Looting Social Security, Part 2
By William Greider
So why do the TFT reporters (Elaine Povich and Eric Pianin) zero in on old folks and Social Security or entitlements like Medicare and Medicaid? Because those are Pete Peterson's favorite targets. He has flogged Social Security as a blight on our future for at least twenty years. He is a nut on the subject. His "facts" are wildly distorted or simply not true. Never mind, the establishment press portrays him as a disinterested statesman.
This crusade is dangerous for the people because the "respectables" in governing circles and both parties embrace the same reactionary logic. Does government have money problems? Don't restore the progressive income tax on the wealthy or capital, don't cut away some of the corporate boodle in the federal budget--that politics is too difficult. Instead, let's whack Social Security while folks aren't watching.
The biggest lie in Peterson's story-telling is his refusal to acknowledge the looting aspect of what he proposes. Despite his inflamed rhetoric, Social Security is not broke--it has a huge surplus of around $3 trillion (trillion, not billion). With no changes at all, the trust fund will be solvent for at least another thirty years. In fact, workers retiring now have already paid for their Social Security benefits because they paid higher payroll taxes for the past twenty-five years. I might have a little respect for fiscal crazies like Peterson, Conrad and Gregg if I once heard them state these facts honestly instead of demonizing Social Security recipients.
Here is what really worries the fiscal hawks: as the Social Security trust fund built up the huge surpluses, the federal government borrowed the money and spent it. The time is approaching--maybe ten or twelve years from now--when the federal treasury will have to start paying back its debts to Social Security. The accumulated wealth does not belong to the US government, any more than the money it borrowed from China. The beneficial owners are all those working people who faithfully paid their FICA taxes for all those years. If Washington stiffs them now, it will be a bait-and-switch swindle larger than Wall Street's.
A year ago, the Obama White House was playing footsie with Peterson and intended to give him a starring role in its "fiscal responsibility summit." The Nation disrupted those plans. I wrote a fierce attack on the billionaire's looting scheme and the true fiscal history of Social Security. The sting that really hurt was The Nation's cover--an unfortunate photograph of Mr. Peterson in which he resembled a Mafia don. The White House abruptly downplayed its summit and dropped Peterson as keynote speaker.
But the assault on Society Security, we knew, would come back sooner or later because many of Obama's lieutenants are devoted to Peterson's fiscal logic. Budget director Peter Orszag once co-authored a "reform" plan that would raise the payroll tax on young workers and cut benefits for older people near retirement. Isn't that clever? Pinhead economists evidently think that workers won't notice. Now the billionaire is cranking up another fight. We should finger him again, big-time, and all those who willingly collaborate in his plot.More of this important read at.................
http://www.thenation.com/doc/20100111/greider
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