Friday, February 20, 2015

Does Social Security Work? You Betcha!

Will Social Security "be there for me" when I need it?  That is the ultimate question, so far as most people are concerned. What about all those predictions that the system is on the verge of "bankruptcy," or that it is nothing but a glorified "Ponzi scheme"? Does it need to be "privatized" in order to survive?

Whenever anybody tries to persuade you of any such claptrap, simply tell them to read Social Security Works! Why Social Security Isn't Going Broke and How Expanding It Will Help Us All, written by Nancy J. Altman and Eric R. Kingson. and just recently published by The New Press. She is a former faculty member of both the Harvard University Law School and its Kennedy School of Government, She is currently a member of the Boards of the National Academy of Social Insurance and the Pension Rights Center and is the author of The Battle for Social Security: From FDR's Vision to Bush's Gamble. He is a professor at Syracuse University's School of Social Work, and the co-author of four books on Social Security and Medicare, including Ties That Bind: The Interdependence of Generations.   

The book is divided into five parts: The Facts; The Challenges; The Solution; The Threats; and Next Steps. Each part includes two or more essays:

I.   Facts: The Changing  Conversation; Social Security Works For All Generations.
II.  Challenges: The Precarious Lives of Today's Old; The Coming Retirement Income Crisis; The
                          Debt Owed To Those Who Care; The New Gilded Age
III. Solution: Expand Social Security For All Generations and Paying the Bill
IV. Threats: The Billionaire's War On Social Security; The Conventional "Wisdom" Is Just Plain
                      Wrong
V. Next Steps: There They Go Again: Why the Supporters of Social Security Must Remain Vigilant;  
                        Passing Social Security Forward: A Legacy For All Generations 
 
The book also includes four appendixes:

A: Additional information About How Social Security Works
B. Additional Information About The Social Security Works All Generations Plan and Other    
Proposals, including Cost and Revenue   
C. Descriptions of Various Social Security Expansion Legislative Bills and Organization's Plans
D. Leading Organizations Working to Expand Social Security 


The entire book is a treasure trove of reason and truth, with reams of statistics, so I will highlight a few of my favorites. For example, The Coming Retirement Crisis reveals that the "difference what people have saved for retirement and what they should have at this point--is a staggering $6.6 trillion, and half of Americans have less than $10,000 in savings."

According to a poll conducted by National Academy of Social Insurance in 2013, 89 percent of respondents believe that " S.S. benefits are more important than ever," 84 percent did not mind paying its payroll tax "because it provides security and stability to millions," and 75 percent believe "we should consider increasing S.S. benefits."  Even 81 percent of Republicans agree with statement #1, 74 percent agree with statement #2, and 62 percent agree that we should consider raising benefits. Broken down by generation, the positive responses to #1 ranged from 84% of "Generation Y to 93% of "baby boomers"; by family income, the positive range is 87% for those in the $75,000 to $99,999 bracket to 93% for those  making between $30,000 and $49,888.  On "consider raising benefits," the lowest positive response is 72% for the "silent generation;" 67% for those making $100,000 or more; and 62% for Republicans.

SO WHERE DOES THE "CONVENTIONAL WISDOM" COME FROM AND WHY DO SO MANY PEOPLE REGARD IT AS "SOMETHING EVERY KNOWS, LIKE THE SUN RISING IN THE EAST (WHICH OF COURSE IT DOESN'T REALLY?).

The answer is "THE BILLIONAIRES' WAR AGAINST SOCIAL SECURITY," along with the obviously intertwined circumstance "that much of the press has reported only one side of this story using "facts" that are misleading or flat-put wrong while ignoring others." This litany of despair "has resulted from a deliberate campaign, backed by hundreds of millions of dollars and a cottage industry of academics who have built their careers on criticizing Social Security. Together, these forces have brought a veneer of respectability to claims that Social Security is unsustainable, in crisis, and spawning  competition and conflict between generations." <Or as the pompous governor of my home state has openly bragged on numerous occasions: DIVIDE AND CONQUER!>

Broadcasting that campaign "have been journalists and politicians who have either willingly advanced an anti-Social Security agenda or have fallen prey to myths, half-truths, and a few outright lies that have been masquerading as incontrovertible facts." Their three-decade long assault is a "tale of three commissions: " the one chaired by Ayn Rand devotee Alan Greenspan in the early 1980s, the Bipartisan Commission on "Entitlements" and Tax Reform of the 1990's  which branded S.S., Medicare, and Medicaid combined as one humongous "entitlement crisis," and the Obama administration's  National Commission on Fiscal Responsibility and Reform, chaired by Erskine Bowles and Alan Simpson. In the process, S.S. was calculatedly transformed from a program of social insurance paid for by a carefully calibrated "payroll tax" on employers and employees over the entire work-life of the latter to an unearned "welfare handout," whose escalating cost would bankrupt not only the system itself, but the entire United States. (The same slight-of-hand stigmatized the Affordable Care Act as "Obamacare.") The "money behind the campaign" that effected the triumph of that "Big Lie" has been primarily that of Peter G. Peterson, former Nixon Secretary  of Commerce, one-time CEO of Lehman Brothers, and the 147th richest American, with a reported net worth of near $3,000, 000,000. He has bankrolled several foundations dedicated to obliterating Social Security, including Fix The Debt, of which his son Michael is president and whose board of directors includes both Bowles and Simpson.

In an absolutely mind-blowing table titled THE RETIREMENT SAVINGS OF SOME FIX THE DEBT CEOS WHO WANT TO CUT YOUR SOCIAL SECURITY spells out in graphic detail their "Total CEO Retirement Assets," "Estimated CEO Monthly Pensions," and "Employee Pension  Deficit Fund." The list includes the CEOs of 13 of the nation's richest corporations. It could just as well be captioned " The Personification of Greed and Hypocrisy." (See p. 155). Their total CEO retirement assets range from a "low" of $20,677,631 to a high of $78,084,417, while their estimated monthly pension benefits range from a "low" of $113,363 to a high of $428,092. <The average monthly Social Security benefit is $1,294; for "widowed caregiving parents with two children" it is $2,593.> Estimated employee pension fund deficits range from $454,000,000 at Corning to $21,756,000,000 at General Electric. "Independent Living" accommodations at the newly-opened Primrose Retirement Community" in my hometown start at $2,695/monthly for a one-bedroom apartment; $3,595 for "assisted living.">

The best feasible "SOLUTION", according to Altman and Kingson, is the "Social Security Works All Generations Plan,"(SSWAGP)-- " a comprehensive package of benefit and revenue changes that expands Social Security's protections in important ways."
1. Increase benefits for current and future beneficiaries by 10%, up to a maximum of $150 monthly
2. To prevent erosion of benefits over time, use the Consumer Price Index for the Elderly
3. Minimum benefit of 125% above poverty for those reaching retirement age after 30 years work
4. Twelve weeks of family leave upon birth or adoption of child or illness of covered worker
5. Up to five years of SS benefit credits for care of one or more children under age 6
6. Restore student benefits up to age 22 in case of death or disability of covered parents  
7. A new benefit of $1,000 upon birth or adoption of a child
8. Eliminate maximum taxable wage base, giving credit for those contributions
9. Dedicated 10% marginal income tax on those with income more than $1,000,000
10. Gradually increase contribution rate by 1% for both employers and employees
11. Gradually diversify SS portfolio by investing 40% of its reserve in broad-based equity funds
12. Treat all salary deduction plans the same as 401(k) with respect to definition of SS wages
13. Combine OASI and DI Trust Funds

The authors' assert that, except for modest in the SS premium rate, these revenue sources "would have no impact on the vast majority of Americans." The existing refundable Earned Income Tax Credit could be expanded to offset any increased burden on lower income workers.  These various revenue sources could be "mixed and matched depending upon how substantially the nation want to expand SS," and phased in gradually to blunt impact on individuals."  They would build upon SS "existing financing and retain premiums as the primary source of income, consistent with the earned-benefit nature of Social Security."  They also provide precise estimates of how much each of their proposals would cost in the taxable payroll and in percent of GDP. In almost every case, the increased cost would amount to considerably less than 1% of either one. They are all "fully affordable." So what's the hang- up? "Standing in the way, they state flatly, are determined, powerful, and well-financed foes," which they spell out in frightening detail as "THE BILLIONARIES WAR AGAINST SOCIAL SECURITY"             
         
This is most definitely a war and one which the vast majority of Americans are losing! The ammunition for mounting a successful counter-offensive lies clearly between the covers of SOCIAL SECURITY WORKS!