Bipartisan assault on Social Security: The rich and corporations get tax cuts, the rest can work ’til they drop

Share with your friends










Submit

Back in fall 2008, a collapsing real estate market threatened to bring down titans of banking and Wall Street, which had been speculating wildly in “mortgage-backed securities.” In response, then-President Bush, candidate Obama, and the U.S. Congress quickly agreed to bail out the culprits — with trillions of tax dollars. This, regardless of a ballooning federal debt swelled by years of exorbitant wars in Iraq and Afghanistan.

Fast forward to now. In the third quarter of 2010, corporate profits were the highest in U.S. history, while workers still suffer wage cuts and layoffs. So what are politicians doing? Screaming that the deficit is the only priority — and aiming their guns at Social Security and Medicare to pay the bill. Oh, and corporations and the rich get even more bailouts in the form of tax cuts!

President Obama is now the chief architect of a united Democrat/Republican attack on the safety net that was won by workers through hard struggle over the last 80 years. Obama’s weapons are the “National Commission on Fiscal Responsibility and Reform,” and renewal of Bush’s tax-cuts-for-the-rich in December.

Working people must mobilize to fight back or pay a heavy price.

The “catfood” commission. So nick-named because its proposals would reduce seniors to eating cat food to survive, the deficit reduction commission was overwhelmingly anti-labor. One of its top recommendations was to cut Social Security by raising the full-benefit retirement age to 69 and “early” retirement to age 64. Other proposals include raising Medicare premiums, reducing other government services, and shrinking the federal workforce by 10 percent.

On income tax “reform,” the commission calls for steep cuts in tax rates at the top. Individual and corporate rates would drop from 35 to 29 percent or lower, saving billions of dollars in taxes for the rich and big business. Meanwhile, reduced tax rates for workers would be offset by eliminating deductions, such as for home mortgage interest.

The commission, created by Obama in February 2010 to address the deficit, went far beyond its mandate. It developed a blueprint for defunding government programs, along the lines of what Tea Partiers want. It calls for a 21 percent ceiling on government income, another back-handed swipe at Social Security and other human services. For form’s sake, it recommended cuts to the military budget, but these were far short of the trillions of dollars to be saved by getting out of the war-and-empire business completely.

But the aim to destroy Social Security is at the heart of the proposals. Here’s why.

Stealing Social Security. First, let’s be clear. Social Security has not contributed one dime to the national debt. The funding comes entirely out of workers’ wages and employer contributions in what amounts to a government-mandated employee benefit. It’s our money, not Uncle Sam’s!

Neither is Social Security “broke.” Workers have paid a $2.6 trillion surplus into it. In the ’80s, Social Security taxes were raised to cover retirement costs of the baby boom generation, when pay-outs would outpace the program’s income. This surplus should cover payments fully until sometime after 2036.

Furthermore, as presidential candidate, Obama endorsed a solution to the very manageable problem of a post-2036 shortfall; now he’s apparently suffering amnesia. Wages above $106,800 per year are not taxed. If they were, the problem would be solved without decreasing benefits.

But here’s the real problem. The Social Security “trust fund” consists not of regular U.S. Treasury bonds, but of special non-negotiable government bonds. According to Fortune Magazine’s senior editor Allan Sloan, these are essentially “IOUs.” Since the ’80s, the federal government has taken Social Security’s payroll taxes and “borrowed” the money to fund massive tax cuts for the rich and military adventures. All that wealth was transferred from the working class to the elite.

To underline this fact, Alan Simpson, Republican co-chair of the catfood commission, said: “There is no surplus in there. It’s a bunch of IOUs. … It’s 2.5 trillion bucks in IOUs which have been used.” Some progressives dismiss such statements as rightwing misinformation. But the point is that it is a statement of intent. The bill is coming due; and the ruling class has no intention of paying the Social Security Trust Fund back.

Not to mince words, this is embezzlement!

New tax bill undercuts Social Security. No sooner did the commission fold up shop than Obama and Congress passed the “Tax Hike Prevention Act of 2010.” Obviously, running the deficit higher is A-OK where tax cuts for the wealthy are concerned.

Obama billed the act as a “necessary compromise” to get a 13-month extension for unemployment benefits, and a one-year economic “stimulus” for individuals. But three quarters of the act’s $858 billion price tag goes to the highest earners.

Also, unlike last year’s income tax credit, “Making Work Pay,” the act undermines Social Security by reducing workers’ portion of the payroll tax by two percent over the next year. This amount will be made up from the government’s general fund, artificially creating some truth to the lie that social security is running a deficit.

It’s time to fight. Social Security is essential to most -seniors, especially since private pensions are going the way of the dinosaur. The program is particularly vital for women; recent research shows that without -Social Security, half of those over 65 would live in poverty.

Raising the retirement age is also unacceptable. Arguments that workers are living longer omit the fact that longevity is limited to the higher income crowd. Low paid workers, who are more likely to have physically demanding jobs and, hence, are more likely to need early retirement benefits due to injury, illness, or layoff, aren’t living longer.

The catfood commission’s proposals were so repugnant, they didn’t get the super-majority required to make formal recommendations to Congress.

But undeterred, the Obama administration will consider the proposals anyway. The majority of Democrats and Republicans are also supporting this ruling class attack, so far.

Now it’s working people’s turn to fight back, for our own, and our children’s survival.

• Make those who benefitted repay the $2.6 trillion Social Security surplus!

• Tax corporations and the rich! Lift the income cap on the Social Security payroll tax.


• End wars and occupations!

Share with your friends










Submit