Deficit Commission's Rumored Deal Would Pit Middle-Class Seniors Against the Poor - HuffPo

[WillyT]

Deficit Commission's Rumored Deal Would Pit Middle-Class Seniors Against the Poor
Richard (RJ) Eskow - Huffington Post
Consultant, Writer, Senior Fellow with The Campaign for America's Future
Posted: September 9, 2010 12:07 PM

<snip>

If back-channel sources are correct, the Deficit Commission is finalizing a deal that would increase Social Security benefits slightly for low-income recipients while cutting them for everyone else. The Commissioners apparently believe that putting this "progressive" gloss on a package of unneeded cuts would allow them to move forward with their predetermined anti-Social Security agenda.

The new proposal would pit middle-class seniors against the elderly poor, forcing them to compete for a stripped-down pool of dollars. The end result would be the one that many Commission members have pursued for years: to cut the most stable and successful program in the Federal government's history.

Accounts of this pending deal come from the top-secret, behind-a-firewall, inside-the-Cone-of-Silence proceedings of the Commission itself, which is why they can't be officially confirmed. (Remind me again: Why are such critical issues being debated in secret, only to be presented to Congress for ratification after the November elections?) But if these reports are correct -- and there is good reason to believe they are -- some members of the Commission presumably believe this strategy would confuse and divide the many Americans who oppose Social Security cuts, while defusing the growing resistance to their actions among progressive members of Congress.

The Commissioners have clearly been stung by the nickname bloggers have given them: the "Catfood Commission." This recommendation would take the edge off that name, since they could now claim they've made sure nobody will be eating Purina Old Folks' Chow as a result of their actions. It would also give them chance to bait their opponents: Don't you care about poor people? But there are a number of problems with their proposal, and there are fairer and more cost-effective ways to help impoverished seniors. Here's what this new proposal gets wrong.

They're misreading the public: First, progressives aren't the only ones opposed to cutting Social Security. Recent polling by the Celinda Lake organization showed that seven out of ten voters opposed cutting benefits for people earning over $30,000 in order to reduce the deficit. 76% of independents oppose cutting Social Security to reduce the deficit, as do 77% of Republicans -- and 76% of Tea Party supporters! Putting an antipoverty gloss on overall cuts won't impress these voters. Nuanced arguments -- "we're cutting the program to save it" or "we're not reducing the deficit, we're stabilizing the program" -- will be lost on angry voters with finely-tune BS detectors who have contributed to the program for years.

It's a broken promise: This policy would violate a compact the United States government made to generations of its citizens: Pay into the system and you'll receive what's been promised in the end. Social Security is a self-funded system that provides some income security during old age or disability. Using employee and employer contributions to reduce poverty would be a redirection of the money that working Americans and their employers paid to help them when they're disabled or retired. If the Commissioners have a new antipoverty mission, there are better ways to pay for that.

There aren't enough "rich" beneficiaries: The Commissioners will no doubt make the argument that Warren Buffett and others in his income shouldn't receive the same benefit income as somebody who's struggling to make ends meet. But there aren't enough Warren Buffetts in the system to make a difference. Since Social Security benefits are capped at a relatively low level, Warren Buffett isn't likely to receive any more in benefits than someone who earned less than $100,000 per year.

If benefits are going to be tied to overall income and wealth in the future, cuts will have to reach deep into the middle-class in order to make any real difference -- especially if there's a slight benefit increase at the low end. The number of Social Security recipients who are still impoverished (from 2000-2002 data) is 1. million, or 8.7% of the elderly. Since Social Security currently keeps 13 million seniors out of poverty, that leaves a lot of stable or increased benefits that would have to be offset by by reducing benefits for middle-class recipients in order to cut overall costs.

<snip>

More: http://www.huffingtonpost.com/rj-eskow/deficit-commissions-rumor_b_710612.html

:kick:

[gratuitous]

1. Nobody could have foreseen

18 multi-millionaires making recommendations for the great unwashed have absolutely no clue that most people live hand-to-mouth. Alan Simpson has his pile, what's the matter with you?

Means testing social security is an extraordinarily bad idea.

[exboyfil]

10. If needs testing gets too onerous

then I am going to do a John Gault at 55 and spend down my 401(k). With my wife's Social Security (or a roommate if she is gone) I could live on the current benefit alone (maybe not a great life but at least I will have the years after 55 to enjoy myself). Males in my family don't live too long anyway.

Every working day of my life, I have been kicking in from 5.7% to 6.2% and my employer has been kicking in the same amount (thus reducing my compensation for my labor).

Those making between $50K-$105K are carrying the rest of the system already. Many of the current middle class retirees paid a much lower percentage of their income.

Those over $105K should subsidize the system just like those making $50-$105K. No additional needs testing than what is already ready done with the tax code (do we really want to decrease the national savings rate on a long term basis?).

Do something about the trade deficit so that U.S. workers can actually go back to making things and being compensated for it.

Assets and other income should not be considered for Social Security. The progressiveness has already been addressed in the benefits formula (90%,32%, and 15%).

[bobbolink]

2. Yet,, when I keep saying that the plan is to keep middle class people fighting poor people, I am

vilified.

What will it take?

When will progressives begin to see that they need to include poor people????

Or do you all just want to fight us to the (our) death?

[WillyT]

7. This Would Be The Perfect Time, Since Many Of The Former Middle Class Are Now Of The Newly Poor...

The Rich do none of the work and pay none of the taxes,
The Middle-Class does most of the work and pays most of the taxes,
And the Poor are there just to scare the shit out of the Middle-Class. - George Carlin

Something like that... if I'm remembering correctly.

:shrug:

[another saigon]

3. "progressive" gloss?

lol. Like any progressive/liberal/leftist would not recognize the bait and switch? They really do believe we are stupid. Or helpless?

[Fumesucker]

4. Why is one group "seniors" and the other "elderly"?

That language jumped out at me..

[dkf]

5. My understanding is SS benefits are already tiered so that those at the lower end get more for their

Contribution than the higher end.

It sounds like they are further tweaking it in this direction.

[exboyfil]

11. The split from last year

was as follows:

90% of income for incomes up to about $9K
32% of income for incomes between $9K and $45K
10% of income for incomes above $45K until $100K (those above $100K do not get taxed on their amount above $100K and they don't get additional benefits for that amount)

Effectively what happens is those making above $50-$60K until $100K are subsidizing the system.

[dkf]

15. So isn't the middle class vs poor rhetoric a little overblown considering we already do this?

[tularetom]

6. Anything to avoid pissing off rich people

And WTF is the "Deficit Commission" doing messing around with SS anyhow? It has no relation to the deficit.

If they're so concerned about SS future, all they need to do is eliminate the cap on withholding.

[exboyfil]

12. Ding Ding Ding

we have a winner. Remove the cap, eliminate excess contributions by reducing the rate of withholding on everyone, draw down the trust fund, and go with a complete pay as you go system. We should have never had this B.S. trust fund. It was just a slush fund for additional deficit spending. Now that S.S. wants to present the Treasury Bonds for payment, it is now a problem. I don't think so.

[RKP5637]

8. Many Americans went to sleep and woke up to a country like this and now they wonder WTF. They've

slept their rights away by being asleep at the wheel over the years when/if voting. Throughout the years they voted their country away. Now we have this fine mess. USA, Inc. Divide and Conquer. Pit one portion of the country against another.

[Whisp]

9. back channel sources - that's enough for me.

*throws post in trash.

MEOW

[WillyT]

13. Oh Yeah... I'm Sure He's Making It All Up...

Did you ever read the book, or see the movie, 'All The President's Men'?

You see... a lot of reporters have sources that do not want to be named for fear of retribution. And because of such sources, or sourcing if you prefer... BIG STORIES GET OUT TO THE PUBLIC!

In fact... if it weren't for unnamed sources, we'd be even more in the dark than we already are.

But then... some people only want to hear what they want to hear...

:shrug:

[RKP5637]

16. +1000 +++ n/t

[Whisp]

18. ''some people only want to hear what they want to hear...''

well said.
I will believe it when it takes on the Watergate proportions and coverage you say this story is, till then it's nothing more than baseless stupid rumours.

Till then I will believe this:
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=9064794

Some side points on the "Cat food" Commission on Fiscal Responsibility and Reform -
Just a couple of procedural notes in the ongoing discussions about the commission and it relevance to actual legislation.

- Any recommendation forwarded from the commission requires 14 out of 18 votes. Only 5 "nays" are a block on any proposal, across the board.

- The proposals go to Pres. Obama, not the Congress. They aren't writing a bill or enacting legislation.

- Any proposals that get forwarded to Congress are up for a vote.

- Any legislation passed that runs counter to the Administration's goals are liable to a veto.

All the players know that. It's more a process, imho, than a nefarious plot to gut Social Security.

I truly feel that Soc. Sec. will remain sacrosanct, if that's the right term, in our national framework.

~ pinto

[WinkyDink]

14. The resultant fury will finally achieve Obama's goal: Bi-partisanship.

[WillyT]

17. LOL !!!

A-Yup

:evilgrin:

:hi: