Social Security Reform: A Democratic Alternative

Social Security Check, originally uploaded by Wazdat!.

It's Time We Stopped Being On The Defensive, And Proposed An Alternative Of Our Own!

Social Security Reform – progressive style

I think it is time that we Progressives went on the offensive as far as Social Security is concerned, with our own ideas of Social Security reform. The problem with simply being on the defensive is that we are setting ourselves up for being called “naysayers” and “deniers.” If all that Social Security needs is fine tuning then let us explain to the people what we mean.

I have seen the preliminaries on the Diamond-Orszag plan. So far, it makes sense to me.

According to Diamond-Orszag , earnings rose most rapidly over the past two decades among workers whose earnings were the highest. Life expectancy among higher earners with more education has grown faster than it has for lower earners with less education. The resulting life expectancy gap adds to Social Security’s finance gap, making the system less progressive.

OK, time for balancing revenue and benefit adjustments.

1) Raise the maximum taxable earnings base gradually until the total earnings share (that is above the base and doesn’t get payroll taxed) has declined to 13 % roughly where it was over the past twenty years.

2) Next, to offset the gap in life expectancy between higher earners and lower earners, benefits for the highest earning percentage of workers, (15%) should be reduced. Lifetime earnings in the top tier of the benefit formula (according to Diamond-Orszag that is about $44,000 in 2003) add less to benefits than current law permits. Instead of a benefit of 15 cents for each dollar of top tier lifetime earnings, the Diamond-Orszag plan would gradually reduce the benefit rate to 10 cents of benefits for each dollar of top tier lifetime earnings.

3) The third portion of the plan has to do with the Legacy Debt.

The Legacy Debt stems from the Great Depression. People were in horrifying straits back in the 30’s. Social Security was mean to be a form of insurance. The younger generation (who could still work) was obliged to pay for their elders, (who are retired) and-or disabled. Now the proportion of benefits given would usually be according to the amount paid into the system, however with the extreme poverty of the time, it was only human, that when the aged, or disabled were given their checks, they were proportionally overpaid just to return them to level of well being appropriate for that time.

But by paying out more than the share we paid in, we incurred that Legacy Debt. Our present trust fund problems would be greatly improved if paid back that debt.

1. First: Mandatory Social Security coverage for new state and local government workers, so that eventually all workers bear a portion of the cost of benefits paid to earlier generations. According to Diamond-Orszag , while most state and local workers are covered by Social Security, 4 million of them are not. They are not contributing to paying back the debt.

2. Next to make sure that very high earners contribute to paying down the Legacy Debt in proportion to their full earnings, we should lay down a tax on earnings above the maximum taxable earnings base. The legacy tax above that base starts at 3% and, gradually rises along with the universal legacy charge we shall impose, for everyone reaching 3.5% by 2080.

3. The universal legacy charge would be on all future workers and beneficiaries half in the form of benefit reductions eligible in or after 2023, the other half in gradual very modest increases in payroll tax from 2023 onward. Personally, I would do that a lot sooner from a political point of view to preclude the other side’s ability to argue that we would impose heavy taxes later.

An partial alternative to benefit reductions or tax increases is to get revenue from some other specific source such as, reform the estate tax rather than remove it entirely, and use some or all of it’s revenue for Social Security.

This plan would restore the balance to Social Security over the next seventy-five years according to Diamond-Orszag . The system should also be expected to remain in balance ever after. In addition, there are resources for improving benefits for particularly vulnerable beneficiaries, such as: widows and widowers, workers with low lifetime earnings and disabled workers.

1. Presently, workers with low lifetime earnings receive small benefits from Social Security. Diamond-Orszag would increase their benefits so that workers with at least 35 years of work receive a benefit equal to the poverty line of 2012. After 2012, benefits for workers with low lifetime earnings would gradually increase above the poverty line.

2. Widows who typically suffer a 30% drop in living standards when their husbands die. Diamond-Orszag increases the benefits of both widows and widowers with the aim of leaving the survivor with three fourths what the couple received when both spouses were alive. Those with lower benefits will find them increased by financing from the larger program. Higher-benefit couples will have their survivor’s benefits financed by a reduction of their combined benefits while both were alive.

3. Holding total benefits for disabled workers constant for the next 75 years, the Diamond-Orszag proposal would move benefits towards workers who become disabled at a younger age, and away from those who become disabled at more a more senior age. Today, under the present system, younger workers who are disabled fall very far behind the growth of the economy. The Diamond-Orszag plan would reduce this somewhat by raising benefits for disabled beneficiaries faster than inflation. The same procedure would apply for young survivors of deceased workers.

Today we have no protection against unexpectedly high inflation in the in between ages sixty and sixty-two. The inflation adjusted level of benefits of workers in these two years would experience a significant decline if inflation were to be particularly severe for those two years.
The Diamond-Orszag Policy Brief gives this example:

“For example, a repeat of the inflation rates of 1980 and 1981 (14.3
percent and 11.2 percent) would reduce the real benefits for a particular group by almost 25 percent. To protect against this risk, the plan modifies benefit determination in a cost-neutral fashion.”

Diamond-Orszag believes that these changes would be sufficient to restore the actuarial balance. Also according to the plan, the life of the Social Security trust fund is not only extended throughout the projection period, but the trust fund is slowly rising relative to annual benefits at the end of the seventy-five year period.

Workers over fifty-five will not experience any change in their benefits from those under current law.

To it’s detractors I would remind them that there would be no problem with the very budget of this country if it hadn’t been for the irresponsible tax cuts and examples of overspending done by this administration, chief of which is this unnecessary war in Iraq. What I’ve learned about Social Security is that maintaining it is a matter of moving money around, taking some of it from where you don’t need it, and putting it where you do. If we had started out this way in the first place, we wouldn’t have any problem at all.

More on this in later posts.

Brookings Institution policy Brief # 126 Reforming Social Security: A Balanced Plan

This White House Don't Operate That Way

This White House Don't Operate That Way, originally uploaded by Wazdat!.

Oh Really?

Are you sure the White House doen'st operate that way Mr. President? I would say that such a thing is endemic for the way any kind of Republican club operates as I have discussed in this blog before. See this blog November 2004: More Tales Of The Prairie How could a gay online prostitute gain access to a hard pass to the White House press core and top secret information concerning Valerie Plame? How did Michael MacManus and Maggie Gallagher get paid to shill for the President?

A good theory is networking. Someone knew somebody, or a group of somebodies. That entity was important enough to get things done for itself that you and I can't conceive of doing.

If you can't see an immediate connection between names you throw them together in Google to cross reference them. Now I couldn't get anywhere with either "Jeff Gannon", or James Guckert, but I did get somewhere with the name of Gannon-Guckert's boss Morton Blackwell, and Jack Abramoff, the friend of Tom DeLay and and Ralph Reed, and who is now in a bit of trouble concerning Indian gambling casinos. They have a history. They are the The Conservative Caucus, they have the Council for National Policy. A culture of networking means a collegial atmosphere where everyone knows everyone, and has at his or her disposal the means to accomplish their ends. You know someone, who knows someone, and a brother Bonesman will always help a brother Bonesman. And therre are layers upon layers complicity. If you think you found a connection between two people, look again because that connection is but a tentacle of something more mysterious.

For instance, at first I found only one connection between Robert Eberle, Morton Blackwell, and Press Secretary Scott McClellan. That was The Conservative Caucus. In the Eighties The Conservative Caucus. showed what an ultra Right-Wing club it was by opposing the Panama Canal Treaty, was an active lobbyist for contra aid in Nicaragua. TCC was very active in Africa as well in places like South Africa and Namibia. For the most part they are an externally oriented organization, but they always weigh in on any issue important to conservatives:

"TCC helped to line up 18 co-sponsors for Rep. Philip Crane's 10-percent Flat Tax bill (H. R. 111). (13) "*

"TCC Research, Analysis and Education Foundation conducts research and analysis on public policy questions. Information compiled by the group is used by congressmen, senators, federal government officials, White House personnel, and others. Publications of the foundation include: Senate Report, Senate Issues Yearbook, Eye on Bureaucracy, and Inside Bureaucracy. (50) In 1989 the Reunion Conference of the Council on Southern Africa was a benefit for the TCC Foundation. Speakers at the reunion included Maj. Gen. John K. Singlaub (ret) and Jardo Muekalia of UNITA, the Angolan rebel group led by Savimbi."*

Members include: Major General John Singlaub (ret.), Howard Philips, Terry Dolan founder of NCPAC, Richard Viguerie (he of direct mail venture), Jack Abramoff, Paul Weyrich, co-founder of the Heritage Foundation, and The Moral Majority, Senator Jesse Helms.


Each of these people control various enterprises and ventures for the Right. But the TCC is only the tip of the iceberg. TCC is a subsidiary of the Council For National Policy.

The Council For National Policy is that iceberg, the octopus to The Conservative Caucus's tentacle. It is a rather secretive organization, and I won't call them necessarily sinister, after all the Rosicrussians are very secretive too. So are the Freemasons. It's just that the nexus of such an organization and public policy bears a great deal of examination.

According to ABC's Marc Ambinder:

"In 1999, candidate George W. Bush spoke before a closed-press CNP session in San Antonio. His speech, contemporaneously described as a typical mid-campaign ministration to conservatives, was recorded on audio tape.


(Depending on whose account you believe, Bush promised to appoint only anti-abortion-rights judges to the Supreme Court, or he stuck to his campaign "strict constructionist" phrase. Or he took a tough stance against gays and lesbians, or maybe he didn't).


The media and center-left activist groups urged the group and Bush's presidential campaign to release the tape of his remarks. The CNP, citing its bylaws that restrict access to speeches, declined. So did the Bush campaign, citing the CNP.


Shortly thereafter, magisterial conservatives pronounced the allegedly moderate younger Bush fit for the mantle of Republican leadership.


The two events might not be connected. But since none of the participants would say what Bush said, the CNP's kingmaking role mushroomed in the mind's eye, at least to the Democratic National Committee, which urged release of the tapes.


Partly because so little was known about CNP, the hubbub died down."

And:

"According to one of its most prominent members (who asked that his name not be used), the CNP is simply and nothing but a self-selected, conservative counterweight to the influential center-left establishment."


Some say the CNP was founded by Nelson Bunker Hunt, Herbert Hunt, and T. Cullen Davis. Others say that Richard Viguerie created it to act as a counterweight to the liberal Council on Foreign Relatons. The list of present and former members is a who's who of the American Right. From the military you have General Singlaub, Gen. Albion Knight and Lt. Col. Oliver North. For foreign relations you have Phyllis Schlafly and Jean Kirkpatrick. Congress is represented by Tom DeLay, Gary Bauer, Richard Armey. Business brings the caliber of Lou Lehrman, Howard Ahmanson, the Coors family. Religion is represented by people such as Jerry Falwell, Pat Robertson, Ralph Reed. Journalism has the honored presence of Charles Krauthammer, Jonah Goldberg.

So what does this have to do with a simple gay prostitute who had priviledged information concerning the war in Iraq, Valerie Plame and a press pass to the White House? These are people who, when they want something done, they know where to go, and whom to call on to get it done.

For instance, here is something on an alleged former member:

"John Lenczowski - CNP Membership Roster (1984-85). Consultant to the Council for Inter-American Security...[which] played a pivotal role formulating Washington's program for counter-revolutionary war and mass murder in Central America during the 1980s... The group functioned in a dual-capacity; as an alarmist "public policy institute" and as a domestic spy ring, a "privatized" version of the FBI's infamous COINTELPRO operations. Having staked-out Latin America as their geopolitical niche, CIS targeted Central America solidarity activists, progressive clergy, and the Salvadoran exile community. The group gathered intelligence and disseminated disinformation, funneling data on foreign policy opponents to the FBI and the intelligence service of the Salvadoran death squad state...In 1980, they published the influential A New Inter-American Policy for the Eighties, generally known as the "Santa Fe Document." [A Small Circle of Friends]".

One of the Hunt Brothers has an interesting tale:

"Herbert William Hunt- CNP Board of Governors (1982). Multimillionaire and brother to Nelson Bunker Hunt. In 1981, William Herbert and Nelson Bunker Hunt provided the start-up money for the Council for National Policy.


A subsidiary of the pro-Nazi German American National Congress [DANK], the council is headed by Karol Sitko...Sitko was also the organizer for the West German branch of the Western Goals Foundation, a far-right political organizing and research group which, until the death of its founder, Congressman Larry MacDonald, was essentially a front for the John Birch Society's private intelligence network. In Germany, Sitko organized rallies in Nuremberg and Hanover drawing 240,000 people. He was supported by billionaire H.L. Hunt and General John Singlaub. His activities were conducted in concert with the Anti-Bolshevik Block of Nations.


Renamed Conservative Alliance (CALL), this group was organized by the late Terry Dolan's National Conservative Political Action Committee (NCPAC is Laos in the Coalition for Peace Through Strength). CALL has received major funding through groups affiliated with Rev. Sun Myung Moon, according to the Wall Street Journal and other reports. CALL started the National Coalition for America's Survival, which includes the newly-reincarnated America First Committee...One of the three groups in the Coalition headed by Lady Malcolm Douglas-Hamilton, who is also on the board of the American Security Council Foundation. Her deceased husband, part of the British aristocracy, was the brother of Rudolph Hess when, in 1940, Hess made his secret flight to England. Hess, a top aide to Hitler and Nazi Party official, sought to meet with the British aristocratic circles known as the Cliveden Set. Sympathetic to Hitler's war aims, the Cliveden Set tried to get England out of the war it had declared against Germany in September 1939, after Germany invaded Poland. Hess was arrested and imprisoned. After Lord Douglas came to the U.S., he established an American branch of a racial eugenics group headquartered in Scotland. The oil billionaire Hunt brothers and Jesse Helms are members of this group. It was headed by Robert Gayre, who published the racialist Mankind Quarterly until Roger Pearson took it over in 1978. [Bellant, ON 45-6]"

Now I'm not completely sure about some of these sources. Some of them are religious websites, but even those look like fairly reasonable sites, respectful of the people's right to believe or not. Given what all of the sites impart to me that the people who are members of such organizations as the CNP, can generally arrange for things, like getting secret intelligence to a "news stringer" like Gannon-Guckert should be easy. And Gannon-Guckert's little secrets, of little matter. It was Gannon - Guckert who made the mistake of being obvious.


Americans For The Separation of Church And State - Council For National Policy
Council For National Policy
The Conservative Caucus.*

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I've just added Namebase.org to my Permanent Links. It's a place where you can find out the various networks people are associated with, who's pals with whom, what organizations they belong to or help out. It's "Six Degrees" without Kevin Bacon.

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I've just added National Security Archive to my Permanent Links Section:

"The National Security Archive combines a unique range of functions in one non governmental, non-profit institution. The Archive is simultaneously a research institute on international affairs, a library and archive of declassified U.S. documents obtained through the Freedom of Information Act, a public interest law firm defending and expanding public access to government information through the FOIA, and an indexer and publisher of the documents in books, microfiche, and electronic formats. The Archive's approximately $2.3 million yearly budget comes from publication revenues and from private philanthropists such as the Carnegie Corporation, the John D. and Catherine T. MacArthur Foundation, the John S. and James L. Knight Foundation and the Ford Foundation.  As a matter of policy, the Archive receives no government funding."

From National Security Archive .

Selling A Lemon

Used Car Dubya, originally uploaded by Wazdat!.

Warming Up For The Big One

Ever get the feeling that you are about to be taken by a used car dealer? Well look out here comes a foretaste of things to come! The Bush Budget is in the display room now. And he and his salesmen are out there glad-handing! They'll make a big hullabaloo about this hot baby'll cure you of the midlife blues, when the only time you'll get to drive it, is when it's not in the shop, costing you an arm and a leg! Meanwhile Honest George is dialing back the odometer!

He wants to take away money from first responders, you know the folks who are there to save your life in an emergency. Hundreds of them died on September 11, 2001 saving the lives of civilians. National security? If every locale had a decently equipped fire service, police force, ambulance, and trauma service half the battle for Homeland Security would be won.

According to the Minneapolis Star-Tribune: "On Monday, President Bush sent Congress the most austere federal budget in perhaps 30 years, a plan that would slash aid to cities by one-third, eliminate health insurance for thousands of low-income families, reduce veterans' medical benefits, cut funding for city cops and county sheriffs, wipe out child care subsidies for 300,000 families, trim funding for clean water and soil conservation and shutter dozens of programs for preschool children and at-risk youth.

These are not the priorities that Americans voted for in 2000 and 2004."

But this budget gives a very good indication of Dubya Bush's priorities.

Bush's Budget simply means that he is once again asking us to pull his chestnuts out of the fire, when he was the one who put them there.

In January 2001 the Congressional Budget Office reported a budget surplus of $32 billion.

Even when business was slow the CBO could still say:

"With an apparent slowing of the economy, tax receipts grew at a slower rate in the first quarter of fiscal year 2001 than they did over the previous year. Nevertheless, by the CBO's estimate, the deficit for the first quarter of 2001 was about $17 billion less than the deficit for the same quarter last year. CBO will issue updated budget projections for 2001 and the following 10 years at the end of January."

And it projected this for the end of 2001:

"CBO estimates that the total surplus in the first five months of fiscal year 2001 was about $27 billion. In the same period last year, the surplus was a negligible $0.1 billion. In the absence of legislation that would affect spending or revenues this year, CBO expects the surplus to reach $281 billion by the end of the fiscal year."

Since 2001 Bush had tax cuts of $1.85 trillion over 10 years according Bloomberg.com.

Now with the help of the CBO let’s see how the surplus-deficit situation fared in 2001:

January 2001

“The Treasury reported a deficit of $23.7 billion in November, about $1 billion less than CBO had projected on the basis of the Daily Treasury Statements. Outlays were about $2 billion less than CBO had estimated, but revenues were also a bit lower.”

January 2002

“The Treasury reported a deficit of $54.3 billion in November, about the same as CBO's projection based on the Daily Treasury Statements. Both revenues and outlays were slightly higher than CBO had anticipated.”

January 2003

“The Treasury reported a deficit of $59 billion in November, about $1 billion less than CBO's projection based on the Daily Treasury Statements. While revenues were the same as CBO anticipated, outlays were about $1 billion lower than expected.”

January 2004

“The Treasury reported a deficit of $43 billion in November 2003, about $1 billion less than CBO's projection based on the Daily Treasury Statements. Although revenues were the same as CBO anticipated, outlays were about $1 billion lower than expected.”

January 2005

“The Treasury reported a deficit of $58 billion in November 2004, about $1 billion more than CBO's projection based on the Daily Treasury Statements. Although revenues were about the same as CBO anticipated, outlays were about $1 billion more than expected.”*

From a deficit of $23.7 billion in January of 2001 to a deficit of January 2005 the deficit of $58 billion

By the way doesn’t that deficit include $80 million for Iraq? An unnecessary war? And what about that model of ineptitude and inefficiency the Homeland Security Department?

And so Bush has sunk us into this mess. But again The Boy In The Bubble expects us all to pull his fat out of the fire for him. Just like when he slid on the DUI charge, and on being AWOL.

But guess what? Iraq won’t appear on the budget because Bush doesn’t want us see it yet. He knows the bill’s coming due, and it’s a whopper!

And of course he didn’t bother to mention the kind of money we would need to borrow for Bush’s Social Security Edsel.
According to Cheney’s Favorite Website Factcheck.ORG, the Administration understates even this amount:

“The administration projects it will borrow $754 billion (including interest) through 2015 to finance the initial phase-in of the accounts, and much more thereafter. The liberal Center on Budget and Policy Priorities -- which opposes Bush's proposal -- projected that $4.5 trillion (with a "t") would be required to finance the first 20 years of the accounts after they start to be phased in in 2009.”

Oh, but Americans will make out fine, SOME Americans anyway. Bush will take care of his friends. Cheney, Rove and DeLay will take care of theirs. The bush tax cuts are to be made permanent at a cost of $53 billion for the next five years, and $1.1 trillion to 2015. And there are supposed to be more tax cuts worth $23 billion in the next five years and $117 billion to 2015.

The total CBO deficit as projected in September 2004 shows that they expect the deficit in 2015 will be $2,294 billion.

Justice would have to cut two programs to help localities hire more police officers. Hey they saved $635 million!

Education would end 48 programs including one promoting drug – free schools worth $441 million. Another program reducing alchohol abuse among students that would spend $33 million this year.

EPA would be cut by $500 million.

Of course pet projects would be looked after. NASA would get $400 million, bringing it’s lettuce up to $16.5 billion. Hey, after all if Bush gets his way with Social Security, we’ll all want to go to Mars!

The CBO weighs in with some interesting news about Homeland Security:

“Because of the nation’s continuing concern about homeland security, the Administration has identified the spending that it considers related to such activities, and CBO follows the Administration’s classification. Net discretionary budget authority for homeland security is estimated to total about $36 billion this year—$9 billion for defense and $27 billion for nondefense programs.”


Their projections for 2015 are: Authority for $422 billion, outlays of $418 billion.

In the end the only thing that could say up how I feel about this budget, and the man trying to sell can best be summed up by this from John Kerry:

"Only in Washington would anyone call this budget fiscally responsible. Every American family has to live within their means. Their government should, too. Yet with this budget, the Bush administration has succeeded in reaching new lows of fiscal irresponsibility while slashing and eliminating investments that help America's communities. This budget takes cops off the street, hurts veterans, and punishes school children while saddling future generations with record budget deficits and mountains of debt.”

Buyer beware. And if anyone still feels like driving Dubya’s lemon off the lot, wait ‘ll yah see what else he’s gonna sell yah!


Minneapolis Star Tribune - Mean, not lean/Bush's abysmal budget

Highlights of the FY 2002 Budget Agreement

The Washington Times Bush's tax cuts add up to zero


Responsible Wealth

Bloomberg.com

CBO MONTHLY BUDGET REVIEW
Fiscal Year 2002
A Congressional Budget Office Analysis


CBO MONTHLY BUDGET REVIEW
Fiscal Year 2001
A Congressional Budget Office Analysis


CBO MONTHLY BUDGET REVIEW
Fiscal Year 2001
A Congressional Budget Office Analysis


CBO's Current Budget Projections

John Kerry.com

Factcheck.org - Bush's State of the Union: Social Security "Bankruptcy?"


* Congressional Budget Office

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