Washington Post Spreads Anti-Social Security Lies

Robert J Samuelson is a relentless foe of Social Security and Medicare who, true to form, filled his column, “The Affluent Elderly” in the Washington Post on May 16, 2011 with lies and disinformation on the subject.
Samuelson endorses House Speaker John Boehner’s call for “trillions of dollars in spending cuts” in any deal to raise the federal debt ceiling and states it must include “significant savings in Social Security and Medicare benefits” because “subsidizing the elderly is the biggest piece of federal spending”. “Savings” in Samuelson’s Social Security and Medicare proposals means cuts in benefits for “well-off seniors” which Samuelson claims is just “…the right thing to do”.
Samuelson supports his “affluent elderly” assertion on the fact that couples 65 and older have a poverty rate of “9.7% which was half the poverty rate of children under 18”. While neither of these rates casts any credit on the richest country in the history of the World, it is appalling that Samuelson sees increasing the rate of poverty for the elderly by cutting their benefits as “the right thing to do”. Samuelson sees further justification for cutting Social Security and Medicare in the fact that 30% of elderly couples were in a “high-income” group defined as those with annual income of $52,000 for a couple in 2009. Samuelson fails to note that his statistic leaves 70% of the elderly below $52,000 per year, a percentage his cuts would clearly increase and an amount no one should mistake as “affluence”.
Samuelson also ignores data from the Social Security Administration that Social Security payments are 100% of family income for over 15% of beneficiaries, more than 50% of family income for 55% of recipients and that the average benefit was $1170 per month, again, an amount no honest observer would mistake for “affluence”.
To Samuelson these sums to the elderly are just too rich and he proclaims that “People do not lose their obligations to the larger society by turning 65”. For Samuelson this means the elderly must give up benefits he argues are excessive and undeserved. Samuelson claims this $1170 per month is a “subsidy” and is just too much to provide for the old, the poor and the sick. However, no matter how many times Samuelson spreads this lie, Social Security and Medicare are not “subsidized” by anyone. They are fully funded programs paid for by taxes on workers throughout their working years and paid back to those very same workers in their retirement years. He compounds his lie by attempting to create a generational conflict, stating “Government over subsidizes the affluent elderly. It transfers resources from the struggling young to the secure old”. In fact, the so-called “secure old” have paid Social Security taxes all their working lives. And for those retiring in 2011 they have actually paid, since 1985, nearly $3 trillion in taxes in excess of benefits paid in those years. That money is held in trust by the Social Security Administration in the form of bonds constituting the sovereign debt of the U.S. Government, for the benefit of the workers who paid those Social Security and Medicare taxes.
Samuelson and his ilk frequently ignore the trust fund or claim that it constitutes “worthless IOU’s”. Or, like Charles Krauthammer in another Washington Post column, (March 18, 2011) suggests that the government could default on the bonds held by the trust fund with no effect on U.S. credit in the world and no serious objections from the tens of millions of U.S. workers who would thus be defrauded. Krauthammer’s expectations in this regard make Pollyanna look like a pessimist. Such a default would be much more likely to create a global financial crisis and push workers to massive protests.
Samuelson repeatedly demands sacrifice to solve our fiscal problems but only from the poor, the sick and the old, who are the main beneficiaries of Social Security and Medicare. He resolutely ignores asking for sacrifices from those in our society who have so richly benefitted from its bounty. He ignores the fact that Social Security and Medicare taxes apply to only the first $106,000 dollars of earned income which amounts to 85% of total earned income. If the 15% of income received by high earners were taxed for Social Security and Medicare, the system would be completely solvent. Why should only the poor and middle class pay these taxes on their full income? And why should only earned income be subject to Social Security and Medicare taxes? If unearned income, including dividends and capital gains, were taxed the same as the income of poor and middle class workers there would be funds for a truly generous retirement for all. But recipients of high incomes and unearned income can’t be touched according to Samuelson and his compatriots because they would all stop working and investing if they were taxed at the same rates as the poor and the middle class.
Of course, the risk to our economy that a fair tax system would stifle anyone’s work ethic is an acceptable one, especially given the otherwise unfettered scope our capitalist markets provide to individual greed.
Mr. Samuelson should do some soul-searching and ask himself if perhaps the policies and programs that provided multi-trillion dollar tax cuts for the wealthy and which pursue completely unfunded wars in Iraq and Afghanistan and against global terrorism are the real causes of our fiscal crisis and that their termination is the key to a its solution?
Answering “yes” would truly be “the right thing to do.”
Joseph L. Mayer
9340 Fairfax Street
Alexandria, VA 22309
Email: xtopherrobin@msn.com
Phone: 703-360-0709

Is Social Security a Pension Plan?

Floyd Norris writing in the New York Times on November 5, 2010 asks "Is Social Security a pension plan?" and answers "No." He supports his answer by noting that when Social Security was established (in 1935 in response to the Great Depression) it immediately paid benefits to individuals who had not paid Social Security taxes. Norris infers these initial recipients received a windfall benefit which forever taints as welfare the benefits of future Social Security recipients, which are fully earned by their social security tax payments. Yes, Mr. Norris, Social Security is a genuine pension plan with workers and employers fully funding the benefits paid to the workers in their retirement.

In fact, the government has collected approximately 2 trillion dollars more in Social Security taxes than it has thus far paid out, insuring that the Social Security system without any increases in taxes or reductions in benefits or improvements in US economic growth, will be fully funded for the next 30 years. Moreover, if average future US economic growth were to even modestly exceed the worst case projections of US growth used to calculate the 30 year horizon, the unchanged current system would be fully funded for the next 75 years. This represents a government fiscal policy of unprecedented and unmatched success, revealing talk of a Social Security funding "crisis" as insidious disinformation.

By contrast, trillions of dollars have been and are being spent for our wars on "terror" and in Iraq and Afghanistan without any funds being raised to pay for them. These huge, unfunded war costs are the cause of our fiscal crisis, not Social Security.

Of course, there is a problem with future Social Security funding. The 2 trillion dollar surplus in Social Security taxes which by law may be spent only on Social Security benefits, have been "borrowed" by the government to partially offset the huge budget deficits caused by simultaneously fighting wars and cutting taxes. In return, the Social Security trust fund has received U.S. government treasury bonds. Those who claim Social Security faces a funding crisis describe these bonds as "just paper" or as an "imaginary" trust fund. But these bonds are also held by China, Japan and other governments and individual investors in the U.S. and around the world. It is inconceivable that the U.S. would default on this sovereign debt including that held by the Social Security trust fund.

In the absence of an unthinkable default, the bonds held by the Social Security trust fund must be made good by either raising taxes or cutting Social Security benefits. Mr. Norris favors cutting benefits through a means test. High earners (he uses Warren Buffet as an example) would receive reduced benefits. Social
Security benefits are already justifiably structured to favor low wage earners and Mr. Norris' suggestion would not materially change it.

Mr. Norris does, however, raise a much more serious question. He asks,"If government spending must be reduced in some areas to deal with the soaring level of national debt, would it make sense to cut spending that benefits those who need it least?" Norris' puny answer to reduce Social Security benefits for high earners ignores the reality that the average Social Security benefit is slightly more than $1000 per month and the highest is only $2500 per month. These are not deep pockets suitable for reducing "soaring national debt". Norris joins the consensus among the wealthiest Americans that the place to balance the budget is on the backs of citizens with the lowest incomes in the country which includes almost all Social Security recipients.

The answer to Norris' question is, yes, of course, cut spending on "those who need it least." Most urgently that includes hedge fund managers with multi-billion dollar annual salaries paying taxes at a rate barely above payroll tax rates. If this country desperately needs to reduce its debt and deficit and make good on the bonds held by the Social Security trust fund, begin by taxing all income at earned income rates by eliminating the tax expenditure entirely for capital gains and dividends which go to those who clearly "need it least."

Maybe soon we will see articles in the New York Times truthfully and informatively reporting that Social Security is fiscally sound and that the Departments of Defence and Homeland Security and the Office of the Director of National Intelligence are bankrupt.

The Chump Generation?!

Robert J. Samuelson is a liar and a provocateur. In his Washington Post op-ed March 8, 2010 he once again blames Social Security, Medicare and Medicaid for the fiscal woes of the US economy.

In a report ostensibly reviewing polling reflecting differing opinions held by separate generations he reaches the conclusion, without any substantiation, that the "millenials could become the chump generation. They could suffer for their elders' economic sins, particularly the failure to confront the predicable costs of the baby boomers' retirement." Facts present a much different picture. Today, baby boomers aged 67 and eligible for full Social Security benefits have for 25 years been paying Social Security taxes at a rate far in excess of the amount necessary to pay current benefit costs. This has resulted in a Social Security trust fund surplus nearing 2 trillion dollars. Samuelson's statement that there has been a "failure" to confront predictable baby boom retirement costs is a lie. And his description of the millenials as the "chump generation" is a shameless incitement to generational conflict.

Unlike the Social Security system surplus, two fiscal policies of the US government over the past 25 years are abject failures. First, trillions of dollars of military spending have been expended on wars and weapons of profoundly questionable value to our national security without even a pretense of raising the taxes to pay for them. And second, tax policy itself has been corrupted to provide huge tax cuts to the wealthiest and most favored of Americans.

Samuelson and the Washington Post know these facts, and their relentless efforts to shield their sponsors among the rich and powerful leaders of the national security state from their responsibility for the US economy's fiscal catastrophe by placing it upon the poorest and least powerful members of society must be resisted and defeated.