $$ to fund his pet project politics.
A effective and genuinely level fielded USian income/held wealth national tax regime should/would have clipped PP and USians like the Kochs who seem to think piling up lots of $$ gives them exceptional political power,voice and influence. PP and the Kochs seem/are misguided about /poorly moored on right/wrong concepts about $$ and $$ in USian politics — they need to be finding out this ain’t so.
Political power based on a few having all the politcal power and lots of wealth to inflict their politics was the big fat reason USians threw off the British Monarch and British Aristocracy.
PP/the Kochs seem(s) to be missing/not seeing this part of USian history.
As is the current POTUS — Barack Obama — who clearly is violating eight decades of SS legacy and effective,proven USG policy based on sound social and fiscal principles because of what and why again? The list of false “whats and whys” one can assign to Barack Obama wanting to undermine/gut SS begins with trying to mix up BS based USG fiscal deficits,silly austerity ideas and not credible overdrawn/baseless fiscal “cliff” schemes/narratives with SS and SS funds/funding. That Obama who claims to be a Democrat is doing this to FDR’s SS are the way too murky politics not being examined enough at great peril to all USians.
Barack Obama is only POTUS — as POTUS Barack Obama is not entitled to abuse,ignore or circumvent for nefarious political/social/fiscal racketeering reasonings USG deep and long programs like SS,MC and the idea that all Americans own America. That all USians have social and legal standing(s) and legitimate claim on and about SS and SS funds/funding. That all USians have legitimate social/political claims to USian commonwealth — SS is plainly all about USian commonwealth and well being. Barack Obama is not entitled to meddle with this being so.
Yes, because if anything Social Security benefits are too low. Seniors have been losing buying power for years because the current CPI doesn’t accurately measure the things seniors spend the most of their money on (healthcare) and if anything benefits should rise.
Cutting them even more is completely unacceptable. Unless of course, you’re a Democrat. Or Republican. But I repeat myself.
> the current CPI doesn’t accurately measure the things
> seniors spend the most of their money on
Like iPads and HD TVs? They’re waaaay cheaper dude, so everything balances out, dontcha see.