AmiBlue's picture

    From cat food to prime rib?

    I had expected the very worst from Erskine Bowles and Alan Simpson, but I confess that I was impressed  and pleasantly surprised with  their draft proposal for shoring up Social Security.  So was Peter Orzsag, which gives me pause, but Kevin Drum over at Mother Jones likes it, too, so maybe I’m not on too far wrong.  None of this affects me directly that I know of because I am already a beneficiary of SS.  I am concerned because of my children, but also because SS is the crown jewel of liberal policy and the thought of this country without it is, well - unthinkable.   

    I realize some, or a lot of you may not agree with me, but that’s why I’m writing this.  If you have objections to the proposals, I would like to hear them.  If I’m overlooking something or have misunderstood something, feel free to say so.  In the absence of contrary evidence, I have to think this is an excellent start.  The devil’s in the details, of course, and especially on something like this.

    The goals and added protections below are from the draft documents.  “The Plan” are simplified and somewhat paraphrased simplifications of the main points. 

    Strengthening Social Security [From Draft Document p. 43]


    • Strengthen Social Security for the long haul by returning the system to sustainable solvency.
    • Prevent the 22% across the board benefit cut projected to occur in 2037.
    • Reduce elderly poverty by putting into place a new, effective special minimum benefit.
    • Enable system to continue to provide for a secure retirement as the population grows older and Americans live longer.
    • Reform Social Security for its own sake, not for deficit reduction.

    Reduce Elderly Poverty  [From Draft Document p. 44]

    Add new protections for the most vulnerable:

    • Add a new special minimum benefit to keep full-career minimum wage workers above the poverty threshold.
    • Wage-index the minimum benefit to make sure it is effective both now and in the future.
    • Provide a benefit boost to older retirees most at risk of outliving other retirement resources.

    The Plan (Main Points)

    1.       Makes  payroll tax more progressive by raising wage level to which it applies.

    2.       Index retirement age to longevity:

             a.       From 67 to 68 in 2050 and

             b.      From 68 to 69 in 2075

             c.       Hardship exemptions for those unable to work beyond 62

    3.       Switch to more accurate measure of inflation (chained CPI [C-CPI]) for calculating COLAs.

    (As you might imagine, this switch lowers the COLA.  See Comparison between CPI-U and C-CPI-U)

    4.       Reduce future benefits for high earners and increase benefits for those at the bottom




    Or, up the Social Security Wage Base to $200,000.


    Increasing the wage base is included in Plan item #1. According to Orzag, approximately 15% of wages are not taxed now and the goal would be to up that to 10%.  I don't know how that translates into $$.

    I really struggle trusting the current group in Congress with Social Security. Let the Congress from 2026 deal with it.

    Somehow I doubt the 2026 Congress will be any better than this one.  There's an off chance that I'll still be around in 2026 and I would hope to have my SS paid on time if I am.

    Here is something that caught my eye over the summer.  Figured I'd hear more about it, but never did.

    Here's more and more.

    As usual, the ones that want to destroy SS were first to rush out and say the sky is falling when in fact it is not, sending the seniors into apoplexy.  People who scare old people piss me off.  Years ago the message was that SS would have to be reworked in order to make it sustainable for the future.  No one wanted to do anything about it then and of course, it is left to the last minute when it turns into a big scary ball of confusion.

    The "added provisions" in the chairmen's draft are particularly progressive it seems to me.  When I read those, I felt that Erskine and Alan really were sincere in their concern for old people and for maintaining SS.

    The "added provisions" in the chairmen's draft are particularly progressive it seems to me.  When I read those, I felt that Erskine and Alan really were sincere in their concern for old people and for maintaining SS.

    My wife and I watched Bill Maher a couple of weeks ago when Darrell Issa was on. I let her know he was a scumbag but she kept saying "He doesn't sound so bad." Then, I found a clip of him on Limbaugh. And she got it.

    Honestly, I find your above statement either naive or disingenuous. Alan "320 million teats" Simpson sincere about maintianing SS? I can't fathom that.

    What do you find objectionable to the Added provisions besides you don't like Alan Simpson? 

    I had expected the very worst from Erskine Bowles and Alan Simpson, but I confess that I was impressed  and pleasantly surprised with  their draft proposal for shoring up Social Security

    Kudos due you for keeping an open mind, especially during a blizzard of negative spin in the lliberal blogosphere, much of it seeming to be based on presumptions about the persons making up the panel based on the political labels assigned to them, rather than on facts about their recommendations.

    I'm  going to refrain from saying anything on topic, as my mind  still isn't made up; I feel haven't read enough on it. But I did want to say that because of this post, I will be paying much more attention to what you have to say in the future.

    Artappraiser, why do you always blame progressives first?   Most of the criticism of the Bowles and Simpson intervention in the progressive blogosphere is based on both the substance of their approach and the innappropriateness of being dragged into a deficit-cutting discussion when we are still in the middle of a profound recession with closwe to 10% unemployment.

    You hit the nail on the head with the presumptions , art. 

    What do you think of the argument many are making that raising the retirement age is fine for professional/white collar folks, but that it's unfair for those (factory workers, janitors, miners, etc.) with physically strenuous jobs?    

    Some of them have retirement plans, like my in-laws in railroad shops, but I understand that some jobs can beat you up.

    There is a provision for people who are unable to work past aged 62.  The higher ages will not apply.

    Yeah...We could create something similar to those new-fangled "death panels!"

    When Washington succeeds in getting the unemplyment rate down below 5%, then I will be happy to engage in a discussion of long-term fiscal balance.   But this whole discussion is jumping the gun in a major way.  I refuse to start banging my head against the deficit wall just because some damn beltway commission says, "Now is the time when we talk about the deficit!"

    The SS issue is not a part of the deficit issue and the chairmen state  that plainly in their draft.  If the democrats don't take charge of the SS argument, it will wind up in the republcan in-box, which mean a fix that puts us on the road to privatization or worse.

    With all due respect, this makes me sad.  That chairmen (one of whom is on the freaking board at Morgan Stanley, a former investment banker--and that's the Dem!) can make such recommendations, and get the attention and the approbation of mainstream Americans is hard to witness. 

    Please at least read Kuttner; I couldn't remember other detractors of the report's rec's, but too many were simply grisly--like co-pay for veteran care, loads of invisible taxes on the people who can least afford them, while those at the top profit on our labor, our taxes, our tax policy, the wars, health care, on and on.  This crap is crap.

    Amiblue, RJ Eskow linked to this page of opinions from the organization Strengthen Social Security.  The pieces might cause you to look at the program differently.

     And he believes that what's going on with Orzag is just what was predicted: he'd come in to protect us from the draconian Bowles/Simpson recommendations so that we could feel some relief, never mind that his rescue is still a screw job.  Eskow says:

    "Funny thing is, I was feeling bad about Orszag. I felt I'd been too harsh, too personal in my criticisms of him, even after his recent hit piece on Social Security and "the left." And I think I was. But that doesn't change the fact that he's become a relentless advocate for unneeded Social Security cuts, and his latest blog post on the topic is just another way to pursue the same goal. Sure, says Orszag, Simpson and Bowles are a little harsh.. Their plan would restore long-term balance by using 70% benefit cuts and 30% tax increases. But Orszag says they and the Republicans will accept a 50/50 split and progressives should be thrilled."

    It's just that we can't keep falling for the bogus framing offered by the Beltway pols and pundits.  They in no way represent what the public needs or wants   As CvilleDem asked a few days ago, "Why do they call my social security an entitlement now?  I paid into it all my life!"

    Thanks for the links, star.  First of all, I'm not an Orzag fan and I was leary of the proposals when I read that he thought they were good.  It wasn't until I read the draft that I thought it was a good place to start.

    I agree with kuttner that now is not the time to deal with deficits.  The subjuect has been broached, however, and it won't go away even if we try to ignore it.  If dems do nothing, cons will just shout louder and continue to claim it as their own and get votes.  The democratic leadership has been too passive and the cons have run with the script.

    Second, even bowles and simpson keep SS out of the deficit argument.  They declare plainly that it has nothing to do with the deficit.  Kuttner relies on increasing wages to make up the SS shortfall and I believe this is short sighted.  Wages have been stagnant, if not falling for the last decade.  I have seen nothing that indicates that trend will change.  The "wages" that are going up are the ones that are, for the most part, not taxed. has some powerful arguments against the chairmen's draft.  I'm not enough of a statistician or mathmetician to evaluate their figures, and I don't know where they're getting all the details they cite.  I do know that item #4 is at least partially wrong because the chairmen have made early retirement exceptions for people who are not able to work past agee 62.

    I still believe the chairmen's draft is a fair place to start when considering the future of SS.  There is no suggestion to privatize, and they have even added some provisions that seem big improvements over what we have now.  There was no mention of these in the StrengthenSS site that I saw.

    It would seem that if the current parameters are basically adhered to in the ongoing negotiations, this plan would be the Democrats best bet to deal with the social security issue in a way that keeps it from being dismantled.  Will it be ideal? No.  But the compromise will keep those who truly do want it to go away at bay, at least for awhile.

    I think the dog/cat food commission meme had been pushed so much that there many who calling the plan DOA out of principle.  Unfortunately the battle over whether something / anything needs to be done was lost awhile ago.  So the issue is not whether SS is sustainable or not sustainable in its current form, but rather since we need to rework SS to ensure its sustainability, how do we best do that.  In that regards, it is, overall, a conservative victory.  But if the liberals can keep it from going the way of privatization and reworked to help those who really need the income over those with higher incomes, then the liberals can achieve a few significant wins.  Not only that, but they can use this time to set the talking points about the future of SS that will help ensure its long-term survival during those days when the republicans take over Congress and the WH, should that happen. 

    You said it best, AT.  Those are my thoughts exactly.  After reading the comments here I have to say that liberals seem to have their fingers in their ears hoping the subject will change. 

    Your last point is a compelling one. With no overhaul now and a Rep. win in 2012 the overhaul could turn out much worse than now. With an overhaul now and a Rep. win in 2012, the R's would be ill advised to make it more severe. In the meantime if Rep's now are unreasonable O can make points. And an overhaul now could help turn around O's bad grades on the "deficit"(I give him my blessing to demagogue the crap out of this issue) plus take some SS arguments away from R's.

    Hi Ami,

    I just blogged about this the other day. When considering what is a reasonable deal, it really all is in the framing, isn't it?

    So if this is framed in terms of 'saving SocSec' from those intent on destroying it, and that the chances it gets destroyed down the road are increasing, then sure, it is reasonable to accept benefit cuts.

    But that seems the wrong frame to me. Here are some questions I find reasonable, and that reframe it differently:

    (i) How much is the shortfall in funding?

    About 1% of GDP, or $150 bn. That isn't a lot of money in the greater scheme of things. It could be easily covered by a tax on banks (on balance sheet, or on transactions, or both). It could be covered by a carbon tax (but that is regressive). It could be covered by dedicating just the funds from the expiring tax cuts on the rich to the SocSec trust fund.

    This of course means that it stops being purely a non-profit mutual fund 'pays-out-what-you-paid-in' structure. Which to some seems 'unfair', but that raises the next question:

    (ii) Is the problem with US society that the inequality in incomes that is currently trending wider fast, is not trending wider fast enough? Or should something be done in various ways to "bend the inequality curve", so to speak?

    In my opinion, the latter. In which case it is not that future benefits should be cut, but they should if anything be raised. And then be funded out of a less regressive taxation system.

    I realize it involves that dreaded notion of 'redistribution'. But how much redistribution are we really talking about? Putting its solvency beyond question requires, as I said, 1% of GDP of funding. And 1% of redistribution hardly seems excessive. 2% of GDP in redistributive funding would really improve social welfare. But then who wants social welfare, eh...? All these terms and frames that have been so vilified it is impossible to even mention them without raising hackles.

    So lets go back to another question providing some context for the 'fairness' question of 'taking from the rich to give to the working class'.

    (iii) Why exactly is there a shortfall in funding?

    Workers' wages haven't kept up with increases in productivity over the last thirty years. In fact they have, in real terms, fallen! Average income for the bottom 90% of households are down to levels last seen in the sixties while their productivity is up 50%, while incomes for the top 1% have tripled. And SocSec is largely funded out of a percentage of the income of that bottom 90%. If the Reagan revolution - of deregulation, destruction of unions, imbalanced raising and lowering of trade barriers (hurting workers and helping the managerial and professional classes) - hadn't kept workers' income from keeping pace with productivity, there would be no shortfall. I.e. the GOP-constructed economic framework has redistributed income upward from workers to the rich. And it has in the process - surrepticiously - defunded Social Security.

    In other words, the Social Security shortfall is part of a larger story - the general weakening of its funding base, that is to say the wages of the lower and middle classes. And, note that this weakening has been an intentional process. Government legislation and regulation has weakened those wages. And now, they turn around and get all outraged about 'redistribution' when it comes to covering the shortfall in SocSec? Chutzpah! Or something worse...

    So you can fix SocSec just by raising the real minimum wage to what it was in the sixties - i.e. some 30% higher than it is now. You can stop subsidizing the Health Care sector - Doctors, Drugmakers, Equipment makers - and bring costs in line with other developed countries. That would raise taxable worker income up 10% or so. You can pass EFCA and encourage unionization and do all kinds of things to roll back the Reagan revolution, and you're likely to indirectly close that SocSec funding gap without anything that looks too ickily like 'redistribution' or 'welfare'.

    I could go on. But you've probably had enough of my ranting...


    But then who wants social welfare, eh...?

    Promoting the general welfare is unConstitutional, Obey!

    If we ran the circus, eh, Obey?  There are all kinds of fixes for SS, health care, poverty, hunger and the economy that are theoretically possible, but (I hate to say it) how many of them are possible?  Trickle down economics has turned into trickle down religious dogma (or vice versa.  I don't know which came first)  The C street gang, where a good many of the rightwing pols hang out, preaches that you help the weak by helping the strong (seriously).  So what is actually possible in this upside down world here in the USofA?  And what is actually possible when you have democratic party leaders who lack the spine to fight for anything that could be labeled large D Democratic. 

    Raising the wage limit for taxation would be my first choice. That is in the chairmen's draft so I guess it's not enough to close the gap, or maybe they didn't go up far enough.

    But these three additions to SS make the chairmen's draft a good starting point for discussion in my view:

    • Add a new special minimum benefit to keep full-career minimum wage workers above the poverty threshold.
    • Wage-index the minimum benefit to make sure it is effective both now and in the future.
    • Provide a benefit boost to older retirees most at risk of outliving other retirement resources.
    • Reduce elderly poverty by putting into place a new, effective special minimum benefit.


    This is similar to the HCR bill in some respects. Have the middle class pay (with lower benefits, in this case - with a platinum tax in HCR) for the lower class, and let the rich have their tax cuts. Unbefuckinglievable that the Dems go along with this crap.

    In the plan, as far as I can see, they raise the payroll tax ceiling, but they don't remove it. If they just removed it, SocSec would be fully funded for eternity, and given runaway raises in income at the top, probably more than fully funded. Then we could talk about how to fiddle with the details about who gets what.

    In general, I don't see any urgency on SocSec. When the trust-fund runs out do you really think people are going to say, 'okay, that's the end of that'? Of course not. They'll just get the money out of general federal revenue. SocSec is NOT a subject on which Dems need to do the whole defensive-crouch routine. Quite the contrary. As for the restof the commission's plan, it is just arbitrary caps - like the 21% of GDP limit on stuff one can call "Government", which is wierd, and other stuff is just tax reform. The suggestions there are fine as far as I can see.

    But it's not deficit reform. Because the deficit problem is entirely an issue of insanely high and rising health care prices in the US. And no one seems to want to even touch that. Not even this commission with its bipartisan cover.

    'Circus'? ha. More like a Home for the criminally insane.

    Just got this in an email from a far-away friend who may have been lurking here, dunno for sure.  Timely coincidence, if not.  ;o)  Hudson has some pretty impressive credentials, and his hair is seriously on fire over some of these proposals via Obama.  I learned several key things that seem obvious once he spells them out in such plain language.

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