Wednesday, January 7, 2015

GOP Congress wrecking crew gets to work cutting Social Security

It didn’t even take a week for the new GOP-controlled Congress to start wrecking things. Through a simple rule change yesterday in the House of Representatives, without debate or even a bill to be written up for people to look at, the GOPs are already striking their poses and making moves that will lead to unneeded stress in people’s lives.
The largely overlooked change puts a new restriction on the routine transfer of tax revenues between the traditional Social Security retirement trust fund and the Social Security disability program. The transfers, known as reallocation, had historically been routine; the liberal Center for Budget and Policy Priorities said Tuesday that they had been made 11 times. The CBPP added that the disability insurance program "isn't broken," but the program has been strained by demographic trends that the reallocations are intended to address.

The House GOP's rule change would still allow for a reallocation from the retirement fund to shore up the disability fund -- but only if an accompanying proposal "improves the overall financial health of the combined Social Security Trust Funds," per the rule, expected to be passed on Tuesday. While that language is vague, experts say it would likely mean any reallocation would have to be balanced by new revenues or benefit cuts.

House Democrats are sounding the alarm. In a memo circulated to their allies Tuesday, Democratic staffers said that that would mean "either new revenues or benefit cuts for current or future beneficiaries." New revenues are highly unlikely to be approved by the deeply tax-averse Republican-led Congress, leaving benefit cuts as the obvious alternative.

The Social Security and Medicare Boards of Trustees estimated last year that the disability insurance program would run short of money to pay all benefits some time in late 2016. Without a new reallocation, disability insurance beneficiaries could face up to 20 percent cuts in their Social Security payments in late 2016 -- a chit that would be of use to Republicans pushing for conservative entitlement reforms.
So the GOP is basically going to create a crisis for Social Security’s Disability side where none exists, and use these disabled individuals as hostages to try to screw up the pension side of Social Security for the rest of us. It’s quite reminiscent about how the GOPs pulled a change in figuring retiree benefits for the U.S. Postal Service in 2006, right before they were to be booted out of power. This move forced decades of USPS benefits to be paid up over ten years (see page 5 and 6 of this PDF), to the tune of $5.4 billion to $5.8 billion a year in extra expenses. This absurd requirement is the only reason the Postal Service had a deficit of $2.5 billion in the last fiscal year, which is now the impetus for GOPs and other “reformers” to claim delivery needs to be cut back and/or privatized in some other way. That’s the game these sick fucks are playing, and now they’re going to try it with those on Disability.

They’re also not very bright as to how this will likely play out in the court of public opinion. Here’s a great take from the DC-based political blog Balloon Juice that explains just how stupid this unnecessary move is.
Hell, the Bush plan to privatize Social Security was a Machiavellian masterpiece compared to this. Remember that the stock market was riding high* [(*) Yes, Wall Street was riding on a mountain of turd mortgages, but few people knew that at the time] and the instantaneous yields on privatizing people’s SS money might have been fairly positive, at least until 2008. The debate concerned how comfortable people felt with risk more than cutting anyone’s benefits tomorrow. As it turned out most seniors lived long enough to remember the stock market going up and down, and the risk did not appeal to them at all. By contrast in 2016 Republicans just hope to cut everyone’s benefits by about a fifth. Psychologically that is about a million times more draconian than the sideways shift that helped Democrats take Congress back in 2016 and I expect it to go over proportionately well.

The GOP can dress it up in opaque mechanisms but somehow people who have benefits will get around twenty percent less of them right before a major election. Say they cut the wealthiest twenty percent off of Social Security; in fact I think that is probably Boehner’s plan. Republicans have flirted with “means testing” plenty of times. Each time they only flirt long enough to take a cold and sobering look at the polls. The main difference is this time they cut off their own escape route. The rule change is the political equivalent of fighting with your army’s back against a cliff in the theory that men will fight harder if the alternative is surrender or death. Sometimes that works, but people only pull that kind of desperation move when the odds are not on their side. You don’t go looking for opportunities to do it.

To sum up, in a Presidential election year Republicans will have to either change the rule back (the smartest move but a pretty stark loss of face), raise revenues (= taxes, ha) or eat the blame for a huge haircut to the single benefit program most important to their core voting demographic. On top of that Democrats can just change the rule back in 2017 if the take Congress, which they may well do if the overriding issue of 2016 is who wants to defend your Social Security benefits and who wants to slash them for no damned reason at all….
I sure didn't vote for these a-holes, but as a 40-year-old, I will sure pay a price if their scheming cuts the Social Security benefits that I’ve paid into for more than half of my life. And especially given that I’ve lived through two stock market crashes since graduating college, I’m not exactly going to be counting on the Magic of the Market or the benevolence of a Greedhead CEO to carry me through.

Heck, in this day and age of shrinking pensions and stagnant wages, not only is it economically stupid for GOP politicians pulling stunts like reallocation to the threaten Social Security, but we should be demanding that it be EXPANDED to age 55, with the rich paying the same percentage of Social Security taxes that the other 95% of us wage-earners do. If Dems actually said that, and kept hammering on it, we’d never have to w1orry about another GOP Congress existing to screw up Social Security ever again.


  1. A close member of my family is on SS disability. A 20 percent cut? It might just mean that dear one's passing. The GOP schemers who came up with this are twisted, all right. Death panels, indeed. Here's urging the Democrats to campaign on this, promising to reverse the damage upon reassuming power. I'm sure in the meanwhile the GOP will be busy blaming them, in any event.

  2. I'm scared actually, to hear of it. I'm on SSI/SSD, get very little to live on, but do survive. But I couldn't with a %20 cut I don't think. That would cut me down to just over $500 a month. I couldn't pay rent and utilities and eat and get like shampoo. I know it's over a year and a half away, when the fund runs out, I read, but I'm trying to figure out what to do. I have a cat rescue and although the cats care is under a nonprofit banner, I cannot touch that money to live off myself, nor is there enough of it even if I could. What will happen to the cats here, I think. I am very worried. I have watched the Republicans and feel they don't care if what they do kills people like me. They just do not care. I am trying to figure out a plan now so I might survive.