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Home Publications Op-Eds & Columns The Social Security Pledge Versus the Old Politics

The Social Security Pledge Versus the Old Politics

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Dean Baker
Truthout, October 11, 2010

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President Obama made a big point during his campaign of running against the old style of politics. He promised to bring a new atmosphere of bipartisan cooperation and openness to the political system.

The bipartisan cooperation part has not turned out very well primarily because the Republican leadership has shown very little interest in cooperation or compromise on anything. However, it looks as though President Obama is prepared to jettison the openness part of his commitment himself.

This comes in the context of the President’s deficit commission, which is carrying through most of its work in secret. The current plan is to have this commission make a report, which will then be given a rushed up or down vote after the election. This means that a lame duck Congress, including dozens of member who were just voted out of office, will be making crucial decisions on Social Security, Medicare and other essential programs.

The two co-chairs of the commission, former Wyoming Senator Alan Simpson and Morgan Stanley board member Erskine Bowles, have both explicitly advocated cuts to Social Security and raising the retirement age. If they can get the commission to support their agenda, then they will rely on President Obama and the congressional leadership to do the necessary arm-twisting to get Congress to approve the cuts to Social Security.

This would be about as old-style as politics could ever get. We have an election next month. The point of elections is to let the public decide on issues such as whether or not we should cut Social Security benefits or raise the retirement age.

If President Obama believed in “new politics” then he would encourage members to say where they stand on cutting Social Security benefits. Then voters would be given the opportunity to set the country’s agenda, not a bunch of political hacks and Wall Street cronies who were too incompetent to see the $8 trillion housing bubble that wrecked the economy.

Of course the public does not have to wait for President Obama to pass judgment. There is a pledge to protect Social Security that has already been endorsed by more then 100 members of Congress. The pledge is very simple. It commits members of Congress, or candidates, to oppose cutting Social Security benefits or raising the retirement age. It doesn’t get any simpler than this – even a member of Congress can understand it. The full text is available at the Campaign for America Future’s website.

Given the simplicity of this statement, it is reasonable to assume that any member of Congress or candidate who does not sign on supports cutting Social Security benefits. There really is no other plausible conclusion.

This is just like if someone accuses you of killing your spouse. Any normal non-murderer would immediately deny the accusation and express outrage at the accuser. In the same way, if members of Congress or candidates find themselves unable to sign a pledge saying that they will not support cuts to Social Security, then we should assume that they do support cuts. Voters can then go to the polls knowing that the person wanting their vote wants to cut Social Security.

If we didn’t have such a separation between the people who make policy and the people who suffer the consequences then there is no way anyone would be considering cuts to Social Security right now. All projections show that the program is completely solvent long into the future. The program does exactly what it is supposed to do – it provides a core retirement income to people who have spent their life working.

Social Security is also extremely well-run and efficient. We know this because its opponents highlight incidents of fraud that are trivial relative to the size of the program. For example, the Washington Post recently ran a major story calling attention to inappropriate payments to federal employees that amounted to less than 0.005 percent of the program’s spending. Opponents of Social Security wouldn’t highlight such trivial errors if they had serious abuses to tout.

The administrative costs of Social Security are less then one-twentieth the cost of private insurers. That is because it has no shareholders getting dividends and no executives drawing eight- and nine-figure paychecks.

And, thanks to the ineptitude of the folks running economic policy, the huge baby boom cohort that is about to retire is in desperate need of Social Security. The Wall Street crew and their friends in Washington managed to destroy their home equity and their 401(k)s.

But former Senator Simpson, who is also the son of a senator, has his pension and inheritance to live on. Erskine Bowles gets $430,000 a year from Morgan Stanley, the bailed out investment bank, to attend a few meetings a year. These are the people who want to cut our Social Security. And, they are betting that their similarly situated friends in Congress will go along.


Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.

 

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