It has long been known that our entitlement programs will be insolvent because of structural issues within the program itself. Republicans and Democrats alike now fully acknowledge that these programs are unsustainable and the longer nothing substantial is done the worse the problems will get.

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.

The financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare.

-2011 Social Security and Medicare Boards of Trustees

Social Security is currently running a deficit. Some have wrongly stated this as the central problem, when it is only a component of the larger picture. Krugman rightly points out that Social Security has a rather large trust fund, which the program can eat away at for a while. Taken with the interest gained from the fund, we have until 2036 when “trust fund reserves are exhausted.” You can probably read a different number from different people in difference places, but this is straight from the trustee report.

Responding to claims made by GOP 2012 candidates, Mr. Klein tries to put the shortfall of Social Security into context by showing the deficit relative to GDP. While his are right, his point does not defuse the fact that these programs are broken and the too often cited “solutions” to make Social Security are not solutions at all. But he knows this. He said it himself.

It’s underfunded, ill-designed for certain features and facts of the modern world, and — probably most important — overused. Beyond Social Security, America’s retirement system is, in general, patchy and insufficient, which leaves retirees too reliant on Social Security. They then learn the hard way that the program is not what they’d hoped. We should do better. And we can.

Klein also made a post about Social Security that admitted that it is “stingy and getting stingier” and that we ought not to “‘solve’ the Social Security problem” by approaching it as a budgetary question. Yet, that’s exactly what he and Krugman do when they provide a list of tax raises and benefit cuts that are precisely tailored to the addressing the estimated deficiency, or when they try to make the program’s problems look manageable by comparing it to GDP. The relative comparison provides what is certainly is a low number and most people probably cannot conceptualize the meaning of an estimated .7% of GDP shortfall over 75 years. (It translates into $106,390,200,000 or $106.3902 billion. For context, all of Massachusetts runs off of roughly $34 billion each year.) That is, of course, if you choose to believe an estimate like that will at all reflect reality.

But the volume of our Social Security problems pail in comparison with the problems of Medicare and Medicaid. These programs’ sheer size and direct involvement with our healthcare industry makes leaves no question as to the connection between rising costs in prescription drug and medical costs and our entitlement programs. Obamacare was an attempt to resolve some of many problems with the government’s hand in health care, but I am unconvinced that it was as much as a game changer as was purported.

I think it is time we all get on the same page about the severity of these problems. Because of our entitlement programs the single largest part of our budget is structurally unsound, unsustainable and has not been changed to meet the challenges of the modern world. The huge lists of small fixes are laughable. The whole notion of continuing to reduce already problematically low benefits is just ridiculous and they are based on estimates that will likely be wrong. The program already does not provide real security to those retiring. If it did, we would not have “do not rely on Social Security” as the first and last point made by retirement advisors across the country. Already, benefits are too low and they are getting even worse. Klein is right – Social Security is ill-designed for the modern world. The entirety of our entitlement programming needs to be reconsidered and redesigned to meet the needs that we have today. It is time to let go of the brands of “Social Security,” “Medicare,” and “Medicaid.” We need a new approach to social welfare. A new program ought to respect market efficiency at all times and set strict (some might say ‘draconian’) guidelines as to what is covered so Republicans know tax dollars are not going to waste. It should be means tested and the taxes that support it should be progressive.

The political reality is that this will not happen. Our government will continue to sputter along until a moment of real crisis, or we will get by on small tweaks or moderate changes that dont replace the most problematic parts of the system (like Obamacare). Rather than blame it on Republican obstructionism or Democrats being socialists I think that this is a simply a good lesson in big democratic government really works. The inertia of our current system makes the implementation of the changes that should have been implemented 10 years ago, and desperately need to be implemented now, a pipe dream. The bigger the government, the bigger the problems and the harder they are to solve.

Simply put, they are wrong. If a single remark loses a candidate nearly one-fifth of voter support in less than a weeks’ time, that’s not a good sign. It doesn’t matter that the same amount of voters now are more likely to support him for president, he still lost support. The voters who are more likely to support him now were probably likely to support him to begin with, so it wouldn’t be accurate to say that he gained any support from his comments on Social Security either.

It’s no secret that Mitt Romney is going to use Perry’s remarks on Social Security until his last dying breath. Despite any of Perry’s insistence that he is only using tough rhetoric to prompt a discussion about the future of Social Security, such a strong and misrepresenting view will not play out well for the majority of Americans. The label of “Ponzi Scheme” most notoriously evokes the recollection of Bernard Madoff’s Ponzi scheme that swindled thousands of investors out of billions of dollars. Naturally, for those who were victim to Madoff, it was Social Security itself that provided a final safety net to otherwise complete financial ruin.

Nevertheless, Romney has his own Social Security ghosts which will continue to haunt him. During President Bush’s push to “privatize” Social Security throughout his second term, Romney openly supported the idea,

“The two major paths that we have is one, to raise taxes on people, which I don’t want to do. And the other is to allow some portion of people’s money that they’re now having taken out of their salaries to be invested in Social Security.”

When a female attendee stated that his plan was “privatization,” Romney offered a different term. “You call it privatization, I call it a private account.”

Clearly, Mitt Romney was against Social Security before he was for it. But that’s the same old tune we’ve heard him whistle for every policy issue that he has flip-flopped on (i.e. healthcare, abortion, etc..) in order to pander to whomever he is trying to gain support.

As the Pew Research Center confirmed in a national survey in June, 87 percent of Republicans say that Social Security has been good for the country. As the table below shows, Republicans are only slightly more negative about Social Security than Democrats.

(1) It’s idiotic because most of America disagrees with that stance

– Social Security is probably the most effective and popular government program of all time. A recent CNN/ORC International poll found that even with misinformation being spread about the looming decline of social security, “Nearly two-thirds say no to major changes to Social Security and Medicare.” If Republicans learned anything from the Healthcare debate of 2009, it should have been that scaring old people about the end of Social Security and Medicare is a winning strategy for gaining public support.

(2) Social Security is not a Ponzi Scheme

– According to data from the Social Security Administration, Social Security will begin taking in less taxes while paying out more benefits around 2016, but then money from a 2.4 trillion dollar trust fund will be used to offset the difference. Then,

After the trust fund is exhausted — which, according to projections, would happen in 2037 — Social Security would be able to pay out only about three-quarters of its promised benefits through 2083.

Therefore, any hype about there being an imminent crisis that demands a dramatic change to the structure of Social Security has more to do with a politicians ideological daydreaming than reality. For there to be any real immediate crisis about paying out Social Security benefits, the government would have to do something incredibly stupid, such as defaulting on our debt. (cough)

It is undoubtedly true that in its present form, Social Security will not last forever; but the Republican’s scaremongering rhetoric does little to help tackle this real problem. It’s surprising that when the economy is failing to rebound after a recession, the Republican front-runner would be the one who wants to do away with a program that makes life bearable for millions of older Americans.

Lately, the tides been turning against Republican Congressmembers who, according to their constituents, have some explaining to do about their recent unyielding stance on the debt-ceiling and their brazen threat to cut Medicare and Social Security. This video of a town hall put on by Republican Congressman Fred Upton of Michigan beautifully captures the constituent backlash to the recent debt-ceiling  mayhem that swept over congress only a few weeks ago.

That strong-jawed Democrat, Senator Chris Dodd, is still determined to do whatever it takes to derail Reid’s compact with the forces of darkness:

Speaking to reporters today, Sen. Chris Dodd (D-CT) said that he would again filibuster any bill that a provision in it granting retroactive immunity to the telecoms — or as he put it, “use every tool at my disposal as a Senator” to stop it. So if you were wondering whether anything has changed since Dodd dropped out of the presidential race, nothing has.

So what remains to be seen is whether Reid is an irresistible force, or whether Dodd is an immovable object. My money’s on Dodd.

(2)
Reid, incidentally, seems to be running for Biggest Asshole in Congress. After routinely allowing Republicans — over and over again — to mount high-end-auction style filibusters (where you signal your intent to filibuster by the merest twitch of one eyebrow, and Reid accepts your filibuster bid), he has decided that Dodd will have to talk himself to death in order to mount his filibuster of the retroactive immunity bill:

Harry Reid — who has (a) done more than any other individual to ensure that Bush’s demands for telecom immunity and warrantless eavesdropping powers will be met in full and (b) allowed the Republicans all year to block virtually every bill without having to bother to actually filibuster — went to the Senate floor yesterday and, with the scripted assistance of Mitch McConnell and Pat Leahy, warned Chris Dodd, Russ Feingold and others that they would be selfishly wreaking havoc on the schedules of their fellow Senators (making them work over the weekend, ruining their planned “retreat,” and even preventing them from going to Davos!) if they bothered everyone with their annoying, pointless little filibuster.

To do so, Reid announced that, unlike for the multiple filibusters from Republican colleagues, he would actually force Dodd and company to engage in a real filibuster.

I doubt very much that Dodd needs advice from anyone else, but how dramatic would it be if he just talks and talks, refusing to yield the floor to anyone else, till he actually collapses in exhaustion? That strikes me as the best form of revenge against Reid’s nonsense. The twerp will never be able to live it down.

*** Update, 7:52 am ***

I don’t think I’ve linked to this before, but Russ Feingold has an excellent fact sheet on his web page where he addresses clearly and concisely some “Myths and Reality Regarding Immunity”. Check it out; it does a great job of putting the retroactive immunity issue in perspective.

Beat the Press:

The Wall Street Journal told readers today that it would take a 16 percent increase in Social Security taxes to make the program solvent over its 75-year planning period, according to the SS trustees. Most people don’t know that the current size of the SS tax is 12.4 percent (6.2 percent on both the employee and employer), so they probably thought that it would take a tax increase of 16 percentage points rather than 1.95 percentage points under the trustees projections. Why not try to inform readers instead of scare them.

Seriously. I really don’t have the energy to relive the first half of 2005 again.

But just as Bush wasn’t chastened after his popular vote loss in 2000 nor his narrow win in 2004, anyone expecting him to reverse course now is in for a surprise. And according to Dean Baker, it’s a pretty big surprise:

The basic story is that the Bush [health care] plan refunds Social Security tax payments on the first $15k of wages for workers who have a family insurance policy. For a worker earning $20k a year, this would mean most of their SS taxes would be refunded, but they would also see their benefits cut by close to 60 percent when they retire. In other words, this proposal would imply a massive change to the SS system, with the greatest impact on the benefits received by low wage workers.

This, in a word, is insane. It appears that Bush is trying to kill two birds with one stone: begin the process of gutting Social Security while at the same time sacrificing the future retirement security of the poorest working Americans in an attempt to stimulate spending now with the refunded taxes. It’s comforting to hear that Congressional Democrats describe this plan as “dead on arrival,” but this and Bush’s executive order governing agency regulations certainly are warning shots to anyone who thinks that Bush is a lame duck with two years left.

Tickets allowing lucky audience members inside to hear the president at the school were colored red, blue or gold.
[...]
James Bock, 12, of Livonia, Livingston County, and five members of his family learned they had “golden” tickets, which mean they’ll sit on stage with the president.
[...]
“I think Social Security should be changed,” said James, who said he’s thought hard about the subject, even though he hasn’t held a job yet. “We should have some of the money to put in a personal account and they should keep part of it for us.”

Gold tickets? What is this, Willy Wonka & the Chocolate Factory?

The consistency is amazing. If Tim Burton had not just finished his own remake of Roald Dahl’s classic, the President’s version could be released this summer, a perfect match for the alternate reality his administration has crafted.

In the book, Veruca Salt, Violet Beauregarde, Mike Teevee and Augustus Gloop are the spoiled, privileged, know-nothing know-it-alls who get their just desserts in the end. Charlie Bucket‘s family was so poor that they all had to sleep in the same bed, and he only won a trip to the Chocolate Factory after Grandpa Joe cleaned his net worth out of the sofa cushions to buy Charlie the candy bar that contained one of the winning gold tickets.

But in America circa 2005, up is down and Robin Hood Republicans take from the poor and give to the rich. Enter young James Bock, all of 12 years old and already an expert in the shell game of Social Security privatization. He and his politically connected family filled in brilliantly for the precocious, obnoxious children who this time get the keys to Social Security trust fund and their very own shiny new private accounts. Poor Charlie doesn’t stand a chance because Grandpa Joe’s investing skills were sub-par, and the change he finds in the cushions goes to pay off his creditors thanks to the new bankruptcy bill.

Rather than a cautionary tale about what happens to children who always get their way, the Bush treatment of Dahl’s parable rewards them all with golden tickets.

Remakes suck.