Death of a Salespitch
Posted: December 5, 2010 Filed under: Catfood Commission | Tags: Catfood Commission, Social Security, Social Security Reform 48 CommentsI’m really hoping that Stan Collender has got it right. He’s arguing in short form today that the Cat Food Commission 
is dead with a promise of further details in an upcoming column at Roll Call. His first argument seems pretty reasonable. The Report needs 14 to pass and only 11 participants seem willing to do so. Here are his others.
- The 11 members of the commission who favored the plan likely overstates the actual amount of support. It seems clear that at least two and maybe more announced their support only when they were certain the plan wouldn’t get 14 votes. Their approval was more about political posturing for the future than actual enthusiasm.
- Don’t read too much into the bipartisan support for some of the options. If these same proposals are considered at all, they will next be debated in a very different political context and in a package that will look very different from the one the commission considered. Support for them in the commission is no indication they will be supported again.
- Don’t read too much into the enthusiastic response the plan received from various deficit hawk groups. Many of them supplied the commission with staff, helped develop what ultimately was proposed, and had a stake in its outcome. Under these circumstances, their enthuisastic approval and attempt to define the outcome as a success was not at all suprising. It’s also not especially indicative of any larger movement toward what was proposed.
I’m actually finding the power of the nifty graph from Matt Ygelisias at TP an even more compelling reason. He’s posting a response to Paul Krugman who can’t believe that the Beltway crowd is so obsessed with ruining social security. Krugman’s blog post today also contains his thoughts and the same nifty graph.
Look at the number of seniors that rely on social security for the majority or near majority of their incomes. That’s just income quintiles. You know that the distribution is skewed right (i.e population is largest on the lower ends.) Who wants to turn their life savings and major income source in old age over to a bunch of Wall Street High rollers or even worse, have it diced and sliced into pieces that you may or may not receive?
Even though Social Security is only a very mildly redistributive program, inequality of wealth is such that it’s a vital element of the bottom 60 percent’s living standards but kind of small beer to the top twenty percent. But I would say the other thing here on the Medicare / Social Security contrast is that Medicare isn’t just a subsidy program for old people. It’s also a subsidy program for doctors, nurses, hospital administrators, pharmaceutical executives, etc. Those people have lobbyists, many of their professions are well-respected, and many members of the political/media elite have siblings, cousins, college buddies, and even spouses who work in those fields.
The tragedy is that this very same factor that makes it harder to cut Medicare is also why cutting Social Security is a much worse idea. Our health care sector is low productivity mess and there are a lot of health-improving things a low-income senior can buy with Social Security money but can’t buy with Medicare. Healthy food, a gym membership, home-repair, etc.
Baby Boomers may not be a monolithic group, but I have to think that since most of us had our private savings and our home values chewed up and spit out by hedge funds and investment banks, we’re not going to go quietly into the night while having our social security gutted. I can’t imagine our remaining parents are going to be happy about it either since most of them have been paying in to the program since its initiation. Also, remind your children that should this pass, you will be expecting a room in their house because you will need it.
The graph and a lot of good information is from Our Fiscal Security. That’s the organization that I wrote about earlier that came up with a liberal response to the Bowles-Simpson ice floes plan. Let me just remind you of a few things from them about our Social Security.
- Social Security is currently in surplus and will take in more than it pays out until at least 2037, more than a quarter century from now.
- Raising the employer and employee payroll tax rates by just 1.1 percent each would erase the entire 75-year projected shortfall.
- Inequality leads to the projected Social Security shortfall: as income growth has become concentrated at the top, more income has fallen above the payroll cap of $106,800. Congress could close the entire 75 year projected funding gap by raising or eliminating the cap on taxable payroll income.
- Not just an I.O.U.: Income to the Social Security trust funds must be invested in guaranteed Treasury securities, which can be redeemed at any time at face value, giving the trust funds the same flexibility as cash.
- Social Security can never add to the yearly deficit; by law it cannot draw a single dollar from general revenues, even if payroll taxes fall short of scheduled benefits.
There’s a few more points out there if you’d like to go read them. It’s a data worth sending to your Congress Critterz.
peej
Carissa
bostonboomer
ecocatwoman
mablue2
Mama Lopez
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quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
Social Security can never add to the yearly deficit; by law it cannot draw a single dollar from general revenues, even if payroll taxes fall short of scheduled benefits.
WHY ISN’T EVERY MEDIA OUTLET TRUMPETING THIS SINGULAR FACT EVERY DAY?!?!?!?
Everyone in the United States is not privy to a great economic mind like we have here to tell them this. You would choke on your spit if you knew the number of intelligent people that didn’t know this fact!
Asshats.
Hillary 2012
Because they all are corporate media now and they live off of ad revenue from other corporations.
I’m afraid that Collender is leaving out an important factor, Obama. And people, not us, will be in for a big surprise when ” a Democratic President screws up Social Security”. He is the “ONE” corporations have been waiting for. But I hope Collender is right.
Point 3 is something I hadn’t realized — has Obama? Our DC Dems? Essentially, out SocSec problems are a direct result of the massive shift of wealth to the top 1-2%. Wow.
This sounds like a point which could be made easily and understandably to the the general public. Why haven’t Dems pushed this?
Oh, yeah. That would be a direct challenge to the ostensibly Dem president.
I’ve been surprised at how many simple Democratic talking points have been allowed to vanish the past few years. I’m wondering if Nancy Pelosi will continue to haul water for this given how she was made the main villain this election and now one at the White House stood up for her.
NBC Evening News is reporting Obama is caving on not extending the tax cuts for the wealthy.
What about the inheritance tax? Is he caving on that as well?
Having Obama as POTUS is such a waste of the presidency.
And of course the House will go along with the Senate.
also the capital gains tax
And, of course, the question remains: Is Obama “caving” or just being cagey in getting exactly what he really wanted?
As lambert says, the answer to why Obama does what he does is very simple once his actions are viewed as those a conservative. All together now: Why is Obama doing these things? Because he’s a conservative.
here’s the CNN coverage of what Mitchie Mitch said on Meet the Press:
Whoop-de-doo. Not a very good deal.
I think you can assume that Obama will cave on just about everything except Republican policies.
I think it’s hilarious that Matt Y believes seniors on SS can afford gym memberships. Believe me, after they pay for medicare and their supplement plan (if they can afford that), there isn’t much left. Then they have to pay for utilities, phone, maybe cable, and food. And that’s just for people that own a home. If they have to pay rent, there probably wouldn’t be anything left for food. Trust me, $1200 to $1500 a month doesn’t go far.
No kidding. Not to mention that many of us don’t have relatives we can move in with if the going gets tough–not children, and not adult relatives. If I’m going to have to sleep in my car, maybe I should trade for an SUV after all.
I keep thinking I’m going to wind up dragging a tear drop trailer behind my mustang and moving into some weird place in Arizona.
I must be bent cause that sounds like it could be fun for awhile.
the modifier “for awhile” is the operative thing there!!!
Yep! 😉
C’mon up here Dak, I have a spare bedroom and after 6 months, you’d be covered for health insurance.
🙂 O Canada
Yup Wonk, O Canada for sure eh.
Dak thanks for that clip, and now I offer you one of our treasures – Bruce Cockburn – a really wonderful man – philantropist, activist, and the premier guitar player in the world. If I had a rocket launcher by Bruce.
Whoops, forgot to include the link.
simply amazing guitar!!!
Bruce!
His lyrics are amazing, too. I find myself quoting him often — he does a lot of social justice songs.
Not only that, BB, I just read the comments on Matt Y, I think I need to poke both my eyes out. These people need to read a history of Social Security.
I haven’t looked. But I’ve read his commenters before. They sound like “creative class” yuppies most of the time.
Dak, one of your last points, The media, for years, have made the american people believe SS runs up the deficit and needs to be “fixed”. Tim Russert was the king of that carnard. Every Presidential Debate you could always count on those questions. And every four years Democrats, trying to be “serious people” never called the press out. Great post, Dak.
One aspect of Medicare that is rarely discussed in the cost cutting debate is the role of Medicare in funding the training of Doctors.
“The Department of Health and Human Services, primarily Medicare, funds the vast majority of residency training in the US. This tax-based financing covers resident salaries and benefits through payments called Direct Medical Education or DME payments. Medicare also uses taxes for Indirect Medical Education or IME payments, a subsidy paid to teaching hospitals that is tied to admissions of Medicare patients in exchange for training resident physicians…”
http://en.wikipedia.org/wiki/Residency_%28medicine%29
Cat Food Commission Mark IV may decide it’s cheaper to stop funding US training programs and just issue more visas to Middle Eastern, South West and East Asian Doctors.
The majority of my daughter’s patients are either medicare or medicaid right now and she’s a second year resident in ob/gyn. The first group are the set she does most of the cancer surgeries on and the latter are mostly pregnancies and just the normal routine stuff. I really believe that.
Great comment, SHV, and once again if you read the comments on Matt Y when they talk about Medicare, they need a history lesson or we need to poke our eyes out to never read them again. Actually one person did try to bring that up.
What’s largely turned me off to the whole creative class is the snot nosed trust fund baby attitude they seem to have. It honestly seems like they have never had to tie their own shoes. The abject ignorance of everyday life is appalling.
Among my friends, there is not one who doesn’t realize that SS is in current surplus. They also know the problems are in health care spending generally, not just Medicare/Medicaid. I think the only people who don’t know these simple things are those who are willfully ignorant or just plain stupid.
The majority of my daughter’s patients are either medicare or medicaid right now and she’s a second year resident in ob/gyn.
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Her salary and benefits are mostly funded directly by Medicare irrespective of the patient funding. Prior to 1965, what little was paid to Doctors in training came from the hospitals. Resident salaries began to increase in the late ’60s with the influx of Fed. $$. Traditional salary was about $300 per year, just enough for beer and cigarettes. By 1968 it had increased to $1,700 and when I started in 1971 it was a livable wadge at $7,000 for a 120 hour work week.
Her student loans are horrendous! Given that she’s primarily servicing that population, they should be subsidizing her a lot more.
Her student loans are horrendous!
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Not something that is often mentioned along with the “big money” that doctors make. A few years ago an friend of my GF finished a vascular surgery residency. He was offered a job for about $900,000/year. After the deductions for practice “buy-in”, operating costs, malpractice insurance, taxes and student loan repayment, his take home was about $34,000.
I think they should build in some incentives for taking medicare patients via student loan repayments. My dad was lucky to get in where he did but he only did so because my sister’s sister-in-law sits on the board of the hospital.
If one works full-time in an underserved area (can be rural or urban underserved) there are programs through that provide loan waivers such as 20% loan forgiveness for each year worked. I have some physician and nurse colleagues who’ve had their loans paid off that way.
Sometimes you don’t have much choice as to wear to practice, though.
Just got this from my cousin. Perhaps there is yet hope.
one of the few liberals left
Wow. He gave a great speech. I’m sure ‘his friends on the other side’ blew it off, if they even listened. I need to take note of the facts and numbers he quoted so I can use them in my own arguments.
Bush Tax-Cut Deal Between Obama and Republicans Is Near – NYTimes.com
“A day after the Senate rejected President Obama’s preferred tax plan, officials said the broad contours of a compromise were in focus.
Rather than extending the tax rates only for people described by Democrats as middle class — couples earning up to $250,000 a year and individuals up to $200,000 — the deal would also keep the rates for higher earners, probably for two years. In return, Republicans said they would probably agree to extend jobless aid for the long-term unemployed.
Senior Democrats on Sunday said that they were resigned to defeat in the highly charged tax debate, and they voiced searing frustration.”
“resigned to defeat?” Anyway, this just came out about 15 min ago…not sure if it has been linked to.
Our president has no spine. That is all.
This was at The Nation this morning: Obama Caves on Tax Cuts, Endorses ‘Bush-McCain Philosophy’
I hope Collender is right too, but he doesn’t address a fundamental problem. Even if all the non-political-elites in the country (ie, “the rest of us”) are in screaming opposition to Soc Sec cuts, the political class simply doesn’t care. Congresspeople don’t really fear losing their seats, because 1) the vast majority are millionaires anyway and to even call it job loss is an insult to real working people; and 2) they can just cruise on down to K St. for a lucrative lobbying job in any case.
Given the ironic-quotes deal they just worked out on expiring the Bush tax cuts, it’s hard to be optimistic.
Too bad our “brilliant” leader can’t wrap his brain around the simple concept that as president he could just veto the tax cut bill.
you made it back on!
too bad that the “brilliant” 11th dimensional chess player can’t figure out that he is the President of all the people and not just the Wall Street denizens and the Republican politicians.
But then he would have to have self-confidence and that doesn’t necessarily come with a giant ego.