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The Importance of Unity

In addition to shoring up support among the young, the most important question facing Social Security advocates is whether or not we can maintain a united front in the congress. Technically speaking, Bush can push this through without a single Democratic vote even in the Senate by abusing the budget reconciliation process. There's always some chance, however, that the GOP Senate caucus won't stand for that (just as Senator Byrd blocked a similar effort by the Clinton administration to do health care as a reconciliation item) so it's worth being prepared. More to the point, however, a lot of Republican Senators and House members aren't too excited about this plan. It's not so much a question of conservatives versus moderates, as it is a question of people who happen to have a bug in their pants about Social Security versus those who are nervous about the political risks here and who have other agendas they'd like to advance. The only really feasible way to put a stop to this is to make sure that the nervous nellies stay very nervous. Key to that is making sure that unlike with, say, the Medicare bill, they can't drape their vote in even the merest veneer of bipartisanship.

I'm told that the most likely culprit for a stab-in-the-back is Joe Lieberman. It seems to me that the Democratic leadership, as well as progressive constituency groups, need to make it clear to Senator Lieberman that Connecticut is not the sort of state where the national party needs to take a certain degree of apostasy for granted. There must be many Connecticut Democrats who'd be eager to take a seat in the US Senate, and at least one who'd be willing to chance a primary campaign over it. If not Richard Blumenthal then one of the state's House members or some other downballot statewide officeholder.

December 19, 2004 | Permalink

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» Unity from The Stakeholder
Yglesias wants unity, he's got it: The Social Security debate is providing the first big test of how Democrats in Congress plan to play out their role as the heavily outnumbered opposition party. If their actions so far are any... [Read More]

Tracked on Dec 19, 2004 11:24:28 AM

» The Need for Unity from The Ward Report
The left is just waiting for an excuse to allow them to target Joe for defeat the way the right targeted Spector. Here I want to offer a word of caution. I understand the frustration with Lieberman. I'm out of patience with him too, but he does se... [Read More]

Tracked on Dec 19, 2004 1:36:43 PM

» A former Nutmegger chimes in... from Wampum
My friend Duncan over at Atrios suggests, per Matt Yglesias' supposition, that if Lieberman chooses to support the dismantling of Social Security, that Progressive Dems should launch a primary challenge in '06. I have two words to say to such... [Read More]

Tracked on Dec 19, 2004 4:36:20 PM

» Fear Us from Pandagon
I'm all for this united front stuff. The fun part of the blogs/netroots/Moveon's/etc is that no one quite knows how powerful we are (jnternet scary, strong), and most politicians are willing to err on the side of caution and... [Read More]

Tracked on Dec 20, 2004 2:24:23 PM

Comments

I'm not one of the Lieberman-haters, who are legion. But if he doesn't get that
if Social Security isn't a core Democrat issue, then there is no such thing
the GOP cannot for a second be trusted on the issue
then it would be better for the Democrats to lose Lieberman's seat to the GOP than for Lieberman to go unpunished for breaking ranks on such a fundamental issue.

Posted by: son volt | Dec 19, 2004 11:42:22 AM

honest question for lefties...

i really can't see why so many on the left are against the idea of letting people spend their own money. Perhaps someone can give me a civil argument, but here's the thing:

i'd rather invest my own $100 than sign it over to some unaccountable agency.

if bush implements the ability to opt-out - i.e. to retain your SS instead of having it automatically deducted via taxes - I can't possibly see the argument against it. If you care about the poor, fine, give them your money. But the poor are not the majority. Why should anyone with a brain trust bureaucrats to invest their hard-earned salary?

I'd appreciate a reasoned response. In particular, can you tell me whether *you* would opt-out if given the option to do so? And if not, why? Do you really think you'd get a better "interest rate" via the government (though SS is not a wealth creating instrument)? Or are you not opting-out because you want to see old seniors taken care of, and you think the government will take care of your grandparents better than you will? As i see it they are logically separable arguments.

Posted by: aquestion | Dec 19, 2004 11:53:17 AM

Everything you need to know about Lieberman

Chimpy: "No WMD's here!!!"
Press: "Haw haw haw"
Lieberman: "Hee hee hee"

Funniest damn joke he ever heard.

Posted by: Barry H | Dec 19, 2004 12:00:51 PM

aquestion--

Because I think that our government should try to ensure that the aged are cared for, and Social Security seems to be an effective way of doing that.

I don't see SS as my personal retirement fund-- I see it as my contribution to something intended for all elderly Americans, myself potentially included.

You say:

If bush implements the ability to opt-out - i.e. to retain your SS instead of having it automatically deducted via taxes - I can't possibly see the argument against it. If you care about the poor, fine, give them your money.


But we could apply this logic to all sorts of programs. "If you care about the army, fine, give them your money." "If you care about public schools, fine, give them your money." "If you care about the interstate highway system, fine, give it your money." Why should Social Security be the only program that we get the chance to opt out of paying for?

The difference between you and me appears to be that I view taking care of elders as a fundamental obligation our goverment has, and you don't. Right?

Posted by: JakeV | Dec 19, 2004 12:10:43 PM

In answer to "aquestion", I would refer you to Paul Krugman's latest op. ed. here:
[http://www.nytimes.com/2004/12/17/opinion/17krugman.html?oref=login&n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists%2fPaul%20Krugman]

[...]

Privatization dissipates a large fraction of workers' contributions on fees to investment companies.

It leaves many retirees in poverty.

Decades of conservative marketing have convinced Americans that government programs always create bloated bureaucracies, while the private sector is always lean and efficient. But when it comes to retirement security, the opposite is true. More than 99 percent of Social Security's revenues go toward benefits, and less than 1 percent for overhead. In Chile's system, management fees are around 20 times as high. And that's a typical number for privatized systems.

These fees cut sharply into the returns individuals can expect on their accounts. In Britain, which has had a privatized system since the days of Margaret Thatcher, alarm over the large fees charged by some investment companies eventually led government regulators to impose a "charge cap." Even so, fees continue to take a large bite out of British retirement savings.

[...]

Please read the rest of the article... Krugman is one of the most concise and "on point" writers, when it comes to economic issues, that I have ever read...

Don't buy the demonization of him by the right, they are afraid of his opinions because he makes such good sense...

I hope you are sincerely interested in this issue and not just trolling...

"Those who can make you believe absurdities can make you commit atrocities." -Voltaire: French author, humanist, rationalist, & satirist (1694-1778)

Posted by: lobezno | Dec 19, 2004 12:14:27 PM

A majority of the elderly aren't poor only because of Social Security. But 2/3 of current retirees would be impoverished without it.

Is there a certain amount of paternalism inherent in Social Security? Offhand, I'd have to say that there is. But since I'm not a libertarian, paternalism isn't a particularly dirty word for me.

Posted by: son volt | Dec 19, 2004 12:15:52 PM

Why do you think Liberman might break ranks? Couldn't this be some malicious rumor?

But you are correct on strategy, Democrats need to know that their political future depends on doing the right thing.

Posted by: Alice Marshall | Dec 19, 2004 12:16:36 PM

Aquestion

It's an insurance plan. It covers you if you become disabled, it pays benefits for your kids should you get killed, it pays for a regular if small retirement check for your wife should she survive you. And you qualify for all that after only a few years in the workplace, working at whatever low rates you start out with.

That is the base of Social Security. Present me a plan that gives me that based on whatever I can save from four or five years of entry level pay. And then we can have that civil conversation.

Or to put it in less civil terms: do you have enough put away right now to support yourself should you become permanently disabled tomorrow? (And you are exactly one drunk driver away from that, one slip on the ice, one motorcycle accident).

And your grandparents question was just crazy. Are YOU in a financial position to support YOUR grandparents? My grandmother was a widow before I was born and my parents had a tough enough time feeding four boys. Your solution would have been ?????

Talk to your AFLAC Rep and bring me a private package of disability and survivors insurance and combine that with a retirement plan that gives the same bang for the 12.4% (6.2% from you) buck. Because in all kinds of ways Social Security is just not about just you. And pretending it is all about returns at age 65 is fundamentally dishonest.

Posted by: Bruce Webb | Dec 19, 2004 12:20:54 PM

Alice - when does Lieberman NOT break ranks? I have a hard time coming up with examples of when he does not stab the traditional Dem Party in the back.

Note that during his campaign for the Dem nomination, there was not one mention on his webpage that he is a Democrat. Not one.

That's the kind of loyalty he feels toward the Democratic Party.

Posted by: Chuck | Dec 19, 2004 12:24:13 PM

jake:

The difference between you and me appears to be that I view taking care of elders as a fundamental obligation our goverment has, and you don't. Right?

Well, I think it would be more efficient if I had 100% of the financial responsibility for my grandparents rather than .0001% of the financial responsibility for everyone's grandparents.

It seems though that this is a limited problem: we are only talking about those who can't work, who don't have grandkids *and* have messed up their investment plans (or didn't have enough money to invest well, etc.). I don't know what fraction of the population that is, but people who are 65+ without grandkids and w/o retirement savings are probably less than 5% of the population.

So, I guess this is my question: I don't see why everyone should be taxed to pay for their "own" SS if we are primarily concerned about that group. Shouldn't a narrow redistribution program be pursued again - i.e. something like AFDC, except it's aid to senior citizens below a certain income?

I also think that if SS is supposed to be an altruistic program - i.e. a program that you are supposed to lose net money on for the good of society - it shouldn't be confused with a retirement program - i.e., a program which are you supposed to gain net money on for your own good.

lobezno:

I guess I have kind of the same response I had to jake. Would you be in favor of just means-testing social security? I.e. payments *only* to seniors with low incomes who'd made a good faith effort to invest and didn't have grandchildren to take care of them?

Also, do you conceive of SS as a

1) a program for us to pay for poor seniors (altruism)

2) a program for people to pay for their own retirement (efficiency/self-interest)

What is confusing is when both rationales are presented simultaneously, because they can't both be correct - you can't expect SS to be both a net loss (altruism to seniors) AND a net gain (retirement money for yourself).

Posted by: aquestion | Dec 19, 2004 12:25:35 PM

"A Question"

I have a question for you - from where does this belief that the private sector always does things better and more efficiently come from? It has attained the status of a quasi-religious belief on the right, and I cannot for the life of me understand on what this belief is based.

Look how well the private sector (i.e. Halliburton) is supplying our troops in Iraq.

Look at DoD procurement programs and you will see nothing but massive waste and cost overruns. Billions in "overruns" go right into the pockets of weapons contractors like Lockheed, Raytheon, General Dynamics - all private companies.

It's amazing to me that in the wake of the Enron, Worlcom, Xerox, etc. scandals someone could possibly suggest that a model government program that has benefitted hundreds of millions of Americans since its inception be thrown to the whims of what is euphemistically called "the free market."

Posted by: Chuck | Dec 19, 2004 12:30:15 PM

Bruce -

Thanks, I was actually not aware that Social Security provided accident insurance. I had conceived of SS as a program primarily for seniors. Do you have a link on that? I'd like to know more about that.

Also, just to make sure I understand you:

1) do you expect to get back more money than you put into SS? If so, do you think that return on investment depends upon compelling other people to participate? [I'm trying to choose a neutral word, so substitute mandating or something for compelling if that bothers you.]

If you don't think your return on investment into SS depends upon the number of people participating, would you be against opt-out?

2) Conversely, is it possible that you *don't* expect to get back more than you pay into SS - that is, you consider it on par with your contributions to welfare/foreign aid/etc.?

That's my fundamental question...SS is simultaneously presented as economic good sense (retire ok) AND a moral imperative (help seniors), but the former is about net gain (efficiency/self-interest) and the latter is about net loss (altruism).

Perhaps this is a false dichotomy, but I haven't yet seen an explanation that resolves it.

Posted by: aquestion | Dec 19, 2004 12:37:09 PM

Look how well the private sector (i.e. Halliburton) is supplying our troops in Iraq.

Look at DoD procurement programs and you will see nothing but massive waste and cost overruns. Billions in "overruns" go right into the pockets of weapons contractors like Lockheed, Raytheon, General Dynamics - all private companies

Chuck, I'm not the most conservative person around (I voted for Clinton and Gore and Kerry...and yeah, Schwarzenegger). And so if I'm wrong on this I bet a conservative on this thread can jump in.

But I think that a conservative would say that those are government procurements and that a company which had billions in overruns would be unable to tax the population to pay for it, and would just go bankrupt.

In other words, Iraq waste & DoD waste is a function of government waste, not free market inefficiency.

Posted by: aquestion | Dec 19, 2004 12:40:36 PM

aquestion sez:

i'd rather invest my own $100 than sign it over to some unaccountable agency.

Great. Join your employer's 401(k) program. If you're a member already, increase your contribution. Open an IRA. Buy an annuity. Buy a certificate of deposit. Gee, even open a savings account.

Why should anyone with a brain trust bureaucrats to invest their hard-earned salary?

Social Security isn't a great deal. It's just a good deal. Remember risk versus reward. Social Security is no-risk, so don't expect a huge return. Same way in the private sector. Savings accounts are low-risk. Low rate of return. Options on frozen concentrated orange juice futures are high-risk. Lotta potential to make big dough. Lotta potential to lose your shirt.

Social Security is not just for retirement. It's long-term disability. It's benefits for your surviving spouse. It's benefits for your minor children. It's benefits for your adult children who are disabled.

When you retire, you receive guaranteed benefits for as long as you live.

If you become disabled, you receive guaranteed benefits for as long as you live. "Studies show that a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement age." - Disability

If you die, your spouse receives guaranteed benefits upon retirement for as long as he/she lives.

If you die, your kids (if they're under 18), get benefits

If you have a disabled child, he/she could get benefits for life.

If you are a divorced spouse of a worker who dies, you can even qualify for benefits.

Try to match these benefits with existing coverage. See how much that will cost you.

No, you're not gonna get rich off of Social Security. But you sure as hell won't be broke either.

Posted by: knobboy | Dec 19, 2004 12:55:43 PM

aquestion, here is my copied and pasted response to your request. I apologize in advance if it sounds less than civil.

I would be okay with some small personal accounts
under the following conditions:

1) A realistic method of payment that does not include massive new debt or payroll tax hikes. Otherwise the middle class eat it.
2) A mechanism to limit transaction/overhead costs. This is all for nothing is (sic) these costs eat up any improvement in return. If you compare government overhead for Medicare, which is about 3%, to private insurance, which is 15-20%, then it does not look so good.
3) It's limited and regulated. Suppose a certain group of people lose a lot of their social security because of bad investment. The fact is society/government will not let them starve, nor should we, so the taxpayers will pay for the loss.

I really don't see private personal accounts plans that get around any of these issues, and the plans I have read add $1-2 trillion in debt, which is roughly 6-12 years of tax revenue.

I assume, in your opt-out scenario, the debt to pay today's seniors and any future shortcomings comes out of the general fund. I assume that currently defined benefits and payroll taxes would stay the same for those who opted in. I also assume that I can keep my employer's contribution too. For me, it's a close call, but my wife would definitely stay in. If I did opt out however, I would probably purchase extremely conservative bond funds.

On that note, I have also become a substantially more cautious investor since Bush's election. I sold several individual stocks but have only purchased conservative mutual and index funds. The fact is I just don't trust him to run the economy or keep my social security secure, so I'm taking substantially fewer risks. That is probably not what a conservative wants to hear.

But the poor are not the majority.

You might want to rethink that. The majority of seniors might very well be poor if it weren't for social security, which was the case before its inception.

Posted by: blank | Dec 19, 2004 1:00:38 PM


Well, I think it would be more efficient if I had 100% of the financial responsibility for my grandparents rather than .0001% of the financial responsibility for everyone's grandparents.


That's great for your grandparents, but it might not be so good for those old people whose grandchildren (if they have them) are unwilling or unable to support them. How would your more efficient system provide for those less fortunate old people?


Posted by: JakeV | Dec 19, 2004 1:02:13 PM

Be aware the thread got hijacked by a troll.

Posted by: bob mcmanus | Dec 19, 2004 1:07:42 PM

Oops, aquestion reading more carefully, I see you've answered this-- with "old person welfare" for the unfortunate aged. Apologies.

Some would say that the real strength of the SS program is that it isn't entirely founded on altruism or on self-interest, but instead on cooperation-- everyone pays in, everyone gets something out. So the people receiving it aren't getting a freebie from the government, but instead receiving a right they have earned as citizens. Replacing SS with a handout for the aged destitue ala AFDC might change that-- perhaps for the better, but perhaps not.

I also think that you may have significantly underestimated the number of old people who would need assistance in the absence of SS, but I'm not qualified to answer that.

Posted by: JakeV | Dec 19, 2004 1:09:42 PM

Bob, in my mind a troll is someone who is trying to provoke, often dishonestly. I don't think that's the case here.

Posted by: JakeV | Dec 19, 2004 1:11:48 PM

Aquestion, First there is a revolving door between the pentagon and defense contractors. Secondly, since we need some of these companies for national security and they are not easily replaceable, they are not allowed to fail every time there is an overrun.

Social Security and Medicare are also insurance policies for anyone who has parents and grandparents (and given longevity, great grandparents) who are not wealthy or who are not themselves wealthy.
Otherwise most of us would be in a lottery which we would win if our senior relatives die relatively young (after we attain self-sufficiency, of course) and/or quickly.

For 12 - 15% of our incomes(up to $87,000) we get disability insurance, survivors insurance, a guaranteed retirement income regardless of what else happens in our lives and a very good chance that we (and our children) won't be burdened with additional dependents. I think that's a good deal.

BTW, I don't know a senior who wants to be a burden to their children - so spare us the moralizing about individual responsibility. We have been responsible as individuals by coming togather as a society and dealing with this. It has worked so well that the only chance those who oppose it have is to lie. There is no crisis and there is a good chance that there won't even be a problem.

One more thing. Those of you who think private accounts will provide a nest egg that can be passed on should actually read beyond the talking points.

These plans include a requirement that one purchase an annunity with part of these "private " accounts. Only what is left over would be passed on.

One problem is that for those segments of the population for whom wealth accumulation is problematic, those accounts would mostly or entirely be consumed by this requirement.

And there is a good chance that the lowest income groups would find their accounts inadequate. That is why Colby's bill has a provision providing for suplimental payments.

Posted by: alan | Dec 19, 2004 1:33:47 PM

On "Unity"

1. We may still be underestimating how far the Repulicans are willing to go, or what they have in mind. We are obviously in an economic war much more important than our ME adventures, and SS privatization is only a weapon in that war. The speculative, inflationary asset bubble (combined with unprecedented, no war-level aggressive borrowing) that is on the way will cause chaos in currency markets, and perhaps the intent is to drive the world economy to 1930 conditions.

2. The revolution is here. We are already in proto-fascism, and viewing this regime as having anything to do with the politics of the last 200 years is unproductive. So is using that framework in thinking how to combat it or replace it. Are we Kerensky or the Mensheviks? For we are not facing a merely political party with comprehensible goals. We are in the "Ten Days."

3. The New Deal is probably dead. We no longer have the manufacturing mass-production unionized economy those programs were designed to support. As is the Democratic Party. I see no hope in multimillionaire Obama, or any other establishment figures. We are in a revolution, and need to come up with revolutionary ideas, a 21st Century progressivism and a 21st Century political structure.

4. Everyone should own a rifle.

Posted by: bob mcmanus | Dec 19, 2004 2:54:49 PM

What about Allen Boyd? He's a congressman from Florida (I think), who Atrios has said has ALREADY broken ranks on the SS issue. Shouldn't we be going after him first?

Posted by: Rebecca Allen, PhD | Dec 19, 2004 3:49:47 PM

Bob, very good, lol: I am eagerly waiting for that 'every revolution eats its own children' moment. Purges and stuff.

Cheers.

Posted by: abb1 | Dec 19, 2004 4:02:35 PM

Thanks, I was actually not aware that Social Security provided accident insurance. I had conceived of SS as a program primarily for seniors

Not to pile on, but if you didn't know that, what are you doing even holding an opinion on the issue in the first place?

I wonder, if we polled privatization advocates, how many would know as little about what they hoped to destroy as aquestion does?

Posted by: BLT | Dec 19, 2004 7:35:57 PM

aquestion:

Thanks, I was actually not aware that Social Security provided accident insurance. I had conceived of SS as a program primarily for seniors. Do you have a link on that? I'd like to know more about that.

The official name of Social Security is actually Old Age, Survivor, and Disability Insurance (OASDI). The name itself rebuts two misconceptions that you share with many others:


Social Security is insurance, not a retirement program.
Social Security covers more than just old people


As for finding out more about the program, why not start with the Social Security Administration? You might read, for instance, their basic factsheet, and then review the most recent summary of the program's status.


That's my fundamental question...SS is simultaneously presented as economic good sense (retire ok) AND a moral imperative (help seniors), but the former is about net gain (efficiency/self-interest) and the latter is about net loss (altruism).

Perhaps this is a false dichotomy, but I haven't yet seen an explanation that resolves it.


Social Security isn't a personal investment program. That's why you have a 401k, 403b, or pension plan. Social Security is an insurance program designed to protect all of us from the highly inefficient drag of having destitute old people, disabled people, and widows who cannot support themselves at a minimal level. It's the same reason you're better off when others have health insurance and can see a doctor rather than having to clog the county's emergency rooms.

Social Security is a complement to retirement investment plans. It works like a mutual insurance company; taxes (premiums) paid by workers (policyholders) are translated directly into payments to beneficiaries; any excess is invested so that the returns can be applied to future claims. Its advantage is the guarantee; you're guaranteed of receiving benefits if and when you meet the right conditions. Defined-benefit plans (pensions) and defined-contribution plans (401Ks or 403Bs) are different; you accept risk that you won't receive the benefits in exchange for a higher return on the money invested.

Posted by: Kenneth Fair | Dec 20, 2004 4:15:34 PM

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