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Home Publications Blogs Beat the Press Deficit Commission Plots to Overhaul Social Security Behind Voters' Backs

Deficit Commission Plots to Overhaul Social Security Behind Voters' Backs

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Tuesday, 02 November 2010 04:44

That is what the NYT reported today, although it used somewhat different language. It told readers that:

"The group, which has a Dec. 1 deadline for recommending how to reduce the annual deficits swelling the federal debt, purposely has done little to date beyond five public hearings, and it has decided nothing lest any decisions leak and blow up in the flammable mix of a campaign year with control of Congress in the balance."

In a democracy, the purpose of elections is supposed to be to have voters determine issues like the future of Social Security and Medicare. According to this article, the members of this commission conspired to keep these issues outside of the election debate.

The article also tells readers that the co-chairs of the commission apparently misled the public in their prior statements. Both former Senator Alan Simpson and Erskine Bowles had given assurances that benefits would not be cut for current Social Security beneficiaries. According to this article, the commission is now considering changing the annual cost of living adjustment formula in a way that would reduce benefits. This reversal of a public commitment by the co-chairs should have been the main topic of a major news article.

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written by izzatzo, November 02, 2010 7:52
Actually the results of a secret study on SS will be released by Alan Simpson on Dec 1. Simpson was inspired to do the study after watching traffic go by a cow barn in Wyoming.

He realized with instinctive teabagger insight that each vehicle was running a deficit, using up more gasoline than it was taking in, clearly enough evidence to prove that SS, like road traffic, was a pyramid scheme, an empty shell of government debt claiming to hold up a phony trust fund that will crash any day now, the same way the big crash is coming for all traffic in the USA as it comes to a standstill.
Simpson's Cunning
written by Bart, November 02, 2010 11:09
My memories of Alan Simpson go back to a dog-and-pony show he once did on the Senate floor concerning whether grand states such as his Wyoming are honorable stewards of western lands.

His staff must have found some old 19th Century photos of western stream beds and such. They went out to those sites and re-took the photos so that Simpson could place them on easels to show how little the particular areas had changed over many decades of careful stewardship.

It was a classic case of cherry-picking, but you had to had it to the old fox.
Preserving Social Security and Burying the Obama Deficit Commission Proposals on Social Security
written by John Bachar, November 24, 2010 3:02
Preserving Social Security and Burying the Obama Deficit Commission Proposals on Social Security
By Emeritus Professor of Mathematics, CSULB
President Obama's National Commission on Fiscal Responsibility and Reform, co-chaired by Alan Simpson and Erskine Bowlers, has issued a doomsday report on "fixing" the Social Security retirement system (OASDI) as a part of its proposals to reduce the Federal deficit. This flies in the face of the fact that, not only has Social Security not contributed a dime to the deficit, it has a $2.52 trillion surplus! Amongst other things, the co-chairs would drastically cut retirement benefits and increase the retirement age to 69. Not a single member of this commission, or of the vast TV/audio/print media, has mentioned nor studied other solutions to the alleged Social Security "crisis".
There is no crisis and there is most definitely no need to advance the retirement age to 69 nor to cut the retirement benefits. .
Based on the data in the totality of individual income tax returns for the 16 year period of 1993 through 2008, there are easy structural changes that can be made to the Social Security (OASDI) taxation system that will easily provide for sufficient annual contributions and assets growth to take care of the retirement needs of the increasingly aging population for the indefinite future, as well as the replacement of the existing 73-year old REGRESSIVE OASDI taxation system by a PROGRESSIVE one, and without reducing retirement benefits nor increasing the retirement age. Regrettably, the ever-present plethora of “privatization” and “fix-it” advocates are clueless about this analysis.
To illustrate the regressive nature of the OASDI taxation system, the data from the calendar year 2008 shows the following. Tax returns listing an Adjusted Gross Income (AGI) of over $200 K (= only 3% of all tax returns) held 30% of all AGI, yet less than 3% of the listed AGI was paid to OASDI; returns listing over $1 Million (= only 0.23% of all tax returns) held 13% of all AGI, yet less than 0.6% of the listed AGI was paid to OASDI; finally, the $10 million and over AGI class had an average GROSS income (AGI plus all exclusionary gross income) of $37 million, yet paid an average of less than 0.006% to OASDI
By using a progressive tax rate system (applied to ALL INCOME, not merely to salary/wage income) for OASDI, the rate for OASDI payments for 85% of all tax returns (= below $100,000 annually) will be LOWER than the current rate of 6.2%. This is because the total income of this class is in the form of salaries/wages, and everything below the salary/wage cap of $100,000 is taxed at 6.2% for OASDI contributions.
Here are the details for a typical progressive OASDI tax rate system: 4% rate on all income below $30,000 (40.3% of all tax returns in 2008); 5% rate for the range $30,00 to $75,000 (24.6% of all tax returns in 2008); 6% rate for the range $75,000 to $200,000 (22.1% of all tax returns in 2008; currently, those from $100,000 to $200,000 pay as little as 3% to OASDI); 7% for the range $200,000 and up (13.0% of all tax returns in 2008; this group pays from below 3% to as little as 0.006% to OASDI).
In addition to providing more than the annual retirement/disability needs produced under the existing regressive taxation system, the annual OASDI Trust Fund assets at the end of 2009, for each of five progressive tax systems that were analyzed for the 16 year period, would have INCREASED from the current $2.52 trillion (2008) to:
$3.47 trillion for tax-rate system 1; $4.17 trillion for tax-rate system 2; $4.27 trillion for tax-rate system 3; $4.41 trillion for tax-rate system 4; $4.83 trillion for tax-rate system 5.
Clearly, this revised progressive OASDI tax rate system would preserve Social Security, the most successful US government program in history, for the indefinite future, and would silence the plethora of “privatizers” and “fix-it” advocates.
...
written by daryy, December 09, 2010 8:20
Most people think time is like a river that flows swift and sure in one direction, but I have seen the face of time, and I can tell you - they are wrong.colon cleanse
Sneakers

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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