How to Cut Social Security in 7 Easy Steps (It's later than you think)

[Hannah Bell]

"This technique is not new and in fact mirrors the original plan for Bush's Commission to Strengthen Social Security (CSSS) in 2001-2002."

Step one.
Get consensus on 'Crisis'. In this case that current debt growth levels are unsustainable.

Step two.
Get consensus that there are only three possible paths out: revenue increases (A), cuts in military and other discretionary spending (B1 and B2), or cuts to non-discretionary spending, meaning Medicare and Social Security (C)

Step three:
Having agreed that some combination of A, B, and C is needed set up a Commission with a mandate to propose an up or down vote.

Step four.
Committee decides it is unwise to increase taxes during a recession and eliminates (A). Commission further decides that it is unwise to cut defense spending in the middle of two wars eliminating (B1) and that eliminating infrastructure spending or farm supports is both unwise or politically impossible in the current climate (B2)

Step five.
Recommend a package of cuts to Medicare and Social Security-C on the basis of shared sacrifice, after all every CD and State has a share of the elderly population.

Step Six:
Tell Congress that the statute doesn’t allow them to revisit A or B and then that NOT voting for a C based solution means denial of Steps one and two.

Seven:
Either get a vote for C or run against opponents as ‘Do Nothing Deficit Deniers”


In 2005 Bush mostly got stopped at Step A. Since his proposal was narrowly focused on Social Security, a 'There is No Crisis' narrative WITHIN the Social Security context was able to get traction. This time we are on a very different track, instead of selling this as a proposal for an 'Ownership Society' (where the numbers were pretty easily debunked), it is being sold as a matter of 'Intergenerational Equity' and 'Fiscal Responsibility'. And from that starting point Step one is pretty much in the bag and logic gets you mostly through Step two.

Leaving us where? Well we are within a week of a vote on Step three of the first list and if it passes steps four through seven pretty much follow automatically, they may not work but I would hate to have to bet on it.

Meaning that we need to stop Step three by convincing people that Step four is already in the bag. So called 'Deficit Hawks' strongly overlap with 'Tax Hawks' and with 'Military Hawks'. Moreover they are largely from farm states and not likely to vote for big cuts there. Which really leaves only one question in my mind, do they stop with proposing big slashes to Social Security, Medicare and Medicaid? Or make new runs at Urban Transit, Community Develpment, or (non-military) Foreign Aid?

I suspect they know better than to get too ambitious and will instead just strike at Entitlements as such.

A last note on Bartlett who revealed too much. In noting that while open to tax increases in principle history showed that while Congress couldn't help cutting future tax increases back (as with AMT), both Congress and people allowed the benefit cuts in the 1983 Reform to occur on schedule. Since future wage working retirees actually decided to go along with that for the general good while the wealthy would predictably resist paying taxes for that same general welfare that we should just go with the benefit cuts. Because they were 'doable'.

So workers are 'doable'. Which puts us 'working guys' into a whole new category, except in this case we are paying the Johns.

http://angrybear.blogspot.com/2010/01/seven-steps-to-social-security-cuts-via.html


Bruce Webb runs an excellent blog, mostly on Social Security - with in depth hard data.

http://bruceweb.blogspot.com/



The other thing I might add: in this scenario, you'd still be paying the same SS taxes -- but getting less than promised. The excess would be siphoned off to pay for, e.g. bankster bailouts & debt repayment for the investor class.

[Dr.Phool]

1. Don't let Conrad et al get this commission. Period

Pete Peterson and his billions are the prime movers of this.

[Hannah Bell]

2. Yep. More on that below. People need to start deluging legislative offices with calls now.

"I am currently working with some policy people in DC to ward off the Conrad-Gregg proposal for a Commission that among other things would address the perceived Social Security 'crisis'. The key vote on this is scheduled for next week and I think it important to push back on any suggestion that Social Security actually needs a short-term fix, at least when that fix is pre-defined as benefit cutbacks."

Jan 15 post here:

http://bruceweb.blogspot.com/

[Hannah Bell]

10. but not the only ones.

[Bruce Webb]

3. Pushing back on the commissions

Hi Hannah I am here.

First most of my Social Security posting is on Angry Bear. If you want the latest that is probably where to go.

Everything is in flux right now. The Senate is voting on the debt limit increase this week and part of the deal to get an increase that will get the country past the election was to allow a vote on Conrad-Gregg as an amendment. Now passing that requires 60 votes and word is they don't have it but something potentially better popped up yesterday. In checking the Senate Calender it appeared that Baucus had introduced an Amendment with the title first of 'Social Security' then changed to 'Social Security Exemption'. I queried a policy list in DC and someone reported that this amendment if passed would prevent any changes to Social Security from being fast tracked, And since fast-tracking is the only way PGP can pull his bait and switch on this this would effectively gut Conrad-Gregg even if it passed. So that is good news.

Now the House version Cooper-Wolf is out there but is unlikely to be attached to anything given House leadership's higher level of control over legislation. Cooper-Wolf is really the bill fronting for Peterson, his plan has always been to get a Commission stacked by 'independent' 'bi-partisan' 'non-partisan' 'former Budget Director/CBO Director/Comptroller General' whatevers and he has conveniently gathered two different such groups just ready to go. One is the Brookings-Heritage Fiscal Seminar and the other is the Peterson-Pew Commission, each drawing in nice even numbers from each Party but not a progressive to be seen.

Which of course has been the plan all along, get the CW and the media to agree that the entire left is 'shrill' 'non-serious' 'in denial' about what "Everyone knows", even where on analysis we don't know that at all.

The Obama Commission does not worry me so much though it is too closely modeled on Cooper-Wolf. Then again Obama promised Cooper and the Blue Dogs last Feb to be open to something. Anyway the key is to keep the fast tracking at bay that activates that seven step process.

[Hannah Bell]

9. Thanks for the update, Bruce.

[Junkdrawer]

4. I suspect that Obama is about to find out why it's called The Third Rail....

If he thinks that he and Congress can sneak this through he has a 10,000 volt surprise waiting...

[Bruce Webb]

7. Dejuicing the Third Rail

Don't kid yourself. The Right has put a lot of thought into this since 1983 and has deliberately and too successfully drained a lot of juice out of that Third Rail.

A little history. When Social Security went to crisis in 1982 the Right hoped to use that to radically transform Social Security, something Reagan was on board with. They were not able to do it directly and tried what they could by appointing the Greenspan Commission, which promptly dead-locked, the deal they ultimately endorsed being worked out between Commissioner Bob Ball for Tip O'Neill and Darman for Reagan.

In any event the very disappointed people at Cato organized a conference in NYC in June 1983 to strategize how to avoid what they called a 'debacle' the next time they came up with an opportunity. Those conference papers were published in the Fall 1983 issue of the CATO Journal under the title: Social Security: Continuing Crisis or Real Reform. http://www.cato.org/pubs/journal/cj3n2/cj3n2.html Among those papers was one by Stuart Butler and Peter Germanis called Social Security Reform: Achieving a "Leninist" Strategy pdf here: http://www.cato.org/pubs/journal/cj3n2/cj3n2-11.pdf

The strategy had three main features:
One reassure those in retirement and approaching retirement that their benefits will not be affected, any changes will be phased in.
Two confince Gen-X and those younger that due to Boomer greed and arrogance they were never going to get anything out of the system anyway.
Three stick it to the Boomers

That is the "no benefit cut for you" was designed to bleed off juice from the Third Rail from the top while "no benefits for you AT ALL" would bleed off juice from the bottom, leaving Boomers exposed in the middle. They have persisted in selling "Leninist" strategy ever since, and while seniors are still nervous about any suggestion for changing SS people under 40 are pretty much convinced they are expected to take nothing and like it anyway.

A Third Rail that was shiny and sparking a few decades ago has almost insensibly been tied down with ground wires and faults. People may not want to cut Social Security but many have been convinced by the lies and liars that there is no choice.

[Junkdrawer]

8. This baby boomer has spent his adult life paying extra FICA taxes....

I had to pay the "pay as you go" FICA

--- AND ----

The "build up the Trust Fund" FICA

And now they're going to tell me the Trust Fund was a fiction and that there's not enough Gen-Xers to support me?

Riiiight...

[dysfunctional press]

11. there are PLENTY of gen-xers...

there just aren't any jobs for them. :shrug:

[BeFree]

17. Trust fund is a fiction?

Don't they have all that money stashed away? No?

Someone told me that the money currently being paid out to one recipient comes
directly from 5 workers paychecks. Is that sustainable? Sounds like a pyramid scheme?

[Hannah Bell]

18. ??? Though I don't believe that's the current ratio, why do you see a 5:1

ratio as a problem?

[BeFree]

19. Well,

What if the economy tanks and jobs are lost and the ratio goes down to say 3:1?

[Hannah Bell]

21. I'd like to offer you another frame. Non-workers are ultimately able to survive, not because they

have pensions or money in the bank (those are just score-keeping devices) -- but because other people are still out there working and producing.

If there isn't any production of goods (& services), all the money in the world is useless. Current non-workers are, in a very real sense, supported by the production of current workers.

So the issue isn't how many workers are working v. how many non-workers aren't - the issue is, how much are workers producing? Are they producing enough value to support themselves & non-workers, with value left over for reinvestment to continue production at the same or a higher level?




http://mjperry.blogspot.com/2009/08/manufacturing-output-per-worker-hits.html

Today's (year 2000) manufacturing worker produces >$224,000 worth of goods (constant 2000 dollars), three times as much as the manufacturing worker of the 1970s & twice as much as the worker of the 1980s. There have been similar productivity increases in most areas.

What this means is that today's worker can easily support double the number of dependents as in the 80s, & triple the number as in the 70s, without impoverishing his own life -- IF he's paid an equivalent share of the value of productivity gains that have been made.

UNLESS capitalists choose to take most of the value of productivity increases for themselves, as profit, while holding workers' wages down.

However, in that case, NO social security or retirement arrangement will "work," for the simple reason that capitalists are keeping most of the value of production for themselves.

It has nothing to do with the structure of SS, or how many workers there are, or how many elderly there are: it has to do with MALDISTRIBUTION of the money value of production. And where the money value is maldistributed, the goods are also maldistributed, with many impoverished for lack of basic goods while luxury goods are produced in quantity.

Another facet of this is the dependency ratio, the ratio of total workers to total dependents: this includes not only the elderly, but also children & the disabled.

In fact, the dependency ratio reached its all-time high in -- 1960.



So if US production was sufficient to support 81 dependents for every 100 workers in the 60s, today, when production per worker is triple what it was then, there should be no problem supporting 79 dependents per worker.

Again -- unless capital insists workers take less, because capital wants more.

[Common Sense Party]

20. Demographics.

The ratio can only go down as boomers retire and leave the work force, unless we increase immigration.

[Hannah Bell]

23. Productivity.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7529061&mesg_id=7540984

[SammyWinstonJack]

5. K&R

:mad:

[Mari333]

6. ditto that GRRRRRR

[leftstreet]

12. K&R

[Edweird]

13. I guess George Carlin was right....

[amborin]

14. K&R and, Brad De Long advocates

cutting Soc Sec also......in addition to his free trade advocacy

[Hannah Bell]

15. BDL used to post on the left business observer board - but he was always a bit of

a corporatist in leftish clothing.

[Hannah Bell]

16. kick

[galileoreloaded]

22. You forgot "inflate the currency, pay out obligations including SS with devalued currency"

way more likely than repudiation and cuts. Oh, and I forgot, "nationalize 401K's".

See Argentina 2000 to present.

[Hannah Bell]

24. That's also another possibility. But that would also involve paying other, more "important" debtors

with devalued currency.

[galileoreloaded]

25. China's gonna crash Hanna, and when that happens, the reset button gets hit.

my opinion.

[Hannah Bell]

26. maybe. in these times, lots of things can happen. imo, china's not quite what it's made out to be.

by the reset button, you mean world-wide crash?

or reorganization of the global power structure, states, etc.?

or?