Elite Conventional Wisdom Is LOSING On Social Security

[Segami]

PACK O' RATS

The crowd calling for cutting benefits is being overtaken by another movement: A proposal to expand the program

In the past two weeks, two radically different proposals for the future of Social Security have provoked widespread discussion in the media. One proposal was made by President Barack Obama, as part of his proposed budget. This called for using inflation adjustments to deprive the middle-class elderly of nearly 10 percent of their promised Social Security benefits if they lived to their 90s, while only the poor would be shielded from the cuts. Obama’s proposal was angrily denounced by progressives and conservatives alike. The rival proposal came in a policy paper called“Expanded Social Security, ” written by Steven Hill, Robert Hiltonsmith, Joshua Freedman and me, and published by the New America Foundation’s Economic Growth Program. Our plan called for a major expansion of Social Security benefits, on the grounds that Social Security is far more efficient and reliable than the other two “legs” of the retirement security “stool” — employer pensions (both defined-benefit pensions and 401Ks) and tax-deferred private savings accounts like IRAs.

Robert Kuttner praised the plan in a column for the Huffington Post:

If you don’t read any other piece of policy wonkery this year, you owe it to yourself, your parents, and your own golden years to read “Expanded Social Security.” It provides a politically serious blueprint for expanding the retirement income of the elderly, rather than selling them out. If we had a Democratic Party worthy of the name, it would get behind this proposal and change the entire dynamics of the Social Security debate.
http://www.huffingtonpost.com/robert-kuttner/social-security-cuts_b_3034692.html

A number of congressional progressives have defended their support for Social Security by citing our report, as did the AFL-CIO. Chris Hayes praised the report on MSNBC. On Washington Post’s “Wonkblog” Ezra Klein wrote:

This is the other, perhaps more pressing, Social Security crisis: It’s not generous enough to counteract the sorry state of retirement savings nationwide. In a report for the New American Foundation, Michael Lind, Steven Hill, Robert Hiltonsmith and Joshua Freedman survey this data and conclude that the ongoing debate over how to cut Social Security is all wrong: We need to make Social Security much more generous.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/05/washington-thinks-entitlements-are-the-problem-maybe-theyre-the-answer/

“Expanded Social Security” also received favorable mentions in the Washington Post, the Daily Beast, the American Prospect, the Nation, Mother Jones, Next New Deal, DailyKos and other venues. Nor has interest been limited to the center-left. The Expanded Social Security Plan was discussed seriously by Reihan Salam at the conservative magazine National Review’s blog and Andrew Biggs of the American Enterprise Institute. That makes it all the more important to note the weakness of most of the criticisms that Biggs levels against proposals like ours to expand rather than cut Social Security in response to the disappearance of traditional pensions, the failure of 401Ks and the inadequacy of private savings.


cont'




http://www.salon.com/2013/04/26/elite_conventional_wisdom_is_losing_on_social_security/

[BethanyQuartz]

1. Or we could force every employer to prefund retirement benefits

I'm sure they'd love that!

[rhett o rick]

2. Only if we let the Federal Government hold the benefits.

Otherwise, at some point, they will just convince a judge they need the money to survive.

on edit: On second thought, private employer retirements should be outlawed unless handled via the SS system. Otherwise they are only a scam to pay less wages.

[BethanyQuartz]

5. If we let federal government handle it we'll need that lockbox

Else they'll just 'loan' it all out to themselves for wars and corporate giveaways and never pay it back.

[Lasher]

7. Recent history proves you are correct.

Defined Benefit Pension Plans were once common. They were fully funded by employers so that employees could look forward to a financially secure pension and medical insurance. This started to unravel during the '70s. Employers wanted to get their hands on those big pots of money. We started seeing behavior that is now familiar in today's predatory venture capitalist management style.

Along the way it has been a tangled web that includes Cash Balance Plan conversions that were eventually replaced with 401(k) saving plans; manufactured bankruptcies made popular by the airline industry; and shitty, catastrophic-only medical insurance in the place of employee benefits that once paid for everything.

This travesty might have been prevented if the government had held the capital. In that case the money would have been safer but vultures would still have circled over it. After all, Social Security benefits are under attack today from a cast that includes a Democratic President. And there are people even at this website who work pretty hard to rationalize theft of the Trust Fund.

[Cleita]

8. Or at least a third party bound by an air tight trust agreement. n/t

[JDPriestly]

11. That goes for the pension plans for public employees at the state level too.

At a recent forum, I heard virtually all the primary candidates for mayor in Los Angeles agree that the pension obligations of the city are too great and that the city needs to renege on its pension promises. I think there was one absent and one who did not state that view clearly. So, people with public employee retirement plans are not safe either.

[bvar22]

3. Raise-the-Cap!!!

I wish we had elected THIS guy!

[SunSeeker]

12. Ugh. Hearing Hillary say raising the cap is "a 1 trillion dollar tax increase on the middle class"

...almost made me throw up. I hope she does not still have that Romneyesque position if she is our 2016 candidate. The fact that she ever had it is bad enough.

[JDPriestly]

13. Have you posted that as an OP?

[siligut]

4. Increase SS benefits?

Increase deductions now? The WP is playing up to the RW meme of Democratic entitlements with that.

[Downwinder]

6. Lost the Rec button, I'll Rec. it here

[FreeBC]

9. Rendell was also wrong on the Eagles draft

He wanted them to trade back and get EJ Manuel.

... just sayin'

[KauaiK]

10. I often wonder if Obama was using reverse psychology on the GOP....

I mean the GOP always does the OPPOSITE of everything he proposes......

[AnotherMcIntosh]

16. If the GOP always does the opposite, why did he appoint so many Republicans, especially Bush

carryovers, to top level positions?

When you've got one real-life example of Obama using reverse psychology on the GOP (JUST ONE!), it would be interesting to learn more from you.

[KauaiK]

17. Good point. Touche

[freshwest]

14. K & R. I regret that I can only give this one Rec.

[AnotherMcIntosh]

15. Remove the cap entirely. And make capital gains and foreign source income subject to SS taxation.

[forestpath]

18. K&R That picture is like an ad for a horror film.

[Dustlawyer]

19. My dad worked for Bethleham Steel for 35 years. They went under and stole the pensions.

You cannot rely on corporations to ever do the right thing!

[Jasana]

20. A whole lot of America is going to have nothing but SS to retire on.

Those arseholes play with this program and they deserve to have their hands charred. Democrat, Republican, I don't care. They need to get flamed but good.

[sabrina 1]

21. Well, finally someone is making sense! It's obvious the program is excellent, successful,

fiscally sound and needs to be EXPANDED. Benefits need to be raised, the money is there, earned by those who own the fund. This would be a huge stimulus package that would cost the government NOTHING.

So why have none of our elected Reps come up with this obviously far superior idea than those draconian nonsensical 'proposals' from Republicans like Alan (let them eat cake) Simpson and his fellow travellers from the Heritage Foundations? And even more puzzling, why on earth would any Democrat give any credence at all to such outrageous proposals when the fact is SS can help reduce the deficit?