CLICKME for full text: Lie #1: Baby Boomers Will Bankrupt Social Security Baby Boomers were already planned for during the reforms undertaken under Ronald Reagan's administration. Here's a chart with the inflows and outflows of the trust fund since 1958. As you can see, there has been positive cash flow since adjustments were made to the assumptions, tax rates and SSRAs. Even in 2009, cash flow was positive, leaving a $2.5 trillion surplus in the fund. Lie #2: There is no Social Security trust fund. It's all smoke and mirrors and accounting lies. From the SSA.gov FAQ: Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government. Not only are they the safest investment, they're the only permissible investment under current law, because they are the safest investment. Social Security is probably the best-functioning and most solvent government program there is. The fact-twisting that yields the idea that surpluses invested in Treasury bonds makes the fund insolvent or non-existent is an infuriating product of right-wing nonsense spin. Think on this: The entire debate about raising the debt ceiling centers on the stability of the full faith and credit of the US Government. The fact that Social Security surpluses are invested in Treasury securities does not mean there are no surpluses. It means that excess dollars paid to Social Security are invested in the single available investment vehicle which carries a high level of security. China thinks they're a great investment. So did lots of parents who saved for their kids' college educations, until they discovered mutual funds and lost their shirts. If US Treasuries were a vapor investment, would they be sought after and bought by foreign investors? Do those investors think our treasury bonds are vapor? Of course they don't and neither should we. The trust fund and the Treasury are two separate entities. They happen to fall under the auspices of the federal government, but they are not two pockets on the same pair of pants and shouldn't be considered such. But what about the interest on those bonds, you ask? Isn't that an obligation of the US Treasury and therefore contributory to our federal deficit? No. Because if they weren't purchased by Social Security, they'd be sold to someone else, and the interest would still be paid. Lie #3: Means-testing benefits does no harm to Social Security There's a movement afoot among Young Conservative Idiots to means-test Social Security benefits, which also appears to be embraced by some young progressives. Such a move would undermine the fundamentals of the program, because Social Security was established as an insurance program, not a welfare benefit. Because it is a contract between individual workers and the United States government, it cannot be contingent on need. It is a straightforward quid pro quo: workers and employers contribute throughout their working lives and benefits are paid upon attainment of Social Security retirement age, death or disability. Because contributions and benefits are tied to the Social Security Wage Base (wages subject to the OASDI tax), it doesn't matter if a claimant is a billionaire or a pauper. Means-testing would remove that objectivity and open the door for the contract to be breached on a number of different levels. Eligibility for benefits must be based upon covered quarters and earnings taxed in those quarters, regardless of whether there might be excess earnings. Means-testing moves it from an objective standard to a subjective standard, leaving the door open for further erosion
The Breaking Point
By: Jane Hamsher Thursday July 7, 2011 12:46 pm, Firedoglake
According to both the Washington Post and the New York Times, Obama is proposing cuts to Social Security in exchange for GOP support for tax hikes. Lori Montgomery in the Post:
At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action. As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal.
And Jay Carney’s carefully chosen weasel-words today do not contradict this:
“There is no news here – the President has always said that while social security is not a major driver of the deficit, we do need to strengthen the program and the President said in the State of the Union Address that he wanted to work with both parties to do so in a balanced way that preserves the promise of the program and doesn’t slash benefits.”
Nobody ever says they want to “cut” Social Security or Medicare. They want to “save” it. Just ask Pete Peterson, he wants to “save” it. Likewise AARP. They don’t want reduced benefits for senior citizens, they want to “preserve” it for future generations. If they have an enormous customer base they can market private “add-on” accounts and other retirement products to when Social Security goes bye-bye, I guess that’s just a happy coincidence.
Now if you think that this is something the President is doing because it’s the only way to get Republican cooperation you can stop reading here, because we’re going to disagree. From the moment he took the White House, the President has wanted to cut Social Security benefits. David Brooks reported that three administration officials called him to say Obama “is extremely committed to entitlement reform and is plotting politically feasible ways to reduce Social Security as well as health spending” in March of 2009. You can only live in denial for so long and still lay claim to being tethered to reality.
And if you think it’s only the President, and the progressives in Congress will oppose him, we’ll have to disagree about that too. Nancy Pelosi can always come up with the votes she needs to pass whatever the White House wants, and she’ll do it again this time. It’s her only chance to ever be Speaker again. If the Democrats somehow manage to retake control of the House, she needs Obama’s support. She’ll shake her fist and say things like any health care bill “without a strong public option will not pass the House” — and then turn around and force her caucus to walk the plank.
“We can never insure one-hundred percent of the population against one-hundred percent of the hazards and vicissitudes of life. But we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age. This law, too, represents a cornerstone in a structure which is being built, but is by no means complete…. It is…a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness.”
— Franklin D. Roosevelt, August 14, 1935
“Social Security…is not a dole or a device for giving everybody something for nothing. True Social Security must consist of rights which are earned rights — guaranteed by the law of the land.”
— Harry S. Truman, August 13, 1945
“We will…endeavor to administer the disability [program] efficiently and effectively, [and]. . . to help rehabilitate the disabled so that they may return to useful employment.. . . I am hopeful that this new law. . . will advance the economic security of the American people.”
“The Social Security program plays an important part in providing for families, children, and older persons in times of stress. But it cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision.”
“One of the most urgent orders of business at this time is the enactment of hospital insurance for the aged through Social Security to help older people meet the high costs of illness without jeopardizing their economic independence.”
“I have today signed [legislation which]. . . constitutes a major breakthrough for older Americans, for it says at last that inflation-proof Social Security benefits are theirs as a matter of right….”
— Richard M. Nixon, July 1, 1972
“We must begin by insuring that the Social Security system is beyond challenge. [It is] a vital obligation each generation has to those who have worked hard and contributed to it all their lives.”
— Gerald R. Ford, February 9, 1976
“The Social Security program.. . represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.”
— Jimmy E. Carter, December 20, 1977
“[This law] assures the elderly that America will always keep the promises made in troubled times a half century ago.. . . [The Social Security Amendments of 1983 are] a monument to the spirit of compassion and commitment that unites us as a people.”
“To every American out there on Social Security, to every American supporting that system today, and to everyone counting on it when they retire, we made a promise to you, and we are going to keep it.”
“Social Security. . . reflects some of our deepest values–the duties we owe to our parents, the duties we owe to each other when we’re differently situated in life, the duties we owe to our children and our grandchildren. Indeed, it reflects our determination to move forward across generations and across the income divides in our country, as one America.”
— William J. Clinton, February 9, 1998