Nel's New Day

November 29, 2012

Stop the GOP in Rolling Back Our ‘Entitlements’

Filed under: Uncategorized — trp2011 @ 8:20 PM
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Let’s solve the whole deficit by rolling back Social Security and Medicare–that’s what the GOP insists. Just do away with the safety net, and the country will have no problems. As always, they’re wrong. Social Security and Medicare are not the cause of the deficit.

Raising the age for Medicare and voucherizing Medicare would shift costs onto needy people, lead to worse health outcomes, and drive people into poverty. Without enough money to pay for their health care, people will postpone treatment, resulting in higher costs because the health situation will require greater expenditures.  People cut from Medicare rolls would just end up on Medicaid or other government safety nets. A study by the Kaiser Family Foundations estimates that the net federal savings in 2014 of $5.7 billion would cost individuals, employers, and states $11.4 billion—twice as much. Also raising the age of Medicare would save very little because younger seniors, those between 65 and 67, require the least health care.

Raising the “full retirement age” for Social Security would be equally useless. About half of the beneficiaries start drawing benefits at age 62; a total of two-thirds begin their benefits before age 65. Full retirement age is already 66 and scheduled to increase to age 67. Deficit hawks use the excuse of increased life expectancy to increase the age for Social Security and Medicare to 67.  Half the people in the United States, however, particularly the poor and working-class people whose earnings are at or below the median, have a life expectancy at 65 that is unchanged since the 1970s.  In the poorer regions of the U.S., specifically the South, black males have a life expectancy of less than 65, sometimes as low as age 59.  

Former Sen. Alan Simpson (R-WY) wants to raise the age for Social Security because it was “never intended as a retirement program” because life expectancy when it was founded was only 63. Yet in 1940, people who got to age 65 still lived for many years. It’s just that more people are living to the age of 65 now, inflating the statistical life expectancy ages. In fact, life expectancy is dropping in the United States.

Rep. Paul Ryan (R-WI) is now negotiating to decrease the deficit. Consider his past plans. He proposed raising the retirement age to 70 and implemented progressive price indexing as well as privatizing the program. Ryan’s plan would effectively cut benefits for all except 30 percent of the beneficiaries.

Social Security has nothing to do with the deficit because it is fully funded. It’s not an “entitlement program” because people pay into that specific program. With the $2.6 trillion surplus, Social Security can pay at 100 percent for the next 25 years and 75 percent after that. There is no deficit in Social Security; Republicans just want to use it for a cash cow to give money to the wealthiest people in the country.

Changes now can make Social Security self-supporting in perpetuity. Payroll taxes are collected only up to $110,100 in 2012, putting the burden on low- and middle-income workers. Eliminating that cap would allow Social Security to pay full benefits for the next 75 years, according to a Congressional Research Service report. Sen. Bernie Sanders (I-VT) tried to raise the cap last year, but both the GOP and the media ignored his attempts preferring to continue the myth of the “bankrupt” Social Security.

Medicare is also in good shape according to the Medicare Trustee’s annual report from April 2012. “The Hospital Insurance (Part A) Trust Fund has sufficient reserves to pay out the full amount of Medicare Part A benefits until 2024—the same projection made in last year’s report.  Should nothing else change, and the Trust Fund reserves be depleted in 2024, the Trust Fund would still receive sufficient income from the payroll taxes and other revenue through which it is funded to pay 87% of anticipated Part A expenses.” The report is based on a poor economy; projections will improve with the economy.

The future of Medicare would be even rosier if the GOP were willing to curb health care costs. Bargaining for drug prices would save billions. The Independent Payment Advisory Board, created as part of Obamacare to help Medicare control costs, could provide a theory of necessary medical treatments. These are not “death panels,” and the GOP wouldn’t care anyway because they are willing to take people off Medicare and let them die.

The problems with Social Security funding began when Bush borrowed heavily from its surplus to hide the fact that federal taxes didn’t accrue enough revenue to pay for his wars and tax cuts. Wall Street’s failures increased Social Security costs while reducing its revenues. The government owes the Social Security Trust Fund the interest for the money that the government borrowed from the $2.6 trillion surplus, but opponents (think GOP) believe that the government is not obligated to pay this interest. The budget deficit was caused by the wars, the lower taxes, and the Wall Street failures, but conservatives want to blame Social Security.

In fact, the government has borrowed more from the Social Security surplus than it has from any other source in the world, including China. As a result, Social Security now “owns” nearly 18 percent of the federal debt, making it the largest single holder of US debt. The government owes almost twice as much to Social Security as it does to China and Hong Kong.

House Republican Majority Leader Eric Cantor (R-VA) provided some insight to the GOP Social Security views in a recent NPR interview: “We are going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want it to be.” In other words, the GOP doesn’t want to help people.

Another program that expires if Congress does nothing about it is the unemployment insurance extension. Conservatives don’t want to give one cent to all the people that they call “slackers,” but there’s an important reason for continuing this extension. Extending the current level of jobless benefits from states and federal government throughout the next year will add 300,000 jobs, according to the nonpartisan Congressional Budget Office.  Cutting off this extension will leave 2 million people without any benefits on January 1 and another 900,000 within the next three months.

The demise of Hostess Brands is a prime example of why we need to keep Medicare, Medicaid, Social Security, and the unemployment insurance extension. The company is doing just fine, thank you. They have 110 potential buyers salivating to take over the company, complete with Ho Hos and Ding Dongs—not to mention the infamous Twinkies. The court has given permission to give bonuses up to $1.8 million to the company’s top executives while all 19 corporate officers and “high level managers” must be employed for the next year. If all goes well, two of the officers will get even more bonuses in addition to their high salaries. CEO Gregory Rayburn, the “restructuring expert,” receives $125,000 a month.

While these corporate leaders, who drove the business into the ground, are making millions, 15,000 workers have lost their jobs, and none of the workers will get retiree benefits that they were promised. These people paid into the safety net; they deserve to receive them now. All of us deserve these benefits instead of giving the money to the wealthy.

November 24, 2012

Conservatives Don’t Get It, Don’t Quit!

One of my wonderful friends lives in Wisconsin, the anti-union state of the nation. She’s even a school librarian who has lost almost 10 percent of her salary since Scott Walker became governor through wage cuts and increases in her payments for health insurance and pension. Her following story clearly points out the class warfare between workers and the elite, sometimes called business owners.

“While I was waiting for my friend for dinner, I met a woman at the bar. Something about Obama came on the television, and she revealed to me that she was very sad that Mittens lost. I told her that I was on the other side of the aisle, and we had a moderately civil conversation. She said she was for Mittens because she owned a business and couldn’t afford Obama.

“As she was leaving, we got to talking about her boots that made her look much taller. She said, ‘Look at this,’ and she lifted her foot to show me the red bottoms of her boots, expecting me to be impressed. She did comment that the cost of the boots was equal to a mortgage payment. She asked about my footwear, and I held up my foot clad in my ancient but very sturdy Ecco sandals. She laughed.

“Later I Googled “red soles” and discovered the boots were Louboutin boots. I realized that our conversation was the race in a nutshell: Louboutin boots being afraid that the Ecco sandals were going to cost her too much money. It was an enlightening conversation.”

To save you the time of price comparison, Louboutin boots run about $2000; Ecco sandals can be purchased for under $50. The discussion shows the values of the wealthy in the United States who consider themselves to be far superior to the people who are educating their children.

Another story about insensitive superiority comes from Linda McMahon who poured $100 million into her two failed political campaigns for Connecticut senator. According to New Haven (CT) News 8, election campaign workers were not paid during the two days following Election Day. After they complained, they received checks that bounced. Twaine Don Gomes, who reported the problem, said his bounced check was accompanied by a little extra in the envelope. “Basically he handed me a check with a condom in it, told me I was screwed,” Gomes said. Maybe this means McMahon won’t be running a third time.

Stupidity meets superiority when Fox News pundit Andrea Tantaros dismissed the plight of hungry Americans, claiming that she would “look fabulous” if she were forced to live on a food stamp diet. Tantaros ignores the fact that the average Supplemental Nutritional Assistance Program (SNAP) household has a monthly income of $731, and 76 percent include a child, elderly or disabled person. Without SNAP, even more Americans would go hungry.

Twinkies will be gone—at least temporarily—after U.S. Bankruptcy Judge Robert Drain gave Hostess permission to wind down and sell off its assets. The decision means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, and 570 bakery outlet stores along with the loss of 18,500 jobs. Hostess said about 3,200 workers are needed for a year to help with the liquidation. The sale of $2.4 billion would equal about one year in sales.

As might be expected, the company blamed union members for its failure. Yet earlier this year, the CEO received a 300-percent raise (from $750,000 to $2,550,000), and other executives almost doubled their exorbitant wages. Unions had already cut thousands of jobs and transferred or totally cut benefits while the company raided the retirement fund for easy funds. Flowers Foods (Georgia) and Sun Capital (Florida) appear to be interested in buying Hostess, putting the Twinkies back on the market. (Sun Capital CEO Marc Leder threw the party where Romney talked about the 47-percent moochers last May.)

So all the people who worked for Hostess lose their jobs and probably most of their pensions, the CEOs make out like bandits, and the company is reincarnated in a “right-to-work” state where the new workers will be paid minimum wage and get no pension. It’s another failure of the American Dream and another blow against the middle-class workers.

According to Josh Eidelson at The Nation, “For about twenty-four hours, Walmart workers, union members and a slew of other activists pulled off the largest-ever US strike against the largest employer in the world. According to organizers, strikes hit a hundred US cities, with hundreds of retail workers walking off the job (last month‘s strikes drew 160). Organizers say they also hit their goal of a thousand total protests, with all but four states holding at least one.” Walmart’s communicator, Dave Tovar, disagreed. “We are aware of a few dozen protests at our stores today.” Addicting Information has a sampling of photos and videos showing the protests.

Several other company CEOs are supporting poverty for the majority of people in the United States so that the highly-paid executives can pay less in taxes. Toward this end, they are lobbying Congress to cut Medicare, Medicaid, and Social Security benefits.

Macy’s CEO Terry Lundgren is part of a coalition with the campaign called “Fix the Debt” that spreads the myth that the country’s biggest problems are long-term debt and deficits rather than long-term high unemployment. The latter problem is actually appealing to company CEOs because it keeps the employees in line. Other members of the coalition are from Goldman, Sachs & Co.; Morgan Stanley; JPMorgan Chase & Co.; General Electric; Bank of America Corporation; Bain Capital; Delta Air Lines; JetBlue Airways; United Parcel Service; Marriott; and Starwood Hotels & Resorts. Fix the Debt’s website had more information.

The election honeymoon is over: it’s time to get back to work because the conservatives haven’t stopped.


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