Saturday, June 19, 2010

WARNING

In retrospect, it was kind of predictable.

Alex Lawson of Social Security Works recently nailed an interview (video below) with former U.S. Senator Alan Simpson (R-WY) of the President's Fiscal Commission on the national debt. The characteristically belligerent Mr. Simpson, appointed co-chairman by none other than President Barack Obama, conceded that the 18-member commission is considering raising the retirement age for Social Security, though he disingenuously denied that it is a cut, which, paradoxically, inadvertently confirmed his support for the cut.

But the more disturbing portion of the transcript ran:

LAWSON: But what about the $180 billion in surplus that it brings in every year?

SIMPSON: There is no surplus in there. It’s a bunch of IOUs.

LAWSON: That’s what I wanted to actually get at.

SIMPSON: Listen. Listen. It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.

LAWSON: Two wars, tax cuts for the wealthy.

SIMPSON: Whatever, whatever. You pick your crap and I’ll pick the real stuff. It has to do with the highway system, it was to run America. And those are IOUs in there. And now there is not enough coming in every month.


Firedoglake's Jane Hamsher explains:

Simpson starts from the premise that the Treasury will default on the bonds issued to the Social Security trust fund, because all the best people apparently know that it’s better to default on America’s senior citizens and plunge them into poverty than it is to default on, say, the Chinese.

(Refutation of Simpson's other claims is here.)

But we were warned:

*The former Senator, while lashing out at the elderly, was asked in February by CNBC what cuts he would recommend to the legislative and executive branches. With Medicaid, Medicare, and Social Security in mind, the co-chairman, an appointee of Barack Obama, eloquently declared "we are going to stick to the big three."

*Testifying before the Senate Banking Committee in January, Ben Bernanke, appointed by President Obama to a second term as Federal Reserve Chairman, advocated cuts in Social Security and Medicare because "That's where the money is."

*Two of the Democratic congressional members of the commission are from Illinois: Senate Majority Whip Dick Durbin, an early and active supporter of Barack Obama's presidential candidacy; and Jan Schakowsky, who was determined to get a public option in the health care bill until she wasn't.

*The other co-chairman of the Fiscal Commission, Democrat Erskine Bowles, served as President Clinton's intermediary when the 42nd president almost struck a deal with House Speaker Gingrich to undermine Social Security. Bowles, like Simpson, is an appointee of President Obama.

*All this might not matter were it not for the support of President Obama, who even as president-elect threatened to take aim at Social Security and Medicare.

Meanwhile, Ben Bernanke, appointed by Barack Obama (have I mentioned him?) for a second term, continues his assault on the elderly, telling Congress earlier this month "The entitlement programs are not self-funded. They are unfunded liabilities. They are the single biggest component of spending going forward.” Characterizing these programs as "unfunded liabilities" sounds far more ominous than need be. And it is a bizarre inference from a guy who wants to raid the system because "that's where the money is" (which, ironically, runs counter to the argument of Simpson, who wants us to believe the money is not there.) Perhaps Ben Bernanke will debate Ben Bernanke.

Robert Kuttner notes

Social security taxes wages. Get wage growth back to historic postwar norms, and Social Security is in surplus forever. Restore the traditional fraction of wages that are taxed, so that affluent people do not get a free ride on part of their income, and the proclaimed crisis disappears. There is no need to further cut benefits, or further raise the retirement age, or raise taxes on working Americans. If only Citigroup's balance sheet were as healthy as Social Security's!

Kuttner's reference to Citigroup is instructive because, as he points out, Wall Street is eager for privatization so it can get its hands on all this money. Republicans, meanwhile, want to undermine the system because Social Security and Medicare are embarassments to the anti-government party, always advocating a reduction in the size of the public sector (except when one of its own is president).

What, then, is Barack Obama's excuse? In the short term, he may want to cut the programs while the federal government continues to raid the accounts and tax cuts for the wealthy are maintained (which he probably thinks will help keep the GOP off his back). Or he may be thinking long-term, aiming to be the president who finally slays the Social Security dragon, confirming that "yes, we can" squash the elderly.








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