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Economy

Report: Few Workers Would Be Affected By Change That Ensures 75 Years Of Full Social Security Funding

According to a new report from the Center for Economic and Policy Research, few workers would be affected if the cap on federal payroll taxes were lifted. Currently, the payroll tax — which funds Social Security and Medicare — is only applied to an individual’s first $110,100 in wages, meaning that middle-class and low-income workers pay the tax on their entire income, while the wealthy pay it on only a fraction.

As CEPR found, just 6.8 percent of workers would be affected if the cap were eliminated, while just 1.4 percent would be affected by a proposal currently before Congress that would apply the tax to income over $250,000 (but not on income earned between $110,100 and $250,000):

Eliminating the payroll tax cap would ensure Social Security could pay full benefits for nearly 75 years. However, this simple solution is ignored by conservatives, who would rather take the more regressive step of raising the retirement age, or simply privatize the program. And it certainly doesn’t help that the mainstream media consistently misinforms the public about Social Security’s financial health, ginning up a “crisis” while ignoring that one simple step would wipe the crisis away entirely.

Security

Rep. McCarthy: Pushing 300K Children Off Lunch Program To Protect Military Spending Is Trimming The Fat

House Majority Whip Rep. Kevin McCarthy (R-CA)

Yesterday, House Republicans moved legislation forward aimed at preventing any reductions in military spending, even if that means cutting much needed programs for the nation’s poorest. The House Armed Services Committee’s bill provides $554 billion for the Pentagon — $29 billion more than DOD had requested — while the GOP-led Budget Committee packaged six bills that would “slice $261 billion from food stamps, Medicaid, social services and other programs for struggling Americans.”

Last night on Fox News, House Majoriy Whip Kevin McCarthy (R-CA) claimed that the Republicans were just trimming the fat from the budget and getting rid of wasteful spending:

VAN SUSTEREN: But these cuts — I mean, these cuts — I mean, some of the cuts, I mean, just — you know, there are — there’s money sitting in our government. There’s some fat that we can.. some of these cuts. I mean — the fat is incredible!

MCCARTHY: Then you would support what we’re doing. That’s we’re doing committee by committee!

Watch the clip:

So what do McCarthy and the GOP consider budget fat? The New York Times today offered some details:

The Congressional Budget Office estimated that the bill would push 1.8 million people off food stamps and could cost 280,000 children their school lunch subsidies and 300,000 children their health insurance coverage through the federal and state Children’s Health Insurance Program. Elimination of the social services block grant to state and local governments would hit child abuse prevention programs, Meals on Wheels and child care.

A further 23 million would be affected by the repeal of the Social Services Block Grant, which helps fund child care and disability assistance to low-income Americans.

In fact, eliminating the Bush tax cuts for the wealthiest Americans would more than provide the savings the Republicans are seeking, twice over.

But not only are House Republicans protecting “largely useless” weapons systems and programs by cutting needed social services, their motivation stems from trying to prevent military spending cuts of nearly $500 billion over ten years because of the Budget Control Act’s sequestration trigger. Luckily for the GOP, the Center for American Progress has found more than $500 billion in Pentagon cuts — i.e. the real budget fat — that could be implemented over the next decade while still maintaining our vast military superiority.

While GOP plan has no chance of passing the Democratic-controlled Senate, the AP noted yesterday that it is “likely just a sample of what’s in store next year from Republicans if Mitt Romney wins the White House and the GOP takes back the Senate.”

Economy

House GOP Would Slash Billions In Benefits For Low-Income Disabled Kids

Our guest blogger is Rebecca Vallas from the SSI Coalition for Children and Families.

House Republicans recently proposed billions of dollars in cuts to Supplemental Security Income (SSI), a critical income support for kids with severe disabilities who live in households with very low-income and assets. While the proposed cuts amount to just one 1/100th of a percentage point of the federal budget, they would be nothing short of devastating for our nation’s most vulnerable children, and the families who care for them.

The 2013 House Budget Resolution includes $3.5 billion in cuts (over 10 years) to benefits for the hardest-hit youngsters — those in families with more than one child receiving SSI for their disability. Some 150,000 children with severe disabilities would see their critically needed benefits cut dramatically, forcing parents to make impossible choices — whether to meet the needs of one disabled child over the other.

SSI provides income support, and Medicaid in most states, to low-income elderly and disabled Americans, including about 1.3 million children with severe disabilities. Only the most severely impaired children in households with very low income and resources qualify for SSI. Kids receive less than $600 per month, on average. While modest, SSI makes it possible for families to care for their kids with disabilities at home instead of in costly institutions.

It offsets some of the extra expenses related to the child’s disability — like transportation to and from doctors and specialists; adaptive equipment; and specialized child care — many of which may not be covered by private insurance or Medicaid.

It also replaces some of the income lost when a parent reduces his or her hours, or leaves a job altogether to stay home to care for a disabled child. Between 10 and 30 percent of parents (usually mothers) with disabled children report stopping working entirely, and between 15 and 68 percent report cutting work hours to care for their children with disabilities. Even with the income support from SSI, over a third of children receiving SSI remain in poverty.

Families with more than one disabled child are even harder hit. Over 70 percent of families with more than one disabled child receiving SSI report experiencing material hardships such as food insecurity, and housing and utility hardships—even with the income support from SSI.

Kids with disabilities face considerable obstacles. They are more likely to drop out of school, be unemployed, have lower earnings, and receive disability benefits as adults. SSI helps parents provide the services and supports kids with disabilities need, offering them a better chance to achieve self-sufficiency later in life, and saving taxpayer expenditures down the road.

Families raising low-income children with disabilities need more help, not less. Cutting SSI, especially for families raising more than one disabled child, would push already needy children with disabilities deeper into poverty, and would end up costing taxpayer dollars in the long run.

We can and must do better than balancing the budget on the backs of poor, disabled kids.

Click here for more information about the SSI Coalition for Children and Families, or to get involved.

Click here to share your story if SSI has helped your family or someone that you know.

Economy

AZ House Candidate Jesse Kelly Etch A Sketches Earlier Plans To Privatize, Phase Out Entitlements

Jesse Kelly 2010 campaign flyer

Jesse Kelly 2010 campaign flyer

With the June 12 special election to fill the Arizona House seat left open by the resignation of Rep. Gabby Giffords (D) fast approaching, the Republican nominee Jesse Kelly has just launched a new attack ad against his Democratic opponent Ron Barber. In the ad and a newly revised section of his campaign website, Kelly highlights his commitment to protecting entitlements for America’s seniors — a commitment that stands in stark contrast to the positions he took in his unsuccessful campaign against Giffords back in 2010 and as recently as last month.

In the ad, Kelly makes a widely-debunked claim that ObamaCare will “cut $500 billion from Medicare.” The legislation aims to achieve $500 billion in Medicare savings, which will extend the life of the program and provide better care.

But after his disclaimer, Kelly and his grandfather Hank Allgyer say:

KELLY: I’m committed to protecting Social Security and Medicare for our seniors.”

ALLGYER: Don’t let Ron Barber cut my benefits, Jesse. I’ve earned them.

KELLY: Don’t worry, Grandpa. I won’t.

ALLGYER: I know you’ll protect us.

Watch the video:

On his website, Kelly says he supports “preserving, protecting and strengthening Social Security and Medicare” and does not support “privatizing, eliminating or phasing out these programs in any way.” He advocates actions to prevent Social Security from “going bankrupt” but lays out five principles that would seemingly prevent any real action to do that:

1. Any solution must be bipartisan
2. I will not vote for any solution that privatizes social security
3. I will not vote for any solution that raises taxes
4. I will not vote for any solution that cuts benefits
5. I will not vote for any solution that raises the retirement age

By ruling out changing the amount of money coming in to the Social Security fund (raising taxes) or the amount going out (cutting benefits or changing the retirement age), he seems to take virtually everything off the table. But he hasn’t always had this view.

The Hill noted that as recently as April 18, his website called for partial privatization of Social Security. His earlier view that “Younger workers should have the choice of allocating a portion of their contribution into a personal retirement account in their name,” is has been completely erased from his positions page.

And, the same article notes, in a 2010 debate, Kelly said the nation must take steps to reform, privatize, and phase out entitlements. “You need to fulfill your promises in the near future while phasing out future generations, taking steps to privatize, vouchers, everything,” he said. “It’s not an option of should it be done. It must be done.”

Kelly, a construction manager and Tea Party favorite, infamously hosted an M16 automatic weapons shooting campaign event to help supporters “get on target” to “help remove Gabrielle Giffords from office,” just months before a gunman went on a shooting spree at a Giffords community event in Tuscon, leaving six dead and a dozen wounded — including both Giffords and Barber. Giffords resigned her seat in January to focus on her recovery.

His issues page has since been changed to remove the phrase “The Second Amendment of the Constitution is not just about hunting. It is about the right of a free people to defend themselves.”

The Kelly website makes no mention of whether the nation has always been at war with Eastasia, but Kelly apparently does not think Arizona voters can remember all the way back to April 2012.

Economy

Media Jump On Idea That Social Security Is Going Bankrupt, Ignore Easy Way To Ensure Its Future

Social Security is going broke even faster than expected, according to a report from the program’s actuaries released yesterday. At least, that’s the narrative the national media presented to the American public.

Headlines from across the country — like the following from the Wall Street Journal, Los Angeles Times, and New York Times — were quick to paint a grim picture of the program’s future finances, noting that “painful” changes would need to be made to ensure its solvency beyond 2033:



The headlines and stories that follow create the illusion that Social Security is fast going broke, even though it is fully funded for another two decades and could pay 75 percent of its benefits thereafter (imagine the shock the media would display, meanwhile, if transportation, food stamps, or other programs had two decades of guaranteed funding).

They also ignore an easy way to ensure the program’s long-term solvency without large changes or cuts to benefits. Payroll taxes that finance Social Security are only collected on income up to a certain level ($110,100 in 2012), creating a regressive system that puts an undue burden on low- and middle-income workers. Eliminating that cap would allow Social Security to pay full benefits for the next 75 years, according to a Congressional Research Service report.

Vermont Sen. Bernie Sanders (I) introduced legislation that would raise the cap last year, but it has been ignored by Republicans and the media, who instead continue to feed the narrative that Social Security needs vast changes — including potential benefit cuts — to shore up its future. Americans of all political stripes oppose cuts to Social Security benefits, but as the Columbia Journalism Review noted earlier this month, media coverage has perpetuated the belief — particularly among young Americans — that Social Security is broken.

“The elite press repeatedly quotes the commentary of the devoted opponents of social insurance retirement programs,” Yale professor emeritus Theodore Marmor told CJR. “But they appear unaware of how they are supporting a strategic attack on social insurance that has been going on for years.”

Economy

Pennsylvania GOP Senate Candidate Favors Privatizing Social Security, Ending Disability Payments

U.S. Senate candidate Sam Rohrer (R-PA)

HARRISBURG, Pennsylvania — Pennsylvania Senate candidate Sam Rohrer (R), an 18-year veteran of the state legislature, has already made a name for himself during this campaign as one of the GOP’s most radical candidates. He thinks federal highways are unconstitutional, doesn’t understand the budget process, and has compared driver’s license requirements to slavery.

Rohrer also thinks the government should no longer provide federal services to the American people, a position he took a step farther Saturday at the Pennsylvania Leadership Conference. During a debate featuring the state’s Republican Senate candidates, Rohrer, the party’s front-runner, outlined a proposal to privatize Social Security and end the Supplemental Security Income (SSI) program, which provides aid to disabled Americans:

ROHRER: The structural aspect of the program that is in place, financially, if we don’t make changes, it will not be there for those who are coming up. So we’ve got to stop the cost increase, meaning we do it this way. We’ve got to take out the younger workers, maybe it’s an age of 50, maybe it’s as you say, 45, determine that age where those up to that point are not compelled to join Social Security. They’re allowed to go into a program like 401(k), have their own plan, and you obviously cut the cost on the outside.

But secondarily, we have to reduce the cost of Social Security now, otherwise we will not find us able to make payouts either. And that, I recommend, we do by bringing it back into line with what Social Security was acceptably set into place to be originally, and that’s as a retirement assistance program. Meaning we have to back off such things as disability — SSI payments — where we have many new people brought into the program. Many illegal aliens are receiving SSI payments. That is a part of the program that Social Security was never intended to fund, and that’s a part that we can logically back off, bring it back to its major core. I think we can preserve and extend the life of Social Security.

Watch it:

Privatizing Social Security, as Rohrer would like to do, would have had disastrous consequences for Americans during the Great Recession. According to a 2008 Center for American Progress analysis found that an October 2008 retiree would have lost $26,000 in a private Social Security account even before the market bottomed out in 2009. Given that two-thirds of senior citizens count on Social Security for more than half their monthly income, those kind of losses would dump millions into poverty.

Ending SSI and disability payments goes even farther. According to the Social Security Administration, more than 8.1 million Americans received SSI in January 2012, and nearly 1.3 million of the recipients were children. SSI’s support is modest — the average monthly payment in January was $517 — but important. A 2005 study by the Center on Budget and Policy Priorities found that SSI lifted 2.4 million Americans above the poverty line in 2003. And despite Rohrer’s claims that “illegal aliens” are benefiting from the program, SSI has far stricter requirements even for legal immigrants than most federal assistance programs.

Rohrer, meanwhile, ignored the easiest solution to Social Security’s long-term health. Lifting the payroll tax cap, which currently taxes all income below $106,800 for Social Security purposes, would ensure the program’s solvency for the next 75 years.

Update

The other GOP candidates — Tom Smith, Steve Welch, and Marc Scaringi — all “said voters under either the age of 40 or 45 should have at least the option of replacing Social Security benefits with private investment accounts. They noted the severe fiscal problems facing the Social Security fund, and several called it insolvent.”

Economy

How Federal Budget Cuts Could Devastate Low-Income Children

Families that depend on government assistance face countless threats, but a new study from the Urban Institute shows just how devastating budget cuts could be to America’s poorest families.

According to the report, as of 2009, low-income children received 70 percent of government funding for children — a respectable portion of overall federal spending dedicated to the needs of those under 18. But while the straight numbers look good for poor kids, those children’s future prospects are frightening.

The Urban Institute “estimate[s] that low-income children receive 99 percent of housing expenditures, 98 percent of expenditures on nutrition, 97 percent of health expenditures, and 94 percent of expenditures on social services.” So, of course, cutting the budgets for these areas would disproportionately affect children:

If these services sound familiar, it’s because many are the same programs that Republicans have aimed to cut in their most recent budget proposals — specifically, housing, nutrition, and health.

Millions of children have been kept out of extreme poverty by programs like food stamps, and the overall poverty rates would have been twice as high in 2010 without the social safety net. Surely, the opposite effect would occur with any cuts to welfare, social security, medicaid, or the other programs that keep these kids afloat.

Alyssa

Josiah Bartlet Was A Mediocre President

Note from Alyssa: With a glut of shows set in Washington—and more specifically, in the halls of power—set to hit television screens this year, comparisons to The West Wing are inevitable. But while that show set a high-water mark for political programming, does that mean that its characters were actually good at politics or at running the country? My colleague Ian takes a look at the man who occupied the Oval Office.

For seven seasons, the West Wing was therapy for thousands of Bush-weary progressives who fantasized about being governed by a Nobel Prize winning scholar who didn’t believe that high-income tax cuts were a panacea. Now that America actually is governed by a Nobel Prize winning scholar with a real domestic policy agenda, however, it’s time to be honest about President Bartlet’s legacy. While the ability to rhetorically shame conservatives made him an appealing fantasy, the substance of Bartlet’s policies ranged from uninspired on issues like health care to downright destructive on Social Security and education. Bartlet had a lackluster economic record. He gave away a seat on the Supreme Court to the far right, and he consistently favored symbolic cultural victories over real opportunities to make life better for American families.

If you set aside the budget-busting Bush tax cuts, George W. Bush was actually a better president on domestic policy than President Bartlet. So Bartlet expanded Medicare to cover mammograms and cancer clinical trials? President Bush actually signed a prescription drug plan for seniors. And while George W. Bush at least had the decency to allow his plan to turn Social Security over to Bear Sterns and Lehman Brothers die a politically embarrassing death, Bartlet worked with Republicans to pass a massive Social Security reform at a time when Republicans’ were single-mindedly focused on privatization. If the Bartlet Social Security plan had actually been in effect when the market bottomed out in 2008, millions of American seniors would have been left with no safety net to fall back on.

Besides trashing Social Security, the Bartlet Administration had few bold ideas. What was the Bartlet plan to ensure universal access to health care? Or the Bartlet plan to combat global warming? What did President Bartlet do to close the education gap between poor and rich children? Or to ensure that every child who does succeed in high school will be able to pay for college? If anything, his education policy was as much a betrayal as his Social Security debacle. Although the first term Bartlet White House had ambitious plans for education reform, the second term Bartlet wound up supporting school vouchers.

After nearly an entire term in the White House, Bartlet’s economic record was so dismal that it is a miracle he was reelected. Consider his attempt to literally defend this record before God (who he also calls a “feckless thug”): “3.8 million new jobs, that wasn’t good? Bailed out Mexico. Increased foreign trade. 30 million new acres of land for conservation. Put Mendoza on the bench. We’re not fighting a war.”

Read more

Justice

Before Perry Endorsed Newt, Newt Endorsed Perry’s Claim That Social Security Is Unconstitutional

Later today, Texas Gov. Rick Perry is expected to drop out of the Republican presidential race and endorse former Speaker Newt Gingrich. Not too long ago, however, Gingrich provided Perry with an endorsement of his own. In 2010, Perry published Fed Up!, a screed against the federal government which claims that Social Security, Medicare and, indeed, most of the progress of the 20th century is unconstitutional. Gingrich wrote the foreword to Perry’s book, and he wholeheartedly endorsed the book as a “handbook” that will arm “every American” with “the facts so that you can inform your family, friends and neighbors”:

Lest there be any doubt, Fed Up! is not the least bit ambiguous when it claims that America’s safety net violates the Constitution. The passage calling Social Security unconstitutional, for example, clearly and unequivocally states that Social Security exists “at the expense of respect for the Constitution” (note: the font in this clip is different because it is not available online and had to be captured on a Kindle reader):

Eighteen months after Gingrich lavished praise on Perry’s narrow vision for America, he will now share a stage with the radical governor and accept his endorsement. Given Fed Up!‘s complete clarity in laying out Perry’s view of the Constitution, however, it is difficult to believe that Gingrich did not know exactly what he was praising when he drafted such an effusive foreword to Perry’s book.

Now that Gingrich has emerged as one of the two leading contenders for the GOP presidential nomination, he has an obligation to explain whether he still believes, as Perry does, that Social Security is unconstitutional. Moreover, if Gingrich has since abandoned that belief, he has an equal obligation to explain what happened in the last eighteen months to change his mind on such an important constitutional question.

Justice

VIDEO: New Iowa Frontrunner Thinks Medicare, Paper Money And Nearly Everything Else Is Unconstitutional

Ron Paul thinks this is unconstitutional

Yesterday, two new polls showed Rep. Ron Paul (R-TX) emerging as the latest frontrunner in the Iowa GOP presidential caucus. Should the GOP primary electorate ultimately choose Paul as their nominee, however, it would be the clearest possible sign that they want to remake this country into a much meaner and more cruelly indifferent nation than the one nearly all Americans grew up in. Rep. Paul does not simply want to repeal most of the 20th Century, he believes that nearly everything America does is unconstitutional. ThinkProgress compiled video of just a few of Paul’s many claims that basic laws and essential programs violate the Constitution. A short list includes Social Security, Medicare, Medicaid, the National Labor Relations Board, the Federal Reserve, income taxes, and even the dollar bill.

To see the new Iowa GOP frontrunner claim that all of these things violate the Constitution — and to learn which seven cabinet departments he also believes are unconstitutional — watch our video here:

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