Reagan also at the same time passed the law that broadened who would be eligible for SS Disability Insurance. This set the stage for imploding this Trust with subprime disability.
In comes Clinton and his brand of neo-liberalism. He creates the policies that sent US corporations overseas leaving incredibly high unemployment at the same time he 'reformed Welfare' to Welfare to Work with these same Republicans. So, they ended the War on Poverty program Welfare knowing what is now hundreds of millions of US workers over these few decades would be cycled through this broadened version of Disability as states were required to get people off employment and Welfare rolls. But there were no jobs! Ergo, they knew they would be sent to Disability and implode that New Deal/War on Poverty program. That is what has happened through Bush/Obama as unemployment has soared.
Before Democrats say Clinton and Democrats in Congress couldn't do anything remember---Clinton was elected to veto legislation as detrimental as ending Welfare while sending all jobs overseas. He did it because he wanted to. Obama knew people were being shuffled and hidden from unemployment stats and he knew that simply recovering hundreds of billions of dollars in corporate fraud would fund the entire Public Works Program just as FDR did sending all those people hiding from unemployment as Disabled and attending school to actually go to work earning strong Federal wages and protected by strong labor laws. He did not do this because he did not want to---Republicans had nothing to do with that. Instead, he and neo-liberals in Congress have watched as subprime Disability implodes SSDI and soaks our Social Security Trust.
Right now SSDI is empty. So, what is a REAL PROGRESSIVE LIBERAL LABOR AND JUSTICE POL TO DO!
Well, as Bernie Sanders said---we do not want to stop sending funds from SS to Disability because we don't want tens of millions of people thrown with no money simply because there are not jobs.
WE WANT THAT PUBLIC NATIONAL WORKS PROGRAM THAT DOES NOT PRIVATIZE THE ENTIRE PROCESS WITH PUBLIC PRIVATE PARTNERSHIPS THAT SIMPLY MOVE FEDERAL MONEY TO GLOBAL CORPORATIONS WHICH WILL EXPLOIT LABOR TO INDENTURED SERVITUDE.
Obama and Congressional neo-liberals and Republicans are gearing up for the privatized version----Bernie rightly calls for a national public version.
So, if we are saying yes to transferring more money from the Social Security Trusts which is causing its solvency to fall by decades---how do we protect that? As Bernie says--we make the small fixes that bring more revenue directed at higher wage earners and corporations. Remember, corporations have fraudulently evaded their share of payroll tax payments for decades as well and simply recovering that will make SS Trust flush with funds. Meanwhile---we shake global market economy by rebuilding a US economy run by domestic small and regional businesses. We do that in each state---so, Maryland being the most global corporate of states will get rid of global corporate control of development and be replaced by small and regional businesses.
THIS IS HOW YOU SAVE SOCIAL SECURITY. RIGHT NOW, ALL DEMOCRATS IN CONGRESS AND OUR STATE HOUSES ARE CLINTON NEO-LIBERALS
Both Republicans and Clinton neo-liberals are doing Kabuki Theater on these safety net issues both intending to dismantle them. Both Republican and Democratic voters like and want Social Security, Medicare, and Disability to stay! Believe me----Disability payments for most are already poverty so cuts like this will leave people unsheltered, without transportation, and unfed.
Little recourse seen for Democrats on Social Security rule change
By David Lawder January 12, 2015 6:39 PM
WASHINGTON (Reuters) - Democrats appear to have little recourse against a House of Representatives rule change that could prompt a steep cut to Social Security disability benefits next year, congressional aides said on Monday.
The new legislative rule, pushed through with little notice last week, would prohibit a routine transfer to the Social Security Disability Trust Fund, which is expected to be depleted by late 2016.
Without an injection from the main Social Security retirement fund, the disability program would have to cut benefits by some 20 percent, only paying out what it can collect from payroll taxes.
Congress approved the last such "reallocation" transfer in 1994 after several in the 1980s under President Ronald Reagan.
Republicans say they passed the rule change to force reforms to the disability program, which they claim is rife with fraud and mismanagement. Democrats, unable to stop the shift, have called it a "stealth" move to cut benefits.
U.S. Senate Majority Leader Mitch McConnell smiles after he ceremonially swore-in, in the Old Senate … On Monday, Senate Democrats issued a plea to Republican Senate Majority Leader Mitch McConnell to oppose an "audacious" rule change that would "hold hostage" benefits for some 9 million disabled Americans.
"It only increases the chances of yet another unnecessary manufactured crisis, akin to shutting down the government or threatening the full faith and credit of the United States," Richard Durbin of Illinois, the No. 2 Senate Democrat, and seven others wrote in a letter to McConnell. They asked him to "forcibly reject" the change.
McConnell has not commented on the request, but Republican aides say there is little he can do about a legislative rule passed in the House. Since revenue measures must originate in the House, the House rule would ensure that a routine transfer could not take place.
A Democratic aide on the House Ways and Means Committee acknowledged that not much can be done about the rule change until 2016, when the disability fund is close to depletion and an election-year showdown over benefit cuts could occur.
Republican Representative Sam Johnson, of Texas, who authored the rule change, said it was meant to protect Social Security retirement benefits from being "raided" by the "fraud-plagued disability program" and to encourage reforms.
As Congressional neo-liberals pretend Republicans are attacking Social Security let's return to Obama's use of executive order to create myRA. Remember, Obama wanted to use CHAIN CPI to lower Social Security payments but when progressive groups fought this he went straight to actually building the privatized structure. Those progressive groups fighting against CHAIN CPI declared victory but have been silent on the intention of myRA to do worse. This is how you know an organization or pundit is Clinton neo-liberal----they come out fighting just as a policy is getting ready to be installed----but are silent early on when people could be organizing against it. WHAT GROUPS ARE SHOUTING myRA IS THE REPUBLICAN POLICY TO PRIVATIZE SOCIAL SECURITY?
STOP ALLOWING CLINTON NEO-LIBERALS TO CONTROL THE PEOPLE'S DEMOCRATIC PARTY------RUN AND VOTE FOR LABOR AND JUSTICE IN ALL PRIMARY ELECTIONS!
Wednesday, Feb 5, 2014 07:43 AM EST Salon
The quiet war on Social Security: Meet the dark side of MyRA Some Democrats want to expand Social Security -- but a new effort to push 401(k)-style accounts poses a real threat
A year ago, the Social Security expansion movement was limited to dreamers, and had little to no clout on Capitol Hill. But thanks to some dogged determination, liberals began to recognize that the country stood at the precipice of a retirement crisis. Years of conversion from defined-benefit pensions to defined-contribution 401(k)-style plans made returns uncertain and subject to the vicissitudes of the stock market (as well as the greed of mutual fund managers, who subjected accounts to high fees, eroding the balances). Meanwhile, the savings rate plummeted amid stagnant wages (indeed, the savings rate is currently at historically low levels). What was once a three-legged retirement stool – pensions, savings and Social Security – had been whittled down to one. And the only viable way to avoid a disaster of baby boomer seniors falling into mass poverty is to expand the last leg of the stool, Social Security.
This notion of expansion gradually began to pick up adherents, from activist organizations like MoveOn.org and the Progressive Change Campaign Committee to think tanks like the New America Foundation. In November, Elizabeth Warren endorsed expanding Social Security in a speech on the Senate floor. The expansion movement had some momentum, and tangible legislation from liberal Tom Harkin and moderate Mark Begich to rally behind.
It is in this context that you must place the myRA policy. The Obama administration clearly heard the growing demand to do something about retirement. In a speech in Pittsburgh the day after the State of the Union address, President Obama said that “if you’ve worked hard all your life, you deserve a secure retirement,” adding that most workers don’t have a pension anymore, and while “a Social Security check is critical … oftentimes that monthly check, that’s not enough.”
But instead of going ahead and endorsing Social Security expansion, Obama introduced myRA, a glorified savings account deducted from your paycheck in amounts as little as $5. It’s portable from job to job, and it earns a small amount of interest, the same as the Thrift Savings Plan for government workers. The account can never go down in value, and it’s backed by the full faith and credit of the U.S. government. Plus, you can withdraw the funds whenever you want without a penalty.
This is a nice thing to have, but has little to do with retirement. Americans don’t need a new savings account vehicle; they need higher wages so they can actually manage to save a few dollars out of every paycheck.
In fact, every benefit of the myRA – portability, easy access, protected investment, small interest accumulation, government protection and no fees – could be accomplished through an interest-bearing savings account distributed through the post office, as it did from 1911 to 1967. Postal banking, recently endorsed by the inspector general of the Postal Service, would serve a triple role – promoting savings, helping the Post Service survive, and cutting out the greedy middlemen like payday lenders and check cashing stores that cost the 68 million Americans with little or no access to financial services nearly $89 billion a year. The inspector general says that postal banking, too, could be accomplished by executive order.
In fact, postal banking avoids one potentially malign implication of myRA. The accounts are capped at $15,000: After that, the account holder must roll them into a Roth IRA, subjecting the money to the whims of the market – and handing it over to Wall Street fund managers. You can see myRA in this context as a veal fattening pen for small savers before they get led into the Wall Street slaughterhouse. The administration has yet to finish the Department of Labor’s fiduciary rule, which would force investment advisers to act in the best interests of their clients. Until that gets done, it’s foolhardy to funnel more savings into Wall Street’s hands.
The administration would tell you that the myRA is a small-ball solution merely because it was all they could accomplish without Congress’ involvement, and that it’s a good first step, to get people to think about saving for retirement. But you have to understand what the administration wants Congress to do about retirement security. The president said it in his Pittsburgh speech: “Let’s fix an upside-down tax code that right now gives the wealthiest Americans big tax breaks to save, but does almost nothing for middle-class folks, doesn’t give them the same kinds of tax advantages … And we need to give every American access to an automatic IRA on the job, so they can save at work.”
The president rightly calls out retirement tax preferences that flow to the wealthy; in fact, these subsidies are massive – over $140 billion a year – and the New America Foundation study on expanding Social Security identifies them as a source of revenue that could pay for the entire expansion. But that’s not what the president wants to do. He wants the middle class to get the same kind of subsidies so they can open their own IRAs – automatically enrolled IRAs, in fact (a behavioral economics nudge, to force people to invest). He wants to double down on a failed system where retirement savings are leashed to the stock market.
That’s the real battle over retirement security inside the Democratic Party. The Obama wing wants the private market – in this case, private retirement accounts – to solve the problem, while the progressive wing wants government to act and deliver a defined benefit through Social Security. Given that Social Security, even in its current state, is the most effective anti-poverty program in America, and 401(k)-style accounts have hastened a crisis, I know which approach I would choose.
It’s pretty clear, then, that myRA is an effort to distract from the burgeoning Social Security expansion movement, offering an alternative that remains grounded in the private market, to throw liberals off the trail. In fact, in a perfect example of how allergic the administration is to using government solutions in this area, even the myRA – a simple savings account – will be run by a private-sector money management firm. The White House chooses not to see how a government program that has been efficiently run for over 75 years can do the job of delivering dignity in retirement, without having to build a better mousetrap.
It’s fine to want to make the current mess of the employer-based retirement account system better – the aforementioned Tom Harkin has a bill to do just that – but liberals shouldn’t take their eye off the prize. They have the simplest, easiest-to-explain solution to this crisis: expand Social Security, and use the hundreds of billions in retirement tax preferences to pay for it. Anything less is a poor substitute.
MyRAs -- the New Social Security?
Posted: 01/30/2014 2:35 pm EST Updated: 04/01/2014 5:59 am EDT Huffington Post
What a creative idea! It sounds so familiar. Wait... we already have that account: It's called SOCIAL SECURITY!
In fact, that's exactly how Social Security was promoted when it was enacted in 1935.
It was a "voluntary" account, thus the term FICA, Federal Insurance Contributions Act.
And it was an individual account. Remember the "shoebox" in Baltimore with your SS number on it?
By the late 1980s, the growing surpluses in the main Social Security "trust fund" (which were meant for baby boomer retirement) were such a tempting target that they were combined into the government's total budget. Thus, our current annual budget deficits consume the trust fund, though its assets are reported separately.
And Social Security was to be a tax-free return of your contributions. That lasted until the 1983 "reforms" made up to 85 percent of your payout taxable, depending on earnings.
And employers would "help" by collecting these "contributions" and passing them on to the government, which would hold them in a special type of bond. (The current proposal calls for a R-bond. How different can that be from the current $2.7 trillion in "special purpose" treasury IOUs now stuffed into the Social Security trust fund?)
And how long will it be before employers are asked to make "matching contributions" to this fund -- much as they make matching 7.65 percent "contributions" to your current Social Security "account?"
And, of course, now everyone agrees that this new retirement plan won't work unless "everybody is auto-enrolled." So much for voluntary!
So, I think we've seen this movie before -- back in 1935. And how will that work out for those just retiring?
In offering his new "MyRa" proposal, the President said: "MyRA guarantees a decent return, with no risk of losing what you put in."
Yes, and you can keep your doctor too.
Fool me once, shame on you. Fool me twice, shame on the voters! That's the Savage Truth!
I have spoken at length about how the FED is deliberately manipulating interest and inflation is ways that hurt main street and super-size profits for the rich. The FED is a quasi-governmental agency with a mission of full employment and economic stability. Engineering bubbles and policy that gives corporations reasons to gut their workforce does not meet that mission----IT IS ILLEGAL AND MALFEASANCE.
While Obama is creating myRA and allowing for high unemployment to continue by watching as every Federal economic stimulus/policy is used to expand US corporations overseas---the FED is crippling the SS Trust and lowering people's SS monthly payments further into poverty.
IF YOU DO NOT BELIEVE THIS IS A TAG-TEAM EFFORT----WAKE UP FOLKS!
If you are Wall Street, you want Social Security to implode and be privatized. What does that better than zero % interest and inflation. These two manipulations are what created the conditions for the wealth of the rich to soar-----while it killed our Social Security Trust interest increases as well as individual people's Social Security increases by COLA. If you think the FED policy is about protecting the American people, jobs, and their wealth---I have swampland to sell in Florida. We lost more from our Social Security in the Obama terms in office and Obama built the structure to privatize SS, myRA. He did that because he is a Clinton Wall Street global corporate neo-liberal!
'Based on current law, all SS benefit payments must be cut by (approximately) 25% when the TF is exhausted'.
If you do not understand this is a deliberate attack to kill Social Security-----and it moves insolvency to just a decade with 2015 being the critical point----
RIGHT NOW---THINK FED CHAIR YELLEN!-----you need to WAKE UP!!!!
Bernanke – My Goal is to Wreck Social Security
Submitted by Bruce Krasting on 07/04/2012 14:28 -0400 Zero Chris Hedges
In June of each year the Social Security Trust Fund (SSTF) reinvests a significant portion of its investment portfolio in newly issued Special Issue Treasury Securities. The interest rates on these bonds is set by a formula that was established in 1960. The formula was designed to insulate the SSTF from transitory changes in interest rates by averaging market based bond yields over a three-year period.
Bernanke’s Fed has set interest rates at zero the past four years. In 2012 the 1960's formula has finally caught up with the SSTF. It got murdered on this year's rollover.
The following is from the SSA (link). It shows what has matured this year and what new investments have been made. I will be breaking down sections of this report, so don’t get eye strain looking at this:
Consider the bonds that matured in 2012:
$135 billion of old bonds matured this year. This money was rolled over into new bonds with a yield of only 1.375%. The average yield on the maturing securities was 5.64%. The drop in yield on the new securities lowers SSA's income by $5.7B annually. Over the fifteen year term of the investments, that comes to a lumpy $86 billion. It gets worse.
Bernanke has pledged that he will keep interest at zero for a minimum of another two years. The formula used to set interest rates for SSA looks back over the prior three years. Therefore, SSA will be stuck with a terrible return on its investments until at least 2017. I anticipate that the formula will result in still lower investment returns for the next five years, but I’ll conservatively use the rates set this year to evaluate the consequences to SSA.
The following looks at what is maturing at SSA:
A total of $543 billion of securities with an average yield of 5.6% is coming due in the existing ZIRP window. The reduction in income from the 4.2% drop in yield translates to a nifty $23 billion a year, for fifteen years ($350b). It gets worse.
As a result of the Fed’s extended ZIRP policy, and the SSA's interest rate setting formula, it is now a certainty that interest income at SSA is going to substantially drop over the coming decade. The problem is that SSA has provided projections for its interest income over this time period that don’t jive with this reality.
From the 2012 SSA report to Congress:
The SSTF believes it will earn an average of 4% over this period. That is not possible any longer. I calculate that the most SSA could earn is an average of 2.3% (it could be significantly lower). The drop in yield translates to a reduction in income of $535B over the forecast period. That’s a lot of dollars.
Consider again the base case provided by SSA in April. The following compares the size of the trust fund based on SSA’s estimates and my adjustments for what interest income will be (everything else is constant).
Based on a realistic assessment of interest income at SSA, the trust fund tops out in 2015, its peak value will be ~$2.823B. The SSTF has reported that the TF will top out at $3,061B, and that milestone will not be reached until 2021. Essentially, the train wreck will happen six years earlier then assumed, and the TF will be $250B short. It gets worse.
The other key ingredients in the SS "pie" are tax receipts from workers and the amount of monthly benefit payments (the assumptions used is that GDP growth will average 4%, and unemployment falls to 5.5% - no recessions over the ten-year horizon). These are not realistic assumptions. This means that once the SSTF hits its peak in 2015, the run off in assets will happen very quickly.
The SSTF has stated that the date in which the TF falls to zero will be 2033. The actual termination date of the TF is much closer than that. It could come as early as 2023.
Anyone who is 55 or older should be worried about this. Based on current law, all SS benefit payments must be cut by (approximately) 25% when the TF is exhausted. This will affect 72 million people. The economic consequences will be severe. The drop in SS transfers translates into a permanent drag on GDP of 2%. In other words, when this happens, the country will be unable to have any significant positive growth for a long time to come.
I know I will get comments from readers who have worked 40 years and paid into SS and now want it back. I tell those folks in advance that I'm sorry, but they will have to accept a cut in benefits. It will happen it about ten-years. Make your plans accordingly. If you don’t like these conclusions, write a letter to Bernanke. It’s well past time that the true consequences of his monetary policies are understood. He’s not just breaking the backs of small savers; he’s killing Social Security.
You can look at Obama and neo-liberal actions these two terms in office actions that do just what this neo-conservative think tank says----raise payroll taxes and cut benefits. Meanwhile, Social Security payments are already far behind as Living Wage. So, the solution has the working and middle-class paying a whopping 4% increase in payroll taxes---larger than the Reagan tripling of payroll taxes just so there would be plenty for baby boomers.
WE HAVE PAID PLENTY INTO SOCIAL SECURITY----WE SIMPLY NEED TO GET THE MONEY TAKEN FROM THE TRUST FROM CORPORATIONS.
This anti-posing Third Way progressive article is right on------as Clinton neo-liberals jumped to reform Social Security in the very way that Republicans would while making it all sound progressive. Obama is of course the false progressive and as we see after two terms he did all he could to follow the Republican plan for Social Security. Clinton neo-liberals are a tag-team for Republicans in privatizing Social Security. Most REAL progressives know we can make SS solvent for the long term with a small increase in payroll tax----1-2%, removing of the cap on high wage earners, and recover the trillions of dollars corporations have stolen from the SS Trust by tax evasion through non-payment of payroll taxes. The amount of corporate payroll tax evasion, whether through straight out refusing to pay them or by using schemes like declaring employees independent contractors when they are not-----IS THE BIGGEST REASON FOR THE SHORTFALL!
A quote from NATIONAL AFFAIRS-----a neo-conservative think tank----
'To make Social Security "sustainably solvent" — meaning solvent over that 75-year stretch, and in good financial health at the end of that period — would require an immediate and permanent payroll-tax increase of 4% of wages. This means that the average Social Security payroll-tax bill would increase by 32%. Alternatively, we could reduce benefits immediately and permanently by around 28%. If we choose to put off these changes — as Congress has done for decades — the tax increases or benefit reductions required to keep the program sustainable will only grow larger'.
'Social Security is the most successful, progressive antipoverty program in American history. In 2009 alone, Social Security lifted 20 million people out of poverty, and lessened the poverty of millions more. (Does that sound progressive to you?) That's why if there's any lesson to take away from Pozen's article, it is that we must be skeptical of center-right Democrats whose primary reason for "reforming" Social Security is that it is somehow "no longer progressive." '
Third Way is the Clinton neo-liberals!
Executive Producer, Take Action News with David Shuster
On Social Security, Beware the False Progressives
Posted: 03/28/2011 1:33 pm EDT Updated: 05/28/2011 5:12 am EDT
Pozen recently took to the pages of the Washington Post to admonish progressives to "lead the charge" on Social Security "reform" (read: cuts). Pozen is certainly not the first pseudo-Democrat to champion benefit cuts under the progressive banner. But what makes Pozen's approach so novel is why he thinks progressives should get behind Social Security "reform." Unlike his colleagues at Third Way, who erroneously took progressives to task in January for not even recognizing that in 27 years Social Security will have a modest financial shortfall, Pozen hardly even mentions the solvency question.
No, Pozen's main argument for reform is that Social Security is "no longer progressive." Thus, progressives should warm to the idea of overhauling the program in order to restore it to progressivity. Pozen then offers a vague outline for "progressive reform" that is nearly identical to the Bowles-Simpson plan and various other extreme center-right reform proposals floating around: raise the retirement age, dramatically scale back benefits for the middle class, turn Social Security into a hated welfare program, and throw Democrats a bone with one minor revenue increase. Pozen's reform plan is at best two-thirds cuts, one-third revenue increases.
Many experts have already dissected the provisions of his plan in greater depth, so I'll save my breath.
Instead, I want to take down Pozen's mischaracterization of Social Security as "regressive" -- the claim upon which his entire case for reform is based. Because Social Security provides benefits to middle class people, and not just the poor like other programs, the myth that Social Security is no longer progressive is one falsehood in Pozen's column that could have sticking power.
Social Security was, and is still, progressive. Here's why:
- The lower your lifetime wages, the more you get out of Social Security. The key figure to look at in assessing Social Security's progressivity is the extent to which Social Security benefits substitute your annual pre-retirement earnings, because it is the best indicator of whether Social Security accomplishes its goal of preserving Americans' pre-retirement standard of living, and preventing poverty in old-age (as well as disability, or death). This figure, aka the program's "replacement rate," is decidedly progressive and was specifically engineered to be that way. The lower your pre-retirement earnings, the higher the program's replacement rate. For low-wage workers, Social Security replaces as much 90% of their pre-retirement annual wages; for upper-income workers the replacement rate is often closer to 15%.
- Flat tax rate, progressive benefit formula. One of the reasons people are so often under the impression that Social Security is a regressive program is that it has a flat tax rate. Unlike income taxes, which are paid in progressively higher rates, every worker pays the same 6.2% of their earnings in payroll taxes to finance Social Security. But in fact, the flat tax conceals the progressive nature of the benefit formula, which allows for a higher replacement rate the lower down on the earnings distribution you are. The revenue from the contributions of higher earners partially subsidizes the benefits of the low and moderate-income workers, allowing them to enjoy a larger replacement rate. Call it redistribution by stealth.
- The link between earnings and benefits. Benefits are earnings-based, so even though the replacement rate is higher for lower earners, higher earners still receive higher benefits in absolute terms. But that's what keeps the system fair and popular. Social Security was intended as a wage insurance program that workers purchase through their payroll contributions to safeguard against the "vicissitudes of life," as FDR put it. There are, no doubt, a small number of wealthy individuals who could support themselves and their families very well in retirement, disability, or death, without Social Security's help. But FDR knew what some politicians have apparently forgotten: the support of the rich and powerful is essential for the financing of any government program. Since Social Security benefits are universal, the rich have a financial stake in its survival, and do not feel that they are simply underwriting other people's lifestyles. As a result, the program has been inoculated from the funding cuts that the upper middle class and the rich have successfully fought for in numerous other government programs.
- Benefits are already capped for the rich. Since Social Security's inception, benefits have been capped for wages above a certain level. Right now that means wealthy Americans do not receive Social Security benefits on earnings above $106,800. So whatever check we send to Warren Buffett, as the Pozens of the world love to remind us, it is no more than around $27,000 -- hardly a windfall for him, and financially insignificant for the program. It is true that having the cap in place also means wealthier Americans are not taxed on earnings above that amount, but that is a reason to consider increasing the cap, while continuing to keep replacement rates low or non-existent on earnings above it--not a reason to lament how "regressive" Social Security is. (For more details on a plan that does just that, see Rep. Deutch's "Preserving Our Promise to Seniors Act.")
Social Security is the most successful, progressive antipoverty program in American history. In 2009 alone, Social Security lifted 20 million people out of poverty, and lessened the poverty of millions more. (Does that sound progressive to you?) That's why if there's any lesson to take away from Pozen's article, it is that we must be skeptical of center-right Democrats whose primary reason for "reforming" Social Security is that it is somehow "no longer progressive."
The truth is, progressives have already been leading the charge on progressive reform. For evidence of that, one need only look here, here, and here. It's just that Pozen's idea of "reform" isn't progressive at all.
Did you know that Baltimore is one of the biggest violators of corporate payroll tax evasion fraud? Indeed, Maryland is tops in allowing for this fraud. Know that this is what is making our Social Security Trust shrivel to levels so low as to look as if we don't have enough money in the SS Trust for everyone for the long-term.
Know who feels the brunt of corporate payroll tax evasion? The low-income and working class employee who get pushed into the category of independent contractor when he/she is not and forced to pay the corporation's payroll taxes. Since low-wage and working class employees do not earn enough money to do that-----corporate payroll taxes are largely left unpaid!
Simply recovering some of the trillions of dollars in corporate payroll tax fraud would boost the SS Trust quite a bit!
If you are a small business trying to survive then people have a tendency to overlook cash payments for example----but this is now mainstream and global and national corporations are doing it and that is huge losses for SS Trust!
Employment Tax Evasion Schemes
Employment Tax Evasion Schemes
Employment tax evasion schemes can take a variety of forms. Some of the more prevalent methods of evasion include pyramiding, employee leasing, paying employees in cash, filing false payroll tax returns or failing to file payroll tax returns.
"Pyramiding" of employment taxes is a fraudulent practice where a business withholds taxes from its employees but intentionally fails to remit them to the IRS. Businesses involved in pyramiding frequently file for bankruptcy to discharge the liabilities accrued and then start a new business under a different name and begin a new scheme.
Employee leasing is another legal business practice, which is sometimes subject to abuse. Employee leasing is the practice of contracting with outside businesses to handle all administrative, personnel, and payroll concerns for employees. In some instances, employee-leasing companies fail to pay over to the IRS any portion of the collected employment taxes. These taxes are often spent by the owners on business or personal expenses. Often the company dissolves, leaving millions in employment taxes unpaid.
Paying Employees in Cash
Paying employees, whole or partially, in cash is a common method of evading income and employment taxes resulting in lost tax revenue to the government and the loss or reduction of future social security or Medicare benefits for the employee.
Filing False Payroll Tax Returns or Failing to File Payroll Tax Returns
Preparing false payroll tax returns understating the amount of wages on which taxes are owed, or failing to file employment tax returns are methods commonly used to evade employment taxes.
Keep in mind how these global corporate pols privatize successful Federal agencies-----they make them public private partnerships. That is what happened to the FHA-----with Freddie and Fannie------that's what happened to Federal Student Loans with Sallie Mae------and that is what happened with Medicare with Medicare Advantage. In all cases they allow these private entities to look better than the public ones and then simply implode the public agency to hand all to the private sector.
WAKE UP----THEY HAVE BEEN DOING THIS SINCE THESE NEW DEAL PROGRAMS WERE INSTALLED AND IT WAS PLACED ON STEROIDS BY REAGAN CLINTON NEO-LIBERALISM.
So, Obama comes along with myRA which is supposed to run simultaneously with public Social Security as an added aid for working class families to save. The private entity that will replace Social Security as things like Disability and the FED policy implodes our SS Trust with debt. Obama never intended to protect Social Security and Medicare-----he came to office ready to dismantle them just as Clinton did Welfare and Disability.
CLINTON NEO-LIBERALS ARE THE OPPOSITE OF PROGRESSIVE LIBERALS---THEY DISMANTLE ALL OF WAR ON POVERTY, NEW DEAL, AND LABOR AND JUSTICE/ EQUAL PROTECTION LAWS AND PROGRAMS.
This is long but glance through to see how Obama spoke throughout his short political career on Social Security----it is interesting to see how he phrased it back then and see his intent to privatize and eliminate it today! Republicans didn't make him do it-----he used executive orders to do it!
Watch as Obama ends up doing all of what he campaigned should not be done.
Barack Obama on Social Security
Democratic incumbent President; IL Senator (2004-2008)
MyRA: new savings bond for retirement Let's do more to help Americans save for retirement. Today, most workers don't have a pension. A Social Security check often isn't enough on its own. And while the stock market has doubled over the last five years, that doesn't help folks who don't have 401k's. That's why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It's a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans. Offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can. Source: 2014 State of the Union address , Jan 28, 2014
No new promises we can't keep; but keep promises we've made We can't ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and most powerful. Most Americans understand that we can't just cut our way to prosperity. They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share. And that's the approach I offer tonight.On Medicare, the reforms I'm proposing reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. Our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital--they should be based on the quality of care that our seniors receive. And I am open to additional reforms from both parties, so long as they don't violate the guarantee of a secure retirement. Our government shouldn't make promises we cannot keep--but we must keep the promises we've already made.
Source: 2013 State of the Union Address , Feb 12, 2013
Entitlements don't make us takers; they free us to take risk We, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America's prosperity must rest upon the broad shoulders of a rising middle class. We understand that outworn programs are inadequate to the needs of our time. We, the people, still believe that every citizen deserves a basic measure of security and dignity. We do not believe that in this country freedom is reserved for the lucky, or happiness for the few. We recognize that no matter how responsibly we live our lives, any one of us at any time may face a job loss, or a sudden illness, or a home swept away in a terrible storm. The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.
Source: Second Inaugural Address , Jan 21, 2013
Tweak Social Security like Reagan did, but keep entitlements Q: Do you see a major difference between the two of you on Social Security?OBAMA: I suspect that, on Social Security, we've got a somewhat similar position. Social Security is structurally sound. It's going to have to be tweaked the way it was by Ronald Reagan and Democratic Speaker Tip O'Neill. But the basic structure is sound. But I want to talk about the values behind Social Security and Medicare--what's called entitlements. You know, the name itself implies some sense of dependency on the part of these folks. These are folks who've worked hard, and there are millions of people out there who are counting on this. So my approach is to say, how do we strengthen the system over the long term? And in Medicare, what we did was we said, we are going to have to bring down the costs if we're going to deal with our long-term deficits, but to do that, let's look where some of the money's going.
Source: First Obama-Romney 2012 Presidential debate , Oct 3, 2012
OpEd: Eliminating FICA ceiling means rich won't spend Higher-income households, in particular, are facing huge tax increases in the future. George W. Bush had cut the rates for the top bracket, but Obama is committed to letting that expire in 2010, pushing the top rate up to 39.6%. And House speaker Nancy Pelosi is pushing a millionaire surtax. Today, she says the tax is designed to pay for health care; tomorrow, however, she'll doubtless present it as a way to reduce the deficit. And Obama has advocated eliminating the ceiling on the FICA (Social Security) tax so that we would all have to pay it on our entire incomes, rather than below the $100,000 cutoff as at present. What higher income household in its right mind would resume spending with these taxes on the horizon? Source: Take Back America, by Dick Morris, p. 39 , Apr 13, 2010
Good health care and tax reform will save entitlements Q: How should we fix Social Security and other entitlement programs?OBAMA: If we get our tax policies right so that they’re good for the middle class, if we reverse the policies of the last eight years that got us into this fix in the first place and that Sen. McCain supported, then we are going to be in a position to deal with Social Security and deal with Medicare, because we will have a health care plan that actually works for you, reduces spending and costs over the long term, and Social Security that is stable and solvent for all Americans and not just some.
McCAIN: What we have to do with Medicare is have the smartest people in America come together, come up with recommendations, and then, like the base-closing commission idea we had, then we should have Congress vote up or down.
Source: 2008 second presidential debate against John McCain , Oct 7, 2008
2007: Raise income cap to avoid future shortfall The Social Security crisis is mostly fake. The rather dour projections of the Social Security Trustees, which have been proven overly pessimistic for the past decade, forecast a 75-year shortfall.However, the supposed crisis of Social Security has tripped up even our most astute liberal politicians. In May 2007, Obama accepted the premise that Social Security suffered from a mighty shortfall. Seeking to establish himself as a politician not afraid to tackle hard issues, Obama declared his support for raising the cap on income subject to Social Security taxation (currently $102,000) and chided Sen. Clinton for not doing likewise. Obama at first implied that in his administration, everything would be on the table--higher taxes, lower benefits. He later explained that he would increase taxes only on people making $250,000 or over, and that he would not reduce benefits. But Obama needlessly accepted conservative conventional wisdom, and then set a trap for himself in having to remedy a false crisis
Source: Obama`s Challenge, by Robert Kuttner, p. 77-78 , Aug 25, 2008
What do we do with the losers of privatizing? "What would the Ownership Society do with the losers (if Social Security were privatized)? Unless we're willing to see seniors starve on the streets, we're going to have to cover their retirement expenses one way or another--and since we don't know in advance which of us will be losers, it makes sense for all of us to chip into a pool that gives us at least some guaranteed income in our golden years. That doesn't mean we shouldn't encourage individuals to pursue higher-risk, higher-return investment strategies. They should. It just means that they should do so with savings other than those put into Social Security."Thus, Obama was able to cut through all the rhetoric and see the key underlying fallacy of Bush's and McCain's proposal to privatize Social Security. If we allow people to invest in riskier assets in the stock market, we will just have more losers who end up gambling with their retirement money and end up with nothing at retirement.
Source: Obamanomics, by John R. Talbott, p.161 , Jul 1, 2008
Raise cap on payroll tax for 3% of earners over $102,000 Q: The Republicans are keeping a running total of all your plans. They say it’s $662 billion over four years.A: Right.
Q: They say for all your promises not to raise taxes on the middle class, that, in fact, you want to raise the cap on the Social Security payroll tax, and you also want to increase capital gains.
A: In terms of raising the cap on the payroll tax, right now everybody who’s making $102,000 or less pays 100% of payroll tax on 100% of their income. There are about 3% to 4% of Americans who are above $102,000 in income every year. So if you want to talk about who’s middle class, me giving cuts to folks making $60,000 or $70,000, and potentially asking more from friends of mine like Warren Buffett. That’s a debate I’m happy to have with John McCain, because it’s the people making $75,000, $50,000, $60,000 who are hurting.
Source: 2008 Fox News interview: presidential series , Apr 27, 2008
Raise $97K cap on payroll tax exempting earnings under $250K CLINTON: I’m certainly against one of Senator Obama’s ideas, which is to lift the cap on the payroll tax, because that would impose additional taxes on people who are educators, police officers, firefighters and the like.OBAMA: What I have proposed is that we raise the cap on the payroll tax, because right now millionaires and billionaires don’t have to pay beyond $97,000 a year. Now most firefighters & teachers, they’re not making over $100,000 a year. In fact, only 6% of the population does. And I’ve also said that I’d be willing to look at exempting people who are making slightly above that.
Q: But that’s a tax on people under $250,000.
OBAMA: That’s why I would look at potentially exempting those who are in between. This is an option that I would strongly consider, because the alternatives, like raising the retirement age, or cutting benefits, or raising the payroll tax on everybody, including people making less than $97,000 a year--those are not good policy options
Source: 2008 Philadelphia primary debate, on eve of PA primary , Apr 16, 2008
Must capture new revenue; no new Social Security Commission OBAMA: We’re going to have to capture some revenue in order to stabilize the Social Security system. You can’t get something for nothing. And if we care about Social Security, which I do, and if we are firm in our commitment to make sure that it’s going to be there for the next generation, and not just for our generation, then we have an obligation to figure out how to stabilize the system. I think we should be honest in presenting our ideas in terms of how we’re going to do that and not just say that we’re going to form a commission and try to solve the problem some other way.CLINTON: With all due respect, the last time we had a crisis in Social Security was 1983. President Reagan and Speaker Tip O’Neill came up with a commission. That was the best and smartest way, because you’ve got to get Republicans and Democrats together. That’s what I will do.
OBAMA: That commission raised the retirement age, and also raised the payroll tax. So Sen. Clinton can’t have it both ways.
Source: 2008 Philadelphia primary debate, on eve of PA primary , Apr 16, 2008
Stop any efforts to privatize Social Security THE PROBLEM
- Insecure Retirement Savings: 75 million working Americans lack employer-based retirement plans. Too many companies have dumped their pension obligations, leaving workers in the cold.
- Income Security: With skyrocketing health care, energy and housing costs, too many seniors do not have the resources to live comfortably.
- Commitment:As someone who was largely raised by his grandparents, Obama has first-hand knowledge of how hard America’s seniors have worked. He will honor their lifetime of work.
- Protect Social Security: Obama will preserve Social Security by stopping any efforts to privatize it and working in a bipartisan way to preserve it for future generations.
- Secure Hard-Earned Pensions: Obama will fight to ensure that companies don’t dump their pension obligations.
- Help Americans Save More: Obama will make retirement savings automatic.
FactCheck: Removing $97,500 cap would be $1.3T tax increase Clinton called Obama’s proposal to raise Social Security taxes on earnings over $97,500 per year, the current upper limit on which any tax is levied, a trillion-dollar increase on “middle class families.” Clinton said, “I do not want to fix the problems of Social Security on the backs of middle class families and seniors. If you lift the cap completely, that is a $1 trillion tax increase. I don’t think we need to do that.” Taxing all earnings would indeed amount to a $1.3 trillion increase over the next 10 years alone, according to estimates by Cato Institute Social Security experts. A similar estimate comes from Citizens for Tax Justice, which figures the measure would bring in $124 billion per year.
Obama defended his proposal by saying it would fall only on the upper class: “Understand that only 6% of Americans make more than $97,000--so 6% is not the middle class--it’s the upper class.”
Source: FactCheck on 2007 Democratic debate in Las Vegas , Nov 15, 2007
Cutting benefits & raising retirement age are wrong answers Q: You said earlier this year that everything should be on the table for Social Security, including looking at raising retirement age, indexing benefits, and then suddenly you said, “I’m taking them off the table.”A: That’s not what I said. I said I will convene a meeting as president where we discuss all of the options that are available. I believe that cutting benefits is not the right answer; and that raising the retirement age is not the best option, particularly when we’ve got people who are still in manufacturing.
Q: But in May you said they would be on the table.
A: Well, I am going to be listening to any ideas that are presented, but I think that the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and the people who are in need are protected. That is the option that I will be pushing forward.
Q: But the other options would be on the table?
A: Well, I will listen to all arguments and the best options.
Source: Meet the Press: 2007 “Meet the Candidates” series , Nov 11, 2007
The wealthy should pay a bit more on the payroll tax Social Security is not in crisis; it is a fundamentally sound system, but it does have a problem, long-term. We’ve got 78 million baby boomers, who are going to be retiring over the next couple of decades. That means more retirees, fewer workers to support those retirees. We are going to have to do something about it. The best idea is to lift the cap on the payroll tax, potentially exempting middle-class folks, but making sure that the wealthy are paying more of their fair share, a little bit more. Source: 2007 Democratic debate at Drexel University , Oct 30, 2007
Privatization puts retirement at whim of stock market Q: Would you raise the cap for Social Security tax above the current level of the first $97,500 worth of income?A: I think that lifting the cap is probably going to be the best option. Now we’ve got to have a process [like the one] back in 1983. We need another one. And I think I’ve said before everything should be on the table. My personal view is that lifting the cap is much preferable to the other options that are available. But what’s critical is to recognize that there is a potential problem: young people who don’t think Social Security is going to be there for them. We should be willing to do anything that will strengthen the system, to make sure that that we are being true to those who are already retired, as well as young people in the future. And we should reject things that will weaken the system, including privatization, which essentially is going to put people’s retirement at the whim of the stock market.
Source: 2007 Democratic primary debate at Dartmouth College , Sep 6, 2007
Stop any efforts to privatize Social Security Obama believes we need to preserve Social Security by stopping any efforts to privatize it and will work across party lines to maintain Social Security’s solvency for generations. Obama wants to make private saving easier, cheaper, & more automatic for middle-class workers. He supported the Save More for Retirement Act, which encourages automatic 401K enrollment. Obama also voted for new rules to force companies to properly fund their pension plans so taxpayers don’t foot the bill. Source: 2008 Presidential campaign website, BarackObama.com “Flyers” , Aug 26, 2007
No privatization; but consider earning cap over $97,500 Q: We all know that Social Security is running out of money, but people who earn over $97,500 stop paying into Social Security. The Congressional Research Service says that if all earnings were subject to payroll tax, the Social Security trust fund would remain solvent for the next 75 years.A: I think that it is an important option on the table, but the key, in addition to making sure that we don’t privatize, because Social Security is that floor beneath none of us can sink. And we’ve got to make sure that we preserve Social Security is to do the same thing that Ronald Reagan and Tip O’Neill were able to do back in 1983, which is come up with a bipartisan solution that puts Social Security on a firm footing for a long time.
Source: 2007 YouTube Democratic Primary debate, Charleston SC , Jul 23, 2007
Stock market risk is ok, but not for Social Security If the guiding philosophy behind the traditional system of social insurance could be described as “We’re all in it together,” the philosophy behind Bush’s Ownership Society seems to be, “You’re on your own.” Relying on the magic of the marketplace is a tempting idea, elegant in its simplicity. But it won’t work.Take the Administration’s attempt to privatize Social Security. The Administration argues that the stock market can provide individuals a better return on investment, and in the aggregate they are right; historically, the stock market outperforms Social Security’s cost of living adjustment. But individual investment decisions will always produce winners and losers. What would the Ownership Society do with the losers?
That doesn’t mean we shouldn’t encourage individuals to pursue higher-risk, higher-return investment strategies. They should. It just means that they should do so with savings other than those put into Social Security.
Source: The Audacity of Hope, by Barack Obama, p.178-179 , Oct 1, 2006
Raise the cap on the payroll tax on wealthy individuals What we need to do is to raise the cap on the payroll tax so that wealthy individuals are paying a little bit more into the system, if we are going to deal with this problem specifically. Right now, somebody like Warren Buffet pays a fraction of 1 percent of his income in payroll tax, whereas the majority of the audience here pays payroll tax on 100 percent of their income. I’ve said that was not fair. Source: 2008 Facebook/WMUR-NH Democratic primary debate , Jan 6, 2006
$2000 tax credit for Working Families Savings Accounts Obama today proposed Working Families Savings Accounts to increase retirement security and give families a greater incentive to save. “The best way for our government to help ensure that every American can retire with dignity is to provide incentives for middle-class families to save for the future,” said Obama. “My Working Families Savings Accounts plan gives working men and women earning up to $50,000 per year the opportunity to put money in a retirement plan, whether it’s an IRA or an employer based 401(k), and have that money matched with a 50 percent tax credit for contributions up to $2,000.“ Today, only about half of workers participate in an employer-based pension plan. Participation rates in other savings plans are substantially lower. Only about five percent of people contribute the maximum amount allowed each year to an IRA or 401(k).
Source: Press Release, “Increase Retirement Security” , Jul 7, 2004
Voted NO on establishing reserve funds & pre-funding for Social Security. Voting YES would:
- require that the Federal Old Age and Survivors Trust Fund be used only to finance retirement income of future beneficiaries;
- ensure that there is no change to benefits for individuals born before January 1, 1951
- provide participants with the benefits of savings and investment while permitting the pre-funding of at least some portion of future benefits; and
- ensure that the funds made available to finance such legislation do not exceed the amounts estimated to be actuarially available.
Perhaps the worst example of wasteful spending is when we take the taxes people pay for Social Security and, instead of saving them, we spend them on other things. Even worse than spending Social Security on other things is we do not count it as debt when we talk about the deficit every year. So using the Social Security money is actually a way to hide even more wasteful spending without counting it as debt. This Amendment would change that.
Opponents recommend voting NO because:
This amendment has a fatal flaw. It leaves the door open for private Social Security accounts by providing participants with the option of "pre-funding of at least some portion of future benefits."
- This body has already closed the door on the President's ill-conceived plan for private Social Security accounts. The opposition to privatization is well-known:
- Privatizing Social Security does nothing to extend the solvency of the program.
- Transition costs would put our Nation in greater debt by as much as $4.9 trillion.
- Creating private accounts would mean benefit cuts for retirees, by as much as 40%.
- Half of all American workers today have no pension plan from their employers. It is critical that we protect this safety net.