Tuesday, December 25, 2012

SS cuts would be a death spiral for elderly

By Richard (RJ) Eskow

Liberals and progressives who want to cut Social Security? Democrats who want to cut one of their party’s signature achievements? 

“It has been done in your name, or at least in that of your family,” said Scrooge. 

As Christmas Eve approaches, supporters of the “chained CPI” are engaging in increasingly tortured – and positively Scrooge-like – arguments for the President’s callous and economically unsound proposal.

And they’re doing it in the name of the “progressive movement.”

“There are some upon this earth of yours,” returned the Spirit, “who lay claim to know us, and who do their deeds of passion, pride, ill-will, hatred, envy, bigotry, and selfishness in our name, who are as strange to us and all our kith and kin …”

The Randian Liberals
We’ll need a name for this new political genre: “Randian Liberalism” might work.
A classic in the field is a blog post entitled Dear Liberals, Chained CPI is NOT a “Cut” to Social Security. Get Over It, written by someone calling him- or herself “Deaniac83″ on a website called “The People’s View.”

Serving as a perfect representative of his ilk, this self-described but anonymous “progressive” sneers that the chained-CPI benefit cut has “set off more alarm bells on the Left’s media than Pearl Harbor.” Progressive?

“Charge their doings on themselves,” said the Spirit, “not us.”
Same Old Playbook

The piece’s blend of arrogance and misinformation typifies the new style of the corporate-Democratic loyalist, with rhetorical ploys straight out of the Pete Peterson playbook: Benefit-cut opponents are “zealous liberals” and “ideologues” who speak with “hair-on-fire” hysteria. And this is not a cut in benefits.

When is a cut not a cut? Well … actually, never.

The chained CPI would reduce a 75 year old’s benefits by 6.5 percent and a 95 year old’s by 9.2 percent. The average woman on Social Security received $997 per month in 2010.  Had the chained CPI been put into effect then, when the President first planned to propose it, her monthly income would have fallen to  $933 (in inflation-adjusted 2010 dollars) by age 85 and $915 by age 95.

But that’s not a cut, scoff the Scrooge Liberals. It’s a technical adjustment.  
Death Spiral
The cost-of-living calculation for Social Security is already too low. Something like the proposed “CPI-E” (which adjusts for the costlier goods and services used by the elderly and disabled) would be fairer and more accurate.  Many (though not all) extremely good economists agree with me.

The “chained CPI,” by contrast, lowers the rate at which benefits are increased by factoring in the reduced consumption of certain items – reductions that would be driven by cuts in benefits!

Whatever you think of this approach to economic modeling, it’s a pretty brutal in real-world terms to calculate benefit increases this way. You’re reducing people’s benefits based on the things you’ve helped ensure they can no longer afford.
This would quickly become a death spiral to the financial security of the elderly and disabled financial:  They can’t afford beef so they buy  chicken. They can’t afford chicken so they buy cereal. Then they go from cereal to Fancy Feast. From Fancy Feast to Purina. And so on and so on, ad infinitum, Ad nauseum.
Say what you will about taking $64 out of a 95 year old woman’s check, but it’s absurd to say it isn’t a “cut.”
You know me. I’m just too generous …
That brings us to the second, and even more absurd, “liberal” argument for the cut: Current benefits are too generous.  

That will certainly come as a surprise to 8.7 million disabled workers, who currently receive an average of $1,111 per month in benefits – a figure that will be cut even more drastically under the President’s proposal, since they’re expected to live longer on average than elderly recipients.

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It will also come as a surprise to knowledgeable economists like Kathy Ruffing and Paul Van de Water, who compared our nation’s Social Security benefits with those of similar programs in other countries.  They note that, in their words:
  1. Social Security benefits in the United States are low compared with other advanced countries.
  2. Future retirees already face lower benefits (relative to their past earnings) than current retirees as a result of a rising Social Security retirement age and escalating Medicare premiums.
Ruffing and Van de Water found that Social Security benefits in this country provide 41.3 percent a retiring worker’s income on average, while those in other developed countries provide 60.8 percent.

That’s roughly one-third less than other nations’ program — and yet this “liberal” argument claims that our  cost-of-living calculations are so lavish that they must be slowed down.

Know Your Subject Before Lecturing
Of course, these liberals don’t say that benefits are too generous. That’s too nakedly cynical. Instead they deploy rhetoric like “minor adjustment.”
But what they’re really saying is “we’re too generous to these elderly, underaged, and disabled recipients.”

That’s partly the result of their callousness, and partly due to their inability to grasp  some of the fundamental concepts of social insurance, as when “Deanian 83″ says that “each additional year lived is an increase in one’s lifetime benefits.”


Social Security is social insurance. Social insurance provides for certain needs when they arise. Social Security is supposed to support our living costs when we’re no longer working. Our cost of living rises with – this should be self-evident – overall increases in the cost of living.

That’s nothing like increases the defense budget, a comparison which “Deaniac” introduces with an embarassingly ill-place “gotcha” flourish. The purchase of weapons systems and the maintenance of a worldwide network of military bases (with thousands of physical facilities) is a matter of choice, not driven by external factors like an individual’s cost of living. Moreover, a military budget is not an insurance program.

Higher Taxes, Too … But Not For the Richest Income
The chained CPI would also raises taxes on all but the highest levels income, by forcing all other earnings into higher tax brackets more quickly.

Deaniac83 celebrated the chained CPI’s tax hike, too. But it’s funny: Randian “liberals” don’t ever get around to explaining why this tax increase on the middle class is not a “tax increase” on the middle class.

I’m sure they will eventually.

Party Line
A piece in this genre isn’t complete unless it marginalizes anti-cut advocates as rigid and hysterical ideologues of the far left, thereby condemning both the arguments and the people making them the Beltway exile of a “shunning.” Deaniac83 doesn’t disappoint.

But prior polls have shown that 75 percent of Republicans – and 76 percent of self-described Tea Party members – oppose cuts of this kind.  That means we have both the facts and the real political center, on our side.

We shouldn’t have to explain these things over and over again. But we do. Why?
Often the answer is that they want to argue in favor of a party and a President, not for policies that benefit most Americans. Deaniac83 lays his or her cards on the table: "Let’s get the president’s back. Tell him and Leader Pelosi you support them.”

But some of us support the public interest, not just a political party.  We also support a better understanding of public policy, not the cloud of confusion generated by arguments like these.

Ayn Rands of Christmas Future
Even die-hard Democratic loyalists should oppose a plan that will gravely wound their party’s credibility and popularity for generations to come. Left to their own devices, the party’s leaders have agreed to these unwise and unpopular cuts.

“Men’s courses will foreshadow certain ends, to which, if persevered in, they must lead,” said Scrooge. “But if the courses be departed from, the ends will change. Say it is thus with what you show me.”.

We don’t have to defend the elderly, the disabled, and the children on Social Security, of course.  Instead we can embrace the thinking Scrooge expressed so well, in Dickens’ striking foreshadowing of Ayn Rand’s language and creed:

“If they would rather die,” said Scrooge, “they had better do it, and decrease the surplus population.”

If that’s not your philosophy, you can sign this petition calling on our leaders to oppose cuts to Social Security, Medicare, and Medicaid.
“Answer me one question,” said Scrooge. “Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”

 Take action against this benefit cut. It’s the only way to find out.

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