Wednesday, December 19, 2012

Social Security: Obama Needs to Stick it to the man...

...instead of sticking it to the poor, the disabled and the elderly.

But President Obama and Speaker Boehner may be close to reaching a deal to avert the "fiscal cliff", and the details are not good for old people.

First of all, there need not be any deal at all. Obama doesn’t have to “compromise”, the Republicans lost the election, the people have already spoken. Yet the president is reportedly willing to cut Social Security benefits for current and future retirees by reducing the cost of living adjustment (COLA) and make $400 billion in unspecified cuts to Medicare in exchange for a modest increase in tax rates on the wealthy.

Calculating COLA payments with a Chained-CPI would essentially reduce seniors income over time as their medical costs skyrocket. We must let our elected officials know that even benefit cuts hidden behind statistical manipulations like the Chained-CPI are unacceptable and that we will not support anyone who facilitates cuts to Social Security, Medicare of Medicaid.

There also are strong objections to using the chained CPI to set the annual COLA. Already, supporters argue, the CPI-W understates the impact of inflation on seniors. That's because it does not reflect their relatively heavy spending on healthcare. If a different index is going to be used, they say, careful study should be given to using an experiment index, the CPI-E, that measures price changes for elderly consumers.
The National Committee to Preserve Social Security and Medicare, AARP, and most other seniors' organizations decry even including Social Security in the fiscal cliff negotiations, let alone cutting benefits. The program is self-funded and has not added to government deficits.

And if Social Security is included in the talks, then let's talk about Social Security taxes. Most people who rely solely on Social Security had worked 46 years or more and paid Social Security taxes on 100% of their life-time income.

But those earning $1 million a year pay no Social Security taxes at all after their first $112,000 in "regular" wages. But if someone ONLY earns income with investments (dividends, stocks, real estate, etc), even if they make $20 million a year, they pay NO Social Security or Medicare taxes at all, because "investment income" is exempt from any FICA taxes and is also taxed at a lower rate as "capital gains", rather than the higher "marginal" tax rate that most people pay.

Capital gains and dividends should be taxed at the regular marginal tax rates. Why do those on the Forbes Fortune 400 List get such a better tax deal then everyone else?

And when we cash out our 401ks and union pensions, even though our funds are invested in stocks, WE have to pay the marginal tax according to our annual income.

And why not eliminate the CAP on Social Security taxes entirely? The rich live longer, collect higher monthly SS benefits, and collect much longer than everyone else does.

And why not tax “investment income” for Social Security and Medicare taxes, just like everyone else who has to pay this tax on 100% of our “regular” wages? The tax system is rigged for the wealthy, and always has been.

But I digress, let's get back to the subject of Obama ripping off the poor, the disabled, and the elderly...

Predictably, Democratic leaders like Nancy Pelosi have already started falling in line behind this awful proposal. But recent polls indicate 60% of Americans oppose the Chained-CPI benefit cut, and even the AARP has come out strongly against it. That's because most people understand that, at a time when 15.1% of seniors are living in poverty, cutting Social Security benefits — which represent the primary source of income for many retirees — would only increase their suffering. If anything, our nation's strongest anti-poverty program needs to be expanded, not contracted. The reality is that seniors have a larger share of income devoted to medical expenses, and therefore are subject to higher rates of inflation than the general population.

By using a chained CPI, Social Security benefits will become increasingly insufficient as an individual ages — forcing severe austerity upon retirees as 401ks, pensions and home equity continue to dry up. Using this method is both cruel and manipulative and does little to strengthen Social Security or address the so-called deficit crisis.

 And, I’m missing the part where the Republicans give up something

Obama has already comprised before in 2010 by letting the rich have their tax cuts for two more years in exchange for funding extended unemployment benefits for those who were already suffering. This time, their is nothing to compromise on. This time around, Obama needs tax the rich their fair share and leave the old people  alone!

Obama needs to stick it to the man, instead of sticking it to us!

1 comment:

  1. If Obama had agreed to extend the Bush tax cuts for billionaires, the GOP wouldn't have insisted on cuts to food stamps & other entitlements for the poor.