Social Security Coalition Kicks Off By Pointing Out Myths - FDL

[WillyT]

Social Security Coalition Kicks Off By Pointing Out Myths
By: David Dayen Thursday July 29, 2010 1:19 pm

<snip>

Today, a coalition of 50 organizations dedicated to ensuring no benefit cuts to Social Security launched in Washington. The coalition, including top labor unions, progressive groups like MoveOn.org and Democracy for America, and a host of others, released seven principles that will guide their policy prescriptions:

1) Social Security did not cause the federal deficit; its benefits should not be cut to reduce the deficit.

2) Social Security should not be privatized in whole or in part.

3) Social Security should not be means-tested.

4) Congress should act in the coming few years to close Social Security’s funding gap by requiring those who are most able to afford it to pay somewhat more.

5) Social Security’s retirement age, already scheduled to increase from 65 to 67, should not be raised further.

6) Social Security’s benefits should not be reduced, including by changes to the COLA or the benefit formula.

7) Social Security’s benefits should be increased for those who are most disadvantaged.

Members of the coalition gave an aggressive presentation on their opposition to benefit cuts or raising the retirement age (which AFL-CIO President Rich Trumka called a benefit cut today) at their National Press Club launch. And to back this up, coalition member MoveOn.org today released a debunking of five Social Security myths. I’ll put the full text at the end, but basically, they take on the ideas that: 1) Socia Security is bankrupt, 2) the retirement age must go up because of increased life expectancy, 3) only benefit cuts can solve the long-term funding problem, 4) the Social Security Trust Fund is full of “worthless” IOUs, and 5) Social Security adds to the deficit. Needless to say, these are all ridiculous, but even progressives who don’t pay careful attention to the debate could end up parroting them. So the MoveOn action could be helpful in that regard.

A Gallup poll released today shows that people actually want to subject all wages to the payroll tax as a way to protect Social Security. This would completely eliminate the long-term funding imbalance and allow the program to pay out higher benefits. Just 39% supported raising the retirement age as a solution, and at her weekly press conference House Speaker Nancy Pelosi announced her opposition to that idea:

The fact is, though, that I don’t think, and I have said this over and over, that we should be balancing the budget by raising the retirement age of Social Security. I oppose that. There should be two separate conversations. What are we doing to keep Social Security solvent? Let’s discuss that. What are we doing to balance the budget? But let’s not say that we should balance the budget by making the Social Security age — raising the Social Security age. What is that for? To pay for tax cuts for the wealthy that went before, now we have to raise the retirement age? Is that for wars, endless wars, unpaid for wars; now we have to raise the retirement age? These are two separate subjects. The solvency of Social Security, that is one subject. Let’s discuss that. Reducing the deficit, that is a different subject.

A coalition member described to me a partial strategy for the coalition, mainly to increase awareness of the deficit commission’s plans, and increase the pressure on members of Congress to oppose any cuts to the program. The August recess and the town halls could play a major role in that, as well as the November elections.

The full set of myths and facts are on the flip.

Myth #1: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.6 trillion surplus (yes, trillion with a ‘T’). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever. After 2037, it’ll still be able to pay out 75% of scheduled benefits—and again, that’s without any changes. The program started preparing for the Baby Boomers’ retirement decades ago. Anyone who insists Social Security is broke probably wants to break it themselves.

Myth #2: We have to raise the retirement age because people are living longer.

Reality: This is a red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than they did 70 years ago. What’s more, what gains there have been are distributed very unevenly—since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half. But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Myth #3: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn’t need to be fixed. But if we want to strengthen it, here’s a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come. Right now, high earners only pay Social Security taxes on the first $106,000 of their income. But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

Myth #4: The Social Security Trust Fund has been raided and is full of IOUs

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States. The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market—which would have been disastrous—but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.

Myth #5: Social Security adds to the deficit

Reality: It’s not just wrong—it’s impossible! By law, Social Security’s funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.

<snip>

Link: http://news.firedoglake.com/2010/07/29/social-security-coalition-kicks-off-by-pointing-out-myths/

:kick:

[BrklynLiberal]

1. This needs to be posted on billboards all over the country..

[WillyT]

2. I Agree...

With MoveOn... maybe it will be!

:shrug:

:hi:

[BrklynLiberal]

3. We have to educate and inform the public..even if it means holding them down and shoving it down

their brains... lololololol

[JHB]

4. More Myth-busting...

...this in a 2005 article, with links to previous articles going back to 1994

Social Security, revisited

Earlier LBO articles on Social Security: http://www.leftbusinessobserver.com/Pensions.html">1994, http://www.leftbusinessobserver.com/AntisocInsec.html">1998, http://www.leftbusinessobserver.com/NSPensions.html">2004.


It's uncanny reading Paul Krugman's New York Times column these days—his stuff on Social Security sounds like what LBO was saying in 1998. His February 1 piece was all about how the Trustees of the Social Security system are projecting absurdly low economic growth rates, about half the long-term average, even though proponents of privatization assume that the stock market would continue to return its historical average. That couldn't happen, unless the standard measure for evaluating the dearness or cheapness of stock prices, the price/earnings ratio (which compares stock prices to underlying profits), were to scale unprecedented and ludicrous heights. The numbers Krugman used to illustrate the point are a bit different from LBO's seven-year-old vintage, but not by much.

It's nice to be vindicated, though one would always prefer it to be at Krugmanesque levels of name recognition. But, vanity aside, the transformation in the political discourse around Social Security over the last few years has been stunning. Views once espoused only in marginal newsletters now appear regularly on the op-ed page of our most prestigious newspaper. One reason for this, it must be conceded, is that in the 1990s, it was Clinton and the Democrats who were flirting with Social Security privatization, a scheme derailed by revelations of Clinton's tender encounter with Monica Lewinsky. Now that it's Bush proposing it, Democrats are showing a surprising level of resistance, and the polls on the subject can't make pleasant reading for the administration. There is some progress in political life despite last November's election results.

Not that there's any progress in the arguments of the privatizers, or the economic analysis on which the projections of Social Security's bankruptcy are based. And even Social Security's defenders are too quick to concede the system has "problems" that "need to be fixed." If Social Security has any problems in its current form, they won't become apparent for decades, and if they do, they could easily be dealt with. Conceding anything on this point only strengthens the hands of the privatizers, who are using fear of bankruptcy to promote an ugly and dangerous agenda.

http://www.leftbusinessobserver.com/SocialSecurityRevisited.html

[WillyT]

5. Thank You For That !!!

:hi:

:kick:

[bvar22]

6. Its coming.

With the destruction of Social Security, the dismantling of FDR's New Deal will be complete.
Wall Street WILL get the Social Security funds.
The 20 year PNAC/DLC plan will be complete.
The Centrist Democrats (DLC) will succeed where the Republicans failed.
Of course, it WILL be framed as "saving" Social Security, and it will be lauded as "historic" reform.

Have you seen any indicator during the last 18 months that contradicts this pattern?
Have you seen any indicator that public opinion makes any difference?

Like Health Insurance "Reform", most people won't realize what has happened until it is too late.

[glitch]

7. The only problem with social security is the people who "borrowed" from it don't want to pay it back

Plus as a successful government program it serves as a bad example to their idealogy, but that's the twofer.

[amborin]

8. K&R

[Enthusiast]

9. This is all well and good

and I believe what the Social Security Coalition has to say. But I just watched a woman on C-Span's Washington Journal say the opposite, that Social Security and Medicare cuts are the only possible paths to a balanced budget.

My point is this, reality means nothing if the only words heard are the myth makers words. And that is what we face, a media assault on Social Security.

This is what we face on every single issue. The media always emphasizes the position of the right wing while relegating our position, the honest position, to a whisper. You will never ever hear a guest on C-Span present our position to counter the words of that Republican shill.

[Bandit]

10. In their seven principles how do number three and four relate to each other?

Social Security should not be means tested but those that can afford it should pay more.....:crazy:

[laughingliberal]

11. K & R & Bookmarked. eom

[Lifelong Protester]

12. Excellent post!

Thanks for sharing this important information.

As to the myth of having to cut SS because people live longer, I disagree also.
My father, paid in his entire life, died at 51. No SS benefits for him.
My mother, paid in off and on, collected a widow's benefit for only 7 years before she died, never reaching retirement age and collecting benefits in her own right.

Me? I'm a typical boomer, have paid in since I was 15 (my first year of reported income wat $73 in 1970).
I think I will have earned my benefits when they come. Very few in my immediate family have taken their benefits, so in my mind, there is still some cash sitting there (I know, I know, it really isn't MY cash...) that my folks put in, and should be still there for me.