Thanks For Asking, Fix the Debt! We DO Know How to Fix Social Security

Richard Eskow

­The folks behind Fix the Debt, the corporate- and billionaire-funded group lobbying against Medicare and Social Security benefits, asked if people like me have a “solution” for Social Security’s benefits or would rather “do nothing.”

Hey, thanks for asking!

Like most Americans, I support increasing Social Security benefits and understand that there are very practical ways to make that happen. So we’ll be glad to answer your question, Fix the Debt, about what really needs fixing.

Then we have a few questions for you.

A little bird told me …

I recently published a column warning that the White House and Congress may be headed once again toward the entitlement-cutting “Grand Bargain.” Both the Republicans’ wish list and President Obama’s budget include the “chained CPI” cut in Social Security benefits, and these cuts are being heavily pushed by lobbying groups like Fix the Debt.

That prompted this Twitter response from Fix the Debt:

@rjeskow Re: your column, is your solution to do nothing? If that’s so, SS Trust Fund will exhaust in 2033 forcing 23% across-the-board cuts

Their tweet reflects what has become a very familiar tactic from the anti-Social Security playbook.

Bait and Switch

It works like this:

  1. First, create a false sense of crisis around an assumed problem – one which is based on current projections about what will happen two decades or a quarter-century from now.
  2. At the same time, ignore the more immediate crises around us – especially the crises of joblessness and stagnant wages which is making these long-term projections worse.
  3. Pretend that the long-term funding imbalance is not largely caused by the behavior of some Fix the Debt patrons – especially the large Wall Street firms who wrecked the economy – and isn’t exacerbated by the taxpayer-bilking defense firms who are also funding Fix the Debt.
  4. Act as if that the very real solutions which are out there – and which the public is eager to support – simply don’t exist. (See, for example, economist Alice Rivlin. She is affiliated with billionaire Pete Peterson’s anti-Social Security efforts. Fix the Debt CEO Maya MacGuineas also runs a group that’s openly linked to Peterson’s foundation.)
  5. This game of false premises even extends to purportedly liberal associates of the corporate anti-entitlement crowd, who write editorials which claims to lay out all the available options, but ignore the ones that corporations and wealthy individual funders dislike.
  6. Lastly, having created a false sense of emergency and artificially limited the debate, pretend that those who have better solutions aren’t willing to make “tough choices” and would prefer to “do nothing.” Hence the tweet from Fix the Debt.

We’re glad you asked

Despite its wealthy funding sources, its conservative ties, and its history, we will assume that Fix the Debt has asked their question in good faith – and we’re so glad they did. Those of us who are fighting to defend Social Security do have a “solution” to that long-term funding imbalance. In fact, we have a whole toolkit filled with them.

To improve a situation, you must first understand how it came to pass. Social Security’s long-term shortfall was caused by factors which include:

Wealth inequality. Economist L. Josh Bivens and others have shown how the shift in national income to the wealthiest among us lowered Social Security’s revenues.

Unemployment is a major contributor to lower Social Security revenues. Jobless people don’t pay payroll taxes.

Wage stagnation in the middle class also cuts into revenues. It’s caused by a range of factors including runaway CEO pay and a declining minimum wage. (Middle- and lower-income workers with lower salaries pay less into Social Security.)

Bank recklessness. Financial institutions therefore cut into Social Security’s revenues when they inflated the housing bubble, engaged in massive fraud, and gambled on a massive scale, leading to the financial crisis of 2008 and its aftermath.

Solutions

Here are some of the practical, real-world solutions we’re offering – solutions which Americans want, and which will work to protect and expand Social Security’s benefits:

  1. Expand Social Security’s benefits through bills like those introduced in the House and Senate by elected officials such as Sen. Tom Harkin, Sen. Mark Begich, and Rep. Linda Sanchez.
  2. Finance these increased benefits by lifting the payroll tax cap as proposed in these bills. (Sadly for Fix the Debt, that will lead to the slight tax increase for billionaires such as group patron Pete Peterson, whose leading spokesperson is Fix the Debt CEO Maya MacGuineas.)
  3. Explore ways to offer additional benefit enhancements by increasing the payroll tax very slightly for everyone, which polling shows most Americans would support.
  4. Provide additional funding for benefits through a financial transaction tax on each Wall Street trade. While the individual tax assessed would be miniscule, the massive trading conducted on Wall Street – including computerized trades – would lead to a significant amount of money. This would have the added benefit of discouraging idle gambling, which reduces the likelihood of further bank-caused disasters.

It’s Your Turn, Fix the Debt

One of the most insidious effects of Fix the Debt and its many sister groups has been to shift the national conversation from our real crises – massive unemployment, poverty (especially child poverty), and the wage stagnation which is killing our middle class. Now that we’ve answered your question, Fix the Debt, we have a few of our own:

22 million Americans are looking for full-time work, and long-term unemployment is at record highs. Your proposed spending cuts will only make things worse. What’s your solution – do nothing?

Your kind of austerity economics has devastated Europe. It’s even made deficits worse. Yet politicians in your camp are about to impose more cuts. What’s your solution – do nothing?

Wealth inequality lowers Social Security revenue as more income is above the cap. What’s your solution – do nothing?

Unregulated Wall St crashed the economy, increased government spending and unemployment. What’s your solution – do nothing?

If Fix the Debt is serious about finding “solutions,” its leaders should open a dialog with those of us who represent the majority’s views on Social Security. We have real solutions, and we’re willing to share them.

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