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Tuesday, October 21, 2014 / PROGRESSIVE JOURNALISM FOR POSITIVE ACTION
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Dave Johnson
Published: Saturday 27 August 2011
This bill will start taxing income above $250,000 a year to cover this Social Security shortfall; so instead of just “raising the cap” it lets that cap stay, and then takes it off again on income above $250,000.

Sen. Sanders’ Plan To Actually Fix Social Security

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You hear over and over that Social Security is "in trouble" or that we "can't afford it." This is as far from true as can be, and the idea behind this is to convince people to just give up on defending the program and let the haters have their way. The people who hate Social Security the most are the ones who say they want to make these changes to "save" it. Well Bernie Sanders loves the program and has introduced a bill that actually will save it.

The Haters

Conservatives have hated Social Security from the start, because it is a program that demonstrates once and for all the value of progressive governance. Social Security is as clear an example of We, the People watching out for and taking care of each other as there ever was. It has made a huge difference n the lives of older people, and their/our families. It works, is cost-effective and requires minimal overhead to keep it going. So they hate it.

A very recent example of conservative hatred for Social Security came from Senator Marco Rubio of Florida, who said, that We, the People helping each other makes us weak,

"These programs actually weakened us as a people. ... All of a sudden, for an increasing number of people in our nation, it was no longer necessary to worry about saving for security because that was the government’s job."

Substitute the words "We, the People" or "each other" for "government" in Rubio's statement and you'll get the point: people don't have to worry so much because we're taking care of each other. He says that makes us weak. Yikes!

Decades Of Attacks

For decades conservatives who hate Social Security have been using every trick in the book to turn people against the program. Over and over you hear, "It's a Ponzi scheme." "It won't be there for you." This latest attack is that it "makes us weak." And of course the old classic: "Social Security is broke."

The "it's going broke" and "won't be there for you" attack strategy goes back to a 1983 Cato Institute Journal document, "Achieving a Leninist Strategy" by Stuart Butler of Cato and Peter Germanis of the Heritage Foundation. The document is still available at Cato, and select quotes are available at Plotting Privatization? from Z Magazine. If you have time it is worth reading the entire document (in particular the section "Weakening the Opposition") to more fully understand the strategy that has been unfolding in the years since. But if you can't, the following quotes give you an idea:

"Lenin recognized that fundamental change is contingent upon ... its success in isolating and weakening its opponents. ... we would do well to draw a few lessons from the Leninist strategy."

" construct ... a coalition that will ... reap benefits from the IRA-based private system ... but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public."

"The first element consists of a campaign to achieve small legislative changes that embellish the present IRA system, making it in practice a small-scale private Social Security system.

"The second main element ... involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it."

"The banking industry and other business groups that can benefit from expanded IRAs ..." "... the strategy must be to propose moving to a private Social Security system in such a way as to ... neutralize ... the coalition that supports the existing system."

"The next Social Security crisis may be further away than many people believe. ... it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform."

Here is what to take away from this: Every time you hear that "Social Security is going broke" you are hearing a manufactured propaganda point that is part of a decades-old strategy. Every time you hear that "Social Security is a Ponzi scheme" you are hearing that strategy in operation. Every time you hear that "Social Security won't be there for me anyway" " you are witnessing that strategy unfold.

The Problem

The Social Security program is entirely self-funded, separate from the way that the government taxes and spends for other programs. People set aside money in their working years, they get a monthly amount when they retire. (The program also has other benefits including disability benefits, survivors funds and others.) Social Security does not contribute to the deficit in any way.

You never hear that the huge, vast, bloated, enormous, mammoth military budget is "going broke" or "won't be there for you." But year after year you hear that Social Security is "in trouble."

Currently the program has built up a huge trust fund -- over $2.5 trillion. This is invested in US Treasury Bonds, and is earning interest. But there are projections that this trust fund will be depleted in approx. 2037, and if this happens the program will have to cut payouts by as much as 25%. (Hey. when does the military budget Trust Fund run down?)

One big reason for this shortfall is that the last time the programs was comprehensively adjusted (1983, Greenspan Commission) certain economic growth and income projections were used to decide how much "payroll tax" to take out of people's paychecks. They increased the amount taken out of paychecks, and set up an increasing "cap" on the income that would be taxed. Right now 6.2% (temporarily reduced to 4.2%) is taken out of paychecks, and employers kick in another 6.2%, on income up to a "cap" of $106,800. There is no "payroll tax" on amounts above that "cap."

But something changed between 1983 and now: almost all the income gains have gone to a few at the very top. Instead of people who mostly were under that "cap" getting raises, thereby increasing the amount they pay into the fund, the raises went to people who already pass that amount, so the increased income is not contributing to the program. So that money that was calculated would go into the Social Security Trust Fund instead went to the top few. As a result the program is no longer bringing in enough money to keep the trust fund fully-funded past 2037.

Sen. Sanders' Solution

Senator Bernie Sanders is introducing a bill to the Senate to fix this, once and for all. In simple terms, this bill will start taxing income above $250,000 a year to cover this Social Security shortfall. So instead of just "raising the cap" it lets that cap stay, and then takes it off again on income above $250,000. In effect it means there will be a gap between the current top income that is taxed, and $250K.

Get the money from where the money went: So because much of the real Social Security problem is that so much income is now going to just a few at the top, this gets the money to fix the problem from those top-level incomes.

Here is Sanders, talking about his bill:

“When [Social Security] was developed, 50 percent of seniors lived in poverty. Today, poverty among seniors is too high, but that number is ten percent. Social Security has done exactly what it was designed to do!”



Sen. Sanders is right. I too

Sen. Sanders is right. I too wish he would be president. Social security is good now, but the government must be stopped from borrowing it. Our government is now known for not paying back what is due.
If only common sense would return to this nation because too many are under the delusion that faux news promotes. If we could get rid of faux news maybe people would blink there eyes, look at reality and come to their senses again.

Senator Sanders fails to

Senator Sanders fails to confront the real problem - Namely, that congress has borrowed 2.4 trillion dollars from the Social Security trust fund with no plan in place to pay it back when it will be needed to pay benefits. This is a problem with government spending and tax policy generally - not Social Security, but anybody who thinks that money (over twice what we owe China) is going to be paid back without a fight is whistling past the graveyard. Congress won't default on the bonds in the trust fund - That would look bad - but since Congress controls the benefits, it has the power to delay paying the money back indefinitely - And by making predictions about life expectancies and the growth of the economy 25 years from now, it can make the numbers come out any way it wants. Senator Sander's plan would just put more money into that trust fund for the rest of the government to borrow with no plan in place to pay it back. - Instead, his focus should be on reminding the public that the existence of the Social Security surplus has made it easier to cut income taxes, and now it is time for the people who benefited most from the income tax cuts of the last 35 years to have their income taxes raised so that the money can be paid back.

Mr. Sanders should be

Mr. Sanders should be commended for his service to the people of this nation. His bill is intelligent and correct in its intent. Send campaign contributions via his web site. I did and it felt good.

We need to remember what we are fighting here is not just an attack on Social Security. This is a wholesale assault on freedom and American Ideals. Everyman for himself is the ideaology of cowards and fools. The article shows how the "right", whatever that is today, is working together with industry, academia and government to further their financial interests at the expense of the majority in our nation. If their object was to sell drugs or guns they would be guilty of conspiracy under the RICO Statues. Why is it not illeagal to plot the destruction of societal institutuions? We dicipline our children better than our political officials. Let's get the belt!

Senator Sanders fails to

Senator Sanders fails to confront the real problem - Namely, that congress has borrowed 2.4 trillion dollars from the Social Security trust fund with no plan in place to pay it back when it will be needed to pay benefits. This is a problem with government spending and tax policy generally - not Social Security, but anybody who thinks that money (over twice what we owe China) is going to be paid back without a fight is whistling past the graveyard. Congress won't default on the bonds in the trust fund - That would look bad - but since Congress controls the benefits, it has the power to delay paying the money back indefinitely - And by making predictions about life expectancies and the growth of the economy 25 years from now, it can make the numbers come out any way it wants. Senator Sander's plan would just put more money into that trust fund for the rest of the government to borrow with no plan in place to pay it back. - Instead, his focus should be on reminding the public that the existence of the Social Security surplus has made it easier to cut income taxes, and now it is time for the people who benefited most from the income tax cuts of the last 35 years to have their income taxes raised so that the money can be paid back.

Senator Sanders fails to

Senator Sanders fails to confront the real problem - Namely, that congress has borrowed 2.4 trillion dollars from the Social Security trust fund with no plan in place to pay it back when it will be needed to pay benefits. This is a problem with government spending and tax policy generally - not Social Security, but anybody who thinks that money (over twice what we owe China) is going to be paid back without a fight is whistling past the graveyard. Congress won't default on the bonds in the trust fund - That would look bad - but since Congress controls the benefits, it has the power to delay paying the money back indefinitely - And by making predictions about life expectancies and the growth of the economy 25 years from now, it can make the numbers come out any way it wants. Senator Sander's plan would just put more money into that trust fund for the rest of the government to borrow with no plan in place to pay it back. - Instead, his focus should be on reminding the public that the existence of the Social Security surplus has made it easier to cut income taxes, and now it is time for the people who benefited most from the income tax cuts of the last 35 years to have their income taxes raised so that the money can be paid back.

Earl,You are exactly right.

Earl,You are exactly right. Liberals, conservatives, tea party patriots, socialists, Democrats, Republicans and communists are all owned by the same 2%. They control all the media and dialogue that causes us to squabble with each other while camouflaging their real interests. Wake up. We are all slaves to these people.Dennis

I love Bernie Sanders, but I

I love Bernie Sanders, but I disagree with this plan. The cap on the payroll tax should be removed completely. There should be no cap.

I agree with the people who wish Bernie would run for president!
BERNIE SANDERS FOR PRESIDENT!!! It's about time we had an Independent President!

Jerry Brown does not

Jerry Brown does not understand the way economics works. His quote above about Trust fund assets being counted as part of the national debt is used exactly backwards from the facts. The fact is that the assets he is talking about are loans from the Trust Fund to the general fund, so that yes, they are counted as part of the national debt, but they are not contributing to the debt, they are helping to carry the debt. It is as if you borrow money from your brother to buy a car. You then owe money to your brother but you can not say that he caused your debt. The debt was caused by borrowing money to pay for something else, just as you can not say that the people who buy government bonds cause the debt. In effect that is what the SS Trust Fund does, it buys government bonds which are then counted as part of the debt in exactly the same way as the bonds purchased by private individuals.

FBUSER: Sanders IS honest.

FBUSER: Sanders IS honest. I've been watching him for years, on C-SPAN (he's not my Senator, wish he was), and he always takes the high road, and picks the hard problems; coming up with, as now, very appropriate solutions.(like your picture!)

Bernie Sanders is speaking

Bernie Sanders is speaking for the American people. We should all continue to listen to his measured ideas about how to fix our major economic problems.
Thank you Mr. Sanders

Jerry Mercks's picture

How to Destroy the Social

How to Destroy the Social Security Program
>>>>On August 14, 1985, Pat Robertson unveiled his ingenious program on how to get rid of Social Security.

1. “We should say to all the elderly, ‘You’re going to be taken care of. The government’s going to pay you. Don’t worry about it. [You’ll] get your Social Security like you’re expecting, ‘cause you’re counting on it.”
2. “There should be a gradual moving [up] of [the retirement] age to reflect the fact that we’re healthier and we live longer and people should have dignity and be allowed to work a little bit longer.”
3. “The last thing we should do is to begin to let the younger workers slowly but surely go into private programs where the money is tax sheltered and over the years build up their own money and that would in turn, through the intermediary organizations, banks, insurance companies, would invest in American industry. <<<<

Under their plan Social Security would be gambled with in the stock market just as people’s savings were and when they are lost there is no recourse for them except to go hungry or rob somebody. Banks and insurance companies would make money off folks retirement by charging fees and being paid interest for somebody else’s money.

Any of this sound familiar to anybody besides me?

Michael McGee's picture

A BIG "Amen," Jerry. It's

A BIG "Amen," Jerry. It's just plain scary. Can you imagine what shape the country would be in if "W" would have gotten his way by privatizing SS? Thanks for the refresher.

I believe in Bernie Sanders

I believe in Bernie Sanders plan but I would take it one step further. Those who are retired and have incomes exceeding $250k should not be getting Social Security.

Jerry Mercks's picture

I thought that way once but

I thought that way once but after reading more about Social Security I decided it wouldn't be fair. That introduces means testing.

While I do believe the rich should pay their fair share of taxes, I don't believe we should change Social Security. Rich people paid into it the same as the middle class. They should have the same entitlement as the middle class.

Don't misconstrue what I'm saying here. I am not sticking up for the rich. I stand for fairness.

No matter how responsibly one

No matter how responsibly one lives--investing the max. allowed in one's 401-K, living within one's means, stashing additional savings only in the lowest risk CD, Money Market, affordable home, etc.--a single economic downturn, family emergency or serious illness can destroy old-age security

Interesting idea but it will

Interesting idea but it will never pass ... in effect you are increasing the taxes of the wealthy by 6.2% ... easier to increase the 6.2 to 6.3 and the cap to $250,000 ... also increase the retirement age by one month, per year, for the next sixty years ... (the increased retirement age should be for 62 and 66) ... we are living a lot longer and we need to face the fact that a payment can not be made for so many years ...

Although we live longer, we

Although we live longer, we also start work earlier. So, one could work for 40 or 50 years and should be able to retire. And, people need to retire--work is stressful in a lot of ways and we also want to make way for younger workers. Why should a Congressman get a full pension after working 10 years and a real working American has to wait 40 years for his or her $500, $800, $1000 check per month. Nobody is going to get rich on their Social Security.

Agreed. Yes, it is Ponzi. But

Agreed. Yes, it is Ponzi. But Ponzis only collapse when investors stop investing. This is a tax and so people have to. No cap on the income amount to be taxed. And, if have to have general fund pay back to SS. What is even more offensive in a Ponzi scheme is not that money is taken from one investor and paid to another, but that the manager takes some of the money to support his lifestyle. SS money should never have gone to general fund expenses. So, pay it back from the general fund.

If you've watched MSNBC at

If you've watched MSNBC at all and have seen Senator Bernie Sanders, you will know that this Independent Party Senator is the real thing. He's a man of absolute integrity. He doesn't answer to anyone but the American People!I wish he would run for president.

I AGREE! BERNIE SANDERS FOR

I AGREE! BERNIE SANDERS FOR PRESIDENT 2012!!!

I am very glad Bernie Sanders

I am very glad Bernie Sanders is doing something worth while. Finally some democrats are waking up? One thing I would like to mention is that there is a cut-off for people who make over $101,000 ( I am not sure about the exact amount), but here again - the super rich do not contribute. I know they won't need SS but it is just like Health Insurance and Medicare, everyone should pay into the pot to keep the program solvent. When I was young I did not want to pay SS either, but now I am glad it is there. One more thing, we should demand that the money our politicians took out of the SS fund will be restored. This is the people's money and should NOT be used by the politicians for their little stupid projects.

Michael McGee's picture

Right on, Heidi! And as

Right on, Heidi! And as Robert Reich says, "This Labor Day, we need PROTESTS, not parades!"

Just because you borrow from

Just because you borrow from one account to pay for deficits in another account, doesn't make that first account a contributor to the deficit. If anything, the social security system is a counter to the deficit because it means we are able to borrow from ourselves to fund the deficit rather than borrowing from the Chinese, etc. We need to fix the true problems: Medicare/Healthcare and too low taxation on the wealthy.Tombo

Wow. I thought all of the

Wow. I thought all of the democrats were dead, or at lease in a coma. The reasons that programs like Social Security are in jeopardy is simply the democrats are owned by the same people that bought the Republicans. Wake up America. The enslavement that blacks experienced is now knocking at your door. You better take a close look at this period and prepare yourself for life you are going to live.

"Wow. I thought all of the

"Wow. I thought all of the democrats were dead, or at least in a coma. The reasons that programs like Social Security are in jeopardy is simply the democrats are owned by the same people that bought the Republicans."

Sanders has always been there. He's ALWAYS been speaking his mind, and the content of it has NOT changed. The REASON you haven't come across Sanders is NOT because he is "new" in any fashion, but because the MEDIA always covers the same old tired junk, running from so-called "sensation" to "sensation" -- a track that runs in a decidedly self-congratulatory circle.

The media is OWNED by the Rich of the Reich Wing, and ANYTHING Left, or Progressive, will ALWAYS get short shrift in it.

With the result you can see here. A stable Progressive voice somehow gets air, and "suddenly" we see a "new" player in the game -- a player who's actually been here all along, and saying the same things.

Not to mention, Bernie isn't

Not to mention, Bernie isn't a Democrat in the first place. He's an Independent.

I could not have said it

I could not have said it better. Thank you for making a really eloquent statement!

Donna M Crane's picture

I've been hearing that old

I've been hearing that old saw "Social Security won't be there for you" since I was in my teens, I'm in my late 60's and it is still here and keeps a roof over my head. Do I wish I'd saved more for my retirement, yes, but what part of my life would I have changed. Should I have stayed in the abusive marriage I got out of at age 40, even though my son and I would continue to be terrorized? Should I have not quit job in my 50's and moved to another state to take care of my aging WWII & Korean War Veteran father thereby allowing him to stay in his home until he died at age 93? When my father died, and I was 65 should I have gone back to work rather than to take care of my Vietnam Veteran boyfriend who was dying of pancreatic cancer and had no one else to care for him. That pretty much took care of my life from age 40 - 67. What I did was valuable to me, and to those I loved, but it did not build up a retirement fund and is not valued by the Republicans "Ayn Rand" vision of society that sees need as weakness and giving as something to be despised. I want this "insurance plan" called Social Security to be there for my son, and for his son so that when life intervenes in unexpected ways it will provide a floor for their old age as it has for mine. There is every reason to keep this program intact, and to strengthen it and I think Senator Sanders has a good plan. Do not believe the Republican Tealiban lies when they tell you that Social Security won't be there for you when you reach old age. Also, when the Republicans talk about only doing away with it for those below age 54, I wonder what makes them think we don't care about our children's future. We do not want them to steal our children's security either. Raise the cap on Social Security.

FYI: SSI is a means-tested

FYI: SSI is a means-tested program for poor and disabled people who qualify. While administrated by the U.S. Social Security Administration, it receives no funds from Social Security. Just check Wikipedia.

Exactly End the SS cap now

Exactly End the SS cap now SS is solvent for next 25 yrs
GOP Baggers Ryan Fox Rush Beck lie & scheme to break Obama as GOP De Mint vowed to do.

I am glad Bernie Sanders is

I am glad Bernie Sanders is doing something. The right thing to do is remove the cap completely and tax ALL income. When you retire the more income you had while working the more your SS check.

I totally support this man

I totally support this man for PRESIDENT.......and I am not even interested which party he belongs too........he actually sounds honest ( I hope, I hope, I hope )
This is more or less to the people who don't like my picture - it was the worst I could find....I have one worse but its stuck in my camers - one day

I LOVE Bernie! He is smart,

I LOVE Bernie! He is smart, passionate, and he cares about people! We need MANY MORE LIKE HIM!

Senator Sanders has a very

Senator Sanders has a very good point, wall street needs their ears trimmed back, the GOP is taking a beating on the polls for the things their trying and in some cases have done. It is up to those of us affected with possibly no Social Security, Medicare benefits being able to continue after we have worked, and paid into the fund banking on it for our retirement to make sure in 2012, the Democrats take back both houses and put America back on track and in the black with JOBS, Manufacturing, and have the World look up to us again as a leader in the world.

<> Well, yeah, they are

<> Well, yeah, they are counted as amounts that are owed and must be repaid due to the fact that the gvt. has repeatedly dipped into the SS fund to pay other bills. What they are not is an expenditure expected to continue indefinitely increasing the amount owed, such as, say, the Pentagon, for instance. Social Security is part of the national debt in its role as lender, not as an unnecessary expense.

Sanders' proposal is

Sanders' proposal is definitely in the right direction. But it's still a little more complicated than it needs to be. Just remove the cap. That's a lot easier to explain than exempting salaries between $105,000 and $250,000. You could remove the cap, tax all salaries, and lower the workers' portion to 4.2% permanently and make the SS fund solvent forever. The advantage: tax CEOs and bankers the same rate as waitresses and bus drivers. And if companies want to pay their top executive 400 percent more than their productive workers (as many do now), the companies will pay a full 6.2% on the entire obscene salary.
Go Bernie Go

Great solution. Lets hope

Great solution. Lets hope all will listen to this great idea!

And if they cut Social

And if they cut Social Security, they don't have to pay back into fund what they borrowed, thus in effect double dipping. Very lucrative for the teabaggers in government.

The Government should stop

The Government should stop raping the funds whenever it needs money for other things.

And sir, none of this would

And sir, none of this would have happened if the right had not insisted on using SS income for the general fund. It is not and should not be. It can stand on its own if left alone. In addition, the information you are quoting is about SSI not SS. Get your facts straight.

I'm not opposed to Social

I'm not opposed to Social Security. But, I really object to nonsense like the statement " Social Security does not contribute to the deficit in any way." Here is the info that comes right from a report on the SSC website at www.ssa.gov.
"Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Through 2022, the annual cash deficits will be made up by redeeming trust fund assets from the General Fund of the Treasury. Because these redemptions will be less than interest earnings, trust fund balances will continue to grow. After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2085."
The Trust Fund Assets are special bonds that are not redeemable in the private market AND THEY ARE COUNTED AS PART OF THE NATIONAL DEBT. Furthermore, the Trust Fund Interest mentioned in the SSC report is a liablility of the Treasury. It is also part of the national debt and the Treasury must sell T-bills to get the cash necessary for the interest payments.

Actually, Jerry, what you got

Actually, Jerry, what you got from the SSA site is misleading. It allows too much interpretation without giving all the information. Basically, what you understood and what it states are only half the story.

Those trust funds that are counted as the "national debt" are basically IOU's from Congress for money "borrowed" from Social Security. Because they are IOU's written to SS, the country itself has incurred further indebtedness. SS isn't contributing to the debt it's actually a creditor.

Though the balance between income and pay out is off kilter, if the IOU's were to be called in, the reserves would fund the program for twenty five years before it went broke. What Sanders is suggesting is raising the "income" now to fend off that eventuality.

Because the government

Because the government borrows from the Social Security Trust Funds, you accuse Social Security of contributing to the deficit. Would you prefer the government instead borrow more from the Chinese? You need to take a class in basic accounting.

You didn't mention the fact

You didn't mention the fact that the goverment keeps dipping into the social security fund to pay for things. If they privatize it, they can do this behind closed doors and no one will know.

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