White House Floating "Deal" on Social Security Reform

It was only a matter of time.

Remember that effort by President Bush and the Republicans in Congress to partially privatize the Social Security program? The one that was a complete and total failure? The one that burned up whatever of a mandate the President had? The one that, as much as almost anything else, led to the Republican defeat on November 7? Well, it looks like the White House is getting ready for another pass at this bamboozlement. And according to Stephen Dinan of The Washington Times, the Bush administration is even trying to reach out to Democrats in this effort.

The Bush administration has sent signals since last month's elections that the president is prepared to accept some tax increases on upper-income families, worrying congressional Republicans and fiscal conservative watchdogs who say he will compromise with Democrats to win a legacy accomplishment.

[...]

The watchdog groups have been demanding that the president repeat his earlier pledges not to raise taxes in order to reform Social Security. But the White House has refused, with officials saying everything is on the table, including tax increases.

[...]

Meanwhile, the House's top Republican on tax cuts, outgoing Ways and Means Committee Chairman Bill Thomas, warned last week that the White House has hinted that it will accept a tax increase on higher-income families in order to win accommodations from Democrats.

Just as the Democrats were able to stay resolute during the last debate over Social Security, so too must they say no to any entreaty from the Bush administration that could lead to private accounts. And just as the Netroots maintained a robust effort to keep Democrats in Congress in line during the last Social Security debate, so too must we be on guard during the 110th Congress to ensure that the program, one of the most successful in American, if not human history, is not gutted to please conservative ideologues.

Frankly, I see little reason for Social Security to be a top priority of the coming Congress -- at least in its first months. If, however, Democratic leaders decide to move forward with an attempt to plug the long-term deficit in Social Security (the trust fund could run out in 30 to 40 years) then they should craft a plan largely on their own without the input of the White House because the lesson learned from previous Congresses is that the Bush administration is willing to renege on any deal and screw any Democrat if they believe it will advance their policies and thus their political strength. While this might make it more difficult to pass reforms with George W. Bush in office, the legislation crafted during the 110th Congress can always serve as guidlines for legislation to be passed in a future Congress dealing with another President -- Democrat or even possibly Republican (though hopefully not) -- who is not as obsessed with partially privatizing the program.



Display:


The tax hike is a gimme (3.00 / 1)

To be square, the cap on SocSec should be a hell of a lot higher.  Any privatization should be resisted and considered beside the issue when it comes to the idea of raising the cap.

Why not use that combination to push for a bit of good old commie redistribution of wealth?  Raise the SocSec cap, and then cut the amount lower wage earners pay in.

I'm sure it wouldn't be the end of the WalMart world if things worked out that way.  Somewhere in all these record earnings report there has to be a couple dollars for the people who make the earnings possible.


by jcjcjc on Wed Dec 20, 2006 at 01:58:11 AM EST

Re: The tax hike is a gimme (3.00 / 2)

It is important that Social Security NEVER become needs based - ever.  Once you turn it into a "needs based system" in any way, it will turn into the new "bogeyman".  Like welfare reform.  Reagan and Clinton sure showed them babies a thing or two, but they didn't touch a dime of the corporate welfare.  


Follow the money
by dkmich on Wed Dec 20, 2006 at 06:12:27 AM EST
[ Parent ]

Re: The tax hike is a gimme (3.00 / 2)

You could hike the tax without making it needs based.   Right now, the tax part is actually "lack of needs based," in the sense that people only pay SS tax up to $90,000 or whatever.   If Paris Hilton pays SS tax up to the first $90,000... why not the subsequent 9 million?

But in terms of making the payments needs based -- I agree with you.  It's tempting to say that millionaires (or even upper middle class) citizens simply don't need to get SS payments, and that we should restrict to those who need it.  But that would gut the popularity in one fell swoop (think of the popularity of SS vs welfare, and you get the idea).


by jhlinko on Wed Dec 20, 2006 at 08:02:39 AM EST
[ Parent ]

This is true (3.00 / 1)

Because, as we all know, Wall Street brokers are earning absolutely every penny of those bonuses.  

Honestly?  At some point this is a conversation America needs to have.

Why is "needs based" so evil?  It's half the reason that things like New Orleans happen -- because we don't think "needs based" means shit until bodies are floating out into the Gulf of Mexico.  And even then, "needs based" has more to do with the government's need to keep pictures of dead black people off the TV, than it does with helping anyone.

Does anyone seriously believe that in a country with 4.4% unemployment (and dropping) that it would trigger an economic backlash to go with needs based systems?

There is a point where the Republicans need to be made to confess their motivations for what they do have nothing to do with anything except being assholes and appealing to assholes.

While I understand the argument for avoiding it (and I'm sure Harry Reid and Nancy Pelosi wouldn't even ponder a needs based system), I do wonder how much of the soul of the Democratic Party should be traded for having a big happy hugfest with a bunch of pricks who fully intend to destroy Social Security whether it is needs based or not.


by jcjcjc on Wed Dec 20, 2006 at 10:45:05 AM EST
[ Parent ]

Re: White House Floating "Deal" (none / 0)

I'm not worried.  This is just the Bush/Cheney/Rove team trying it on.  
Since they've treated the Democrats like #@&! the last six years, I don't expect positive response.

It's going to take Democrats  some time to adjust to running the show.

For B/C/R/ to realize they don't have any control over the domestic agenda will take longer.
They still have no conception that the whole country has rejected Bush's leadership on everything, not just Iraq.


by clio on Wed Dec 20, 2006 at 03:45:46 AM EST

no dice (none / 0)

I also hope there's no deal here. Working towards a balanced budget is necessary, but the truth is that nobody wants to mess up social security, and everybody wants to tax the ultra-wealthy. The Democrats would be foolish to compromise here.

Pass the Paris Hilton tax and make him veto it. That's a fight that helps us to have.

If we did it right, I would not be surprised to see it come back and get overrides from congress, especially if the whole thing took until late 07' to work out.


Me | My Work | Future Majority
by Josh Koenig on Wed Dec 20, 2006 at 04:03:43 AM EST

Stoller was right (3.00 / 2)

There is no crisis!


by Bob Brigham on Wed Dec 20, 2006 at 04:31:31 AM EST

There is no Stoller! (none / 0)

I think he's simply an invention of the right wing!

Except... well, I've met him.  Several times.  And he's a pretty good guy.

Okay, never mind.   :)


by jhlinko on Wed Dec 20, 2006 at 08:05:52 AM EST
[ Parent ]

He's Jerome, remember? (none / 0)

Jeez.


by jcjcjc on Wed Dec 20, 2006 at 10:46:50 AM EST
[ Parent ]

No Crisis (3.00 / 2)

And if you doubt the non-existence of the Social Security Crises, just read the introduction to the excellent book, Social Security: The Phony Crisis by Dean Baker and Mark Weisbrot, including this choice paragraph:

This is the situation facing Social Security, and it is well known to those who have looked at the numbers. The program will take in enough revenue to keep all of its promises for over 30 years, without any changes at all. Thirty years is a long time--it's hard to think of any other program that can claim to be secure for that long. Furthermore, the forecast of a shortfall in 2034 is based on the economy limping along at less than a 1.7 percent annual rate of growth--about half the rate of the previous three decades. If the economy were to grow at 1998's rate, for example, the system would never run short of money.
In short, the way to avert any shortfall in Social Security is to stop electing Republicans, since economic growth is substantially lower under the GOP than under the Dems, as I explained some time ago in the April 2005 diary, "We'd All Be 3 Times As Rich, If Not For Republicans!"


by Paul Rosenberg on Wed Dec 20, 2006 at 11:45:03 AM EST
[ Parent ]

Re: W H "Deal" on SS Reform (none / 0)

If the Dems deal, they deserve to have everyone abandon this damned party.  They need to raise taxes on the lower and upper middle classes and keep their GD mitts off social security.  Social Security is a middle class staple.  There can be no more assaults on the middle class, and the Dems better remember who the hell elected them.  


Follow the money
by dkmich on Wed Dec 20, 2006 at 06:15:05 AM EST

They won't deal, don't worry (3.00 / 1)

Remember what happened the last time BushCo tried this, in December of 2004?  It's what started him back on the long road downward and erased the remnants of his once-phenomenal 9/11 boost.

People like their Social Security and they don't like people messing with it.  (Especially Bush, and especially now, when it has become apparent to all but the most self-deluded that Bush and his minions cannot be trusted on anything, ever.)  And we all still have a passel of links and materials to start shoving down the Republicans' throats should they try it.


by Phoenix Woman on Wed Dec 20, 2006 at 10:46:22 AM EST
[ Parent ]

Social Security is a third rail issue (3.00 / 2)

You'd think at some point the Republicans would realize that some of America's most socialist programs are also some of America's most beloved.

Poor Republicans... they don't seem to understand you can't abolish a program that works and that everyone likes by making up and repeating a few lies about it going broke.


by jcjcjc on Wed Dec 20, 2006 at 10:50:44 AM EST
[ Parent ]

Re: White House Floating "Deal" (3.00 / 2)

The power dynamic has shifted. So, then, should control of the agenda. If the Democrats in Congress have enough votes to change/improve social security to add strength and extend further into the future, then they should work on their own package AND THEN offer whatever they develop to Bush. Not the other way around.

I worked in the Congress in the Gerald Ford days, and it was about the Congress moving legislation and leading the policy debate, and leaving it up to the President to veto if he dared.

It would be foolish at this point for Congressional Dems to cede any issue leadership or primacy and fall back into a reactive mode. After all, we didn't just vote for new policies; we voted for new leadership.


by lenstewart on Wed Dec 20, 2006 at 07:02:15 AM EST

Re: White House Floating "Deal" (none / 0)

This comment gets to the truly significant point, which is the crippled, staggered, irrelevant Bush White House having the gall to initiate anything.

We'll give them a couple of deck chairs to rearrange when we're feeling charitable someday. Until then break rocks in the political prison they've built for themselves.

And whenever there is mention of "Bush" and "legacy" in one sentence, we all better be talking about the wounded and the dead.

B/t/w How do you get to be a "fiscal conservative" by favoring giveaways that balloon the federal budget deficit?


Within weeks they'll be re-opening the shipyards And notifying the next of kin --Elvis Costello
by ShagBark on Wed Dec 20, 2006 at 08:11:05 AM EST
[ Parent ]

Well, They Could Initiate Leaving Iraq (none / 0)

This comment gets to the truly significant point, which is the crippled, staggered, irrelevant Bush White House having the gall to initiate anything.
On the oh-so-advanced theory of "clean up your mess before you can watch tv."


by Paul Rosenberg on Wed Dec 20, 2006 at 10:09:20 AM EST
[ Parent ]

Re: "Deal" on Social Security Reform (none / 0)

In exchange for strengthening the basic government-run program, Bush will try to give his high income base a final gift by carving out a supplemental, tax-deferred private program that only they can afford.


by Bob H on Wed Dec 20, 2006 at 07:03:39 AM EST

Re: White House Floating "Deal" on Soci (none / 0)

"One of the most successful [programs] in American, if not human, history"?

Dude, I love SocSec too, but didn't that sound a little overheated when you wrote it?  Just off the top of my head, the Marshall Plan and the GI Bill were better.  NATO was pretty hot shit too.  Plus the Homestead Act, the Manhattan Project...

Sorry to be negative, that's not normally my style, but I couldn't help it this time.  Your post is great.


by texas dem on Wed Dec 20, 2006 at 07:20:29 AM EST

Nothing Overheated At All (3.00 / 2)

He wrote "one of the most successful," so there's plenty of room for four or five others... if that many can be found.

Now the "human history" part definitely is overstated, because (a) American's are typically ignorant of what others have done and (b) European retirement and disability systems are generally far superior to ours.

But in the US, do you have any concept of how much good it has done?

Here's just a "side-benefit" that most people don't even think of when they talk about Social Security, from a 2005 press release from the The Center for Economic and Policy Research, "Social Security Is Very Important Anti-Poverty Program for Children: More Poor Children Benefit from Social Security Than TANF":

Social Security is an important source of income support for the low income families who receive it, accounting for nearly half of the income for families with children living below 150 percent of the poverty level and receiving a Social Security check.
Without Social Security, millions of children, as well as elders would have lived in poverty from the 1930s to date--a period of 70 years.  Many of those who would not have lived in poverty would have done so at the cost of enormous sacrifices by other family members. One simple equation: Grandparents kept our of poverty by Social Security means money for grandchildren to go to college.

The GI Bill was a tremendous acheivement.  But it lasted only until 1956. It paid for the training of 7.8 million "including 2,230,000 in college, 3,480,000 in other schools, 1,400,000 in on-job training, and 690,000 in farm training."  It also paid for 2,360,603 home loans before the Korean War GI Bill was passed.  That's no small potatoes.

OTOH, from a table on the Social Security websitethe Social Security beneficiaries in 1970 totaled 23,035,295 for Old-Age and Survivors Insurance, and 2,665,629 for Disability Insurance.  In 2005, the figures were 40,120,122 and 8,314,314, respectively. In short, the size of Social Security, which has lasted seven decades so far, utterly dwarfs that of the GI Bill, which lasted just over a decade.

So, no, the GI Bill was not "better" than Social Security, just in terms of how much good it did.  Social Security reached more people by at least an order of magnitude.

The Homestead Act is much more comparable.  But, of course, there's the genocide on which it depended to be considered. The Manahattan Project?  Surely you jest! Aside from killing roughly 200,000 Japanese civilians, what exactly did it accomplish?  No less an expert than General/President Dwight D. Eisenhower said, "The Japanese were ready to surender and it wasn't necessary to hit them with that awful thing."

NATO?  Well, it's only "pretty hot shit" on a similar level with Social Security if you buy the myth that the Soviets were planning to invade Western Europe, and that NATO is what stopped them, while nothing less would have.

The Marshall Plan--it was certainly timely. But again, it lasted only a relatively short period of time.  It's like comparing any of the 7 different school teams who've won NCAA basketball championships since 2000 to the UCLA dynasty under John Wooden, which won 10 chapionships in 12 years.  Each of the teams that's won since 2000 was successful, no doubt about it.  But they simply can't be compared to the UCLA dynasty. No one can.

So, in short, your "off the top of my head" list does nothing to diminish the standing of Social Security as one of the most successful programs in American history. To the contrary, it illuminates the strength of that claim.


by Paul Rosenberg on Wed Dec 20, 2006 at 11:18:15 AM EST
[ Parent ]

Re: Nothing Overheated At All (none / 0)

Unfortunately, I, like many Americans, am so ignorant of non-American governmental policy that I had to go with only American programs.  The part that was overheated was not the "one of the most successful programs in American history", which it surely is and which you dazzlingly showed.  It was the "human history" part that was overheated.  Course, I didn't have any examples to show that, so I stuck to American programs, which weren't actually relevant to the point I wanted to make.

Oh well.  Thanks for your response anyway.

Also it's interesting that I think that a program that moved millions from poverty and hunger into successfully-scraping-by status is less successful than a program that takes working class people, sends them to college for free, and turns them into middle class professionals.  It's because I think middle class professionals is the goal status, so a program that successfully gets people there is an unqualified success, whereas a program that gets people from an awful situation into an acceptable-but-still-not-great situation is a more qualified success, even when the impact of the second program is, by the numbers, much much greater.  (This is setting aside for the moment the social consequences of financial independence for the elderly and disabled.)  Classism is one label for that kind of thinking.   There's a little more to it than that, I think, maybe.  And a lot of it in this case was just being uninformed; oddly enough, I haven't heard a lot of detailed arguments for social security based on its historic social value.  But, yeah.  I mighta just got caught with my pants down.


by texas dem on Wed Dec 20, 2006 at 07:36:42 PM EST
[ Parent ]

Subway corollary (none / 0)

Touch the third rail. die.


.. and when I win the lottery, gonna donate half my money to the city so they have to name a school or a park after me - camper van beethoven
by heyAnita on Wed Dec 20, 2006 at 07:41:00 AM EST

White House "Deal" on Social Security (3.00 / 1)

Pelosi is smart enough to avoid the SS Tar Baby.  Dems won't even let it come to the floor for discussion.   Declare it "not a problem" and get on with more important problems like Medicare/aid and health care.


by bakho on Wed Dec 20, 2006 at 08:20:43 AM EST

Exactly (none / 0)

She's probably laughing her ass off right now as she reads this piece in the Moonie Times, thinking "Oh, PLEASE, Dim Son, PLEASE make my day and try this!  We shoved this down your throat two years ago and we'll do even harder now."


by Phoenix Woman on Wed Dec 20, 2006 at 10:51:21 AM EST
[ Parent ]

Re: White House on Social Security (3.00 / 1)

what bakho said

You all are having your OWN trouble adjusting to the fact that it is Pelosi and Reid who decide what gets debated and voted on.  Sure, the White HOuse people might get, e.g., Joe Lieberman to say something positive but there is no way it is going any further than that.  Unless you think Pelosi and Reid are a lot dumber than I do.


by sck5 on Wed Dec 20, 2006 at 08:32:03 AM EST

No Rush (3.00 / 1)

    Social Security is the not in crisis. The whole idea that SS needs attention is based on economic projections 30 years from now. Economists don't do a very good job projecting 2 years let alone 30. Runaway medical costs and a structural budget deficit are true crises. If those two problems are tackled, SS would be an easy fix. If they aren't addressed, everything will be problematic.


by MarvToler on Wed Dec 20, 2006 at 08:32:22 AM EST

Re: This is personal (none / 0)


If ANYONE deals with Bush on it, I'm gone.

Iraq's a fuckup and I knew it was going to be a fuckup the day the Bushies started talking about it.

But Bush's Social Security scam was a rich bastard's attack on my retirement.

That's when it got personal.


by Bush Bites on Wed Dec 20, 2006 at 09:39:30 AM EST

Remember, this comes from the Moonie Times (none / 0)

1) Why should the Democrats deal, when they beat Bush into the ground in December of 2004 and January of 2005 on this -- and this right after he came off an election "win"?   And Bush's credibility hasn't exactly improved over the last two years.

2) The WashTimes exists solely to prop up and propagandize the GOP and other right-wing outfits.  That's why Sun Myung Moon is cheerfully willing to lose $100 million a year on it, as he has for the past quarter of a century:  He makes far more than enough from his forced-labor enterprises (pardon me, his "church") to cover his losses.


by Phoenix Woman on Wed Dec 20, 2006 at 11:08:35 AM EST
[ Parent ]

Repeat After Me (3.00 / 4)

There is no crisis.   There is no need to craft a deal on any terms.  

Now say that 1 million times.


by eRobin on Wed Dec 20, 2006 at 09:45:04 AM EST

Agreed (none / 0)

Medicare is what needs to be dealt with, particularly the ability of the program to negotiate lower prices on drugs. Let's hope Dems stick to their promise and focus on that.


TAKE BACK OUR PARTY: Democracy Bonds
by LiberalFromPA on Wed Dec 20, 2006 at 11:06:35 AM EST
[ Parent ]

No compromise with Republican cheaters (none / 0)

"Frankly, I see little reason for Social Security to be a top priority of the coming Congress..."

I see even less reason for the Democrats to compromise on this. They are stronger now than they were the last time this came up.


G
by lemonyellow on Wed Dec 20, 2006 at 10:29:21 AM EST

If you take a look at the financials (3.00 / 1)

The odds are better than even that Social Security is overfunded going forwards.

Most people think that is crazy talk. On the other hand most people haven't looked at the numbers. Examine the economic assumptions in Table V.B1 & V.B2. Examine the demographic assumptions in Table V.A1, particularly the immigration numbers. Do they make sense?

http://www.ssa.gov/OACT/TR/TR06/trLOT.ht ml

I put up a diary on this back in January suggesting that we use Social Security as a club in the mid-terms. It works even better in a presidential election cycle.

The odds are pretty good that the real policy debate on Social Security over the next decade is how to redirect the excess FICA and how to keep the Trust Fund from balooning with interest being credited on interest. Still think this is crazy talk? Well examine the numbers of the Low Cost alternative, ask yourself why on earth we cannot beat them, why indeed we probably will beat them.

The relevant tables here are VI.F7 (Constant dollars) and VI.F8 (Current dollars). Or you can examine the result in graphic form with Figure II.D7.
http://www.ssa.gov/OACT/TR/TR06/trLOF.ht ml

Not only is Social Security not in crisis, it is not even broke, not now, not in 2041, not in 2055. And privatizers know this. They are not just wrong about Social Security they are deliberately and blatantly lying.

Still think this is crazy talk? Well that is what people were saying about WMDs two years ago. Don't get fooled again, browse some tables and figures.


by Bruce Webb on Wed Dec 20, 2006 at 02:33:24 PM EST

New Bureau of Public Debt Trust Fund webpage (3.00 / 1)

The Bureau of Public Debt put up a new webpage giving actual month end statements for each Trust Fund. If you want to know to the penny how much is in the OAS (Old Age Survivors) Trust Fund and the DI (Disability) Trust Fund as of the end of the most recent report month and compare that to the estimates of the last Annual Report you can see if we are on track. The October 31 report went up Dec 1 so we can expect the December report to go up February 1.

While they can screw around with the projections going forward they really can't do a lot with the actual balances. Are we on course to beat (fully funded) Low Cost?

You tell me.
http://www.publicdebt.treas.gov/dfi/dfit rustfundreport.htm


by Bruce Webb on Wed Dec 20, 2006 at 02:44:03 PM EST
[ Parent ]


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