Just a Wee Bit About Routine
Social Security Bookkeeping
These details may be too complex for hillbillies and bigots,
but they're perfect for reducing grandma to a blubbering mess.
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| Why can't they just leave us alone? [image] |
Just think of this post as MeanMesa's effort to "get ahead of the curve." The House Republicans, no doubt following the direct orders of their billionaire owners, have patched together an exquisite, albeit utterly wretched, little Social Security "bankruptcy terror scam" to spring on US elders in the middle of the 2016 election frenzy.
Like many of the "little projects" a Republican Congress is tasked with performing, this particular case is, for all practical purposes, conveniently invisible. In better times older citizens of this country were not intimidated into spending large portions of their golden years frantically threading through the Congressional Record searching for the latest evidence that the Koch brothers were scheming to grab their Social Security.
These times are not anything similar to those "better times" of yesterday. The strikingly unlovely political creatures presently in control of the Congress are little more than criminal "lap dogs" for their oligarchic bosses, and those bosses have been having daily wet dreams of "reinvesting" the $2+ Tn Social Security Trust into "some really great ground up opportunities" in Wall Street markets "to boost return revenues" every night for decades.
We should chase this rat just a little farther down the hole before rejoining the discussion of the primary focus of this post.
[MeanMesa's thanks to Thom Hartmann for this "heads-up;" link OPED News-Thom Hartmann]
[MeanMesa's thanks to Thom Hartmann for this "heads-up;" link OPED News-Thom Hartmann]
A "Sentimental Journey" Back
to the George W. Bush Days
The [Un-Offset, Galactic Size Tax Cut] Gift that just keeps on giving...
just not giving to you. You just pay to make up the shortage.
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| See the brown? [image] |
Republicans have a long and painfully credible history of being absolutely terrible with handling the country's fiscal health. Most of the disasters in this long series stem from the same cause: the Owners of the GOP absolutely forbid their puppets in Congress to tax dynastic wealth in any way -- at all -- in any amount -- ever. The recent Republican autocrat, George W. Bush. may offer the most egregious example of this disastrous type of this barely disguised, greed driven incompetence.
George II had a few really big legacy "ideas" requiring substantially more money than was available. As a consequence the Bush II administration began borrowing every dollar possible from absolutely anyone who was foolish enough to lend it. The Social Security Administration, operating under the control of the Bush Congress, was forced to extend immense loans from the Social Security Trust.
Predictably, the US economy finally collapsed in 2008 when the level of oligarchic looting -- with the consistent complicity of the GOP controlled Congress -- crossed the "tipping point," most Americans who had previously held any assets of any type suddenly [in a matter of five or six weeks] found themselves with 40% less personal wealth.
Well, this "list of victims" also included the Social Security Trust. Fortunately, the SSA had managed to insist on Treasury notes as collateral for the funds removed from the Trust. While these are not the typical form of Treasury bond, they are still quite valid, and -- importantly -- because these notes still hold some sort of redeemable value, they represent a "smoldering ogre" for the Republicans.
Even while contemporary GOP "leaders" of the Boehner/McConnell ilk [most of the same ones were there when the economy was sacked in 2008...] continue to blindly obey their respective billionaire donors, they have grown understandably more and more "nervous" with respect to this Republican debt held by the SSA Trust. Being entirely inept in terms of actually operating our government, these Republicans now face the very unpleasant reality that they are probably about to lose at least one part of Congress [the Senate], and that they have absolutely no idea how to discharge this debt, that is, no idea whatsoever about how this debt might be paid back.
Replacing Failed Republican Economic Policy
with Republican Social Security Propaganda
Better have plenty of propaganda because the policy really, really failed.
Beyond the "not knowing how to pay it back" problem, the Congressional Republicans were also doing "yeoman's work" for the propaganda factories in the oligarchs' think tank bunkers. Anything -- absolutely anything -- which could be done to twist the finances of the Social Security system into a weaker state could become a political talking point, and this included anything which could be done to even make it look weaker.
We can see this in popular Congressional "talking points" implying that the SS Trust is bankrupt, or that the return on the Social Security Administration's intentionally conservative investment policies are insufficient to keep the Trust going and benefits being paid. Of course these "GOP facts" as they are implied by these statements are entirely false. The extremely ugly nature of these GOP talking points cannot be politely dismissed under the guise of their being "simply confused," "innocently misinterpreted," "improperly presented" or made less outrageous by any other type of possible mitigation.
These are LIES.
Out right, fraudulent, premeditated,
criminal, conspiratorial, Congressional LIES.
And, every Republican who has stood before a microphone proclaiming any part of this phony argument has known -- at the very instant his jaw began to move -- that he was absolutely not telling the truth. THAT is today's GOP.
Republican propaganda about what Republicans very intentionally and incessantly call "entitlements" is as predictable as a good wind-up alarm clock. [When MeanMesa refers to "entitlements," it includes the entire Social Security safety net: Medicare, Medicaid, Social Security retirement, Social Security disability -- the works. When Republicans refer to "entitlements," they are referring to money which they think should rightfully belong to them and to their bosses.] Each round of the propaganda begins with the claim that the system is $50 Bn in debt without mentioning that, at the present, the system is $2.500 Bn to the good!
After that we hear the "repair suggestions."
After that we hear the "repair suggestions."
1. Raise the retirement age to 68 or 70.
2. Cut benefits by 20%.
3. Work longer hours.
4. The Trust fund must be invested on Wall Street.
5. And, the cravenly short sighted "futuristic" scam where benefits get cut for the future recipients but not for the old people who still might vote for them in this election. "You old people here at the town hall will get your benefits, but there won't be enough for your children and grandchildren. They will have to do with less."
Why are they so obsessed with this? It isn't even good politics.
The answer to this question is simple. These cuts and new limits to benefits are the only "solutions" possible when the alternative of increasing SS revenue is taken "completely off the table." Funding trouble with the Social Security Disability Trust is also seen as an available "avenue of attack" on the ADA. [Social Security Targeted on Day One of Congress]
Social Security operates in roughly the same manner as hedge funds, mutual funds and stock brokerages with the important exception that it doesn't invest in the "Wheel of Fortune" market casino shots because they are too unstable. Social Security's investments, on the other hand, have a low return on its investments, for example, around 2-3% this year. It's been as high as 14-15% when the US economy was functioning more normally. [Read more here-SSA.gov]
Of course the "return on investment" from the SSA's forced investment in the Bush Oil War Adventures [think extortion] is dismally low -- which drags the current overall investment return rate down. [As mentioned before, an unending Republican talking point which is used to justify investing the Trust funds in the stock market.] All that's left of that "strong armed" investment from the Bush years is a pile of Treasury notes, notes which have been paying around 0% interest lately thanks to the Republican world-wide economic disaster in 2008. [Remember when Al Gore was ridiculed for proposing that the Social Security Trust should be kept in a "lock box?"]
Further, when the US economy was staggering after the last Republican looting frenzy had reduced it to a near feudal level, the SS payments continued to pump economic activity into the corpse when way too much of the nation's "normal business" had become a credit starved, comatose liability.
The mere thought of SSA ever "demanding payment" for cashing out these particular Treasury notes is the constant nightmare for the sold out Republicans who were in charge of the Congress and able to force the Trust to finance Bush's crazy wars. It continues to serve as a nightmare for the current crop of Republican puppets in the House.
The actual amount extracted from the Trust is hard to pin down accurately, but it might have been as high as $1 Tn or more. However, a good portion never even made it to the asset portfolio of parasitic corporate leeches such as Halliburton, Raytheon, Lockheed-Martin and other war profiteers. Instead, it wound up in the pockets of, wait for it, the same oligarchs and corporations who were already presently enjoying lots of tax payer money they had already "earned" in other ways.
115th Congress:
Republican Dirty Tricks Committee
Beating up Social Security finances in time for the election
When the 115th Congress "opened for business" in January of 2015 three of the very first votes taken were entirely the normal routine for every new Congress [House of Representatives].
1. Elect the Speaker of the House
2. Enact House rules for the conduct of the Congress, and,
3. [as part of the "Rules" vote] Congress transfers money already in either the Social Security Trust account or the SS Disability Trust account back and forth, if necessary.
Dirty trick? Although every Congress since the beginning of the Social Security program has routinely done this, the GOP controlled 115th Congress did not.
By 2016 election time the SS Disability Trust will have run out of money.
For this simple reason.
Republicans target Social Security disability
They say new limits will force Congress to fix the ailing program.
Liberals see a ploy to weaken all of Social Security.
By David Rogers 1/20/15
Like Mrs. O’Leary’s cow, House Republicans kick-started a bigger fire than many imagined with an opening day rules change that revived Social Security as a hot issue for this Congress — and the 2016 presidential elections.
The GOP’s immediate target is Social Security’s sprawling disability insurance program, which has grown at a pace far beyond its revenues and will exhaust its trust fund reserves by December 2016, threatening a 19 percent cut in benefits.
In the past, Congress has simply shifted revenues from Social Security’s larger retirement account to fill holes in the disability fund. But the new House rule throws up a roadblock by creating a point of order against any such bill that does not improve the “actuarial balance” of the combined funds.
“What we want to do is not kick the can down the road anymore,” said Rep. Sam Johnson (R-Texas), who promoted the change as chairman of the Social Security panel on the House Ways and Means Committee. “The rule is intended to get the Congress to at least take a first step toward solving the Social Security problem. If we continue the way we are, it’s a go-broke operation.”
“If all they’re doing is rob-Peter-to-pay-Paul, that’s going to be subject to a point of order, and rightly so in my opinion,” added Rep. Thomas Reed (R-N.Y.). “We have to protect the retirement fund and the retiree.”
It all sounds like “good government,” but the politics are rich.
House Democrats were not consulted on the rules change, and liberals accuse the GOP of trying to cull the weak from the herd, pitting the disabled against pensioners to undermine the larger Social Security coalition.
In fact, the new rule’s fine print leaves an escape hatch for Republicans to move tens of billions into the disability fund if this gambit fails. Still, the upshot could be a one-two punch Democrats most fear: a first-round debate over disability funding in 2016 followed by a bigger battle over all of Social Security in 2017, when Republicans hope to control both Congress and the White House.
“They’re looking for a new weapon,” said Michigan Rep. Sander Levin, the ranking Democrat on Ways and Means. “What they’re doing in this rule is to use any problems within disability as a way to attack the whole system. It’s dangerous doubletalk when they have been the problem, not the answer.”
Adding to Levin’s fears was testimony last week before Ways and Means, in which Harvard economist Martin Feldstein promoted the idea of Congress gradually raising the eligibility age for full Social Security benefits to as high as 70. That would increase labor-force participation among people older than 65, expanding the economy, Feldstein said. But raising the retirement age would add to the strain on the disability fund, which has had to cover more workers longer since the retirement age was raised from 65 to 67.
These tensions fueled a separate uproar last week over remarks by 2016 presidential hopeful Sen. Rand Paul about the disability program.
Testing the waters in an appearance in New Hampshire, the Kentucky Republican suggested that half the people on Social Security disability had no more to worry about than achy backs and anxiety in the morning. “Join the club. Who doesn’t get up a little anxious for work and their back hurts,” Paul said disparagingly.
After video of his remarks went online, Paul quickly backtracked: “We absolutely should take care of those truly in need of help,” he said in a statement.
At this stage, the White House and Treasury show no sign of backing down from their intent to pursue a straight reallocation of funds from the retirement account, formally known as the Old Age Survivors Insurance or OASI trust fund. Given all the divisions already in Washington, adding a new procedural hurdle is “unhelpful,” an administration official said icily.
Indeed, transfers between the two Social Security funds have gone on for years. Each relies on a percentage of the same payroll tax, and the disability program helped the retirement trust fund in the 1980s by reducing its own share of the tax revenue.
What’s most changed now is that critics are singling out the disability fund as the profligate partner — and a harbinger of bad times ahead for all.
Without doubt, the growth of the disability program has been explosive.
In the past 20 years, the number of workers getting disability payments has more than doubled to 8.95 million last month. About $140 billion went out the door in fiscal 2013, double what the costs were just 10 years before. And like food stamps in the Farm Bill debate, disability payments are common enough now to be a whipping boy for conservatives like Paul, playing on resentment toward people receiving government aid during hard economic times.
At one level, this is all political catnip for Democrats, eager to be seen as defenders of Social Security and its New Deal heritage. But given their history, Republicans don’t come to the table with clean hands.
For example, the GOP’s 2011 budget deal with President Barack Obama held out the promise of millions in appropriations to help the Social Security Administration fight precisely what Republicans complain about in the disability program: medical fraud. But for 2012 and 2013, House Republicans failed to approve the money, thereby adding to Social Security’s woes.
Moreover, an analysis by Social Security’s chief actuary, Stephen Goss, suggests there’s less to the new House rule than meets the eye. That’s because the point of order is triggered only if lawmakers exceed a “0.01 percent” threshold, which equates to a $38.6 billion cap on what any one Congress can move from the retirement fund, Goss told POLITICO.
That leaves too little room for some long-term, multiyear reallocation of payroll tax revenues but it is enough to get past 2016, by Goss’ calculations.
“We’re projecting [disability] trust funds will be depleted in December of 2016. … The shortfall for the ensuing 12 months would come to about $29 billion,” Goss said. “What that means is that we could have a tax rate reallocation that could apply in 2016 or 2016 and 2017 that would generate up to $30 billion or even $35 billion transferred to the [disability] trust fund, which would at least extend its reserve depletion date for one more year.”
It’s a stop-and-go scenario that serves neither party’s goals in the end. Much depends in the interim on Johnson and new Ways and Means Committee Chairman Paul Ryan (R-Wis.).
Ryan has boasted that Ways and Means will be “command central” for the GOP’s agenda, and he has installed his own staff in Johnson’s Social Security subcommittee. In the previous Congress, the disability debate among Republicans was shaped by flamboyant personalities such as the now-retired Sen. Tom Coburn (R-Okla.) and Rep. Darrell Issa (R-Calif.), who has had to surrender his platform as chairman of the Oversight and Government Reform Committee. But now, Ryan would like to be the architect for reforms in the social safety net.
There is room for compromise. The crisis is no surprise — as long ago as 1995, Social Security’s actuaries were predicting 2016 as a breaking point for the disability fund. And multiple academic papers from the center-left and center-right outline changes Congress could consider.
Unleash the GOP Social Security Terror Propaganda!
These are on the first page of links found by the GOOGLE.
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| RELEASE THE GOP KRAKEN! [image] |
By this time MeanMesa visitors have already concluded that "there is no there, there," but rest assured, these despicable political creatures such as the current gang running the Congress will eagerly "unleash" this phony "emergency" just in time to return every terrorized US senior and disability benefactor "to the GOP's fold" in time to re-elect them.
In fact, they've already begun.
MeanMesa GOOGLED the topic, and BOOM! -- as usual, the oligarch tribe has, once again, forgotten that "everything that goes on the Internet, stays on the Internet."
Social Security Disability Insurance Trust Fund Will Be Exhausted in Just Two Years: Beneficiaries Facing Nearly 20 Percent Cut in Benefits [Heritage Foundation]
Social Security Trustees Sound the Solvency Alarm, and,
Social Security Costs Keep Increasing Over the Long Term -- all July, 2015
[Committee for a Responsible Federal Budget]
Don't take the bait. Un-elect these propaganda drooling thieves while we still can.
Don't take the bait. Un-elect these propaganda drooling thieves while we still can.
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