Economy -- Social Security: An 'Absolute Disgrace?'

July 10, 2008

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, Benjamin Armbruster, and Igor Volsky

ECONOMY

Social Security: An 'Absolute Disgrace?'

During a recent town hall meeting in Denver, CO, Sen. John McCain (R-AZ) called the "present" Social Security "setup" -- in which "we are paying present-day retirees with the taxes paid by young workers in America today" -- "an absolute disgrace" that's "gotta be fixed." McCain’s disavowal of the way Social Security works raises concerns about his commitment to preserving the successful retirement security program, and has even led some economists to question McCain's basic understanding of the program. In response to McCain's comments, Gerald McEntee, International President of the American Federation of State, County and Municipal Employees (AFSCME) union, issued a statement arguing that "McCain's ignorance about Social Security is the real 'disgrace.' ... Working Americans understand that Social Security is the contract between the generations. It has served our country well since FDR signed it into law." Former congresswoman Barbara Kennelly, President of the National Committee to Preserve Social Security and Medicare, pointed out thats "since its inception, Social Security has been a pay-as-you-go system. That's not new and it's certainly not a disgrace. To suggest that Social Security is fundamentally 'broken' because of this fact, shows a lack of understanding of the program, its traditional role and the need to preserve and strengthen it for the future." McCain's remarks come on the heels of his support for President Bush's failed campaign to privatize social security and highlight the inconsistencies between McCain's rhetoric, policy proposals, and voting record.

MCCAIN'S FLIP-FLOPS ON SOCIAL SECURITY: Currently, McCain says he supports "supplementing the current Social Security System with personal accounts." But in 2006, McCain voted for and strongly backed Bush's privatization scheme, which would have allowed workers to "divert a portion of Social Security payroll taxes to fund private accounts." McCain proposed diverting "a portion of Social Security payroll taxes to fund private accounts" during the 2000 campaign and suggested privatization in 2004 and 2008. In fact, during a March interview with the Wall Street Journal, McCain said, "I'm totally in favor of personal savings accounts…along the lines that President Bush proposed." When questioned why his website proposed merely "supplementing" the current system with personal accounts, McCain promised to "change the website," the Journal reported.

BUSH'S FAILED PUSH FOR PRIVATIZATION: Shortly after being reelected in 2004, Bush immediately began a campaign to privatize Social Security. As White House officials told the New York Times in April 2005, conservatives planned to "lure Democrats into negotiations on the program's solvency and prepare for an endgame in which Mr. Bush will make an all-out push to convince the country that individual investment accounts will reduce the pain of benefit cuts or tax increases." Realizing that Bush's proposal would add trillions to the national debt, cut retirement benefits, and raise taxes, the public ultimately compelled the president to end his social security privatization tour. By the end of the campaign, an ABC News-Washington Post poll showed that 64 percent of Americans disapproved of Bush's handling of Social Security, up from 56 percent in March when the tour began. During a press conference in Oct. 2005, Bush admitted that his reform efforts failed, saying that "there seems to be a diminished appetite in the short term" for dealing with Social Security.

PRESERVING AN EFFICIENT SYSTEM: Americans have a "diminished appetite" for dramatically reforming Social Security because they understand that there is "no Social Security crisis." Despite conservative fear mongering about the insolvency of the Social Security trust fund, the program is fairly strong. In fact, "Social Security is more financially sound today then it has been throughout most of its 69-year history," the Center for Economic and Policy Research stated in 2005. In March, "Social Security's trustees issued a report on the program's financial status which stated that the program 'passes our short-range test of financial adequacy.'" According to the Congressional Budget Office, without any changes at all, the Social Security program can pay all benefits though at least 2052. And while McCain has not explained how he would prevent the projected shortfall, progressives have pointed out that the long-term social security shortfall is smaller than the cost of Bush's tax cuts for the top 1 percent of Americans, which McCain has promised to extend. While McCain often invokes the 1983 Social Security compromise as a model for a bipartisanship solution to prevent the budget shortfall, insuring that the system remains solvent for the indefinite future requires much more moderate proposals.

VETERANS -- WHITE HOUSE ISSUES VETO THREAT ON BIPARTISAN HOUSING BILL FOR LOW-INCOME VETS: The White House Office of Management and Budget issued a veto threat yesterday against the Homes for Heroes Act, which would provide housing assistance for low-income veterans. The bill, introduced by Rep. Al Green (D-TX), passed 412-9 in the House Wednesday; a Senate companion bill introduced by Sen. Barack Obama (D-IL) has 10 sponsors. The act authorizes $200 million for veterans' housing and support services, requires the Department of Housing and Urban Development to provide at least 10,000 rental vouchers a year available for homeless veterans as well as a comprehensive report on homeless veterans to be made each year. The Statement of Administration Policy released yesterday stated that the White House opposes provisions requiring that builders of veterans' housing pay prevailing wage and that Bush's "Senior Advisors would recommend that he veto" the bill. The Department of Veterans Affairs estimates that nearly 200,000 veterans are homeless on any given night and that veterans make up 23 percent of all homeless people in America.

ADMINISTRATION -- MUKASEY WON'T SAY IF ALBERTO GONZALES POLITICIZED THE JUSTICE DEPARTMENT: Under questioning from Sen. Joe Biden (D-DE) before the Senate Judiciary Committee yesterday, Attorney General Michael Mukasey hedged on whether he found the Justice Department to be politicized when he was sworn in. Mukasey bumbled back and forth, repeatedly contradicting himself. "What I found were enormously dedicated people who were very committed to my succeeding," he said. Biden followed up: "Did you find that some of those enormously dedicated people engaged in politicizing the administration of Justice?" Biden asked. "No. No," said Mukasey. "So you disagree with the IG (Inspector General) report?" "I do not disagree with the IG report," Mukasey said. The IG report concluded that DOJ employees "inappropriately used political and ideological considerations" in the selection process. The blatant politicization of the Justice Department is something that administration officials have admitted under sworn testimony. Even Senate conservatives said that Alberto Gonzales "made up reasons to fire" prosecutors. Mukasey maintained that considering politics in hires for career slots is "unacceptable." "You really are an enigma to me. ... I find it very difficult to understand you," Biden said.

ETHICS -- MILITARY OFFICIALS INCREASE MEDIA RESTRICTIONS AT SOLDIERS' FUNERALS: Today, Washington Post reporter Dana Milbank reports that Gina Gray, the newly appointed public affairs director at the Arlington National Cemetery, appears to have been fired for her efforts to restore media access to military interments. In April, Milbank wrote an article about how Pentagon officials had obstructed reporters from viewing the burial ceremony of Lt. Col. Billy Hall, who had been killed while serving in Iraq, even though Hall's family had granted permission to the media to cover the funeral. After Milbank's initial column, which noted that Gray was shot down by her superiors for attempting to allow reporters to access the ceremony, Gray says she was demoted, that her BlackBerry had been disconnected, and that she received various forms of pressure before eventually being fired. Milbank notes the strict rules at Arlington Cemetery are a continuation of policies started under Secretary of Defense Donald Rumsfeld, who rigorously censored images of American dead and even flag-draped caskets returning home from the war. CBS News Chief Foreign Correspondent Lara Logan also recently raised the issue of the Pentagon concealing the death of American soldiers, asking on the Daily Show, "Tell me the last time you saw the body of a dead American soldier?"

Democrats in Congress are negotiating a compromise on offshore oil drilling. "Democrats also want any compromise plan to include investments in clean and renewable energies, a crackdown on oil speculators and proof that the oil and gas companies are fully utilizing land that is already leased for exploration."

According to American military and intelligence officials, "there has been an increase in recent months in the number of foreign fighters who have traveled to Pakistan’s tribal areas to join with militants there." The officials said that "the flow may reflect a change that is making Pakistan, not Iraq, the preferred destination for some Sunni extremists" and "shows a further strengthening of the position of the forces of Al Qaeda."

Sen. Byron Dorgan (D-ND) yesterday "accused an Army general of misleading Congress about problems with a major defense contractor in Iraq." Dorgan said Maj. Gen. Jerome Johnson told the Senate Armed Services Committee "in April 2007 that there were no widespread problems with water supplied by KBR, after the Pentagon's inspector general had already found that there were."

Yesterday, the House approved legislation "designed to ensure the preservation of e-mails by the White House and other federal agencies." The measure "passed 286-137 in the wake of accusations that the White House had failed to preserve internal e-mails." The White House has threatened a veto.

"Home foreclosure filings jumped 53 percent in June from a year earlier," according to real estate data firm RealtyTrac. Though they were down 3 percent from May, "foreclosures are expected to rise further."

The chief economist of England's carbon reduction agency criticized the climate plan agreed to at the G8 summit as not doing "a single thing" to reduce emissions. Professor Michael Grubb of the Carbon Trust accused G8 leaders of "an abrogation of responsibility" for their "lack of anything specific that will make any difference."

Gulf Stream Coach, a leading U.S. trailer manufacturer, "failed to disclose to Hurricane Katrina evacuees or the government its internal findings that formaldehyde in some units exceeded a federal health standard by as much as 45 times in 2006, its chairman acknowledged to Congress yesterday."

"Iran test-fired nine missiles yesterday -- including at least one capable of striking Israel." While Defense Secretary Robert Gates said "the world is not closer to a military confrontation," Secretary of State Condoleezza Rice said, "We will defend American interests and the interests of our allies. ... No one should be confused about that."

And finally: Sen. Patrick Leahy (D-VT) is still a huge Grateful Dead fan. On Tuesday, he "bounded" out of a Capitol elevator singing the song "Casey Jones." "Driving that train," he sang, although Roll Call notes he "stopped before completing the second part to that lyric, which goes, High on cocaine." Leahy said that one of the best moments was when he brought the Grateful Dead "to the Senate Dining Room when [singer and guitarist] Jerry [Garcia] was alive."

Yesterday, the Senate approved the Medicare Improvements for Patients and Providers Act of 2008, halting a "10.6% cut in payments to physicians, scheduled to take effect July 15, and instead institute a 1.1% payment increase in 2009. The bill would also boost preventive and mental health benefits."

PENNSYLVANIA: Gov Ed Rendell (D) signs bill ensuring that "insurance companies now will have to pay for medically necessary services for the 6,000 Pennsylvanians who are under 22 and have autism."

NEW YORK: New law "would make it possible for people in dating relationships, heterosexual or gay, to seek protection from abusers in family court."

MASSACHUSETTS: Lawmakers "are expected to vote next week on repealing a 1913 law that prevents out-of-state gay and lesbian couples from getting married in Massachusetts."

THINK PROGRESS: White House Press Secretary Dana Perino demands apology after Sen. Barbara Boxer (D-CA) reveals that the White House Lied about Vice President Cheney's global warming editing.

WONK ROOM: The oil shale promise: a trillion tons of tater tots.

ESCHATON: National Review's Jonah Goldberg falsely claims that America's "founders" were alive in 1865 when the 13th amendment was ratified.

CLIMATE PROGRESS: The G8's climate change statement as part of President Bush's long journey from a denier of global warming to a delayer of solutions.

"I thought actually some of it was...some of the more irresponsible reporting that I've ever seen."
-- White House spokesperson Tony Fratto, 6/17/07, on a Washington Times study showing that mentally distressed veterans were recruited by the VA to test suicide-linked drugs

VERSUS

"Department of Veterans Affairs watchdogs have concluded that the department failed to alert veterans suffering from post-traumatic stress disorder in a timely manner to the dangers posed by a drug it was prescribing."
-- Washington Times, 7/10/08

Think Progress

Social Security: An 'Absolute Disgrace?'

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