Don’t they usually wait until after Labor Day to do this?
Ten days ago, I asserted that that the administration’s cynical use of Andy Griffith for a patently political promo on behalf of Medicare (“This year, as always, we’ll have our guaranteed benefits, and with the new healthcare law, more good things are coming: free check-ups, lower prescription costs”) was “the foundation for the biennial Democratic scare-the-seniors campaign.”
Well, the Social Security portion of that scare campaign kicked in this morning.
President Obama used his weekly radio and Internet address to glorify Social Security’s accomplishments (he “somehow” forgot to mention the program’s $7.7 trillion unfunded liability) and to rip unnamed Republicans for proposing to privatize the program. The President, who has used so many straw-man arguments in the past 19 months that he ought to have a scarecrow sitting next to him every time he speaks, framed active GOP proposals as all-or-none privatization (“You shouldn’t be worried that a sudden downturn in the stock market will put all you’ve worked hard for, all you’ve earned, at risk”), when they’re not. For example, what President Bush proposed five years ago involved giving those who wished the opportunity to invest 2% of their pay — out of the 12.4% of their pay that currently goes into the system — in one or more of a limited number of investment funds.
But wait until you see how the Associated Press and Erica Werner fanned the flames even further. I found the headline that follows at both the AP’s main site and at the same story at USA Today, so what you’re about to see is clearly their preference:
I watched (i.e., endured) the President’s address at the White House web site (the transcript is here). The President was in full demagogue mode, but he never used the word “destroy.” It’s also not in the transcript.
So here’s a question for Ms. Werner: Where did the word come from? Did co-worker Ben Feller suggest that this is what the President Obama was going to say, or that it’s what Obama would like to see written, after he (Feller) participated in that disgraceful off-the-record lunch with the president (covered Friday evening at NewsBusters; at BizzyBlog) earlier this week?
Werner’s writing, as would sadly be expected, also did nothing to dispel the false impression that what Republicans want is full privatization. As you’ll see in the final excerpted paragraph below, she also perpetuated the Trust Fund myth while failing to note that the program is already running cash deficits:
President Barack Obama used the anniversary of Social Security to trumpet Democrats’ support for the popular program and accuse Republicans of trying to destroy it.
Seventy-five years after President Franklin D. Roosevelt signed Social Security into law, Obama said in his weekly radio and Internet address Saturday: “We have an obligation to keep that promise, to safeguard Social Security for our seniors, people with disabilities and all Americans – today, tomorrow and forever.”
Some Republican leaders in Congress are “pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall,” Obama said.
He contended that such privatization was “an ill-conceived idea that would add trillions of dollars to our budget deficit while tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market.”
Most Republicans, in fact, are wary of touching that idea, because Social Security is virtually sacrosanct to voters, particularly seniors.
Nonetheless, Democrats have been able to seize on the issue because of a proposal by Rep. Paul Ryan of Wisconsin, the top Republican on the House Budget Committee, that would allow younger people to put Social Security money into personal accounts.
Ryan’s idea is similar to a proposal pushed unsuccessfully by former President George W. Bush.
… Unless Congress acts, Social Security’s combined retirement and disability trust funds are expected to run out of money in 2037. At that point, Social Security will collect enough in payroll taxes to cover about three-fourths of the benefits.
As a result of Congress’s inaction and the Obamanomics-prolonged recession and weak recovery, Social Security has in two short years gone from running a string of $180 billion-plus surpluses (from 2006-2008) to cash deficits. Benefits paid and administrative costs have been have been outpacing taxes collected. The Congressional Budget Office says that there will be Social Security deficits during the current fiscal year and the next few to follow.
As to the status of the allegedly “almost sacrosanct” program, let’s explain the fiction of the “trust funds” once again for Erica Werner’s and the AP’s benefit:
- Iinstead of being a separate, untouchable stash of cash and investments (i.e., instead of being run like a normal pension plan), Social Security’s Trust Funds have been raided by the rest of the government for decades. The politicians have done this by continually borrowing from them.
- Until recently, by including Social Security in a “unified” budget and raiding its surpluses, Uncle Sam has been able to paper over typically huge deficits in all other government operations. Now that the system is running cash deficits, the days of papering over are gone.
- The Social Security “Trust Fund” balance of $2-plus trillion is, except for very nominal amounts, nothing but a pile of IOUs from the rest of the government — which is otherwise (excluding its debt to the Trust Fund) over $10 trillion in debt.
You see, Erica and AP, the politicians in the ruling class have for all practical purposes already destroyed Social Security. Maybe someday you’ll break down and tell readers about it.
Cross-posted at NewBusters.org.