Under the Radar: The Bi-Partisan Scheme to Gut Social Security
Written by Media-ocracy on July 5th, 2010
A Media-ocracy News Report
Privatizing Social Security was long thought of as a Republican issue, especially when former President George W. Bush pushed for the creation of private accounts to be invested in the stock market following the 2004 presidential election. This all appears to be changing with the growing corporatism of the Democratic Party. The Obama administration, in addition to some prominent Democrats, have signed onto the neoliberal agenda that frames wartime spending as "essential" but entitlement social welfare spending as overly "expensive" and "unnecessary" - and as based upon the harmful "greed" of America's "spoiled" retirees.
Republican Senate Minority Leader John Boehner is explicitly linking the "need" to support cuts in Social Security benefits with efforts to pay for the "War on Terrorism" through cuts in entitlement spending. As Boehner explained in the Pittsburg Tribune Review: "ensuring there's enough money to pay for the [Afghan] war will require reforming the country's entitlement system." Republican Senator Alan Simpson demonizes retirees as "greedy geezers" for assuming that they are entitled to retirement benefits after having paid into the program for their entire careers. Presumably, Simpson would have Americans believe that military contractors are the rightful heirs to retirees' lifetime savings.
The Obama administration has increasingly subscribed to a conservative "market" ideology in which entitlement welfare programs are seen as the enemy. Obama proposed the formation of a "debt commission" in early 2010 (composed of 10 Democrats and 8 Republicans), which was packed with Wall Street insiders who are largely sympathetic to either privatizing Social Security (and investing individual funds in the stock market) or to reductions in individual benefits. The commission, created by presidential executive order, is strongly opposed by liberal groups such as MoveOn.org and those representing retirees, such as the AARP.
The Democratic commission was originally created to exercise power to propose reductions in entitlement programs such as Medicaid, Medicare, and Social Security. The cuts have been justified by Obama, who claims that the increasing national deficit, and the fact that Social Security is going "bankrupt," requires dramatic cuts in the program: "We've kicked this can down the road and now we are at the end of the road." Among the proposed sacrifices are increasing the retirement age (in order to receive benefits) to 70 and reducing cash payments.
The age-old assault on Social Security - framing the program as "in crisis" - is largely manufactured by political elites. The entire attack is based upon the notion that the program is "going bankrupt," a claim that has been systematically refuted by the government's own research. The Congressional Budget Office, for example, concluded from its own calculations (when Bush proposed privatizing Social Security in 2005) that the program would remain economically solvent until at least 2042. At that point, the program would not go "bankrupt" as the "conventional wisdom" maintained; it would merely pay out a portion of the benefits (74 percent of those currently enjoyed) to retirees.
Furthermore, a modest increase in the payroll tax (targeted toward wealthier earners) was seen as enough to stave off any possible payout shortfalls into the indefinite future.
More recent estimates from the Social Security and Medicare Board of Trustees (from 2009) show the program is far from in crisis. Social Security reserves are not estimated to be exhausted until 2037, just five years less than the projections from five years ago. At this point, the program, if left untouched, will simply fail to pay out full benefits; it will not "go broke."
Any budget shortfalls must be understood as emerging as inherently linked to political officials' longstanding (and shrewd) campaign to starve the program of its financial assets. The program has been so successful that it ran budget surpluses, year upon year, which were appropriated by officials for spending in other programs. The assault on the projected Social Security surplus took place, for example, under Clinton, who appropriated it to "balance the budget" and George W. Bush, who proposed cutting Social Security in order to pay for his tax cuts, which went overwhelmingly to the wealthy. Readers may remember the famous Social Security "lock box" that Al Gore spoke of, in which Bush promptly supported draining to pay for his tax cuts. The idea of raiding Social Security now appears to be making a comeback, as Republicans and Democrats return to finish raiding Social Security funds to pay for the war in Afghanistan.
The commitment to appropriating funds that would otherwise be used for Social Security for the war effort appears all the more radical and controversial in spite of the tremendous popularity of social welfare programs (including Social Security and Medicare) amidst the increasingly unpopular Afghan war - now opposed by the majority of Americans. This, however, has hardly stopped officials from both parties in their efforts to demolish what is left of the American welfare state.