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Friday, October 19, 2012

The Safety Net (Updated)

Specifically, Social Security, and what to expect from the lame-duck session. This post from Gaius Publius at AmericaBlog lays out some possibilities:

▪ It’s a safe bet Obama wants this [reductions to benefits]. He’s been angling for something like Simpson-Bowles for years. In fact, Simpson-Bowles is his commission. (For more on why I say this with such certainty, click here.)

▪ Unless the Dems take the House, there are only two places this can be stopped — at the White House and in the Senate. The White House is likely — but not certainly — a lost cause (see above). In addition, Sen. Whitehouse said last month that if Obama doesn’t take a strong stand, many Dem senators won’t either. I take that as a request from Mr. Whitehouse, in public, for Obama to do what he fears Obama won’t do. More confirmation of the first point.

▪ In the Senate, Bernie Sanders has marshalled 29 Democrats who will “oppose including Social Security cuts … in any deficit reduction package.” He, they and 96 activist organizations are organizing a resistance to this lame duck catastrophe.

My senior senator, Dick Durbin, is not among the signers of Sanders' letter. I wrote him, and got this response:

Thank you for contacting me regarding recent proposals to cut the Social Security trust fund. I appreciate hearing from you.

Social Security benefits provide more than 47 million Americans with financial stability during their retirement years. Millions of baby boomers will enter retirement over the next decade. We need to maintain our commitment to retirees by protecting the financial stability and integrity of the Social Security trust fund. I am troubled by recent proposals that would undermine the commitment Congress made.

The Social Security system is currently generating a surplus in tax revenues. However, its board of trustees projects that the trust fund will be depleted by 2041. This is a challenge, but not a crisis.

The last time we had a serious national debate about the solvency of Social Security was in the early 1980s, when Social Security truly faced an imminent crisis. Social Security would have run out of funds in July 1983. President Regan and then-Speaker Tip O’Neill, members of opposing political parties, came together and Congress passed bipartisan legislation in March 1983 that secured more than 50 years of solvency. That should be the model for how we proceed today.

I will continue to support and defend the important programs that have helped generations of Americans working through hard times. Although there are many difficult budgetary choices that lie ahead, we must ensure that we pursue a path of shared sacrifice, rather than one that unduly burdens hardworking families who are struggling.

Thank you again for contacting me. Please feel free to keep in touch.

Richard J. Durbin
United States Senator

Let me parse this a little:

"protecting the financial stability and integrity of the Social Security trust fund" -- there's nothing here that gives any guarantees, and it can just as easily translate as "cut benefits" as anything else. Update: It occurs to me that protecting the trust fund is not the issue -- that's a no-brainer, with a couple of very easy fixes -- the trust fund is under no pressure right now. What's at issue here, and what Durbin dodges, is the real threat of reduced benefits as a result of "deficit reduction," when Social Security has nothing to do with the deficit.

"we must ensure that we pursue a path of shared sacrifice" -- outside the Beltway, this translates as "we're going to stick it to you again."

And note how enamored he is of "bipartisan solutions." That might have worked in the 1980s, when someone in Washington was still interested in governing for the benefit of the country as a whole, rather than the 1%.

I''m taking Durbin as a surrogate for the White House on this, because he is one. I'm not reassured.

Here's some background from Richard RJ Eskow at Crooks and Liars, specifically on the "chained CPI":

So why would so many Democrats, from Barack Obama to Dick Durbin, push a Social Security benefit reduction that would lower that cost of living adjustment even more? The " chained-CPI" is a terrible idea, a back-door cut to Social Security that would be both economically tragic for seniors and politically disastrous for anyone who supported it.

Social Security Works calculated that under the chained-CPI "the average earner at age 45 who begins receiving disability benefits would get a $333 benefit cut at age 55, and a nearly $700 cut by age 65. By age 75 ... that person faces a loss of over $1,000, an 8.1 percent cut." The President said of this change, "Most folks would hardly notice."

(You can get a sense of how much you'd lose under this proposal here, and then decide whether you'd notice.)

Some of these Dems have also suggested raising the retirement age even further than it's scheduled to be raised. That's a benefit cut, too.

Write your Senator, especially if he's not among the signers of Sanders' letter.

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