Why doesn't Washington "Get" Social Security?

[jtown1123]

National Committee to Preserve Social Security and Medicare's President, Barbara Kennelly, discusses how Washington isn't listening to voters on Social Security in Huffington Post.

While people are concerned about the deficit, Social Security does not contribute to it and people harping for cuts to "save" the program are really just trying to avoid paying up the $2.5 Trillion Trust Fund Social Security has in surplus in US bonds. If this isn't a case of Wall Street vs. Main Street I don't know what is.


http://www.huffingtonpost.com/barbara-b-kennelly/washington-disconnect_b_667205.html

[sandnsea]

1. "Washington" isn't advocating cuts

Republicans in Washington Are.

More lumping of Demcorats with Republicans and then wondering why people "vote against their own interests".

[jtown1123]

3. While Republicans usually are the culprit

look no further than Democratic House Majority Leader, Steny Hoyer, who wants to raise the retirement age to 70! Major benefit cut. There are many Blue Dog Dems who have no problem cutting Social Security.

[sandnsea]

15. That's a life span consideration

And I believe they're also considering a method that would allow for non-professionals to retire earlier. Also, there are already provisions in place that allow people to put off retirement until 70 and collect more money if they do. So it's possible they will just make that more attractive.

Considering these things is not advocating cuts to social security. It's a way to preserve it for those who most need it while bringing more money into the system and getting wealthier people to put off collecting.

[Demeter]

20. this is a falsehood that has been debunked repeatedly

please don't buy it or spread it around

[SharonAnn]

28. The stole it "fair and square" and they don't want to give it back.

[alarimer]

23. Not this time.

Obama is the force behind the deficit commission. It is HIS plan to cut social security; he appointed people who have advocated cutting SS to that very commission.

[sandnsea]

25. Alan Simpson does

A Republican. None of the Democrats on that commission want to gut social security. I've seen the kitty litter spread all over the blogosphere, so save your breath. It's a deficit commission and it will have a host of recommendations. I'm sure Alan Simpson will recommend the withered vine. I'm sure Andy Stern will recommend defense cuts. But the thing is, they're all recommendations. That's All. I'm sure a lot of what gets implemented will depend on the elections in November. Want to trust the Republicans with the deficit?

[Angry Dragon]

2. Because Washington looks at it as their money not ours'

SS is a pot of money and they just want it.........

[NoNothing]

4. I don't understand this claim

That social security does not contribute to the deficit.

FACT: This year, social security must pay out more cash than it collects in payroll taxes.
FACT: This cash has to come from somewhere.
FACT: This cash comes from the U.S. Treasury, which buys some bonds back from the social security "trust fund" and pays interest on the ones it doesn't.
FACT: This shows up on the government balance sheet as an outlay with no corresponding revenue.
FACT: The deficit is caused by outlays exceeding revenues.

THEREFORE: When social security fails to collect enough in payroll taxes to finance the benefits it has to pay out, the exchange of cash for bonds shows up on the balance sheet certainly DOES contribute to any existing deficit.

Can anybody explain which of these facts are wrong, or where my logic is in error?

[Historic NY]

5. Its can't keep putting IOU's in the drawer forever.......

the government has been borrowing against the payroll funded accounts for years taking out the surplus amounts for other government uses. It owes on the IOU's with people out of work less is going in than goes out. They recently had to cash in one of those IOU's to make the monthly payments. The government owes Social Security the money not the other way around.

[jtown1123]

7. True, what you're saying is exactly

why this whole deficit commission has been targeting Social Security. They don't want to pay up the money owed to Social Security because they've been borrowing for so long that when they do pay, they have to be pretty creative where the money is coming from.

[jtown1123]

6. Good question! Here's the answer

Social Security draws from the Trust Fund in the event it pays more than take in revenue like this year. Since Social Security has been in surplus to the tune of $2.5 Trillion, it is merely collecting the money owed to Social Security. The surplus in Social Security has masked the size of our nation's deficit for years. That doesn't change the fact that those surplus dollars belong to Social Security, not the defense department or any other government expenditure.

[NoNothing]

8. No argument about that

Social Security certainly does have a claim on the money that it loaned to the government. But, and this is my point, it doesn't change the fact that as it exercises those claims it will add to the deficit, just like that chunk called "debt service" adds to the deficit. It's all outlays.

[jtown1123]

9. What you bring up

is exactly the issue. Gov't doesn't want to pay up but is also struggling with the fact that a default on a U.S. bond is very, very bad. So what do they do? Set up a "bipartisan" deficit commission to scare everyone into thinking Social Security caused a deficit and recommend cuts to the nation's most vulnerable, when in reality, Gov't spending caused the deficit. Social Security has the reserves and never contributed to deficit, what will contribute to deficit is the gov't paying Social Security back. This is sort of a complicated issue to explain to people.

[dkf]

10. When does "government doesn't want to" turn into "government can't afford to"

Eventually it will come down to cutting education or cutting health insurance subsidies or cutting federal jobs or cutting social security. Or you can inflate the currency and make the cost of everything go up and then the poor won't be able to stretch the food stamp budget. Yeah all fun stuff to look forward to. If we cut the defense budget I bet it comes out of veterans health first or the GI bill.

[jtown1123]

13. Some may disagree

but a government is nothing like a household budget (http://crooksandliars.com/susie-madrak/james-galbraith-zero-danger-posed-def). Technically, economists like Dean Baker and James Galbraith would agree, a gov't has an unlimited supply of money. Deficits are pretty high now because of the recession and the ridiculously high cost of healthcare. Do we really want Social Security cut in the name of lower taxes for the wealthy? Spending on unnecessary wars and weapons systems? People forget that Social Security lifts millions of children, seniors, and the disabled out of poverty. Deficit reduction should be way down on the priority list right now. Millions of people don't have jobs and little hope for ever reentering the work force again. Why not try to grow the economy instead of stifle it? If you cut the measly Social Security check, how will seniors, disabled, and families who lost a wage earning parent be able to afford groceries, rent, etc.?

[hay rick]

24. DVA budget is separate

from defense budget.

[shraby]

11. Today's payouts in Social Security comes from prior

"pay-ins" and was supposed to be in a fund to pay for today's social security. Since it's been borrowed and borrowed and borrowed to cover any congressman's whims, the borrowed funds need payed back..and that is what they don't want to do.
The fund is supposed to be viable until around 2030 or so anyway.
Sooo they just say it needs "fixed" and needs "cuts" and needs the retirement age up higher. Bullpucky as Rachel would say.

[NoNothing]

12. Yeah, I know that

Doesn't change the fact that "paying it back" means adding to the deficit. That's all I'm taking issue with, this idea that somehow Social Security doesn't affect other government finances, when it obviously does.

[jtown1123]

14. But I don't think we can say Social Security adds to the deficit

when it was government spending in the first place. Why blame the piggy bank?

[NoNothing]

16. It's not about blame, just facts

We will not be able to plan appropriately if we do not accept the fact that social security shortfalls must be made up through general revenues, and we can't do that if we deny that such shortfalls will show up on the government balance sheet. It's not about blame at all, it's about financial accounting that has a basis in reality.

Furthermore, all I am saying is that the government must be held accountable for the money it borrowed from social security. Denying that paying the money back will add to the government balance sheet (and the deficit) is the same as denying that the government owes anything to social security. *I* am the one calling for holding the government accountable. It's not my fault that this is politically and fiscally inconvenient.

[Demeter]

21. Only IF we don't tax the Obscenely Wealthy

to pay for their war profiteering wars.

[Recursion]

17. The IOUs are already part of the debt

So they don't "add" to it in that sense.

[MannyGoldstein]

18. Most Americans were in favor of a healthcare public option

Two-thirds, if I recall correctly.

We got flipped the bird on that one too.

The Republicans are nuts, and the Dems think they can win no matter what they do by yelling "vote for us or Palin becomes president!".

Bad situation.

[n2doc]

19. frankly they don't need it, so they don't see the use for it

Since all pols are at least upper middle class nowadays, and most are rich by any standard, few to none of them will ever need SS to keep them off the streets. All they see is $$$ coming out of their paychecks, and can't imagine those who really need it. And the whole RW sees anyone trying to retire on SS as a "leach" and a "loser", someone who "didn't work hard enough". Unlike them and their CEO/donor buddies they spend all their time with

[alsame]

22. That's how I see it too. There is no understanding of what it's

like to not be wealthy. Honestly, how many of those who will make a decision about SS need it to survive?

[yurbud]

27. Wall Street sees a use for it: they want our contributions going into their offshore accounts

[yurbud]

26. Washington gets that Wall St. wants to get Social Security

and leave us with cardboard boxes and catfood for our retirement.