Friday, January 30, 2015

Here's What the GOP Should Expect If They Dare Cut Social Security Benefits

by Nomad

When it comes to cutting Social Security, the Republicans are playing with fire. As usual, the GOP appears to be heading towards a showdown it cannot win. 

As Reagan famously said,"There you go again." And the Tea Party Republicans are at it again, trying to find a way to cut Social Security. Another crusade bound to end in tears. 

From opposition to same-sex marriage to the rapprochement to Cuba, from criminalizing abortion to immigration, it's staggering how many unpopular positions the Republicans have decided to take up.
Now they are itching to get their hands on Social Security despite the fact that seventy-six percent of all Americans think Social Security is worth the costs to taxpayers, according to a poll in 2012. 

Attempting to slice and dice Social Security by labeling it a “big-ticket entitlement program” is surely going to blow up in the conservative faces. It's practically guaranteed.

Fixing What Wasn't Broken
Paul Waldman in an op-ed piece for CNN points out Social Security, contrary to the Tea Party narrative is not driving the country to bankruptcy. In fact, it is
the most successful and beloved social program in American history. Most of us are too young to remember when growing old in America almost inevitably meant a miserable descent into poverty, but until the middle of the 20th century, that's what it was.
Right after being sworn into the new Congress, ( on the first day, mind you) Republicans seized upon the opportunity to change the rules. Waldman explains:
Social Security is actually two separate programs, Old Age and Survivors Insurance (OASI), and the much smaller Disability Insurance program (DI). The disability program will be facing a funding shortfall next year, and to ensure that disabled people continue to get all their benefits, Congress would have to move some money from OASI into DI. This isn't anything new -- it's been done many times in recent years.
However, Congress changed the rules making this quick fix impossible. Forbes provides us with a few more details:
An obscure package of procedural rules approved by a nearly party-line vote barred lawmakers from using retirement funds to support the disability program unless they accompany changes that stabilize the overall Social Security Trust Fund (by cutting benefits, raising taxes, or both).
It was, therefore, a problem created by the Republicans in order to propose radical changes to the entire Social Security program. By claiming to the American public that Social Security is broke, Congress can get to work "fixing" something that isn't actually broken.

According to a study in the Brookings Institute the entire cost is just 5 percent of our gross domestic product. Projected over the next 75 years, it will grow just 1 percent.  
In 2014, over 59 million Americans will receive almost $863 billion in Social Security benefits. As baby boomers have started to age, there will indeed be stresses on the program. That said, there are plenty of other options than the reckless proposals of the Republican party. These can be summed up  as  more borrowing, higher taxes or reduced benefits.

The problem does not require immediate action as has been suggested. Waldman explains:
When people say that, what they're usually referring to is that, according to the projections in the Social Security Trustees' latest report, in 2033 the program's trust fund will be exhausted. But even if there are no changes between now and then, the program would not be "broke." That's because it would still be taking in billions of dollars in taxes every day and paying them out in benefits. Even under this scenario, the program will still pay 77% of recipient's benefits after 2033, according to the report.
The Myth of Entitlement and Fraud
So, Republicans work around the Social Security success story by calling it an "entitlement program" (as if the Bush tax cuts were somehow not an extreme form of entitlement.)

As Kenneth Fuller, a retired Rome Georgia attorney and former state senator, observes the term is a heavily weighted one, leaving a sour note on the ears of good-thinking, taxpaying Americans who  are "tired of people feeling they are “entitled” to anything.
To feel one is entitled to something is, in our culture, unacceptable and a trait one wants to avoid. So to refer to SS as an entitlement program is intended to cause the benefit to be seen as being in the same class as “welfare.”
Basically, he suggests, they are playing on the emotions of those still paying into the system.  Fuller thinks the conservative plan is fairly straightforward. It's a classic divide and conquer strategy. (The same vilifying trick was played on so-called welfare queens and food stamp recipients.)

Rand Paul, for example, has implied that the majority of those receiving disability are "gaming the system." A fact-checking of his statements show some- shocking!- Paul's allegations are highly deceptive. Although it is hard to know the exact numbers, there's a lot less cheating going on than Paul suggests.
CNN reported last week,
The Social Security Administration has often cited a figure that disability fraud amounts to less than 1% of cases. Conservatives have disputed that figure, but what's clear is that the number of applications referred to investigators and then the number of cases actually determined to be fraudulent are in the thousands -- not the tens or hundreds of thousands, which would indicate a significant percentage.
A Social Security administrator told a congressional committee in 2012 that of the 19,000 cases referred for suspected fraud, only about 4,600 were opened for fuller investigation. And fewer were determined to be fraudulent.
But why are the Republicans so intent on destroying a program that 18% of the U.S. population depend on? In a word, privatization.

Privatization: The Means to the End
One organization, The National Committee to Preserve Social Security and Medicare (NCPSSM), has, since 1982, been leading the battle to preserve Social Security, Medicare, and  Medicaid. Privatization, they say, is not about saving Social Security. It's all about dismantling it.
At best the plan to privatize means "increased retirement risks, severe cuts in Social Security benefits, and a multi-trillion dollar increase in the federal debt."
Privatization diverts money out of Social Security into individual accounts leaving an even larger solvency problem. Privatizers fill this funding gap by dramatically cutting Social Security benefits. They cover the rest by borrowing money, thereby increasing the debt burden on all taxpayers by trillions of dollars over the next half century. With market-based accounts, the risk of an adequate retirement is placed entirely on the individual.
Fuller has an even darker theory. Privatization is a means to an end and the end is control of the vast sums of money. The answer to why Republicans are so eager to privatize Social Security lies, he says, in the old truth.
Follow the money and we will find who stands to benefit by the privatization of Social Security. Wall Street banks, hedge fund managers, and the large financial institutions of the world will be entrusted to gamble your money on Wall Street, and that song is just not comforting at all.
Any politician that dares to advocate cutting any part of Social Security- and especially in an election year- can quickly find himself facing the wrath of some angry seniors. 

The Tea Party Punchline
The strangest part of this story? 
Despite its reputation for a scorched earth policy to government spending, the contrary rank-and-file Tea Party voters have in poll after poll made an exception when it came to Social Security. Back in 2011, an overwhelming majority of them 76% opposed any cuts to Social Security. Last year, a full 62 percent of Tea Party members said programs like Social Security and Medicare are worth the costs to taxpayers.

This  Social Security axing party is apparently being led by national organizations like FreedomWorks and the Cato Institute. Ironically, both organizations are heavily funded by- you guessed it- the fathers of the Tea Party, the Koch Brothers. 

The "entitlement" loving seniors within the Tea Party- many of whom love Rand Paul with baskets full of kisses- will probably never wake up to the fact that were extraordinarily useful in getting a new Republican Congress into power which now plans to cut their Social Security. 

Back in 2009, when President Obama mentioned a Tea Party protest in Missouri. He said that he welcomed a "serious conversation" about how to cut government spending and how to stabilize Social Security. 
We are going to have to tighten our belts, but we're going to have to do it in an intelligent way. And we've got to make sure that the people who are helped are working American families, and we're not suddenly saying that the way to do this is to eliminate programs that help ordinary people and give more tax cuts to the wealthy.
They weren't listening then and next year they will have only themselves to blame if the Republicans manage to cut their untouchable entitlement program.