This is a Democratic Adviser?

I have to admit to being with Digby on this one.   It’s getting more obvious to me that this Democratic Administration is going after our Social Security benefits with gusto.  You may recall that Peter Orzag was the Obama Budget Director and is now one of the major economic advisers to the President.  This contribution to the NYT is not the first flare to be fired, but it is a distinctly blinding one.

So, first Orzag admits that Social Security is not a federal deficit problem. You would think he’d end with that.  Social Security is an off budget program and it’s self funding and managing.  That’s the deal.  People pay for the benefits and they expect them.  It’s a third rail of politics and you’d think after Dubya’s adventures into handing the trust fund to Wall Street that would be all she wrote.  But, it’s not.  (Emphasis is mine on this.)

So it would be desirable to put the system on sounder financial footing. And that is precisely what the co-chairmen of President Obama’s bipartisan commission on reducing the national debt have bravely proposed to do. It’s too bad their proposal has been greeted with so much criticism, especially from progressives — who really should look at it as an opportunity to fix Social Security without privatizing it. Although the plan leans too much on future benefit reductions and not enough on revenue increases, it still offers a good starting point for reform.

The main flaw in the proposed Social Security plan is that it relies too little on revenue increases and too much on future benefit reductions. A reasonable objective would be a 50-50 balance between changes in benefits and changes in revenues. But the way to bring reform into better proportion is to adjust the components of this proposal, not to fundamentally remodel it.

Alrighty, so let’s first IGNORE the fact that the cat food commission had no real business sticking its nose into Social Security because it’s charter said it was to go after the Federal Deficit.  And, as Orzag has stated, Social Security is NO contributor to that deficit.

So, here’s where I agree with Digby.

I can hardly believe anyone of his stature could argue this nonsense. Orszag agrees that SS does not contribute to the long term deficit and yet is trying to convince us that that the Deficit Commission draft just put it on the table anyway, apparently out of a surfeit of progressive idealism. Huh? Moreover, he also thinks it makes sense to jump right on the third rail in American politics because it would be desirable” to do something about a potential future problem — when we are in the middle of an epic economic shitstorm with stubborn 10% unemployment and a banking and housing crisis that shows no sign of abating.

Is he ignorant of the fact that most people in this country are convinced — mainly because they’re being told it every single day by every politician, talking head and gasbag — that “entitlements” are destroying the economy and the future of the United States? The idea that social security cuts could buy the administration a chance for more stimulus is delusional.

Yup, delusional. And get this closer …

The White House has been handed a highly progressive reform plan for Social Security that could attract Republican support as well.

If this is progressive, I want to be known as something completely different.

This just seems to be the start of the swansong for the program.  BostonBoomer sent me this call for liberals to get on board with similar clarion calls today. It’s from USN and John Farrell.

Okay, my liberal friends. On Friday I explained why the proposals of the Simpson-Bowles commission should be welcomed, and put on the bargaining table by conservatives. Today I will argue, despite what Paul Krugman says, that there’s good stuff for liberals too.

Remember, first and foremost, that this is a starting point. You don’t have to buy into everything to keep the conversation going. And beware misinformation.

You know, this all seems to assume that we don’t have Democratic pols that make Faustian bargains with themselves before they even start dealing with the Republicans.  I have to admit that I’m with Krugman on this one too.

Right at the beginning of his administration, what Mr. Obama needed to do, above all, was fight for an economic plan commensurate with the scale of the crisis. Instead, he negotiated with himself before he ever got around to negotiating with Congress, proposing a plan that was clearly, grossly inadequate — then allowed that plan to be scaled back even further without protest. And the failure to act forcefully on the economy, more than anything else, accounts for the midterm “shellacking.”

You expect any one to fight for what’s right in Social Security given recent history like Krugman identifies?  I don’t. No hope or expectation of it at all.  After all, a major Presidential Advisor just call Allan Simpson brave instead of being labeled the crazy old coot he is.


39 Comments on “This is a Democratic Adviser?”

  1. shoutabyss says:

    My personal theory is that when large sums of money are allowed to accumulate, bad things will invariably happen.

    Sadly I don’t expect to ever receive a penny of my own money back. Money that was taken by force from me without my consent.

    In the end, I imagine I’ll have paid for a lot of other folks who came before me.

    So what exactly is this progressive solution for SS?

  2. bostonboomer says:

    Great post, Dakinikat. Krugman is getting more and more shrill by the day. Pretty soon he’ll be running around with his hair on fire for real.

  3. fiscalliberal says:

    Dak – I think the real problem with Soc Sec is that the government will have to start paying back some of the money it appropriated from the fund. This is equivalent to the Chineese cashing in their Treasuries. They will have to do that by borrowing more money. Life is a bitch when you have to pay things back.

    So – that becomes a expenditure in addition to the regular budget.

    • cwaltz says:

      Bingo!

      They’ve borrowed the 2.2 trillion dollar surplus that Social Security was running and now they don’t want to repay that money so are running around saying we all need to tighten our belts and talking about SS imminent failure. The truth is the people they are complaining about retiring in record numbers have been contributing that surplus amount. There would not have been a problem had they not been using the money as a general slush fund to begin with.

    • dakinikat says:

      That should happen for about another 20 – 30 years, however. The real problem is with medicare. It’s like Dubya put a poison pill in it. That horrible deal he worked with Big Pharma will blow that program up in less than 10 years.

    • Sima says:

      This is what I’ve suspected as well. SS isn’t in trouble and doesn’t have a problem. It just needs to collect the debt owed it by the Feds.

  4. votermom says:

    It’s a mistake to argue about SS details, imo — it confuses the basic issue: Social Security is our money held IN TRUST by the government. For the government to use it for anything else is theft.

  5. Zaladonis says:

    I wonder if now more than ever is a dangerous time to try to mess with SS. Dubya couldn’t do it, and people are a lot more skittish about their retirement solvency now than they were then.

    Also, Obamanation young adults who, just two years ago, were carping about having to foot the bill for oldsters, might be looking at it now from an angle of their own concerns about the future.

    • dakinikat says:

      The other thing that’s not being discussed to much is how that there have been no cost of living raises for Social Security Recipients because there’s not been any inflation. Will that continue or not?

    • Sima says:

      Maybe the 20 year olds won’t start to care, but I bet all those who are in the late 30s and 40s, who can kind of get a whiff of old age and retirement, will.

    • Seriously says:

      MM was really fired up today on the Fox Morning show and she was going on (with Beckel agreeing, of course) and on about how SS was supposed to be “a widow and orphans’ fund” and the private sector would have to pick up the slack. As if everyone in the US is nodding along, like no worries, the destruction of SS will be accompanied by the return of the private pension plus risk-free 401ks. We’re saved! Even Fox was flashing up stats that showed more than half the nation’s retirees rely on SS for half or more of their income.

  6. fiscalliberal says:

    Who is Joe Cannon?

  7. fiscalliberal says:

    We need to remember that Soc Sec was formed to provide a poverty level of living in retirement. To keep standard of living requires pensions and personal savings. Oh by the way, I paid off my mortgage and did not use the house for a ATM for a new car or pool in the yard. I did not take trips to Vegas or New Orleans for parties etc. So far I am ok. However I do not begrudge some one who has had tough luck in life to not have a retirement. I am definitely for a means test as a lot of people. Howver this balony about Soc Sec being in trouble in nonsense. A fair question is Medicare which needs to be seriously examined for uncontrolled costs.

    By the way – if you did nto contribute to the fund, you should not have access to it.

    • dakinikat says:

      I’d like to think I’m going to have access to something other than social security, but unfortunately the housing market and Wall Street are wrecking my otherwise well thought out plan. I do have part of a defined benefit retirement plan from my exhusband as well. But, there have been two major crashes during the last dozen or so years I’ve beefed up one of my investment plans. Luckily I cashed the other one out as a down payment on this house right before housing prices shot up. I owe less than it should be worth by at least 1/2 by that’s if I could see it right now, which would be doubtful. Nothing has sold since the first time home owner tax credits expired. Plus, I’m not eligible for anything right now anyway. I feel totally in limbo and I’m probably in better shape than most.

    • Zaladonis says:

      By the way – if you did nto contribute to the fund, you should not have access to it.

      I agree, and by that I include survivor’s benefits because it’s so unequally rewarded.

      • Zaladonis says:

        Make that “awarded,” not rewarded.

      • Sima says:

        I agree with one exception. The disabled. My sister gets SS from my father’s fund because she is severely autistic. That money will go to pay for her care when she has to be moved into a home when my parents finally become incapacitated from old age.

        BTW, I’ve never paid into SS. Always been self employed. I should have, boy, how I should have.

        • Teresa says:

          Don’t say that very loudly, given that self-employed are supposed to pay social security/medicare too….you should be paying both halves of it (15%). It’s called the ‘self-employment tax’. If you’re really not paying it, I hope you’re never audited….

        • Zaladonis says:

          I agree with one exception. The disabled. My sister gets SS from my father’s fund because she is severely autistic. That money will go to pay for her care when she has to be moved into a home when my parents finally become incapacitated from old age.

          That’s the problem: everybody wants the situation they’re personally sympathetic to, or need addressed, to be included in a government program, and Social Security got bogged down with too much responsibility.

          I’m not saying your sister shouldn’t receive assistance, if your family can’t take care of her of course she should have it, but if Joe Schmo pays into SS his whole life, it seems unreasonable that he should have his benefits cut while people who never paid into it receive benefits.

          The SS set up really is ridiculous. For instance a wealthy widow receives a check from SS every month but a woman who’s lived a lifetime with an aunt who’d worked and paid into SS, suddenly facing poverty and homelessness upon her aunt’s death, isn’t provided a dime. I think everybody who’s paid into SS should be able to designate a beneficiary, and I think wealthy older people should forfeit their benefits. Being poor when we’re young adults is one thing but being rich and being poor in old age are two very different circumstances and giving rich people government money while letting some poor elderly live in the real discomfort of poverty is just gross.

          • Sima says:

            Yes, you are right about everyone wanting their personal situation cared for. Guilty as charged, here.

            The problem with ‘assistance’ is that if we were to designate a fund to care for the disabled, I guarantee it will be decimated or defunded within, oh, 10 years. It happens constantly at the state level. Then some other scheme or fund comes along, the disabled are shunted into it, and all is hunky dory for another 5 or 10 years, until the funding stops, yet again. I think the disabled being tied into SS is a good thing precisely because it doesn’t go away. For some reason people really care about SS in a way they don’t care about the other funds. Perhaps it’s because it’s for them, personally, and so they fight for it.

          • Zaladonis says:

            Sima, there’s SSI, which has for many years been a reliable program specifically for the disabled.

            If, as you said, your sister is receiving benefits from your “father’s fund,” I still say diminishing the benefits of someone who needs the money and has paid into the fund all her working life while people who have NOT paid into it receive benefits is an unfair and unreasonable way to handle Social Security.

          • Sima says:

            It’s weird. My parents applied for her to have SSI.

            But the government gave her SS. THEY determined it, not my parents. She’s listed on my father’s account, along with my mother, with the same number my dad has, only as -C (mom is -B).

            So it’s very possible she’s supposed to have SSI but the data entry people, etc, screwed up. I don’t know.

            And, I agree, it’s not fair to diminish benefits for those who have paid into it all their lives. I don’t think diminishing benefits is the way to go.

            Edited to add: Actually I think she’ll end up with SSI after Dad dies. I seem to remember my mother telling me that.

          • BxFemDem says:

            I have a cousin who is in his 90’s. He was self-employed all his life making cabinets, bookcases, and general furniture items. He did not contribute all that much to his SS fund. A couple of years ago, with his eyesight failing, he gave up the business. He was receiving $17 a month from SS. His assistant, who continues to care for him as my cousin’s wife died 20 years ago as did their only child, helps him out from time to time. My mom, who is 101 years old is sending him a monthly amount to cover some expenses. My cousin receives food stamps but there are water and electricity bill that must be paid. Last May I heard from another cousin that his SS benefits had been reduced to $ll a month.

        • Dee says:

          Even if you can get by without needing SS income I would still think you might want to be paying into the Medicare fund. You will need 40 quarters paid in to qualify at 65 for medicare.

          • Sima says:

            I never thought of that. As for getting by without needed SS. We’ll see. This new Depression has changed everything for me and my family. I don’t by any means think I have a right to SS and don’t expect to ever get it. Like a good idiot, I did what the government wants to do with SS, I put it into the stock market.

            Anyway, the medicare payments aspect never occurred to me. I will look into how much I’d have to pay in and see if I can swing it.

  8. fiscalliberal says:

    Dak – Through out my life I have not seen a more uncertain time. You seem to be relatively young and have a brain. So – if you are carefull, you will do ok. Just a opinion of a 68 year old liberal. I think the main thing for people to do is live within thier means. The economy seems to have leveled and hopefully bottomed. The unknown is really how bad the banks are with toxic debt.

    A little bit off topic, Enron precipitated Sarbanes Oxley. I just read a book on SAR BOX and a large part of it is about risk and executive transparency. So – my question is: why are these people not being prosecuted criminally under SAR BOX. If we do not enforce the laws, there is not sense of writing them.