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Madfloridian's Journal
Posted by madfloridian in General Discussion (1/22-2007 thru 12/14/2010)
Tue Mar 24th 2009, 12:40 PM
Hot diggity dog.

The new centrist coalition has not been formed for much over a week...and here they go already talking about "entitlements" and not letting them get in the way of "real" reform.

Digby calls out McCaskill's twittering today.

Fiscal twit

Claire McCaskillsays it's absolutely essential that old and sick people don't ruin everything:

Just came from bipartisan meeting on fiscal discipline. We must deal with entitlement reform. Very hard, but absolutely essential.
20 minutes ago from web

Entitlemnt reform is making sure Medicare & Soc Sec don't devour every penny of our budget leaving nothing for education or other services.
12 minutes ago from web

From 1997 deja vu: "Can Social Security Survive Another "Rescue"?

Every time either party gets ready to "change" or "save" or "rescue" this wonderful program that enables people to live with a fair amount of dignity as they get sounds just about like it always has.

They make up all kinds of new stuff to form to "rescue" Social Security. Instead of making sensible changes....they want to add new kinds of savings that will in the end take money away from Social Security. They always want to "rescue" it. Maybe things will be different under Obama's presidency...maybe they will tweak it enough not to harm it. I hope he did not mean it when used "universal savings accounts" in the same breath as saving "Social Security" in his speech. I trust President Obama, but I was surprised to hear these words:

In President Obama's speech to Congress he said these words:

Now, to preserve our long-term fiscal health, we must also address the growing costs in Medicare and Social Security. Comprehensive health care reform is the best way to strengthen Medicare for years to come. And we must also begin a conversation on how to do the same for Social Security, while creating tax-free universal savings accounts for all Americans.

This article is from 1997. This has been happening for years.

Here We Go Again. Can Social Security Survive Another "Rescue"?

The rescue of Social Security has been a staple of American journalism for 20 years now—a story all the more remarkable in that Social Security has never been in peril except from its rescuers.

The rescues have all been based on faulty arithmetic.
First, in 1977, the rescuers humbly confessed that they had made a mistake in adjusting benefits to inflation, as a result of which Social Security was threatening to go broke. (They never say the Army is threatening to "go broke," only that it needs more money to do the job that it's asked to do.) Not to worry. Amid the Yuletide hosannas of our massed punditry, our leaders found the courage to enact a correction that would, they swore, assure solvency into the 21st Century.

"Up, Up, Away!" cried Time (11/7/77). And as they now say about proposals to neuter the Consumer Price Index, it was practically painless. The withholding tax would rise by fractions over succeeding years, so workers would hardly feel it, and the cut of 20 percent in benefits would take effect only for those retiring in 1983 or thereafter. Since the media seldom bothered the public with such details, most of them didn't know what would hit them; all they got from the headlines was the assurance that Social Security was safe into the next century.

.."A bipartisan commission under Alan Greenspan went to work on the numbers, while the media developed an unprecedented campaign of vilification of the elderly. On magazine covers, in cartoons and columns and on broadcast commentaries innumerable, they were depicted as hogs, vampires, sharks, gorillas and card sharps scooping up the sustenance of the young. While the investment banker Peter G. Peterson led the media legions, Greenspan fabricated a hurricane warning. Multiplying one false assumption by another (for example, he assumed that the C.P.I. would rise nearly three times as fast as it actually did rise, while his private firm was forecasting an even smaller increase), he predicted that Social Security would go bankrupt in 1983.

The scare headlines permitted Congress in early 1983 to enact a bill acclaimed in headlines as a great rescue. In addition to the previously scheduled cut of 20 percent in benefits for new retirees, it clipped six months of cost-of-living adjustment from all then and future beneficiaries, raised payroll taxes further and postponed the retirement age from 65 to 67 in phases to begin in 2002.

They can't let the most valuable program in our country alone. Here is a vituperative article by Will Marshall of the DLC/PPI. He is vicious in his criticism of Democrats who defend the program. He attacks Robert Borosage's progressive think tank... Campaign for America's Future.

Like camp meeting converts swearing off demon rum, nearly every Democratic candidate for Congress dutifully took the Pledge. They vowed to never, ever allow working Americans to divert some portion of their Social Security payroll taxes into personal retirement accounts. In leftish circles, this goes by the name of "privatization" and is regarded as the ultimate political thought crime.

..."The pledge is the brainchild of the Campaign for America's Future, a union-backed organization that is to Social Security and Medicare what the Inquisition was to medieval Christiandom. Its latter-day Torquemadas enforce New Deal-Great Society orthodoxy and ferret out heresy with religious zeal.

Social Security pledge failed Democrats

Spare the vitriol, Will Marshall, we will fight you on this one.

Another DLC article from 2002 talks about Universal Pensions. Hmmm...that sounds like Universal Savings Accounts to me.

Universal Pensions

The author presents five main reasons we need to establish Univeral Pensions.

YET everyone of those can be achieved by tweaks to Social Security very easily. In fact some of them already are part of it.

* Universal Access. To ensure universal access, the federal government will provide financial incentives to encourage Americans at all income levels to open a universal pension when they start working.

* Greater Choice. Because they are under the control of the individual worker and not the employer, Universal pensions will provide the individual saver a greater amount of investment choices.

* Simplification. By eliminating the complex system of IRA accounts and replacing it with one single account called a "universal pension," all Americans -- not just the financially sophisticated -- will get a good deal. The universal pension would encompass all the benefits of existing IRAs while reducing the amount of rules, paperwork, and fees associated with the current system. Like most IRAs, the money contributed to the universal pension and the interest on that investment would grow tax-free until it is withdrawn.

* Portability. Universal pensions provide complete portability by going with every worker from job to job. Furthermore, an employee's 401(k) balance would automatically transfer to the individual's universal pension whenever the worker changed jobs.

* Protecting Worker Savings. To encourage diversification and decrease the likelihood that investors would lose their life savings because their portfolios were overly concentrated in their employer's stock, workers -- after completing the three-year vesting period -- could place a portion of their 401(k) into their universal pension. In addition, unlike IRAs, universal pensions would be protected from bankruptcy proceedings.

All of those things sound good, but as far as I know they are either already available under the mantle of Social Security...or can be accomplished within that program. So why the need for the government to spend more money outside the Social Security framework?

From the article in the OP by Will Marshall...his summary near the end puts the blame on Democrats for nearly everything. His use of the word "entitlements" irritates me so much.

Will Marshall:

"What's crucial now is that Democrats stop reflexively opposing virtually every serious option for entitlement reform that's put on the table. Instead of a lemming-like rush to placate pressure groups by signing pledges that sanctify the status quo, the party needs to regain its old habit of independent thought and bold policy innovation. Because in the end only Democrats can offer what America urgently needs -- a progressive vision of what social insurance should look like in the 21st century."

In my mind one paragraph that Will Marshall posted from his chapter in a book from 2005 about Restoring the Vital Center to American Democracy says very clearly what the centrist Democrats would like to do.

Finally, progressives should embrace modernizing Social Security as an opportunity to expand capital ownership and thereby create a more vibrant,
democratic capitalism.
While over half of all American households report holding some stocks or bonds, the top 10 percent own more than half of all financial assets, while the bottom 40 percent hold only 5 percent. By adding personal accounts to Social Security, we can reduce asset inequality, which is greater than income inequality, and give every U.S. worker an ownership stake in the nation’s economy.

Marshall was actually defending the personal accounts that were proposed by George Bush.

Any new accounts started that will include government contributions will be taking away resources needed to keep Social Security solvent. It seems all the various new savings accounts and "pensions" are ways to allow more private companies to get government money.

I don't see any way that Universal accounts, pensions, or savings will help Social Security. In a time of a budget surplus, they would be a nice thing to have....but no one has shown me how they will save Social Security. Seems to me they will divert funds in other directions.

I don't care if they call them "Universal Savings Accounts"...a term introduced in the late 90s by Bill Clinton and the DLC. It is in my mind and in the minds of many just another way to get private companies involved. I believe they called them Universal Pensions for a while. Are they like Bush's "private accounts" that became "personal accounts" when there was an uproar over the word "private"?

I think we should leave Social Security alone except for perhaps a few funding tweaks. Stop running it down. Democrats who call themselves centrists are some of the worst offenders.

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