Sunday, January 11, 2015

The Republican's Attempted Murder of Social Security

During the 1932 presidential campaign, Franklin D. Roosevelt predicted privately, "I’ll be in the White House for eight years. When those years are over, there’ll be a Progressive party. It may not be Democratic, but it will be Progressive." As a progressive, FDR ended up being elected to 4 terms, including with major support from Southern States.

In January 1935, President Roosevelt sent his "Economic Security Bill" to Capitol Hill. The Act was an attempt to limit the dangers old age, poverty, and unemployment in modern American life.

During a Ways and Means meeting on March 1, 1935 Congressman Frank Buck (D-CA) made a motion to change the name of the bill to the "Social Security Act of 1935". It was passed by Congress as part of FDR's "New Deal".

Congressional votes on Social Security

On August 14, 1935 President Roosevelt signed the bill into law. He became the first president to advocate federal assistance for the elderly. And ever since then, Social Security has been under attack by the Republicans.

Here's Charles Krauthammer (the Fox News pundit) recently writing for the Washington Post -- "Some in Congress are talking about a 10- or 20-cent hike in the federal tax [on a gallon of gasoline] to use for infrastructure spending. Right idea, wrong policy. The hike should not be 10 cents but $1. And the proceeds should not be spent by, or even entrusted to, the government. They should be immediately and entirely returned to the consumer by means of a cut in the Social Security tax." Like most Republicans, Krauthammer hates "government" (except when they are the government).

And when they say "government", the Republicans don't mean corporate subsidies, corporate bankruptcies, corporate bailouts, defense spending or federal disaster relief when Mother Nature destroys one of their great Red States. No, to the GOP, "government" means anything that primarily benefits either the poor or working-class Americans (aka the 99%).

And this is a response to Krauthammer's post from a reader at Mark Thoma's blog: "The party that wanted to privatize social security and wanted to increase payroll taxation (to finance tax cuts) wants the debate to be tied to 'how many workers fund how many retirees'. They want the Social Security program to be tied to this declining ratio and labor taxation."

And another reader at Mark Thoma's blog wrote: "The Social Security system is generally working as it was intended, and the 'worker-to-retiree ratio' was built into the system from the beginning. The problem is with wages (productivity ratio), which has declined dramatically over the past 35 years, as the 1% have seized virtually all the gains for themselves."

But if jobs keep being offshored overseas, or workers keep being replaced with machines, then there will be a declining trend on "how many workers fund how many retirees". And since most of the newer jobs are in the lower-paying service industry (and why they should be unionized, to replace our lost manufacturing union workers), how can we raise any of their taxes when they are already barely surviving?

The decline in wages, along with the decline in the labor force, will make it that much harder to fund, not only Social Security, but our federal government as well (such as congressional salaries and all their perks). Taxes will have to be raised on the wealthy, because 1) they have the ability to pay, and 2) they will also need to fund an ever increasing share of the defense spending as well. After all, unemployed people (or those earning poverty-level wages) can't be expected to pay for it. If you asked them, most would prefer that more of their tax dollars were being spent putting food on their tables (or gas in their gas tanks) rather than having that money spent on a whole squadron of new fighter jets — or another aircraft carrier. Many Americans believe that most defense spending is primarily used for protecting corporate assets abroad, not people at home.

But the uber-rich, not only do they NOT want to pay living wages, they'd rather pay no wages at all (and that's why they offshore so many jobs). So they certainly don't want to be taxed to pay people for doing nothing at all — such as for Social Security, helicopter drops, pensions, or a basic guaranteed income (even though, those "do nothings" had no choice in the matter when their jobs left the shore, or because their work hours were cut, or because their wages remained stagnant, or because they were laid off and were never rehired again).

According to one Pew survey, one in four Americans (who aren't poor?) think poor people don’t work hard enough — even though these poor people are either working for little pay, or only working part-time, or not even working at all. The Washington Post points to another Pew survey which shows 54 percent at the very top of the country's most financially secure citizens believe the "poor have it easy because they can get government benefits without doing anything in return." The WaPo article states: "There is little empathy at the top". And conservatives in general are even more likely to say the "poor have it easy" — more than three quarters.

Another reader at Mark Thoma's blog wrote in response: "That [WaPo] article entirely ignores the fact that sociopaths have the capacity of rationalization. This is to say that some people lack empathy just because they lack empathy. Aware that this is abnormal human behavior, then the sociopath will fabricate a justification for their disregard of human suffering that disguises the fact that the suffering of others is a real turn on for them. The reason that there are more sociopaths among the wealthy is not that wealth makes one sociopathic. Instead, sociopaths are more likely to become wealthy because there is nothing that they will not do, nor anyone that they will not harm, to achieve their goals. Largely sociopathy, like wealth, runs in families. (See my related post: STUDY: 10% on Wall Street are Psychopaths)

Another reader at Mark Thoma's blog counters: "Children that grow up normal — and then just become assholes later in life, like when good luck convinces them that they are just better than everyone else — are not (clinically speaking) sociopaths. They are just plain old garden variety assholes — and there are plenty of them. The discrepancy, I believe, is the inability to distinguish actual sociopaths from plain old assholes (who tend to think and act like sociopaths).

The very rich don't want to pay for Social Security because, after all, they don't need it. As it stands now, 95% of all U.S. wage earners have incomes of $118,500 a year or LESS — which is the maximum amount of taxable earnings for Social Security. That means that 95% of all wage earners pay Social Security taxes on 100% of their earnings. (At $174,000 a year, congressional salaries are in the top 5% — and some say, isn't enough to live on).

But with fewer workers as a percentage of the labor market, and with fewer workers paying less into the Social Security Trust Fund fund (based on lower wages, shorter hours, etc), then critics of Social Security (who fend for the very rich and wants to starve this program) could eventually be proved right — and Social Security could very well end up as a "Ponzi scheme" if something isn't eventually done (such as creating more and better paying jobs, banning the offshsoring of jobs, eliminating the Social Security tax "cap", etc.)

Currently the BLS reports that 252,000 jobs were created last month, and the unemployment rate declined to 5.6 percent. But during that same time, those "not in the labor force" increased by 456,000 — for a new total of almost 93 million working-age Americans who are "not in the labor force" (and who aren't paying Social Security or federal taxes.)

Just from a year ago, the number of people considered "not in the labor force" has increased by 1.2 million — and those considered "employed" grew by 2.7 million during that same time. And the labor participation rate is down for those between the ages of 25 to 54. These are the prime working years, so one cannot blame retirees and college kids for the declining participation rate. The labor force participation rate for this age bracket has not been this low since the 1980's. Those not in the labor force often grows faster than the population which has the potential to work. Meaning, not enough jobs are being created — and so therefore, it's possible that one day (maybe by 2040?) there might not be enough workers paying in to the Social Security Trust Fund.

Washington Post: Obama's Long Battle to Cut Social Security -- "Four days before Obama became President, Michael D. Shear headlined in the Washington Post: Obama Pledges Entitlement Reform, and he reported about a wide-ranging 70 minute interview with Washington Post reporters and editors in which Obama endorsed efforts by congressional Republicans and the Blue Dog Coalition of fiscally conservative Democrats to cut Social Security and Medicare." (The last time was when Obama and many Democrats considered using chained-CPI for Social Security COLAs, which would have also hurt our Veterans.)

So the Republicans are not the only problem. Democrats who refuse to criticize their pro-corporate President (who also wants the TPP trade agreement) are also just as bad, because they give "Moderate / Third Way / Blue Dog / Centrist Democrats all the slack they need to gut our New Deal programs (stuff that mostly benefits the American workers, rather than their employers).

Fiscal Times: "In his first major speech since becoming the new Senate Majority Leader, Mitch McConnell (R-KY) challenged President Obama to work with him on an ambitious agenda that would go well beyond tax reform [cutting taxes for the rich], trade [agreements that offshore jobs] and increased infrastructure spending ... McConnell outlined a far more ambitious plan that hints at a Grand Bargain, including Social Security and Medicare reforms, as well as steps to achieve a balanced budget ... 'The truth is we could work for bigger things too. We could work together to save and strengthen Medicare, to protect Social Security for future generations, to balance the budget and put our growing national debt on a path to elimination.' "

If Mitch McConnell and the Republicans really wanted to "protect" and "strengthen" the Social Security program, why not just eliminate the $118,500 "cap" altogether. The GOP has always praised a "flat tax" proposal, so let's have a flat Social Security tax on 100% of everyone's wages (which would also include the capital gains of the very wealthy.) That way we can save the safety net for American workers and fund the federal government. Otherwise, the whole country will be like Kansas --- totally screwed.

Another reader's comment at Mark Thoma's blog writes that, through most of the post-World War II era, the top 1 percent earned about 10 percent of all income. By 2007, that figure had jumped to 23.5 percent, the most since 1928. Then he notes: "How many retirees can be supported by a one-percenter? More and more all the time!"

But then again, the Republican's ultimate goal is to Starve the Beast. And guess what? To them, we are the beasts. On their very first day, the new GOP Congress has already launched their first strike against the American workers by cutting life support to the disabled beasts. The U.S. House approved a rule change to deny a routine reallocation of Social Security payroll tax income from the Social Security old-age program to the disability program. (Read a letter from the Alliance of Retired Americans and their recent press release and their "fact sheet").

First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out—
Because I was not a Jew.

Then they came for me [the poor, the unemployed, the elderly, the disabled and the sick]—
And there was no one left to speak for me.

That's why friends shouldn't let friends vote Republican. If someone really wanted to "save" and "strengthen" programs such as Social Security and Medicare, then vote for someone like Elizabeth Warren (or FDR, who was a "progressive"). Meaning, always vote for a "progressive", those who caucus with the lesser of the two evils (the Democrats) — and who is truly sincere about keeping these programs healthy and alive. (For more insight, read the progressive's budget proposals: The People's Budget, Budget 4 All, Deal for All, Rebuild the American Dream and Back to Work Budget.)

I have a feeling that if Fox News viewers were better aware of these progressive plans, they might discover that they have far more in common with other economic populists. But I also have the feeling that many Republican voters (because they ONLY watch Fox News), have just cut their own throats in the last mid-term elections — because they also get laid off from jobs, become disabled, get sick or eventually want to retire. But then, when their time comes, if the Republican Party has their way, getting old or sick may not be an option (especially if Congress raises the retirement age again — because it's mostly the rich who are living longer.)

Charles Krauthammer most likely worked very hard all his life, and probably deserves every penny of his $8 million net worth; and so he may never have to financially worry about being old and sick. But most other people, no matter how hard they try, will never achieve Krauthammer's great success in life — and so, they will need programs such as Social Security and Medicare (even Republicans). And the multi-billionaires that he worships should be made to help pay for it — regardless of whether they have empathy or not — because empathy doesn't pay for food and shelter.


  1. * It's interesting to note that, since FDR's Social Security Act was passed, and ever since the Civil Rights movement, many people left the Democratic party to become "Dixiecrats" (now the Tea Party) — and now many people in the South (who once supported FDR) now support the Republicans — and many (mostly whites) have since been voting against their best economic best interests.

  2. Senator Paul’s latest attack on Social Security disability was only the latest salvo in a decades-long attempt by the Republicans to defund, destroy or privatize our Social Security system. But Paul’s attack on Social Security and disabled Americans wasn’t only heartless and offensive, it was also untrue.

    According to a report released in November by the Social Security Administration’s Inspector General, fraudulent Social Security Disability Insurance claims are exceedingly rare. Dean Baker wrote a great piece, and says fraud accounts for just 0.02% of all payments. He also notes:

    "It is also important to note that there are undoubtedly people who should be getting disability who have been wrongfully denied benefit. We could have workers dying of cancer or unable to work due a heart attack or stroke or other disability who an a judge somehow decided was not eligible. If we put more pressure on judges to turn down claims then there will be more people improperly denied benefits."

    And as Social Security Works Executive Director Alex Lawson noted recently, “America has one of the strictest disability standards in the developed world.”

    This wasn’t the first time Senator Paul has attacked Americans living with disabilities. In a 2010 interview, Senator Rand Paul said he supports abolishing the Americans with Disabilities Act – the landmark 1990 legislation that prohibits discrimination on the basis of disability – because it isn’t fair to business owners.