Interesting article in The Nation, Looting Social Security, by William Greider, says that “an impressive armada” of forces are lining up to pressure President Obama to make big changes in Social Security, Medicare and Medicaid that will drastically whack benefits to America’s elderly and needy.
Greider points out that in 1983 Social Security tax was raised to 12.4 percent, split between employees and employers, and as a result, the Social Security system has accumulated a vast surplus–now around $2.5 trillion and growing. This money, of course, has already been used by the federal government — over $200 billion each year.
Greider says, “Follow the bouncing ball: Washington first cuts taxes on the well-to-do, then offsets the revenue loss by raising taxes on the working class and tells folks it is saving their money for future retirement. But Washington spends the money on other stuff, so when workers need it for their retirement, they are told, Sorry, we can’t afford it.”
The idea of reducing Social Security benefits is being financed by Peter Peterson, an 82 year old Republican financier who made a fortune doing corporate takeover deals at Wall Street’s Blackstone Group. Perterson has committed almost $1 billion to this campaign and with his money has enlisted a number of foundations, think tanks, and economists to support his cause.
“Peterson’s proposal would essentially dismantle the Social Security entitlement enacted in the New Deal,” says Greider. “Peterson is financing a media blitz. His tendentious documentary–I.O.U.S.A.–opened in 400 theaters and was broadcast on CNN with appropriate solemnity. Last September Peterson bought two full pages in the New York Times to urge the next president to create a ‘bipartisan fiscal responsibility commission’ once he was in office (Peterson was for John McCain). This group of so-called experts would be authorized to design the reforms for Congress to enact. But Peterson does not want Congress to have a full, freewheeling debate on the particulars. The reform package, he suggests, should be submitted to a single ‘up-or-down vote by Congress, as is done with military base closings.’”
Greider says, “The Social Security fight could become a defining test for ‘new politics’ in the Obama era. Will Americans at large step up and make themselves heard, not to attack Obama but to protect his presidency from the political forces aligned with Wall Street interests? This fight can be won if people everywhere raise a mighty din–hands off our Social Security money!–and do it now, before the deal gains momentum. Popular outrage can overwhelm the insiders and put members of Congress on notice: a vote to gut Social Security will kill your career.”
Mr. Greider has his head in the sand if he doesn’t realize Americans are tired of the “same old” that permeates Washington. BHO is not going to change anything magnamus with the SSI system. He may be the perceived messiah but he is not God.
Like private pensions that were allowed not to be funded, Social Security has not been saved for over the years, but was essentially used to fund the government budget. It is a regressive tax that offsets what progressive qualities remain in the income tax.. Bush wanted to make it into the equivalent of 401(k)s, individual investments of limited resources. Like sending people to swim across the ocean with a tank of air and see how far they get. Longer lives and fewer children have also contributed to a problem, as have the low cielings on income subject to Social Security.