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This post was co-written by policymaven1 and JeffreeB.
Peter George Peterson (US Dept of Commerce / Wikimedia Commons)
You may or may not have heard of Peter G. Peterson, but he has been trying very hard lately to make you believe your Social Security is in jeopardy. Peterson spent about half a billion dollars in 2011 alone to make sure that you feel that you are about to lose your “entitlements” and that we have to deal with this immediately.
So who is this mystery master of manipulation? Peterson has spent decades on Wall Street, amassing a net worth of nearly 3 billion dollars. He has spent some time in politics, serving under President Nixon as Secretary of Commerce. He also co-founded infamous private equity juggernaut Blackstone Group. Sounds like your typical fat cat, right?
Not exactly. While most of Peterson’s cronies make no bones about their right-wing politics, Peterson really wants you to think of him as nonpartisan. Peterson is definitely a conservative, but through his billion-dollar-endowed Peter G. Peterson Foundation, he has made a gargantuan effort to present himself as a friend of both sides of the aisle. Peterson has given grants to conservative think tanks such as the Heritage Foundation and the American Enterprise Institute. But he has also given grants to the likes of the liberal Economic Policy Institute, and Peterson’s foundation has brought the likes of Bill Clinton to its fiscal summit.
By attempting to present himself as nonpartisan, Peterson has been able to set our nation’s agenda. Both Democratic and Republican politicians are being told by their sources of information that Social Security needs reform, so social security reform has, of course, become a big political issue. Peterson isn’t exactly throwing handfuls of money at grantees and yelling, “Tell everyone we have to reform Social Security!” But he is making his priorities our priorities. As Michael Hiltzik puts it in his article “Unmasking the most influentialbillionaire in U.S. politics,” “Peterson’s influence in national politics stems largely from his ability to make his interests appear eclectic and nonpartisan.” Peterson declined Hiltzik’s interview request for the article.
One of Peterson’s latest projects, the bipartisan Fix the Debt campaign, is spending millions to convince us all we need to take one for the team if we want to save Social Security. Fix the Debt proposes a gradual COLA decrease, as well as an increase in retirement age to 69 years old. Mitt Romney, by the way, champions this plan.
This sounds like a reasonable sacrifice to save Social Security, right? After all, if we don’t do something now, we’re going to lose it, right? Wrong.
As of 2011, the Social Security Trust Fund had a surplus of $2.7 trillion. The Social Security Board of Trustees states that the fund will not be exhausted until 2033. And at that point, Social Security recipients will still receive 75% of expected benefits. But thanks to the efforts of Peter Peterson, we talk about Social Security as if we are going to lose it tomorrow. If you ask Peterson, the sky is indeed falling.
Do our “entitlement” programs need reform? Yes. If we continue our present course, we will run into trouble in a couple of decades. Is Social Security circling the drain as we speak? No. But Peterson wants you to think it is. If we believe this, we are much more likely to accept losing some of the benefits of the system we pay into every working year of our lives.
What we don’t talk much about, though, is an alternative. Right now the Social Security payroll tax cap is set at $110,100, meaning that any yearly income earned above this is not taxed for Social Security. Next year this figure will increase to $113,700. But lifting the payroll tax cap altogether would yield over $100 billion more per year for Social Security. And the only Americans affected by removing the cap would be those making over $110,000 per year. If you’re making less than that, your entire income is subject to the payroll tax, anyway.
So should we all listen to Chicken Little Peterson and retire later and get less back from the system into which we ourselves pay (and into which Peterson and friends pay a fraction of a fraction of their income)? Or should all Americans pay their fair share of payroll tax? The answer seems pretty clear.
Note: JeffreeB will be available immediately after publication for comment.
This entry is also available on Daily Kos.
14 Comments
So what do you think, folks?
Should we take the hit to keep Social Security going past 2033, or should we make the wealthy pay their fair share?
Here’s an action plan too. Trying to move your Senators who did not sign the Sanders letter to get on board. The President wants to cut SS, he already said so, even during the First presidential debate. The only hope now is probably to move the undecided Senators to commit to no cuts.
http://americablog.com/2012/10/lame-duck-social-security-reference-post-how-to-take-action-now.html
That’s fantastic. Thanks for sharing, Tom!
Back-atcha jeffreeb! Thanks for exploring the deeper dynamic behind the quest to “solve a deficit problem” whose creation and exploitation represents the dirty work of the top 1%. According to a recent Gallup poll, only 7% think that cutting government spending is the most important issue they would think about when choosing who to vote for President! No larger than the margin of error, no doubt!
Here in NJ both senators have signed but in neighboring Del and PA they have not. I shared with people I know those states names and urged them to make the calls! And they have. I think we should hold the Progressive Caucus’s feet to the fire and demand they stand up or we will urge voters in their states to stand down against them.FDL has been fighting the good fight on this and we all know about that SOB PGP!
The key propaganda triumph of the fix the debt agitprop has been to confuse the federal deficit with the (budgetarily totally independent) future implicit debts of the Social Security program. As early on as 2010 at a conference panel #5 at the Brookings Institute, Altman, Kuttner, Teresa G., and another person discussed this issue. Instead of confronting the ‘big lie’ they discussed ways to address the 75 year possible actuarial shortfall which plays into the ‘big lie’. Reading the transcript is helpful as it lays out the various strategies which were considered to be valid, in addition to laying some of the blame for the shortfall on decades of falling wages for the middle class and inadequate taxation of the rising incomes of the top quintiles (upper income folks).
I link it HERE.
Thank you.
Panelists were: Robert Kuttner, The American Prospect, moderator
Panelists:
Nancy Altman, Social Security Works
Teresa Ghilarducci, The New School
Robert Reischauer, Urban Institute
Of course, raising the cap on Social Security and Medicare wages never entered the mind of all who would impoverish the American People.
We sure have a lot of intelligent humanitarians masquerading as the wealthy.
And wouldn’t it be peachy to have a ‘real’ Democrat in the White House: seems these days to be as rare as hen’s teeth.
Speaking of impoverishing the American people by wanting to cut their Social Security benefits so that they don’t have to pay their taxes and contribute their fair share: Dean Baker writes in The Guardian how the politicians have to play along or they lose their campaign contributions from the rich.
The direct and blatant bribing of American elected officials is endemic to our abjectly corrupt, predatory capitalistic system.
No one gives money regardless of the amount to a politician and does not expect something in return: it comes under the rubric of quid pro quo.
But, don’t tell anyone: it’s a secret!
Impossible to predict!
It is simply impossible to predict the state of the Social Security fund 35 yrs. from now. Those predictions are made on a particular average GDP growth rate, assumptions as to the young / old worker ratio, etc.
I can “fix” the Social Security “problem” coming up in 35 yrs. simply by forcing all those undocumented immigrants into the system. COMPREHENSIVE IMMIGRATION REFORM means more younger workers paying in and, at the very least, kicks the can down the road for another 10 yrs. or so.
So does changing the very conservative assumptions as to GDP growth. If one on the other hand assumes GDP growth going forward will occur at the same rate as it has since WWII, there is no problem.
Remember, this year, Social Security is still taking in more than it is paying out! Yes, that $2.7 trillion is going to GROW modestly, not shrink, this year.
Given what asses our politians are, and their total inability to properly fix immediate problems, like the out of control cost of health care in the US of A, why should they be laboring to fix a non-problem 35 years out?
Unless … they really really want to NEVER pay out the money they over collected for my retirement. Just keep it .. or maybe chuck that surplus into Wall Street somehow?
This rage to “fix” Social Security started after the politicians including “Democratic” Bill Clinton were thwarted in their efforts to turn our retirement funds over to Wall Street.
Keep that one fact in mind, always, and you know we have to “JUST SAY NO!!” Hell no.
Thanks for an excellent diary. Rec’d.
The question left unanswered is what Peterson’s true goal is. What does he hope to accomplish and why? I have a couple of conjectures.
I’m told that the financial-services industry has long held hopes of getting their hands on the Social Security portion of the nation’s money stream.
I’ve seen that many members of the 1% want to repudiate the Treasury’s debt to the Social Security Trust Fund, and the only way that those “special” Treasury bonds that represent that debt can be redeemed is to cover shortfalls in SS revenue. So, if they can “strengthen” SS so that it doesn’t ever run those shortfalls, then those bonds cannot be redeemed and that debt is, in effect, repudiated. In which case the income tax payers have ripped off the the working class to the tune of $2.7T. The relevant fact is that, per the Heritage Foundation, the 1% pay 40% of the income that. The upper 10% pay 70% of the income tax. And the upper 53% pay 100% of the income tax.
My Congressman, Mike Thomspon, “D” for Lake County, Calif, he has already told us constituents that because he values a “balanced budget,” he will be for cutting Social Security and all entitlements. He even has the same stupid pie chart that Bill Maher uses – the one that shows that Social Security checks for seniors come out of the General Fund of the US Governmental monies.
Social Security is actually its own fund, and like the OP states, it has a 2.7 trillion dollar surplus. Several activists attend meetings each time Thompson holds them in our county, but he refuses to call on them, so they can never set the record straight.