White House Appears Unlikely to Put Social Security Cuts Back on the Table

September 16, 2011

White House spokeswoman Amy Brundage has said that President Obama’s deficit proposal will not include any changes to Social Security, reiterating the President’s belief that Social Security did not cause the immediate deficit problem. Aides say that the President’s plan to fix the debt will be modeled after a series of proposals he made in April: $4 trillion in budget savings over 12 years, through a combination of spending cuts and tax increases, without touching Social Security benefits. However, the President’s proposals are not binding; Obama must submit the new plan to the special bipartisan congressional “Super Committee” that has been tasked with finding at least $1.2 trillion in budget savings by the end of the year. The committee may not only be getting proposals from the President.  At a news conference on Thursday, a group of about 30 Democratic and Republican senators urged the special panel to find far more savings than the $1.5 trillion target it has set for itself. This group of senators is also considering making its own proposal. “We cannot let down our guard,” said Barbara J. Easterling, President of the Alliance.  “Unfortunately, Social Security is not beyond the reach of many who still want to cut it.”

 

Social Security Program a Big Topic at Monday’s GOP Debate

At the GOP debate on Monday night, Social Security was a hot issue. The candidates repeatedly stated that Social Security is broken, and they agreed that Social Security would face cuts in the coming years. They also talked about reorganizing the system, and that would undoubtedly have a major effect on the way the program is run as a whole. Two of the most opinionated candidates were Texas Governor Rick Perry and former Massachusetts Governor Mitt Romney. Perry argued for private savings accounts as an alternative to Social Security, a practice that was put into place in his home state. Romney repeatedly questioned Perry’s ultraconservative view of the constitutionality of Social Security. Perry believes that control of Social Security should be given to the states, which would mean astronomical changes. Perry went on to say that he completely disagrees with the creation of Social Security and Medicare in the first place. “If what you're trying to say is that back in the '30s and the '40s that the federal government made all the right decision, I disagree with you,” he declared. Perry accused Romney of calling private sector-Social Security “criminal,” which Romney refuted as a misquote. “Overall, the theme of the night seemed to indicate that Social Security would not be safe in the hands of any of the GOP candidates. The Republicans’ main goal is to cut spending, and they are not afraid to do that on the backs of seniors,” said Edward F. Coyle, Executive Director of the Alliance. To see a comparison of Rick Perry and Mitt Romney on Social Security, go to http://bit.ly/qqlgi5.

 

Galveston: Why the Federal Government Needs to Continue to Run Social Security

In the late 1970s Galveston’s county employees made the decision to opt out of Social Security and open personal saving accounts.  They did this out of fear that Social Security would not be around when it came time for them to retire. This move has been the prime example for those who oppose Social Security as it is currently structured, especially the Republicans in the 2012 presidential race. According to independent studies, individuals who are on the lower end of the income spectrum did not do well with the personal accounts. The studies have shown that the lower one’s income and the longer one lived after retirement, the less advantage there was to private accounts. This was partly because payments did not increase with inflation as they would have with Social Security. Even backers of the personal accounts, who claim that the government agencies used skewed numbers, acknowledge that the Galveston program may not be as beneficial to lower earners, because the program does not distribute the money according to a formula that helps the lower earners, as Social Security does. “Having the states run Social Security would only produce more results like those in Galveston, which at a minimum hurt the middle class and those who earn less,” said Ms. Easterling.

 

Social Security Payroll Tax on Incomes over $250,000 Proposed

Currently, active workers and their employers each owe a payroll tax on a worker’s wages up to $106,800 for Social Security. Congressional liberals have proposed raising the payroll tax to include income above $250,000 a year for individuals. This legislation is designed to keep Social Security solvent for the next 75 years, by putting an additional $6.5 trillion into the Social Security trust fund over that period. The sponsor of the House bill, Rep. Peter DeFazio (D-OR), believes that it is time to stop discussing raising the retirement age, cutting benefits, and privatization. Sponsors in the Senate include Bernie Sanders (I-VT), Barbara Boxer (D-CA), and Sheldon Whitehouse (D-RI). During President’s Obama’s 2008 presidential campaign, he proposed the same type of payroll tax increase. “The concern lies in getting this bill past the Republicans, because they have made it their stance to oppose any increase in taxes,” said Ruben Burks, Secretary-Treasurer of the Alliance. Recently Obama, in an effort to stimulate the economy, has proposed paring the planned 6.2 percent payroll tax on employees next year to 3.1 percent, and cutting the payroll tax to employers as well. He wants to replace the revenue that would be lost to Social Security with money from the government’s overall budget.

 

New on the Alliance Web Site

More photos from last week’s Alliance Legislative Conference are available on our Flickr page at www.flickr.com/retiredamericans. You can also use the “Search” area to search for photos of you, your state or your union in the Alliance photostream. For the latest photos and more from the Alliance Legislative Conference, go to http://bit.ly/pjVbXy. Finally, for the latest fact sheets on Social Security from the Alliance’s Department of Government and Political Affairs, go to http://www.retiredamericans.org/issues/social-security.  

 

State Chapter Round-up: Colorado, Ohio and Texas
The Colorado and Ohio Alliance chapters held their state conventions on Wednesday. In Colorado, Frank Lay was elected President and Bob Knapp was re-elected Secretary.  Mr. Knapp gave accolades to outgoing President Vivian Stovall for her hard work and accomplishments while serving the past two years, and the delegates gave Vivian a standing ovation. To see coverage from the Ohio convention, go to http://bit.ly/rgQwGq.

Gene Lantz is now the President of the Texas Alliance. Mr. Lantz follows Shane Fox, who died in August after a long battle with cancer.


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