Social Security Round-up for 2/27
The latest stories and commentary in the battle to save America’s most successful government program.
I’m writing a series of posts as a blogging fellow for the Strengthen Social Security Campaign, a coalition of more than 270 national and state organizations.
(Still getting caught up on important back stories that are still valuable to read…)
According to a new analysis by the Chief Actuary of the Social Security Administration, the Bowles-Simpson proposal would reduce benefits by as much as $1,107 (16%) for 60% of “Very Low” earners, those workers with average annual earnings of around $10,800.
*Daily Kos: WSJ: White House will leave Social Security out of budget:
The Wall Street Journal is reporting good news on the Social Security front: the White House has decided to leave changes to Social Security out of their proposed budget, hopefully bringing an end their outreach to Republicans on negotiating changes to the system.
*The Means-Testing Mirage – NYTimes.com:
But while there’s some money to be gotten by taxing the top 2 percent — they have more than 20 percent of the income — they account for roughly their pro-rata share of benefit costs — that is, the richest 2 percent account for around 2 percent of Medicare expenses. (Maybe a bit less because they’re healthier than the average American, maybe a bit more because they live longer.) Social Security is more complicated, but bear in mind that high earners get bigger benefits, but also get taxed on those benefits; so again, we’re talking about savings not very different from their share of the population.
So we’re talking very small savings here. This is more anti-Wille Suttonism, going where the money isn’t.
*Understanding Social Security in One Easy Lesson | Mother Jones:
I just don’t get it. Why do smart people keep saying stuff like this? Medicare is a problem. But unless you believe that the United States is literally going to collapse in the near future, Social Security isn’t. Period.
The weird thing about this is that Social Security isn’t even hard to understand. Taxes go in, benefits go out. Unlike healthcare, which involves extremely difficult questions of technological advancement and the specter of rationing, Social Security is just arithmetic. The chart on the right tells you everything you need to know: Right now, Social Security costs about 4.5% of GDP. That’s going to increase as the baby boomer generation retires, and then in 2030 it steadies out forever at around 6% of GDP.
That’s it. That’s the story. Our choices are equally simple. If, about ten years from now, we slowly increase payroll taxes by 1.5% of GDP, Social Security will be able to pay out its current promised benefits for the rest of the century. Conversely, if we keep payroll taxes where they are today, benefits will have to be cut to 75% of their promised level by around 2040 or so.
*The Plum Line – Obama: Social Security isn't the problem:
At first glance, this seemed encouraging. After all, Obama seemed to be saying that Social Security, unlike medical costs, isn’t the problem, because it isn’t contributing to the deficit the way Medicare and Medicare are. That’s a case progressives have been itching to hear Obama make.
But Adam Green of the Progressive Change Campaign Committee emails a far more pessimistic interpretation:
“President Obama said Social Security is not a “huge contributor” to the deficit. In fact, Social Security has a $2.5 trillion surplus, is not even part of the general budget, and therefore does not contribute one penny to the deficit…
“Cuts, tweaks, or slashes to Social Security are the exact same thing — a broken promise to American workers who paid for and earned Social Security benefits.”
*Richard (RJ) Eskow: Six Things Everybody Knows About Deficits… That Are Completely Untrue:
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