Lies Linking Social Security to the National Debt
By: Jeanine Molloff
I just read a strange quote by Abraham Lincoln which succinctly describes the state of affairs in DC regarding the current ‘debt ceiling’ arguments, the fight to destroy Social Security, Medicare/Medicaid and how they relate to ‘backdoor deals.’
“If you call a tail a leg, how many legs has a dog? Five? No, calling a tail a leg don’t make it a leg.” (Source: http://www.1-famous-quotes.com/quote/1608) ) If only the Democratic Leadership Council and Senator Dick Durbin could learn that lesson. But, I digress….
Apparently presidential buddy, Dick Durbin (Illinois)– never learned the lesson of this quote. Earlier this year Durbin forged a ‘Faustian bargain’ with senate conservatives–Mike Crapo (Idaho), Sen. Kent Conrad, and Tom Coburn (Oklahoma)–in a stealth plan which would kill Social Security and Medicare in a ‘death by a thousand cuts’ procedure. You see, Durbin was on the Simpson-Bowles Deficit Reduction Commission– unofficially dubbed ‘the Catfood Commission’ based on the savage cuts to Social Security and Medicare the commission pushed. After Simpson-Bowles–many seniors would be trading meatloaf Mondays for Catfood Sundays.
Undeterred, Durbin has been attempting to resurrect the commission’s previous plan which was defeated in both House and Senate committees and subsequently, denied a vote on the floor. Now–in the heat of a DC July, he is back in the news, poised as a fiscal ‘messiah’ ready to push this compromise budget which is nothing ,more the old ‘Catfood Commission’ plan screamed down by a majority of Americans, back in January. Here is where the ‘gang of six’ looks suspiciously like ‘Catfood’ revisited as four of the six gang members were previous members of the Simpson-Bowles ‘Catfood Commission’–namely Sen. Coburn, Sen. Conrad, Sen. Crapo and guess who–presidential buddy Sen. Dick Durbin.
(Source : http://www.strengthensocialsecurity.org/commission-watch)
Originally in January–amidst the austerity measures proposed by Obama’s fiscal commission co-chairs, were plans to weaken both Social Security and Medicare/Medicaid. As a result of stories running in the alternative press–’outing’ Chairs Erskine and Bowles as the Social Security/Medicare anti-Christs–enough democrats were sufficiently threatened that they actually did their job, namely fighting for the ‘little guy.’ Brooks Brothers-Wall Street suits were temporarily out of vogue and plaid flannel working class voices were heard–for a nanosecond.
The fact that the ‘Catfood Commission’s plan was voted down as a reaction to public pressure has not fazed Durbin. Nor have allegations accusing Durbin functioning as the President’s proxy kept him from pushing Daley-style–a undefined plan minus any accountability or transparency. Durbin merely claims that his involvement insures a ‘progressive’ seat at the negotiations table, and like a ‘used car salesman’ keeps drawing our attention to the shiny parts, while dismissing any serious discussion of details. It would be lovely to discuss the ‘gang of six’ deal–if it existed beyond vague slogans.
Do you notice how Durbin and fellow ‘dems’ in the Senate have forgotten that THEY are still in the majority?! In fact, these ‘back-door’ negotiations don’t even resemble a shakedown or robbery–senate democrats (especially Blue Dogs like my Senator, Claire McCaskill–are frantically panting, ‘bending over’ and begging for it. Unfortunately, ‘back-door’ activities usually result in ‘morning after’ regret and a by-product which smells NOTHING like perfume.
Why Tag-Teaming Social Security/Medicare Funds to ‘Debt Ceiling’ Issues Is a Big Lie…
Most Americans don’t understand how Social Security and Medicare are funded, and as a result have been bamboozled by a curious assortment of corporate network ‘talking heads,’ (yes this includes CNN), and astroturf organizations whose sole purpose is to muddy intellectual waters–allowing corporate interests to reign supreme. They con us by crafting and massaging several myths regarding public programs.
Lie#1: Social Security is Broke….
This national myth is my all time favorite. Not only is Social Security NOT BROKE–IT IS THE ONLY FEDERAL PROGRAM WHICH IS FULLY FUNDED. I repeat–SOCIAL SECURITY IS FULLY FUNDED, ALWAYS HAS BEEN. (Source: http://motherjones.com/kevin-drum/2011/02/understanding-social-security-one-easy-lesson) As for the claim that Social Security absorbs most of our GDP–that is patently false. Social Security presently costs approximately 4.5% of GDP and is estimated to increase to 6% of GDP by fiscal year 2030. (Source : http://motherjones.com/kevin-drum/2011/02/understanding-social-security-one-easy-lesson) That is a far cry from the GOP and Wall Street claims that some 80% or more of GDP will be sucked dry by Social Security. In fact, the federal government OWES THE SOCIAL SECURITY TRUST FUND more than $2.669 TRILLION DOLLARS, according to the report issued by the Financial Management Service of the US Department of Treasury. The Medicare Trust Fund (hospital and supplementary medical) is also owed some $347, 521 BILLION DOLLARS by the feds. (Source : http://socialsecurityinstitute.com/news/recent-news/trust-fund-bait-and-switch/) This was revealed by the National Committee to Preserve Social Security and Medicare. Somehow, this ‘inconvenient truth’ has escaped both the President’s and Congress’ attention. The real problem lies in the fact that the government has continually raided the fund all of us have paid into–to subsidize corporate tax breaks, unbridled Pentagon spending and what has become routine Wall Street bankster raids on the public dime.
Lie#2 : Social Security and Medicare Contribute to the National Debt…
Even a fiscal conservative like Sen. Max Baucus has testified that Social Security does not belong in deficit reduction talks. Baucus, as the Chair of the Senate Finance Committee, held a hearing entitled “Perspectives on Deficit Reduction: Social Security” just this May. Baucus explained that:
“Social Security benefits are financed only through payroll taxes and the Trust Fund.” Baucus further explained that Social Security, …”is not responsible for the deficits we face in the general fund today. Therefore, I believe Social Security should not be part of our efforts to reduce these deficits.” (Source : http://www.advisorone.com/node/20983) In fact the federal law FORBIDS any mingling of Social Security monies with general revenues. Baucus himself clearly stated that, …”Social Security must remain separated from the rest of the Federal budget and the program cannot borrow money from the general Federal budget.” (Source : http://www.advisorone.com/node/20983)
So, how can any Congress or any President LEGALLY sponsor any bill which would MANDATE across the board spending cuts including to Social Security? Well, both democrats and republicans came up with a few very sneaky plans. The two most prominent plans are the Corker-McCaskill CAP Act (S. 245), and the Cut, Cap and Balance Act (H.R. 2560).
First I’ll describe the Corker-McCaskill bipartisan compromise. Another presidential ‘buddy’, Sen. Claire McCaskill co-sponsored a bill benignly dubbed the ‘Corker-McCaskill CAP Act or S. 245. It has a ‘companion’ bill in the House of Representatives, which is now the ‘flavor of the month,’ namely the ‘Cut, Cap and Balance Act or simply, H.R. 2560 in the House and S. 1340 in the Senate. (Source: http://thomas.loc.gov/cgi-bin/query/2?c112:H.R.2562:)
Either bill forces dramatic ‘across the board’ cuts in ALL government programs–including Social Security, Medicare and Medicaid. According to the Center on Budget and Policy Priorities–the Corker-McCaskill CAP Act would LIMIT TOTAL FEDERAL SPENDING TO NO MORE THAN 20.6 PERCENT OF THE GROSS DOMESTIC PRODUCT (GDP), forcing massive AUTOMATIC CUTS in all programs INCLUDING SOCIAL SECURITY, , MEDICARE AND MEDICAID. (Source : http://www.cbpp.org/cms/index.cfm?fa=view&id=3471) As our population ages and healthcare costs continue to rise those costs will probably exceed the 20.6 % limit mandated in Corker-McCaskill. This forced limit would be affected by any downturn in the economy whether caused by future wars, natural disasters, increased aging populations or further outsourcing of our industries thus eroding our GDP. The Center on Budget and Policy Priorities has clearly explained that various limited structural changes to Social Security, Medicare and Medicaid will not result in savings anywhere close to the Corker-McCaskill formula, and that the
…”ONLY PRACTICAL WAY TO GENERATE SAVINGS OF THAT MAGNITUDE WOULD BE TO REPLACE TRADITIONAL MEDICARE WITH A VOUCHER FOR THE PURCHASE OF PRIVATE INSURANCE AND TO CONVERT MEDICAID TO A BLOCK GRANT, AS THE RYAN PLAN WOULD DO.” (Source : http://www.cbpp.org/cms/index.cfm?fa=view&id=3471)
As for Social Security, it is estimated that current beneficiaries and those approaching retirement would see fairly substantial benefit reductions. As the ‘Boomers’ begin collecting Social Security, this act would trigger even further reductions to meet the 20.6% trigger. Increasing Social Security revenues, either through raising the earnings level subject to the Social Security payroll tax or by raising the retirement age to receive full benefits–WILL NOT prevent enormous benefit cuts, because these options do not affect whether total federal expenditures meet the spending cap. The spending cap TRIGGER mandated in the Corker-McCaskill CAP Act would begin in 2013, immediately after the Presidential and Congressional elections. The House ‘companion’ bill, namely the ‘Cut, Cap and Balance Act’ is waiting in the wings, should the CAP Act fail. Either bill is a treasonous surrender of our RIGHTS, namely Social Security and Medicare.
Balancing the budget and the spending cap on the backs of
Lie #3 : Social Security and Medicare as ‘entitlement’ programs are a form of welfare…
Social Security and Medicare are NOT WELFARE. These are social insurance programs which produce a defined benefit for retirees, and as such are not under the auspices of presidential, judicial or congressional whim, under a LEGITIMATE government. For members of congress to retool the program and divert our money set aside for retirement amounts to grand theft. CONGRESS HAS NO RIGHT TO REWRITE THE SOCIAL SECURITY PROGRAM FOR THE MAJORITY OF STOCKHOLDERS which is the American public. Congress and the President have no right to divert funds from Social Security by using it as a corporate piggy bank.
Lie #4 : Increasing taxes proportionally to earnings level will kill business investment and destroy jobs….
This has to be the most insidious of all the myths, having no basis in fact or history. In fact just the opposite is true. The largest gain of jobs leading to the creation of a giant ‘middle class’ for the first time in our history occurred due to an equally giant infusion of monies into public infrastructure works, beginning with the administration of FDR and continuing through the subsequent administrations of Truman, Eisenhower, Kennedy and yes–even Nixon.
Highways, bridges, schools, electrical power grids, were examples of improved infrastructure. This improved infrastructure made it less expensive to do business, for corporations and small Mom and Pop stores. This was dubbed …”the great expansion,” as it grew the largest middle class in our history. As a rule, Americans understood the maxim…”you have to spend money to make money.” Instead of demanding the ‘rock bottom’ price–Americans understood the link between reasonable pricing and a living wage for workers. Rather than demand ‘something for nothing’ we demanded economic justice for both business owners and workers.
The expansion of jobs and economic stability for a majority of Americans continued until the eventful Reagan regime. From Reagan on through Bush I, Clinton, Bush II and now the Obama administration–economic prospects for the average American have dwindled to little more than ‘wage-slavery.’
Tethered to a system which denies healthcare to anyone not covered by an employer backed ‘group’ insurance plan–workers remain in jobs they hate, taking any punishment metered out, in a desperate attempt to retain healthcare coverage which does not exclude ‘pre-existing conditions.’
As workers became more desperate–employers discovered outsourcing those same jobs. Workers in Asia for example would produce goods for pennies of a true living wage. American workers were told to compete against workers making literally pennies–an obscenely unfair labor practice– reminiscent of a drowning man being given the choice of either swimming with sharks or piranhas. Even the Clinton administration, usually heralded for leading our country to a large surplus–sacrificed our manufacturing sector on the altar of Milton Friedman’s ‘open markets’, via NAFTA. (Source: ) Since then, a series of ‘free trade’ treaties have resulted in furthering what historians have titled–’The Great Contraction,’ heralding in an era of massive job losses and the highest rate of childhood homelessness since the Great Depression. (Source: http://www.nhchc.org/ShelterHealth/ToolKitA/A2HomelessChildren.pdf )
Now the ‘free trade’ gurus under the auspices of the Americans For Prosperity ( a tea party ‘advisory group) , the US Chamber of Commerce, the official GOP and yes–the Democratic Leadership Council–are feverishly blaming the present economic meltdown on the poor, the middle class and the elderly in a concerted plan to destroy our paltry ‘social safety net,’ namely Social Security and Medicare/Medicaid. We are told to ‘trust’ the very financial sector that caused this economic train wreck–with our retirement and health benefits. The financial services (ie. Banking, Insurance ) industries have proven to be as dependable as believing that ‘doing it’ for the first time–won’t get you pregnant.
Note: this piece has is a modified reprint of a piece which ran in OpEdNews.
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