POWIP Piece of Work In Progress – Former Abode of Dan Collins

Social Security politics – what wasn’t said

Look like it's that time of the month again.... Obama attacking a strawman to make an unpopular-policy-to-come sound palatable in contrast (and hopefully distract from all the unpopular stuff that's already passed):

President Barack Obama used the anniversary of Social Security to trumpet Democrats' support for the popular program and accuse Republicans of trying to destroy it.
....
Some Republican leaders in Congress are "pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall," Obama said.

He contended that such privatization was "an ill-conceived idea that would add trillions of dollars to our budget deficit while tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market."

Most Republicans, in fact, are wary of touching that idea, because Social Security is virtually sacrosanct to voters, particularly seniors.
....
Many Democrats adamantly oppose any cut in benefits to reduce costs and some won't accept a gradual increase in the retirement age, something that was done in the last overhaul in 1983. Republicans say an increase in Social Security taxes is out of the question, even for the wealthy.

Unless Congress acts, Social Security's combined retirement and disability trust funds are expected to run out of money in 2037. At that point, Social Security will collect enough in payroll taxes to cover about three-fourths of the benefits.

Let's consider reality for a second -- even if Republicans were seriously proposing Social Security privatization now, after it crashed-and-burned during the Bush administration, and after an even bigger market crash-and-burn, there's no way this would pass during Obama's administration. Republicans cannot win enough seats this November to have a majority large enough to overturn an Obama veto. The soonest this could be a "real" proposal is 2013, requiring the booting of Obama.

That out of the way, I think the reason he's demagoguing this, other than DCCC polling indicating that scaring people about SocSec privatization is a winning strategy for Dems for the Fall (good luck with that), is that there will be real SocSec proposals coming out from Obama's deficit commission, and people aren't going to like them: it will involve cut benefits and increased taxes.

And why is this necessary? Not because of some future Social Security disaster, but because of a lack of cash right now. The Trust Fund has been "cashing out", as opposed to being the cash cow it has been for the past 25 years or so. Also, it's a lot easier to cut Social Security benefits than Medicare, as SocSec is a straight cash formula. Change the formula to reduce benefits, and it's reduced across the board.

Easiest way to reduce the benefits: increase the retirement age. Note that Obama said nothing about Republicans wanting to increase the retirement age....probably because that's one of the proposals that will be put forth in real legislation. The left-wing realizes what's really in the cards, because they're starting to hound Democratic incumbents over the retirement age issue.

Meanwhile, a coalition of 60 liberal groups and advocates for the elderly, including the AFL-CIO and MoveOn.org, are predicting a different threat to Social Security: the possibility that a bipartisan deficit commission created by Obama will propose slashing benefits to help dig the nation out of debt.

Coalition members plan to buttonhole lawmakers as they campaign for reelection this fall, demanding that they sign a pledge to oppose any cuts to program entitlements, such as raising the retirement age. "Over the coming weeks and months, we're making sure every politician is put on notice: If you're looking to raise the retirement age, you should be looking to retire in November," said Nita Chaudhary, campaign director at MoveOn.org.

Well, again, good luck with that. I'm wondering how much of the current moves of the progressive cadres are to try to get some of the credit for Democratic electoral failure this year. I doubt anyone will be fooled by this.

This is not to say there aren't issues with regards to raising the retirement age (yes, I linked to Krugman, but the stats are good.) But then, those who don't live very long into retirement have never been a big concern of Social Security Old Age benefits. And while the life expectancy for black men truly does suck, black women have a higher life expectancy at age 65 than do white men, and not many are making much of that.

Meep

Meep is a member of the Irish Catholic mafia, having a suspiciously high number of green-eyed, red-haired friends. While she doesn’t have red hair herself [except when she goes into the sun (rare for any vampire)], she does have green eyes. She’s a raving Papist and is a life actuary on the side [i.e., she counts dead people]. An amateur pain-in-the-ass [willing to go pro!], she likes covering retirement, mortality, math, and education issues.