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The National Commission on Fiscal Responsibility and Reform was organized by the President to get recommendations for cutting benefits and raising taxes on middle Americans. They can’t imagine any alternatives, certainly not taxing the rich, who have already suffered hurt feelings from all that ugly talk about their little screw-ups. In the process it gives the Social Security haters yet another forum. Here’s an excerpt from the incoherent Alan Simpson, a grumpy old man who used to be a Senator from Wyoming, until he quit:
SIMPSON: We’re trying to take care of the lesser people in society and do that in a way without getting into all the flash words you love dig up, like cutting Social Security, which is bullshit. We’re not cutting anything, we’re trying to make it solvent.
Lesser people? That’s you, middle America. Jane posted his cranky ramblings in their entirety here. Simpson is the latest rich right-wing Republican to assault Social Security; it has been the punching bag for the crazy right since its passage in 1935. I posted some of the early cranky ramblings from the Republicans here. Here is Congressman Treadway of Massachusetts, doing an early version of the concern troll:
In my opinion, the proposed imposition of the pay-roll taxes imposed under titles VIII and IX constitutes the greatest single threat to recovery [from the Great Depression] of all the administration’s ill-advised policies. Business and industry are already operating under very heavy burdens. Many businesses at the present time are barely able to keep their heads above the water, and if they have to face a pay-roll tax for retirement annuities, and another pay-roll tax for unemployment insurance, eventually aggregating 8 percent, they probably will be unable to continue in operation. This means more unemployment, and more uncertainty.
1935 Cong. Rec. at 5531; the legislative history is here.
The Catfood Commission is calling for public comments; and I have prepared one for FDL. If I filed it on my own, I’d just be some nobody lawyer from Nashville. When I sign it for Firedoglake, the Commission members and their staffers will know that hundreds of thousands of people read it and more or less agree with me. That’s hundreds of thousands of activists who will mobilize against the VAT tax and benefit cuts, and will call Commission members to account for their willingness to default selectively against the American people.
FDL is holding a fund-raiser. The money supports our blog and our activism. If you can, please chip in $10, $20, or more to enable us to keep speaking out. Unlike the Catfood Commission, we aren’t supported by billionaire Pete Peterson, and we aren’t beholden to him or anyone like him.
And here’s the executive summary of my draft. The entire paper is available here; it includes a selection of quotes from the legislative history. Let me know what you think about it. And please support Firedoglake. Thanks.
Social Security is only a problem for people who don’t want to repay the bonds held by the Social Security Trust Fund.
The 1983 Greenspan Commission caused an increases in Social Security taxes, taxes paid by average Americans, reducing their ability to save for their own future. The Greenspan Commission intended to pre-fund Social Security, and draw it down as needed to pay future claims. The money we need to pay benefits now and for the foreseeable future was paid decades ago by working Americans and is held in the Social Security Trust Fund.
Those excess FICA taxes hid the massive deficits of the last 30 years in the Unified Budget. Presidents and Congresses were able to reduce taxes on the wealthiest Americans without complaint from the deficit hawks, because they benefited. The money went directly from the pockets of average Americans into the pockets of the rich.
Now that it is time to repay those special bonds in the Trust Fund, we are inundated in opinion pieces in the leading newspapers and magazines complaining about Social Security and its horrible impact on the budget. That led to the formation of this Commission and its private funding by the wealthiest of deficit hawks.
Government finances have been trashed by foolish tax cuts, unpaid wars, tax loopholes for corporations and the very wealthy, the failures of economists, the greedy search for greater returns in financial markets and the collapse of moral values in giant businesses. Peter Orszag and the people who funded his research, want to tax average Americans to pay current and future Social Security obligations by raising taxes and cutting benefits.
It isn’t necessary. The money is in the Trust Fund. But the people who manage the finances of the United States don’t want to repay the bonds held by the Trust Fund. They want to default selectively against average people, their fellow citizens, who paid their taxes expecting to be protected in their retirement.
Refusing to repay the $2.54 trillion dollars in bonds held by the Social Security Trust makes the US look like Greece, just another nation unable to govern itself coherently. The people who manage US finances come from the financial elites, the best that Wall Street and enormous corporations have to offer. Selective default exposes them as charlatans. The claims of the economics profession to expertise are puffery. Their theories about the benefits of tax cuts are proven false. Their mathematical proofs about free markets collapse in the real world. Others, like Peter Orszag, who justified taxing the poor to pay for Social Security because it would increase net savings, can’t find evidence for their claims in actual behavior. Politicians have mismanaged the greatest economy ever created into near depression by following the advice of these two groups and by their own ideological rigidity. The US is made to look clownish by these failures.
If this Commission thinks it has to do something about Social Security, then the only fair solution is to raise taxes on the wealthiest Americans, the people who have benefited most from the mismanagement, and using those funds to repay the bonds held by the Trust Fund. Making average Americans pay twice for their Social Security benefits is fraud.
Edwin M. Walker