AARP Blocks Social Security Reform

As you people know, I have shared with you over the course of many years the writings of Robert Samuelson who is an economist and columnist for the Washington Post, and on most occasions, I am a supreme advocate. This piece that ran today in the Washington Post is a little problematic for me in some areas. The title of his column is, "Entitled Selfishness." His theme here is that the baby boomer generation is in a state of denial. Let me give you some excerpts here. “As someone born in late 1945, I say this to the 76 million or so subsequent baby boomers and particularly to Bill Clinton and George W. Bush, our generation's leading politicians: Shame on us. We are trying to rob our children and grandchildren, putting the country's future at risk in the process. On one of the great issues of our time, the social and economic costs of our retirement, we have adopted a policy of selfish silence.”

Now, excuse me, Mr. Samuelson, George W. Bush for six years has tried to do something about this, and he has been rebuked at every turn. He's been turned back. Now, maybe he didn't sell this privatization of accounts as well as it could have been, but you can't lump him in there with somebody who is apathetic about this. “As Congress reconvenes, pledges of "fiscal responsibility" abound. Let me boldly predict: On retirement spending, this Congress will do nothing, just as previous Congresses have done nothing. Nancy Pelosi promises to ‘build a better future for all of America's children.’ If she were serious, she would back cuts in Social Security and Medicare. President Bush calls ‘entitlement spending’ the central budget problem. If he were serious, he, too, would propose cuts in Social Security and Medicare. They are not serious, because few Americans -- particularly prospective baby-boom retirees -- want them to be. There is a consensus against candor, because there is no constituency for candor. It's no secret that the 65-and-over population will double by 2030 (to almost 72 million, or 20 percent of the total population), but hardly anyone wants to face the implications:

By comparison, other budget issues, including the notorious earmarks, are trivial. In 2005, Social Security, Medicare and Medicaid (the main programs for the elderly) cost $1.034 trillion, twice the amount of defense spending and more than two-fifths of the total federal budget. These programs are projected to equal about three-quarters of the budget by 2030, if it remains constant as a share of national income. Preserving present retirement benefits automatically imposes huge costs on the young -- costs that are economically unsound and socially unjust. The tax increases required by 2030 could hit 50 percent, if other spending is maintained as a share of national income.” Well, I happen to agree with that. I told you yesterday, I think we are in a period in our lives where taxes will never be lower. Taxes are lower today than they will ever, ever be, and you'd better get used to it.

“Much of the rest of government (from defense to national parks) would have to be shut down or crippled. Or budget deficits would balloon to quadruple today's level. Social Security and Medicare benefits must be cut to keep down overall costs. Yes, some taxes will be raised and some other spending cut. But much of the adjustment should come from increasing eligibility ages (ultimately to 70) and curbing payments to wealthier retirees. Americans live longer and are healthier. … Because I've written all this before, I can anticipate some of the furious responses from prospective retirees. First will be the ‘social compact’ argument: We paid to support today's retirees; tomorrow's workers must pay to support us.

“Well, of course they will pay; the question is how much. The alleged compact is entirely artificial, acknowledged only by those who benefit from it. My three children (ages 16 to 21) didn't endorse it. Judging from the e-mail I receive, neither did many 20- or 30-somethings. … The failure to communicate also implicates many pundits and think tanks, liberal and conservative. Pundits usually speak in bland generalities. They support ‘fiscal responsibility’ and ‘entitlement reform’ and oppose big budget deficits. Less often do they say plainly that people need to work longer and that retirees need to lose some benefits. Think tanks endlessly publish technical reports on Social Security and Medicare, but most avoid the big issues. Are present benefits justified? How big can government become before the resulting taxes or deficits harm the economy? … Our children will not be so blind to this hypocrisy. We have managed to take successful programs -- Social Security and Medicare -- and turn them into huge problems by our self-centered inattention. Baby boomers seem eager to ‘reinvent retirement’ in all ways except those that might threaten their pocketbooks.”

Now, what's the central theme of this? The central theme is that baby boomers -- and I, on many days, am embarrassed to admit that I am one -- the theory is that baby boomers are set to retire, and to hell with anything else. When it's time for them to get their Social Security and their Medicare and their Medicaid, by golly, by gosh, they're going to get it regardless the cost. They don't care, because they had to pay it for their seasoned citizen generations. And the only way to deal with this is, they're going to have to be cuts in the benefits. Now, here's my problem with this. I do not believe that the problem with Social Security is baby boomers. For once in my life, they are not responsible or targets here. I think who's responsible for all this is AARP. We've had calls from these people on this program before. Folks, it is the present day retirees who will not put up with any changes whatsoever, and they vote. That is the stumbling block to getting anything changed.

The politicians are afraid of denying or cutting back benefits, because they will lose the elderly vote. Most baby boomers I know have never even counted on Social Security. They don't think it's ever going to be there for them. The younger you go into generations that follow the baby boom generation, that sentiment is even more profound. “Social Security, give me a break, it's not even going to be there when I retire.” A lot of baby boomers plan on working beyond 65 for that reason. I don't know too many people who are sitting around waiting to collect Social Security, but the current crop of people who are will stop at nothing to make sure their benefits are untouched. Even if it means massive tax increases on their own kids! They'll put up with that. They will incur and they will vote for that in order to keep their Social Security coming.

So the problem with this is -- I'm sure there's some baby boomers that are going to present a problem here just in numbers, and you can't deny that, but immediate reform? Don't lay that solely at the baby boomers. You got a current crop of seasoned citizens who will not put up with it, and they are one of the largest voting blocs out there, and they are not going to be patient or tolerant with this at all, and that's why there's laziness, reluctance, and fear among politicians to deal with this. AARP is quite a big lobbying group.

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Folks, it is the present day retirees who will not put up with any changes whatsoever, and they vote. That is the stumbling block to getting anything changed.

LOL, Rush must have read my post yesterday on the subject (just kidding.)

I wrote in post number three of this thread
http://www.freerepublic.com/focus/f-news/1765141/posts

Sorry to disagree with this guy, but IMHO, it's the present day "seniors" (aka AARP members and the like) that are preventing a "fix" to the problem. The politicians are afraid of denying or cutting back benefits because they'll lose the elderly vote. Most boomers I talk to don't expect to collect SS, and many are planning on working past their 65th birthday, not necessarily because of necessity.

Some changes could have been made almost painlessly. The first is to tie the annual increase in SS benefits to the consumer price index (inflation) instead of to average wage growth. That would cut about 0.5%-1% per year on average. Even at only 0.5% over 30 years that would cut nearly half of the expected shortfall in SS taxes.

What about the agreement Bush signed with Mexico where the illegals will be able to collect SS after they go back to Mexico?

This program will completely bankrupt the system, as alot of those lower-wage workers will be drawing out much more than they put in.

If the AARP wants to get upset about something, they should get upset about illegal immigrants getting SS payments.

Both parties are complicit in the problem, but the truth is that behind the scenes they are both supporting measures that are aimed specifically at addressing it.

The minimum wage hike passed yesterday is a good example. This is being sold to the American public as a "liberal vs. conservative" issue involving increased wages vs. higher costs of doing business, but these are secondary issues for the most part. The primary aim of this legislation is to inflate the hourly labor rates for America's lowest-income earners -- with the specific intent of generating higher Federal tax revenue through the payroll taxes these people pay (and their employers match) for both Social Security and Medicare.

Maybe we all should take a look at the empty vault where the SS money should be, it has no money there since being, stolen, by our elected officals to be used for everything else but for what it was intended.

It was never invested wisely as it was such an easy target for our elected officals to steal.

There must be a reason that these educated elected officals have a much better retirement source than the voters who elected them. Perhaps their thinking is why would I put MY money into something that will get stolen from by others and replaced with useless IOU'S?

If there was a way to allow the people to withdraw whatever was in their account, the scandal would be beyound belief when they found out there was no money there.

Why do youn think there is such resistance to op-out of SS completly and putting that money where YOU have control and the ability to invest wherever you want? That would dry up their slush fund used at their pleasure for other than what it was intended.

I am sure that will be one of the alternatives offered by the Dems who are trying to keep the system going, even though it is unsustainable as currently structured. The fact is that in 1950 there were 16 workers to every retiree, today it is 3.3, and in 2030 it will be 2 workers for every retiree. You can't keep the system going without increasing taxes and/or decreasing benefits. Tinkering with the COLA computations will just delay the inevitable. SS is a pay as you go system. It starts going broke in 2017.

I suspect that AARP will launch a huge PR effort if there is an attempt to change the COLA computations to give retirees less benefits. Their anti-PAs effort was something to behold.

The primary aim of this legislation is to inflate the hourly labor rates for America's lowest-income earners -- with the specific intent of generating higher Federal tax revenue through the payroll taxes these people pay (and their employers match) for both Social Security and Medicare.

The effect will be negligible. The Ponzi scheme can't be saved.

If there was a way to allow the people to withdraw whatever was in their account, the scandal would be beyound belief when they found out there was no money there.

Individuals have no accounts. They don't own their contributions. The federal government does. The Supreme Court ruled in Flemming v. Nestor that there is no legal right to Social Security benefits. Source: Flemming V. Nestor, 363 U.S. 603, 610–11 (1960)

I think it would be fair that SS benefits be linked with how many kids one has...

My mother got just over $300 a month in SS before she died. She had 8 working kids paying in. The eight of us could have contributed $37.50 a month to give her that level of luxury.

When the boomer's (for what ever reason) decided to have just 2 kids(that's one a peace for both parents), it should have been clear that it was going to put a burden on the kids in their old age.

Then when we (collectively) decided to kill 40 million of the potential workers over the last 30 or so years, what the hell did we expect.

Now, excuse me, Mr. Samuelson, George W. Bush for six years has tried to do something about this, and he has been rebuked at every turn.

Now, excuse me, Mr. Limbaugh, perhaps you'd care to address one of the changes Duhbya tried to make in 2004 --the Social Security Totalization Agreement with Mexico.

Now, you may think that giving US Social Security benefits to 20+ million Mexican law-breakers is a good thing, but I, as well as many Americans vehemently disagree.

A Mexican illegal alien can apply for, and receive benefits after having worked (illegally) in the US for 6 quarters (18 months). US citizens (you and I) have to work 40 quarters (10 years) before we're eligible to apply.

But that's not the worst of it. Under the terms of Bush's agreement, the Mexican illegal alien can apply for, and receive benefits for his Mexican (national) wife and Mexican (national) children, even if the wife and children have never stepped foot in the USA.

So, not only does George W. Bush want US citizens to give US Social Security benefits to the Mexican law-breakers, he also wants US citizens to pay benefits to the Mexican law-breakers' family back home in Mexico.

So, in spite of your statements to the contrary, it looks like you're still a GOP water boy.

It was ever thus.

Gee what a surprise. We are forced to pay SS taxes to an account we don't own so that the Goverment can pay us benifits over which we have no say from an account that has no money. Then we are told that this accout which has no money in it will run out of this money in the next ?? years unless we fix it.

I guess the bottom line is, We elected officals stole all the money from our slush fund and we need more so we need to come up with another smoke an mirror way to get it.

Just remember though, we will not be so stupid as to allow ourselves to be part of this fake scheme.

Have a good day and remember to vote for me as I will always be looking out for my,I mean, your best interests.

"The primary aim of this legislation is to inflate the hourly labor rates for America's lowest-income earners -- with the specific intent of generating higher Federal tax revenue through the payroll taxes these people pay (and their employers match) for both Social Security and Medicare"

No, the primary aim of this legislation is to give union workers a pay increase as their pay is often indexed to the minimum wage.

We elected officals stole all the money from our slush fund and we need more so we need to come up with another smoke an mirror way to get it.

The SS Trust Fund is a scam. It only represents the USG's intention to pay SS benefits. SS is a pay as you go system. The revenue collected is used to pay those benefits. Any "surplus" is put into the general fund to pay for defense, education, servicing the national debt, etc. The SSTF contains IOUs in the form of non-market T-bills [not redeemable to anyone except the USG] and are not assets, but unfunded liabilities. Hence, the SS Trust Fund and other such trust funds are carried as part of the almost $9 trillion National debt as "intragovernmental holdings."

We need to eliminate the fiction of the SS Trust Fund and make SS part a line item on the annual federal budget. 80% of Americans pay more in payroll taxes [SS and Medicare] than they do in income taxes. The only way we are going to resolve SS permanently is to privatize part or all of it. The UK and Chile, among other countries, have already done it. The Dems want to keep American dependent upon the government so they can exercise their power.

Imagine a so called retirement system where someone at 17 could pay into the system for 50 years, die a day before his 67th birthday, and not collect anything [assuming he was single without dependents] except for a small burial benefit. There would be nothing from the system to leave in his estate for a friend or relative.

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