This coming Saturday (Aug. 14th), Social Security will be celebrating its 75th birthday-- but, as the folks at MoveOn.org remind us below, "Social Security is under attack; conservatives who are using myths (see below) to scare people"...(see: http://pol.moveon.org/ssmyths/index.html )...
Unfortunately, tho, it's not just right-wing crazies, folks; recall Dean Baker on Democracy Now July 19th:
[see http://www.CEPR.net for more re: Dean Baker and his Center for Economic and Policy Research!]
"Obama's Social Security Commission is very, very worrisome. It's chaired, you know President Obama picked Alan Simpson, former senator from Wyoming, who's made a career out of beating up on old people-he thinks it's cute. I don't know if he's delusional or what, but he talks about how old people drive into their gated communities in their Lexuses. Maybe his friends do. We have the data. Very few others do. And then the Democratic co-chair was Erskine Bowles, who's getting-he's a Wall Street guy. He gets over $300,000 a year as a director of Morgan Stanley, a firm that should be famous to everyone, because it would be out of business without the taxpayers' support. And he, right off the bat, said, "Well, we're going to have to cut Social Security." So, President Obama's two lead appointees, his co-chairs, are both on record saying they want to cut Social Security. This should have people very, very worried. That isn't a balanced commission."
[see more: http://www.democracynow.org/2010/7/19/social_security_under_attack_cuts_proposed !]
So-- let us know if you can join us for a press conference this Friday (Aug. 14th) at 12:30 pm in front of the FDR site main entrance at Rt. 9 in Hyde Park-- to pull together folks in our region to stand up for Social Security-- not let GOP or Dems cut benefits-- but instead make it stronger w/progressive taxes!...(and bring signs if you can, k?)...
[pass it on]
p.s. Thx already to Rhinebeck's Fred Nagel for passing this message along to a ton of other folks up and down the Hudson Valley-- now it's your turn to do so too!...
p.p.s. Here below is a resolution from yours truly for our County Legislature to pass, just submitted to our Co. Leg. offices; send letters this week to all of us at email@example.com for it to pass:
WHEREAS, there is no Social Security crisis; by 2023, Social Security will have a $4.3 trillion surplus; it can pay out all scheduled benefits for the next quarter-century with no changes whatsoever; Social Security started preparing for the Baby Boomers retirement decades ago, and
WHEREAS, one way to strengthen Social Security would be to have wealthy Americans pay their fair share as part of the program; if the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come; right now, high earners only pay Social Security taxes on the first $106,000 of their income, and
WHEREAS, the Social Security Trust Fund has not been raided and full of IOU's; the truth is that it's full
of U.S. Treasury Bonds, and those bonds are backed by the full faith and credit of the United States, and
WHEREAS, the reason Social Security holds only treasury bonds is the same reason many Americans do; the federal government has never missed a single interest payment on its debts; President Bush wanted to put Social Security funds in the stock market, which would have been disastrous, but luckily, he failed, so the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be, and
WHEREAS, it is impossible for Social Security to add to the deficit; by law, Social Security funds are separate from the budget, and it must pay its own way; that means that Social Security can't add one penny to the deficit, and therefore be it
RESOLVED, that the Dutchess County Legislature strongly urges Congress and our President to strengthen Social Security by making sure that wealthy Americans pay Social Security taxes on all of their income, not just the first $106,000 of their income, and be it further
RESOLVED, that a copy of this resolution be sent to President Barack Obama, Senators Kirsten Gillibrand and Charles Schumer, and Representatives John Hall, Maurice Hinchey, and Scott Murphy.
[see: "Remembering Social Security's Roots on 75th Birthday" by David Woolner of Roosevelt Institute:
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Share your opinions on Social Security issues
AUGUST 3, 2010
Are you glad the Social Security program was implemented nearly 75 years ago? Has it benefited you? Do you doubt it will still be around when you reach retirement age? To share your thoughts, e-mail or call reporter John Davis at firstname.lastname@example.org or 845-437-4807. He is writing a story on the 75th anniversary of Social Security on Aug. 14.
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From http://pol.moveon.org/ssmyths/index.html ...
Help Save Social Security
Social Security is under attack. Conservatives who want to cut benefits are using these myths to scare people. Join our campaign to fight back against the lies.
Top 5 Social Security Myths
Rumors of Social Security's demise are greatly exaggerated. But some powerful people keep spreading lies about the program to scare people into accepting benefit cuts. Can you check out this list of Social Security myths and share it with your friends, family and coworkers?
[through Facebook, Twitter, or Email]
Myth: Social Security is going broke.
Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.3 trillion surplus (yes, trillion with a 'T'). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever.1 After 2037, it'll still be able to pay out 75% of scheduled benefits--and again, that's without any changes. The program started preparing for the Baby Boomers retirement decades ago.2 Anyone who insists Social Security is broke probably wants to break it themselves.
Myth: We have to raise the retirement age because people are living longer.
Reality: This is a red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than did 70 years ago.3 What's more, what gains there have been are distributed very unevenly--since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half.4 But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.
Myth: Benefit cuts are the only way to fix Social Security.
Reality: Social Security doesn't need to be fixed. But if we want to strengthen it, here's a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come.5 Right now, high earners only pay Social Security taxes on the first $106,000 of their income.6 But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.
Myth: The Social Security Trust Fund has been raided and is full of IOUs
Reality: Not even close to true. The Social Security Trust Fund isn't full of IOUs, it's full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States.7 The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market--which would have been disastrous--but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.
Myth: Social Security adds to the deficit
Reality: It's not just wrong -- it's impossible! By law, Social Security funds are separate from the budget, and it must pay its own way. That means that Social Security can't add one penny to the deficit.1
1."To Deficit Hawks: We the People Know Best on Social Security" New Deal 2.0, June 14, 2010
2. "The Straight Facts on Social Security" Economic Opportunity Institute, September 2009
3. "Social Security and the Age of Retirement"Center for Economic and Policy Research, June 2010
4. "More on raising the retirement age" Ezra Klein, Washington Post, July 8, 2010
5. "Social Security is sustainable" Economic and Policy Institute, May 27, 2010
6. "Maximum wage contribution and the amount for a credit in 2010." Social Security Administration, April 23, 2010
7. "Trust Fund FAQs" Social Security Administration, February 18, 2010
8. "To Deficit Hawks: We the People Know Best on Social Security" New Deal 2.0, June 14, 2010
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From http://www.democracynow.org/2010/7/19/social_security_under_attack_cuts_proposed ...
Social Security Under Attack: Cuts Proposed, Higher Retirement Age Suggested
The attacks on Social Security have steadily intensified in the past few months. House Majority Leader Steny Hoyer recently called for a higher retirement age, and House Minority Leader John Boehner suggested raising the retirement age to seventy. Meanwhile, President Obama's bipartisan eighteen-member commission dealing with the nation's public debt is due to come out with a report in November that is expected to recommend cuts to Social Security. We speak with Dean Baker of the Center for Economic and Policy Research.
AMY GOODMAN: Next month marks the seventy-fifth anniversary of Social Security, the government's cornerstone program for tens of millions of retirees and people with disabilities. But in recent months, the attacks on the program FDR initialed on August 14th, 1935, have steadily intensified, and Republicans aren't the only ones calling for cuts to Social Security benefits and raising the retirement age. Last month during a speech on reducing the budget deficit, House Majority Leader Steny Hoyer called for a higher retirement age. A week later, House Minority Leader John Boehner suggested raising the retirement age to seventy in a meeting with editors of the Pittsburgh Tribune. And in February, President Obama created a bipartisan eighteen-member commission to deal with the nation's public debt. The commission's report is due in November and is expected to recommend cuts to Social Security.
For more on this issue, we're joined by economist Dean Baker. He's the co-director of the Center for Economic and Policy Research, and he co-authored a report called "The Impact of Social Security Cuts on Retiree Income." Dean, where are we headed with Social Security right now, and what do you think needs to be done?
DEAN BAKER: Well, it's very troublesome turf. Just to be very clear, absolutely nothing needs to be done. If we look at the projections from either the Congressional Budget Office or the Social Security trustees-they've yet to come out with their new ones, but in any case, the one from last year-the program could pay all scheduled benefits well into the future, at least twenty-seven years into the future. And even after that, it could still pay the vast majority of benefits, assuming nothing is ever done. Now, somewhere down the road, we'll probably make changes in the program as we've done in the past. But the idea that somehow something has to be done anywhere soon, this is crazy. People have paid for those benefits. So, in effect, what we'd be doing is defaulting on the bonds that are held in the trust fund to pay people their benefits that-when they come due. So, nothing has to be done.
Now, what's going on is that you have this real craze about the deficit, because the reason we have the deficit, of course, was we had a collapse of the housing bubble. But there's this obsession about the deficit-"we have to do something"-and you have people running around Washington saying, "Well, you know, we can't do anything on healthcare, because we tried that and the insurance industry was too powerful, the pharmaceutical industry was too powerful, so therefore we have to cut Social Security." It's close to a non sequitur and should have people absolutely fuming at their representatives in Congress. But that's where we are in Washington.
AMY GOODMAN: What about this commission? This is President Obama's commission.
DEAN BAKER: Well, a commission is very, very worrisome. It's chaired, you know President Obama picked Alan Simpson, former senator from Wyoming, who's made a career out of beating up on old people-he thinks it's cute. I don't know if he's delusional or what, but he talks about how old people drive into their gated communities in their Lexuses. Maybe his friends do. We have the data. Very few others do. And then the Democratic co-chair was Erskine Bowles, who's getting-he's a Wall Street guy. He gets over $300,000 a year as a director of Morgan Stanley, a firm that should be famous to everyone, because it would be out of business without the taxpayers' support. And he, right off the bat, said, "Well, we're going to have to cut Social Security." So, President Obama's two lead appointees, his co-chairs, are both on record saying they want to cut Social Security. This should have people very, very worried. That isn't a balanced commission.
AMY GOODMAN: Simpson was also recently quoted talking about older people as "lesser people."
DEAN BAKER: Yeah, Senator Simpson is quite a character. I mean, this whole commission is really fishy in any number of different ways. Among other things, they're holding their meetings in secret. But they even went a step further, because you had a reporter, Alex Lawson, who works with the group Social Security Works, who interviewed Senator Simpson as he's going in or out of one of the meetings, and Simpson, you know, could not control himself, made this comment about "lesser people," and it was rather insulting, used several curse words. And I guess to avoid having Senator Simpson embarrass himself again, they now not only have the meetings in secret, but they actually do not disclose the location, so that you won't have another occasion where a reporter asks Senator Simpson questions and then he makes a fool of himself, essentially. So, again, this should be disconcerting.
AMY GOODMAN: Andy Stern, a key member of the deficit commission, is pushing to invest a significant portion of the Social Security Trust in private companies through the stock market on Wall Street.
DEAN BAKER: Well, what Stern-again, I don't know the full reference, but the way this is usually talked about, and I assume this is what Stern meant, was that he would-that he would put some of the funds in an index fund, which, given that the stock market has plunged, people have asked me about it. I go, I don't see a risk there, so I'm not particularly concerned about that one. I'm concerned about individual accounts. I'm concerned about cuts in benefits. But that you would put some of the trust fund in the stock market, I mean, you'd almost have to come up with like a story like the moon hitting the earth to say how that would give us worse returns than what we would otherwise get at this point. So, that one really doesn't have me concerned.
AMY GOODMAN: Dean Baker, what about lifting the retirement age to seventy? What would be the effect?
DEAN BAKER: Well, this is a cut in benefits. And, of course, this disproportionately hits those who are at the bottom, who have shorter life expectancies, and also who don't have the ability to make this up by working longer because they don't have the health or they have harder jobs. It really is infuriating. You go around Washington, all the people talk about this. They're all-you know, they have jobs like I do. I sit at a desk. I'm hoping I can work 'til seventy, maybe much longer. I like my job. I'm, you know, in good health. But you go around, you've got people working in a factory, people working in restaurants, you know, waiter, wait people. You look around at the jobs people have throughout society, the vast majority of those are not jobs where people could really look forward to working 'til age seventy. So this is really kind of a cruel joke on people. And again, one other point I just think we can't emphasize enough, people have paid for these benefits. So, we're talking about taking away benefits people have paid for. Let's use the word "tax." Let's call it a tax. I know that sends the right wing nuts. Let's say they want to tax Social Security benefits, because that's, in effect, what they want to do.
AMY GOODMAN: We're going to leave it there, but we're going to continue our conversation online just after the show. So people can go to our website at democracynow.org. Dean Baker, economist and co-director of the Center for Economic and Policy Research.
Part two here....
AMY GOODMAN: We're joined by Dean Baker, economist and co-director of the Center for Economic and Policy Research. The big buzz is privatizing Social Security, that Social Security is what's breaking us, it's not affordable.
Dean Baker, I'd like to ask you what I asked you during the broadcast, that it's not affordable. Explain your response to this.
DEAN BAKER: Well, it's really absurd on the face of it. I mean, the program has a separate stream of financing. We all pay a Social Security tax when we work, 6.2 percent of our wages, and employers contribute 6.2 percent on behalf of workers. And that actually has been running a surplus. We've been paying more into the program than benefits have been paid out. This was a design that was put in place by the '83 Greenspan Commission. They raised taxes. They also raised the retirement age. It is going up to sixty-seven, now sixty-six. And the result of that is that there's been this huge surplus run, over two-and-a-half trillion, over the last roughly twenty-five years. And the program is supposed to continue to run a surplus for a bit more than a decade, at which point we're supposed start drawing down on the money in the trust fund, the money that we've accumulated. So this idea that somehow we can't afford this, we've actually been paying more than was need for benefits, and according to the Congressional Budget Office, the program, as it currently stands, could pay all scheduled benefits through the year 2039 with no changes whatsoever.
Now, when you go further out-2049, '59, '69-at some point you are going to be facing shortfalls. The main issue there is people are living longer. And at some point, you're either going to have to increase what you pay in, some source of revenue-you could raise the cap, there's different ways you could do that-or some cut in benefits or raise the retirement age. But this is well into the future. So the idea that, you know, five years, ten years, fifteen years out, that we're facing some crisis, that's just simply not true. And everyone who's familiar with the situation knows that.
AMY GOODMAN: Federal Reserve chairman Ben Bernanke has warned that entitlement programs like Social Security and Medicare will have to face cuts. This is what he told the House Budget Committee last month.
* BEN BERNANKE: The type of programs are not self-funded. They're unfunded liabilities to a significant extent at this point. They are the biggest single component of spending, going forward. Now, there are various ways to address this. You can restructure entitlement programs. You can cut other things. But at some point, you need to address the overall budgetary situation. If you don't, you'll get a picture like this one, where interest rates are rising, interest payments are rising, because the debt outstanding is growing exponentially, and at that point, things will come apart. A famous economist once said, anything that can't go on forever will eventually stop. And this will stop, but it might stop in a very unpleasant way in terms of sharp cuts, a financial crisis, high interest rates that stop growth, continued borrowing from abroad. So, clearly we need to get control of this over the medium term, and we're certainly going to have to look at entitlements, because that's a very big part of the obligations of the federal government, going forward.
AMY GOODMAN: Economist Dean Baker, your response?
DEAN BAKER: Well, this isn't the first time Mr. Bernanke has misled Congress on something very important. You recall, he was a big factor in pushing for the TARP and fundamentally misrepresented the situation in financial markets to get Congress to approve it. But he's done the exact same thing here again. He uses the term "entitlements" a lot. People here in Washington do that. They know better. Again, the story with Social Security, we're all looking at the same numbers. Ben Bernanke would not, if he had him here, tell you anything other than what I just told you, that the Congressional Budget Office says the program could pay all benefits through the year 2039 with no changes whatsoever. Relatively minor changes would keep it fully solvent decades more into the future. The bigger problem is Medicare and Medicaid. But again, Mr. Bernanke knows full well, it's not that those programs are out of control; it's that our healthcare costs are out of control. So the real problem is that we have to fix our healthcare system. We pay more than twice as much for our healthcare per person as people do in Germany, in Italy, France, Canada, whatever country you choose to pick. If our per-person healthcare costs were the same as what they are in those countries, we would be looking at enormous budget surpluses for the indefinite future, rather than deficits. The problem is that people like Mr. Bernanke don't want us to challenge the insurance industry, the highly paid medical specialists, the pharmaceutical companies. Instead, they're saying cut Medicare, Medicaid for the elderly. So it's just really a dishonest story. The issue here is healthcare. That's what we should be talking about.
AMY GOODMAN: So, Dean Baker, what did the so-called landmark healthcare legislation do?
DEAN BAKER: It extended coverage to a lot of people that wouldn't have had it otherwise. So, in that sense, I think it was a very good thing. It also established community rating, so that people who get sick and lose their job could still hope to get covered, because otherwise typically people, when they lose their job, no one is going to cover them if they have a serious health condition. So, in that sense, I think it was a big step forward. But in terms of covering-controlling cost, it's really hard to see that accomplish much. We have to go back to the drawing board. And what's really pernicious is you have all these people running around Washington saying, "Oh, we tried that. We didn't get anywhere, so now we have to cut Social Security, we have to cut Medicare." That's not acceptable.
AMY GOODMAN: You've just put out a report on Social Security. You look at the impact of the three common proposals for cutting Social Security and the impact they'll have on retirees. Tell us.
DEAN BAKER: Yeah, well, we looked at three things that are often suggested: one, raising the retirement age-and this is an accelerated increase, because, as I said, it's already scheduled to go up to sixty-seven for workers who hit age sixty-two after 2022, so it is already going up, but they propose to accelerate that and push it up to seventy; secondly, a change in the benefit formula so that workers will be getting less who retire, say, three, five, ten years out, than they otherwise would have; and the third one is a change in the annual cost of living adjustment. Currently it's tied to the Consumer Price Index; there are proposals actively being debated that would reduce that by about three- or four-tenths of a percentage point a year. Not too long ago, they were talking about doing it by one percent a year.
Now, all of these would lead to substantial cuts in benefits, and the point we make in this report is not just that they cut benefits, but it's a very large cut in retirement income. The big issue here is that most middle-class workers have taken a very big hit to their retirement income as a result of the collapse of the housing bubble. For most middle-income workers, most of their wealth was the equity in their home, which in many cases got wiped out with the plunge in house prices. In addition, they lost money in their 401(k)s, as well, if they had any. And remarkably, when people talk about cutting Social Security down here, almost no one seems to have noticed that we had this huge collapse of the housing bubble that's destroyed much of the wealth of these near retirees who they want to cut benefits for. So if you want to talk about cutting benefits, you know, thirty, forty years out-and we could have that discussion-I still wouldn't be terribly anxious to do it. But we could see these people. We know that someone who's fifty-two, fifty-three, and basically has almost nothing, the typical wealth of someone in their-between forty-five and fifty-four is about $80,000, counting the equity in their home. That's a middle-income household. They're not going to have much for retirement. We know that. They don't have many more years in the work force. They're not going to be able to have huge savings. So when you talk about cutting their Social Security, in many cases, that's almost one-to-one a cut in their income. If you cut their Social Security five percent, you're cutting their income five percent. That's a very big hit.
AMY GOODMAN: Dean Baker, put all of this in the context of the passage last week of what is called the landmark financial regulation bill.
DEAN BAKER: Well, I mean, I guess what I'd say, the regulation bill, again, it had some good aspects, but I think, long and short, the banking industry or the financial industry got off incredibly cheap, because here was-we're suffering incredibly. I mean, it's-you know, again, I hang out with people in Washington who are all employed, but, you know, you look around the country, we have an unemployment rate that's close to ten percent, and what's more, it's expected to stay there long into the future. Those people didn't do anything wrong. You have people who lost their jobs in the construction industry, in the manufacturing industry, retail trades, every sector of the economy. They can't find other jobs. It's not that they're lazy, they're not willing to work, or they don't have the skills. It's we messed up, "we" meaning the people who run economic policy. They're sitting there unemployed, and the people who made out like bandits from it are those on Wall Street, and what they get with the financial reform is, you know, they can't do a little of this, they can't do a little of that, but basically their profits, their bonuses, are going to be largely unaffected. They're still going to be incredibly wealthy. I suspect most of them are laughing pretty hard right now.
AMY GOODMAN: Speaking of Wall Street deals, what about the deal with Goldman Sachs, that they would pay-what was it?-$550 million as a fine?
DEAN BAKER: Well, you know, that's a tough one. You get to some technical issues. You know, suppose the SEC had carried this suit through, they had brought suit against Goldman Sachs, could they have gotten more money? It's hard to say. You know, if you actually carry these things through, they get fairly complex. You don't know what judges will rule. You don't know what-if it went to a jury, I don't know how the trial would proceed. But in any case, I don't know what they would have come up with at the end of the day, so I can't necessarily take issue with the $550 [million], saying it was too small or too large. I wouldn't say one or the other.
What I would say is the question is, do we really think that this is going to change practices on Wall Street? This particular case was so egregious, I mean, it was almost Goldman Sachs put it up on a billboard: "We're ripping off our clients." The vast majority of cases where they're engaged in improper behavior of different types, it's not so egregious, it's not so clear cut, there's not such a clear trail. So I was glad to see them pay what I consider a reasonably, you know, stiff fine. Goldman, you know, they aren't going to-I don't think anyone is going to, you know, go hungry because of this. I mean, it's a company that's going to make, you know, somewhere in the order of $10 billion a year in profit, their bonus pool somewhere in the order of $22 billion.
AMY GOODMAN: Well, they made it back in after-hours trading. They made it back in after-hours trading that night.
DEAN BAKER: Yes. Yeah, so this is not-this is not going to hurt them in a big way. The question is, is it the sort of sanction that's going to make them think twice about engaging in improper behavior? My guess is that basically what it does is it tells them, you've got to be a little more careful; don't-you know, don't put up neon signs. You know, cover your rear.
AMY GOODMAN: We're coming up on the seventy-fifth anniversary of Social Security. Can you talk about why FDR originally established it and what you see, in the next few years under President Obama, will actually happen?
DEAN BAKER: Well, Social Security was started in the context-of course, it was the middle of the Great Depression. At that point, being old meant being poor. You know, if you couldn't work any longer, the vast majority of people had not put aside significant savings during their working careers. Pensions were held by relatively few people. So the poverty rates among the elderly were well over 40 percent. And to a large extent, if people were able to get by, it was only with the help of their children. And Roosevelt set this up with the idea this was going to provide insurance, this was going to provide security, for both the elderly but also disabled, people who get injured during or hurt during their work, or sick during their working career. And also people who die young, it supports their families.
And it was a remarkably successful program, by almost any reasonable measure. We have poverty rates among the elderly, now it's about ten percent, basically about the same as for the adult population as a whole. People who are disabled have some protection. Any number of my friends I know or have were assisted by it, because they had a parent die when they were still young, and it helped support them as they were growing up. So it was an enormously successful program.
It's also incredibly efficient. People don't appreciate this, but the administrative costs of Social Security are just about a half of one percent of what gets paid out in benefits each year. And if you compare that to the private sector, it'd be twenty, thirty times as much gets eaten up in administrative expenses.
So, it was about providing security for people who are working, in their old age, against illness, against early death. And it's been a great success that way.
AMY GOODMAN: Do you see a different trend under President Obama than under President Bush in terms of what will happen to Social Security? Ultimately, President Bush didn't succeed in cutting it.
DEAN BAKER: Well, I worry about what will happen under President Obama. You go back to when President Clinton was in the White House, President Clinton proposed cuts to Social Security. He was recently on a panel here at a program put on by the Peterson Foundation, and he just got right up, and he said, "I wanted to cut Social Security, but, you know, they wouldn't let me." Dick Gephardt, you know, at that time the leader of the Democrats in the House, and he said Dick Armey also opposed it. He goes, "They wouldn't let me, but I wanted to do it." You know, he just said that in very open terms, which is something we knew back in the '90s, those of us who were fighting against it. But it was just quite striking that this was one of the regrets of his presidency, that he wasn't able to cut Social Securit
And you have a lot of the same people that were in the Clinton administration who are back working with President Obama, and I do worry very much that many of them want to cut Social Security. One of the things that I-you know, I'm not longing for President Bush to be back in the White House, but, you know, there was a relatively unified stand among Democrats against President Bush's plan to cut Social Security. And that made it more difficult for him to get very far, and of course he never actually introduced a plan. Nothing ever got voted on by Congress. It didn't come that close to being done. When you have a Democrat in the White House and he says he wants to cut Social Security, or at least people close to him say that, then it becomes much more difficult, because it's not clear how you organize against that, because certainly you will have Democrats who want to support their president. So, again, I find it very worrisome that-you know, you're looking at his deficit commission, he appoints his two top appointees, the Republican and Democrat co-chair, who he picked. Both were quite explicit: they want to cut Social Security. So I do think we have to be very worried about cuts to the program under-during the Obama administration.
AMY GOODMAN: Dean Baker, economist and co-director of the Center for Economic and Policy Research, thanks very much.
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Remembering Social Security's Roots on Its 75th Birthday
Wednesday, 08/4/2010 - 12:18 pm by David Woolner
[David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute.]
Roosevelt historian David Woolner shines a light on today's issues with lessons from the past. **Photo: Ida May Fuller receives the first Social Security check.
On August 14, 2010, one of the New Deal's most famous and enduring programs, Social Security, will celebrate its 75th anniversary. While the debate over the role of government rages and deficit hawks advocate cuts to Social Security benefits to trim the federal deficit, Social Security once again finds itself in the public limelight. To gain a better understanding of Social Security, it is instructive to look back at how the act came into being and what kind of support it received when it was first proposed.
When Franklin Roosevelt took office in 1933, the plight of the aged and unemployed in the United States was grim beyond all description. With no unemployment insurance and private charities overwhelmed by the scale of the crisis, millions suffered a level of economic deprivation that is hard to imagine today. This was especially true for the elderly, where only 15 percent of the population was covered by private pension plans. Age discrimination, lack of adequate health care, and other factors had reduced employment among older men from roughly 70 percent in 1870 to roughly 33 percent in 1930. For women, especially those who had lost their husbands, things were even harder, as it is estimated that only 8.1 percent of older women held steady jobs in that year. As the Depression deepened, these dire statistics became even more pronounced, augmented by the burgeoning banking and financial crisis that wiped out millions of savings accounts between 1930 and 1933.
FDR's response to this unprecedented economic calamity led to a flurry of legislative activity in his first "100 days" in office. The legislation was geared toward reforming the banking and financial sector (via the Emergency Banking Act, the Glass Steagall Act and the Truth in Securities Act, among others) and providing immediate relief in the form of jobs (via the creation of the Civilian Conservation Corps, the establishment of the Federal Emergency Relief Administration and the launching of the Tennessee Valley Authority).
By 1934, however, FDR was thinking more and more about the structural failures of modern industrial capitalism and the critical need - especially in a world where economic hardship had given rise to fascist regimes in Europe and Asia - to create some measure of economic security. This was particularly important for those who were suffering most in the wake of the West's economic collapse: the aged and unemployed. On June 29, 1934, therefore, FDR issued Executive Order 6757, establishing the Committee on Economic Security (CES).
Chaired by Frances Perkins, FDR's Secretary of Labor and the first female cabinet member in US history, the CES was charged with developing "recommendations concerning proposals whichwill promote greater economic security," especially "security against several of the great disturbing factors in lifeunemployment and old age." The Committee received advice from an advisory council made up of leading figures from the public and private sectors (including representatives from business and organized labor), as well as a number of advisory subcommittees. By January 15, 1935, the Committee had completed its work and sent its recommendations to the President, who, after reviewing them, sent them to Congress. In his cover letter, FDR focused on four provisions. Three of those are well known and were incorporated into the final Social Security Act: unemployment insurance, old age benefits, and aid to dependent mothers, children, and the blind. Less well known are the provisions providing federal aid to state and local public health agencies. The President also recommended that the question of "health insurance" deserved further study as per his previous assertion that "the problem of economic loss due to sickness" is "a very serious matter."
Contrary to the impression one might glean from today's debates over Social Security, the original measure, although somewhat controversial, received a broad measure of bipartisan support. It passed the House by a vote of 371-33 and the Senate by a vote of 76-6 (with 81 Republicans voting for the Bill in the House, and 16 voting in favor in the Senate). It is also interesting to note that the first commissioner of the Social Security Board was a Republican, John Gilbert Winant, the former Governor of New Hampshire.
Today, despite the current discussions among some policy elites about the need to cut Social Security, the program remains extremely popular among the American public. Moreover, well respected organizations like the Center on Budget and Policy Priorities argue that recent fears over the near term health of Social Security are greatly exaggerated. Most mainstream economists also agree that the long-term health of Social Security can be secured much as it has been in the past: through an increase or the elimination of the Social Security tax cap, by boosting future revenues, and other adjustments that do not involve a reduction in benefits.
Whatever the solution, one would hope that both the White House and Congress will be guided by the same philosophical approach that inspired FDR. Reflecting on the plight of the aged and unemployed, he once remarked that the "true conservative seeks to protect the system of private property and free enterprise by correcting such injustices and inequalities as arise from it."