Social Security – The Wrongologist

Destruction of Government by Elon (DOGE)

The Daily Escape:

It used to be that In America, one truism of politics is that Social Security (SS) is the “third rail”: You mess with it at your political peril. Republicans have never liked Social Security. They voted against it when it was passed in 1935, and they have been trying to get rid of it in the 90 years since then.

But the problem is that SS is one of the most successful programs created by the government. It has reduced poverty among seniors from nearly 40% to only about 10% (and SS provides at least a subsistence level of income to that remaining 10%). It provides an income for people with disabilities who cannot work. And it has never added a penny to the national debt. Justifiably, it is a very popular program with Americans.

Because of its popularity, Republicans have never been able to abolish the program ̶ but they keep trying. In 2005, GW Bush wanted to privatize SS (putting seniors at risk by putting their money in the stock market). That led to a huge political blowback, and Bush dropped the idea.

Across the years, Trump has consistently promised not to touch Social Security, except now Musk’s DOGE may break Trump’s promise. Musk’s agency almost cut off phone service for people filing SS claims, and stopped only after the WaPo raised a stink:

“The Social Security Administration…abandoned plans it was considering to end phone service for millions of Americans filing retirement and disability claims after The Washington Post reported that Elon Musk’s US DOGE Service team was weighing the change to root out alleged fraud…The shift would have directed elderly and disabled people to rely on the internet and in-person field offices to process their claims, curtailing a service that 73 million Americans have relied on for decades to access earned government benefits.

However, Social Security and White House officials said the administration will still move ahead with another far more limited element of the original proposal: Customers will no longer be able to change a direct deposit routing number or other bank information by phone.”

The phone service change may not be happening, but Elon is still gunning for Social Security. This is from March 11:

“Elon Musk pushed debunked theories about Social Security on Monday while describing federal benefit programs as rife with fraud, suggesting they will be a primary target in his crusade to reduce government spending….“Most of the federal spending is entitlements,” Musk told the Fox Business Network. “That’s the big one to eliminate.’”

Musk also called Social Security “the biggest Ponzi scheme of all time”, and has promised to cut the Social Security Administration’s workforce by 12%.

DOGE can’t actually abolish Social Security. But it can seriously damage it to the extent that the agency wouldn’t be able to deliver checks on time, wouldn’t be able to help recipients make needed changes, and won’t be able to effectively register new retirees. And once the agency can no longer function effectively, Congressional Republicans will step in to “reform” it. They will do that by substantially cutting benefits, or privatizing the program. Probably the latter, because that will benefit moguls on Wall Street.

In February, Trump reassured the nation that:

“Social Security will not be touched, it will only be strengthened, and an unnamed White House official told NBC that “Musk’s personal opinions about Social Security have no impact on Trump’s policies.”

Is Trump really willing to mess with Social Security payments? And if not, why is his administration acting like it’s getting ready to do that? What would be the political upside to broadcasting that you’re going to screw with America’s favorite entitlement program, and then not actually doing it?

What is clear is that the Trump administration doesn’t particularly seem like they’re governing with an eye to future elections. Old people vote in large numbers, and if you stop them from getting the checks they need to live — or even threaten to do so — you’re putting yourself in grave electoral danger.

And if Trump’s team isn’t worried about future elections…well, that’s even more deeply concerning.

The DOGE effort is the newest attempt by Republicans to attack Social Security. It gives the GOP some cover by letting DOGE do the dirty work. But only SS has the huge budget that Republicans want to get their hands on.

This is the latest effort by Republicans to get rid of Social Security (and Medicare and Medicaid). By gutting these funds, they will have the money for huge giveaways to the rich (and especially the super-rich).

They have always been the party of and for the rich. They really don’t care about the needs of the poor, the working class, or the middle class.

This attack on Social Security proves that.

Firing Federal Workers

The Daily Escape:

It should be possible for a non-expert (like any of us) to look at how the Trump administration implements a policy and tell whether they are serious about delivering material results.

One such place is the plan to fire federal workers. As the co-heads of the newly created Department of Government Efficiency, or DOGE, billionaires Elon Musk and Vivek Ramaswamy are promising to slash at least $2 trillion from the federal budget. Trump and his DOGE sidekicks Elon and Vivek have made a lot of statements about cutting the federal budget by firing huge numbers of government employees.

The duo have cited areas they’d like to target, such as the Internal Revenue Service, the Department of Education, the Federal Bureau of Investigation and the Nuclear Regulatory Commission. And they want to take a hard look at foreign aid, defense spending and the inaccurate payments the government sends to Social Security recipients and others.

But taking that big a chunk out of federal headcount would be a tall order. Much of the headcount money supports mandatory programs, which must be funded in accordance with existing laws. These include Social Security and Medicare benefits and interest on the federal debt.

Based on summary numbers at federalpay.org, most federal employees (around 3 million) are associated with the Department of Defense, which Trump is reflexively likely to support. The next two biggest departments are the departments of Veterans’ Affairs (over 400,000) and Homeland Security (over 200,000). Again, big cuts to these departments are not likely to play well with Trump fans, and the number of Homeland Security employees will need to go up, not down, if Trump is serious about deporting large numbers of people. Federal employees are spread out across every state in the US, with most workers living in the DC area, Texas, and California.

Here’s a chart showing total US government employees by department:

Many federal programs are distributed around the country, especially those that deliver federal benefits (Veterans, HHS). Cutting those jobs will disproportionately hurt employment and government services in low-tax Red states that don’t have much in the way of state-level programs to pick up the slack.

Elon and Vivek can undoubtedly find a few DC offices to sacrifice, but that’s just a stunt. It won’t have a big impact on the US budget. For example, reduce the headcount at the Department of Transportation by 25k jobs that we assume are all 100k/yr. positions saves just $2.5 billion while wrecking the department.

The Department of Education, a favorite target of Republicans long before Trump, has only a little over 4,000 employees. The department has a $45 billion budget, but most of that is pass-throughs to local schools to pay for things like special education. Anything that interferes with those pass-throughs will not ultimately play well in rural areas that cannot fund such luxuries other than with federal dollars.

It is also important to remember that a $100,000 a year job in Washington DC might not be considered all that great, but it looks pretty darn good in Wichita. At the end of the day, the biggest thing the working class cares about is the availability of living wage jobs. Cutting some of the best-paid and most secure jobs throughout the country does not provide an immediate net benefit to the working class. It mostly just provides cover for giving more tax-cuts to the rich.

It may be theoretically possible to improve the economy by making the federal government more efficient, but it is fiendishly difficult to do in practice. The size of the federal work force has held about constant for the last 50 years, despite increasing responsibilities of the government. Downsizing has occurred in the past, (under Clinton), but events like the 9/11 attacks halted this trend due to increased security needs.

Although the bar is set low, the low-hanging fruit doesn’t offer lots of opportunity for Trump and Elon to make real gains on the headcount front in DC. Even though Democrats are not in control of much in Washington, they have a chance in 2026 and 2028 if a big backlash from firing federal workers occurs on Trump’s watch.

We’ll see what happens.

Happy New Year from the Mansion of Wrong to all who celebrate!

Where 2024 Went Wrong

The Daily Escape:

If you’re planning on being a part of the resistance, you need to start from having a few ideas about what went wrong and why in 2024.

Plenty of people have ideas about what we should be doing next. Rachael Bitecofer’s latest “Identity Politics and Microtargeting Killed The Party’s Brand” raises a great concern expressed by many Democrats, that the Party no longer identifies with the working class, and the working class isn’t who it used to be. It’s much bigger and much more diverse.

Bitecofer’s big idea is that the culture wars were the prime driver of the 2024 election. The culture wars were created after the era of Individual Freedom that arose in the 1950s and 1960s. The Democratic Party had morphed into an alliance, merging a Party of liberal Whites and racist White Southerners into one big coalition that by staying together, dominated Congress for decades.

By the 1960s, the activism of MLK. Jr and thousands of other civil rights activists forced the Democratic Party to choose: Either preserve their large coalition or end segregation. After the assassination of JFK, LBJ sided with civil rights for Blacks signing both the Civil Rights Act of 1964 and the Voting Rights Acts of 1965. In doing so, this set off the realignment that would lead to total domination of the South by the Republican Party a few decades later.

Nixon’s Southern Strategy recognized that white Southern conservatives were there for the taking, and they took them. Meanwhile, the Democrats began to absorb liberal Republicans, predominantly in the North East and West Coast. Ideological liberals became Democrats and ideological conservatives became Republicans. And the today’s 270 Electoral College map dominated by the handful of swing states became the norm for success in American presidential elections.

From Bitecofer:

“In building their new multi-racial coalition Democrats…turned to something called identity politics. Identity politics is…based on a particular identity, such as ethnicity, race, nationality, religion, denomination, gender, sexual orientation, social background, caste, and social class….as the new Democratic Party became a multi-racial coalition hyper-focused on gaining civil rights for marginalized groups…”

This chart represents the outcome of Democrats following a microtargeting strategy for the past 30+ years:

This one graph tells us exactly why Democrats lost. First and foremost, it tells us that the Democratic Party is a brand “that stands up for marginalized groups.”

Let’s focus on the time window on the graph. As you can see, the Democrats used to have a massive advantage with the working class which began to erode around the time of the Reagan Revolution and round two of Nixon’s Southern strategy. Please keep in mind, the erosion also corresponds with the diversification of America both in terms of ethnicity and gender and reflects in part the backlash to civil rights.

From Bitecofer about the working class:

“Donald Trump just accomplished the same thing by focusing most of his ads on scary trans people and the data don’t lie, millions of ads repeating the sex changes for prisoners broke through.”

More: (emphasis by Wrongo)

“Now, that’s a great brand to have if you’re…an ideological liberal who cares deeply about the rights of the powerless!! The issue is just about a quarter of the electorate is liberal and psychologically predisposed to care about marginalized groups. The rest of the electorate doesn’t get the warm fuzzies we get from marginalized groups, because most humans are hardwired to prefer in groups over out groups and Republican strategists have exploited this expertly.”

Bitecofer argues that what matters for marginalized groups is policy, and that policy only comes from power. The way to represent marginalized groups is by wielding the power to represent them in majorities, not by identity politics in campaigns.

Bitecofer’s central point is that working class voters no longer primarily vote on economics. They did at one time, but those days were done as soon as cultural issues emerged and segregation was ended by the federal government. Here’s how the working class has grown and diversified over the last few decades:

Can the GOP, a Party financed by industry and bankers, permanently “represent the working class”? Maybe so, if the GOP can keep them distracted enough from the economic warfare they are conducting against them by leveraging grievance politics as a backlash to the Dem’s identity politics strategy.

Bitecofer closes with this:

“If we are lucky enough to get another election in this country, the messaging must focus on telling America the story of what happened to all their money, their rural communities, their paychecks, and their health under Republican Party governance.”

A prime part of the coming resistance is to return the GOP Party back to being at war with working America.

35% of Americans Meet The Criteria To Be Middle Class.

The Daily Escape:

Stoney Brook Grist Mill, Brewster, MA – February 2024 photo by Michael Kerouac

Wrongo and Ms. Right spent Sunday with one of our daughters and son-in-law. We spoke about the Ezra Klein op-ed in the NYT about why Biden should step aside. One of Klein’s points is that in presidential campaigns, the candidate is always the campaign’s biggest asset, and that Biden isn’t being used by Democrats as if he is their biggest asset.

Elsewhere, some pundits are saying that the Democrats need to forget campaigning on policy: Dems always try to find things people like and tell them they’re going to help them — and after that, show them the candidate’s character, biography, and qualifications for office.

Instead, the Republicans campaign by appealing more to emotion than intellect, using a negative message to develop enthusiasm.

While Wrongo is happy that Dems want to campaign again on an anti-Trump message, he still thinks policy is the right way to appeal to at least two types of voters: Those who rarely vote, and those who voted Democratic last time but are less enthusiastic this time. These voters think our political system hasn’t produced results for them, and they’re looking for promises to change that in order to get their votes.

While we keep touting Biden’s economic performance, Wrongo recently found a very important poll taken last November by the WaPo that asked Americans how they defined being in the middle class:

“About 9 in 10 US adults said that six individual indicators of financial security and stability were necessary parts of being middle class….Smaller majorities thought other milestones, such as homeownership and a job with paid sick leave, were necessary.”

They also asked how many of those markers of being in the middle class people said they had achieved, and the results are a staggering rejection of how well the US economy is working for many people:

“Just over a third of Americans met all six markers of a middle-class lifestyle. While about 9 in 10 Americans had health insurance, only three-quarters had health insurance and a steady job. With each added measure of financial security, more Americans slipped away from the middle-class ideal.”

Let’s get into the findings. Here’s the WaPo chart about what factors Americans think it takes to be in the middle class:

It’s arbitrary to pick six, but they were the most frequently mentioned. A secure job. The ability to save. To afford an emergency. Paying the bills without worrying. Healthcare. Retirement. It’s a sensible list. And in the poll, huge majorities agreed those are the key criteria for a middle class life.

The Very Big Problem with this is that when the WaPo asked the same respondents if they had the ability to meet those criteria, the numbers are startling. Here’s the second WaPo chart:

Just 35% of people say that they meet the criteria that almost everyone, (~90%) agree should make someone middle class. If that’s true, America needs to redefine “middle” class. The majority in this survey did not have the financial security associated with being in the middle class. More from WaPo:

“The most common barrier was a comfortable retirement, something that about half of middle-income Americans over 35 felt they were on track to achieve.”

Think about what this research is really showing us. America no longer has a middle class. While ~90% of people agree on what a middle class life is, only a minority can afford it. This means we have a “phantom” middle class: Americans want to be middle class, but only a minority of them are. So what class does that make the majority?

What this research appears to show is that America is building something more like a permanent underclass.

Acknowledging this issue would be a great starting point for Biden to gain traction with low propensity voters and with the Gen X and younger voters who make up most of the low enthusiasm cohort of Democratic voters.

As Anat Shenker-Osorio puts it:

“Democrats rely on polling to take the temperature; Republicans use polling to change it.”

This time around the Democrats need to emulate Republicans who work at moving the needle instead of chasing it. And this middle class problem is an issue that will move the needle.

Fortune Magazine’s Tiffani Potesta writes that Gen Xers personify the problem of middle class life: (emphasis by Wrongo)

“Gen Xers expect to keep working longer than they planned–and will be the first generation to go into retirement with less financial security than their parents and grandparents.”

Gen X will be the first to reach retirement under a new paradigm: the widespread move from Defined Benefit plans to Defined Contribution or 401(k) plans in the US. This is a barely cited yet fundamental societal change that shifted the responsibility to save for retirement from employers to individual employees. More:

“…the numbers do not add up: Gen Xers reported that on average they will need roughly $1.1 million in savings to retire comfortably, yet they expect to stop working with only about $660,000 saved–a savings gap of around $450,000.”

Still more:

“According to a report from the National Institute on Retirement Security, the average account balance in 2020 for private retirement accounts among working Gen Xers was $129,994. This is woefully short of the amount of savings most of us will need to be secure in retirement.”

What’s worse is that the median account balance was scarier: $10,000–and 40% have zero savings.

For a society to be staring at the next few generations not being able to retire and not to be members of the middle class is very troubling, particularly in terms of what’s likely to happen if that’s the case. Losing our middle class is almost a sure path to autocracy, possibly through the rise of fascism and/or authoritarianism.

Biden and the Democrats need to acknowledge these problems are real and pledge to do everything possible to return America to having a true, bell-curve shaped middle class. They can run generally against Trump as “order vs. chaos”, but Trump is running on “America’s decline”, which includes the financial insecurity of millions of Americans. Biden needs to call that out specifically, along with ideas on how to fix the problem. That would make financial insecurity an issue for Democrats equal to abortion, something that targets a specific group and encourages them to get to the polls in November.

If Bernie Sanders isn’t too old to rage against economic insecurity, then Biden is old enough to do the same.

Democrats Need New Messaging

The Daily Escape:

Cholla Cactus at sunrise, Joshua Tree NP – November 2023 photo by Michelle Strong

Yesterday’s column described how confusing current polling data is with less than a year to go before the 2024 presidential election. We can easily overdose on polls, but in general, they seem to be pointing toward a very difficult re-election for Biden.

At the risk of contributing to the OD, here’s another example of terrible poll for Biden. It comes from Democratic stalwarts Democracy Corps, run by James Carville and Stanley Greenberg:

“President Biden trails Donald Trump by 5 points in the battleground states and loses at least another point when we include the independent candidates who get 17% of the vote. Biden is trying to win these states where three quarters believe the country is on the wrong track and 48% say, “I will never vote for Biden.”

What to make of all this? Wrongo thinks it’s time to take a different approach to the Democrat’s messaging. Let’s start with a quick look at the NYT’s David Leonhardt’s new book, “Ours Was the Shining Future”. Leonhardt’s most striking contention is based on a study of census and income tax data by the Harvard economist Raj Chetty: Where once the great majority of Americans could hope to earn more than their parents, now only half are likely to. From The Atlantic:

“Of Americans born in 1940, 92% went on to earn more than their parents; among those born in 1980, just 50% did. Over the course of a few decades, the chances of achieving the American dream went from a near-guarantee to a coin flip.”

As we said yesterday, the American Dream is fading. Leonhardt says that the Democrats have largely abandoned fighting for basic economic improvements for the working class. Some of the defining progressive triumphs of the 20th century, from labor victories by unions and Social Security under FDR to the Great Society programs of LBJ, were milestones in securing a voting majority. More from The Atlantic:

“Ronald Reagan took office promising to restore growth by paring back government, slashing taxes on the rich and corporations…gutting business regulations and antitrust enforcement. The idea…was that a rising tide would lift all boats. Instead, inequality soared while living standards stagnated and life expectancy fell behind…peer countries.”

Today, a child born in Norway or the UK has a far better chance of out-earning their parents than one born in the US. More context from The Atlantic: (emphasis by Wrongo)

“From the 1930s until the late ’60s, Democrats dominated national politics. They used their power to pass…progressive legislation that transformed the American economy. But their coalition, which included southern Dixiecrats as well as northern liberals, fractured after…Johnson signed the Civil Rights Act of 1964 and the Voting Rights Act of 1965. Richard Nixon’s “southern strategy” exploited that rift and changed the electoral map. Since then, no Democratic presidential candidate has won a majority of the white vote.”

The Atlantic makes another great point: (emphasis by Wrongo)

“The civil-rights revolution also changed white Americans’ economic attitudes. In 1956, 65% of white people said they believed the government ought to guarantee a job to anyone who wanted one and to provide a minimum standard of living. By 1964, that number had sunk to 35%.”

America’s mid-century economy could have created growth and equality, but racial suppression and racial progress led to where we remain today.

Leonhardt argues that what Thomas Piketty called the “Brahmin left” must stop demonizing working-class people who do not share its views on cultural issues such as abortion, immigration, affirmative action and patriotism. From Leonhardt:

“A less self-righteous and more tolerant left could build what successfully increased access to the American Dream in the past: a broad grass-roots movement focused on core economic issues such as strengthening unions, improving wages and working conditions, raising corporate taxes, and decreasing corporate concentration.”

Can the Dems adapt both their priorities and messaging to meet people where they are today?

The priorities must change first. What would it take to establish the right priorities for the future? Stripping away the wedge issues that confuse and divide us, America’s priorities should be Health, Education, Retirement and Environment (“HERE”). It’s an acronym that sells itself: “Vote Here”.

(hat tip to friend of the blog, Rene S. for the HERE concept.)

Wrongo hears from young family members and others that all of the HERE elements are causing very real concerns. Affordable health care coverage still falls short. Regarding education, college costs barely seem to be worth shouldering the huge debt burdens that come with it.

Most young people think that they have no real way to save for retirement early in their careers when there’s the most bang for the buck. They also feel that Social Security won’t be there for them. From the NYT:

“In a Nationwide Retirement Institute survey, 45% of adults younger than 27 said they didn’t believe they would receive any money from the program.”

Today, only about 10% of Americans working in the private sector participate in a defined-benefit pension plan, while roughly 50% contribute to 401(k)-type, defined-contribution plans.

Finally, people today feel that their elders have created an existential environmental threat that will be tossed into their laps. A problem for which there may not be a solution.

As Leonhardt argues, these HERE problems should have always been priorities for Democrats. But for decades, the Party hasn’t been willing to pay today’s political price for a long term gain in voter loyalty. That is, until Biden started working on them in 2020.

But every media outlet continues to harp on inflation and the national debt. Much of what would be helpful in creating a HERE focus as a priority for Democrats depends at least somewhat on government spending. No one can argue that our national debt is high. It is arguable whether it can safely go higher or if it must be reigned in at current levels.

To help you think about that, we collected $4.5 trillion in taxes in 2022, down half a $trillion vs. what we collected in 2021. Estimates are that the Trump tax cuts cost about $350 billion in lost revenue/year.

Looking at tax collections as a percentage of GDP, it’s less than 17% in the US, well below our historical average of 19.5%. There are arguments to keep taxes low, but if you compare the US percentage to other nations, Germany has a ratio of 24%, while the UK’s is 27% and Australia’s is 30%.

If we raised our tax revenue to 24% of GDP, which is where Germany is now, we would eliminate the US deficit.

There’s a great deal of tension in the electorate between perception and reality. And it’s not caused by partisanship: Democrats and independents are also exhibiting a disconnect, too.

Democrats have to return to being the party of FDR and LBJ. They need to adopt the HERE priorities and build programs around them.

What To Do About Social Security and Medicare

The Daily Escape:

Lupine and poppies, near Glendale, AZ – March 2023 photo by Marion Cart

From Joe Perticone:

“Social Security and Medicare are headed for insolvency—that’s just a mathematical, demographic fact. But when it comes to addressing the problem, there’s virtually nothing the two parties actually agree on. For years, Republicans have waffled between proposing cuts and kicking the can down the road.”

Republicans are correct that Social Security (SS) and Medicare (M) are marching toward insolvency. But they trip over their own feet with their proposals to save them. Republicans are wrong to think they can solve the solvency questions without raising taxes. Once the Republicans take taxes off the table, they’re left without any real solutions to propose.

The Biden administration has done a good job in pre-emptively going after Republican’s ideas about cuts in Social Security and Medicare benefits. The result is that the GOP is squabbling between themselves and scrambling to come up with a plan they could take to the public.

It’s not just the federal debt that should be discussed. Dr. Donald Berwick head of Medicare and Medicaid during the Obama administration wrote in JAMA: (emphasis by Wrongo):

“A total of 41% of US adults, 100 million people, bear medical debts. One of every 8 individuals owes more than $10,000. In Massachusetts, 46% of adults say they skip needed care because of costs. As of 2021, 58% of all debt collections in the US are for medical bills.”

The WaPo explains why people who live in the American South have bad credit scores. It turns out that neither race nor poverty were the deciding factors. It was medical debt:

“Of the 100 counties with the highest share of adults struggling to pay their medical debt, 92 are in the South, and the other eight are in neighboring Oklahoma and Missouri…”

But why the South? Yes, as a region, it’s unhealthy. But there are several Northeastern states where residents struggle with chronic health conditions but have good credit. One thing that stands out is the lack of Medicaid:

“…a recent analysis in the Journal of the American Medical Association…found that medical debt became more concentrated in lower-income communities in states that did not expand Medicaid after key provisions of the Affordable Care Act took effect in 2014.”

So bad health and bad credit are because of Republican governors’ refusal to expand Medicaid to cover more poor people. Leave it to the south to show a MAGA future for all of us: undereducated, unhealthy, and neck-deep in debt.

What’s The GOP Plan For Negotiating On The Debt Limit?

The Daily Escape:

Dream Lake, Estes Park CO – January 2023 photo by Rick Berk Photography

(Wrongo and Ms. Right send healing thoughts to friend and blog reader Gloria R.)

We’re all aware that House Republicans are refusing to lift the debt ceiling unless Biden gives them well, something? And Republicans still haven’t decided what they want. The GOP also wants a balanced budget, but they can’t say what should go, or what should stay.

From the WaPo: (Brackets by Wrongo)

“They [GOP] say they want to reduce deficits — but meanwhile have ruled out virtually every path for doing so (cuts to defense, cuts to entitlements, wiping out nondefense discretionary spending, or raising taxes).”

The fact that Republicans are up in the air about what to do highlights the likely Democratic strategy is against their threats about the debt ceiling. Again, from the WaPo:

“Sensing Republicans are on the verge of a blunder in their schemes to use the debt ceiling to hold the economy hostage and try to extract draconian spending cuts, the White House has developed a two-part response strategy.

Part 1: Lay out the simple argument that Republicans are recklessly inviting an economic meltdown even by talking about a possible default.

Part 2: Force House Republicans to put forward a plan on the table and watch as they struggle with the fallout.”

The Democrats along with Senate Minority Leader McConnell (R-KY) are daring Republicans to put forward a plan. Senate Majority Leader Schumer (D-NY) said:

“If House Republicans are serious about taking the debt limit hostage in exchange for spending cuts, the new rules that they adopted require them to bring a proposal to the floor of the House and show the American people precisely what kind of cuts they want to make….”

Everyone who follows politics knows that Republicans never take much interest in fiscal sobriety when their Party is in control. They agreed to raise the debt limit three times while Trump was in power.

It seems that Republicans are doing the Democrats’ job for them. They are asking for an economic catastrophe and seeking draconian cuts that their base doesn’t want.

Consider the Republican desire to reduce our deficits. They have pledged to balance the budget (that is, to have a zero annual budget deficit) within 10 years. But they haven’t laid out any plausible mathematical path for getting there. And of the current debt ceiling, 90% of it was committed before Biden took his job.

Some Republican House members want to cut military spending, an idea that both Speaker Kevin McCarthy (R-CA) and Rep. Jim Jordan (R-OH) are on board with. But others, including House Appropriations Chair Kay Granger (R-TX), have said defense spending cuts aren’t on the table. Rep. Michael Waltz (R-FL) said:

“We’ve got to get spending under control, but we are not going to do it on the backs of our troops and our military,”

Waltz thinks Republicans should focus on “entitlements programs,” such as mandatory spending programs like Social Security, Medicare, and Medicaid. But the bi-partisan popularity of these programs makes them hard to cut.

And last Sunday, Rep. Nancy Mace (R-SC) was asked to name one thing she was willing to suggest as a spending cut. She instead stated things she wouldn’t put on the table:

“Well, obviously no cuts to Medicare or Medicaid or Social Security….That’s a nonstarter for either side.”

Wrongo has repeatedly suggested tax increases which would help lower deficits, but Republicans have ruled that out.

Instead they’ve changed the House rules so tax cuts will be much easier to pass, and tax increases harder to pass. The House’s rules package now says that any increase in taxes would require a three-fifths vote (60%) rather than a simple majority as previously.

They’ve also proposed doing away with income taxes, payroll taxes, estate taxes and even the IRS itself in favor of a supersized sales tax that would provide most revenue to the government. Republicans would substitute a 30% sales tax on all purchases and in exchange, do away with income, Social Security and Medicare taxes.

That means workers would keep the gross amount of their paychecks. But it also means that buying everything from groceries to automobiles would be hugely more expensive. It also provides a big tax cut for the wealthy and businesses.

The result is a smaller tax burden for the highest earners and a bigger one for people in the middle.

Once you reject trimming entitlements or defense spending and bake in the cost of the GOP’s proposed tax cuts, you’re left with an additional $20 trillion hole in the Federal budget over the next decade.

OTOH, the White House is expected to release its detailed budget in early March. It will build on budgets it has released previously. Republicans want Biden to negotiate on what to do about money we’ve already spent.

Try doing that with YOUR creditors.

A MAGA Idea Wrongo Supports

The Daily Escape:

Sunset, Tucson, AZ – January 2023 photo by Leila Shehab

Sometimes your worst political enemies are on the same page with you. Axios reports that a:

“…threat of cuts to US defense spending has emerged as a flashpoint in House Republicans’ first week in the majority, widening the GOP’s isolationist fault line and exposing the fragility of Kevin McCarthy’s young speakership.”

The backstory here is that according to Bloomberg, among the concessions new House Speaker McCarthy made to secure the job was to agree to vote on a budget framework that caps 2024 discretionary spending at fiscal 2022 levels. Unless the Pentagon is exempted, that could result in a $75 billion drop in defense spending:

“National defense spending, which primarily funds the Pentagon, was about $782 billion in fiscal 2022 and rose $75 billion to $857 billion in fiscal 2023.”

The deal that McCarthy has apparently agreed to would have the House commit to passing bills that would cap all discretionary spending at fiscal year 2022 levels, or roughly $1.47 trillion.

But one of the big wins for Senate Republicans in last year’s budget talks was a bigger defense budget. Sen. McConnell might want to check in with the House MAGA Republicans, since they’re going in the opposite direction.

Wrongo agrees that the idea of cutting $75-$100 billion (or more) from the Pentagon should be up for discussion. Consider that in 2021, the Congressional Budget Office (CBO) released a study that outlined three options for saving over $1 trillion in Pentagon spending over the next ten years without damaging our defense capabilities.

All three options involved cutting the size of the armed forces, avoiding large boots-on-the-ground wars like Iraq and Afghanistan, and relying on allies to do more in their own defense.

Wrongo wrote about the 2021 CBO study here. The CBO report put the potential cut in historical perspective: A $1 trillion cut (14%) over a decade would be far smaller than the cuts to America’s military spending in 1988-1997 (30%), and the 25% cut we had in 2010-2015.

A $1 trillion saving isn’t chump change. Those funds could be used to prevent future pandemics, address climate change, or reduce economic injustice. These are all pressing American problems.

The MAGA’s ideas on defense spending cuts might find support from a few progressives in Congress, including Reps. Barbara Lee (D-CA) and Mark Pocan (D-WI), who pitched a $100 billion haircut for the DoD earlier this year. But this year’s Pentagon budget boost easily passed both the House and Senate on a bipartisan basis.

Both Republican and Democratic House war hawks will resist the idea of cutting defense spending. Some will cite the defense of Ukraine, which will only account for $45 billion of military spending in the coming year. Some will mention Taiwan, citing China’s aggressive military stance toward the island nation.

But how about developing a clear global military strategy along with the willingness to carry it out? Instead of simply talking about how many dollars we should spend.

And the CBO’s proposed strategic shifts don’t account for what could be saved by streamlining the Pentagon by reducing its cadre of over half a million private contractors, many of whom perform tasks at prices higher than it would cost to do the same work with government employees.

The likely outcome is that House Republicans will fail to cut defense spending while sticking to their plan of holding the 2024 discretionary spending flat. So Republicans will focus on social spending to reduce the fiscal 2024 budget to 2022 levels. But if you ask Americans what spending they want to see cut, they will never say that we ought to cut people’s retirement security.

Wrongo has little hope that this 118^th Congress will work to solve the three great problems that face America: Our revenue problem, our social spending/cost inflation problem, and our defense spending problem. As Jennifer Rubin says in the WaPo:

“The danger for the GOP has always been that a short stint in irresponsible governance will wake up the electorate to their manifest unfitness, thereby dooming the party’s chances in 2024. The danger for the country is that, in the meantime, the MAGA extremists will do permanent damage to the U.S. economy and national security.”

The hard Right MAGAs and the anti-democracy Republican Party must be made into a permanent minority, as it was during the Roosevelt years, and for decades thereafter.

The battle for 2024 starts now.

Fixing Social Security

The Daily Escape:

Tahitian Gardenia, Maui – 2013 photo by Wrongo

On June 13^th, The New York Times had an article on the Social Security (SS) shortfall: (emphasis by Wrongo)

“Unless a political solution is reached, Social Security’s so-called trust funds are expected to be depleted within about 15 years. Then, something that has been unimaginable for decades would be required under current law: Benefit checks for retirees would be cut by about 20 percent across the board.”

With life expectancy increasing, by 2035, Social Security estimates, the number of Americans 65 or older will increase to more than 79 million, from about 49 million today. This is the high point of eligibility, as the number of Baby Boomers will start to decline by then.

Americans are counting on Congress to fix this problem. As usual, there are two answers, one offered by each Party. The GOP thinks that we can’t afford SS and Medicare. In fact, they’ve been trying to cut our SS checks since the Reagan presidency. The right-wing Heritage Foundation offered a new policy paper in May. As in the past, they favor cuts to benefits and siphoning money from payroll taxes into individual investment accounts. This is a recycling of George W. Bush’s 2005 idea, that the Democrats blocked at the time. The Heritage Foundation overlooks that at one time, pensions were widespread, and SS was a supplementary source of income for many retirees, not their primary source as it is for most today.

The Democrats have suggested an increase in Social Security benefits, along with higher taxes for the wealthy. Taken together, these measures would eliminate the SS program’s financial shortfall.

Millions of words have been written about how to deal with the shortfall. Here is one idea from Dale Coberly posted at the Angry Bear:

“All we have to do is pay an extra dollar per week per person per year. After next year It will be more like a dollar and ten cents. And if we wait another year it will be about a dollar and twenty cents for the first few years, then a great deal less than a dollar per week on average. This would keep Social Security solvent essentially forever. The Deputy Chief Actuary at Social Security agrees that this is true.”

Most of the political discussion is about “we can’t afford it”. They mean the US government. But, when we think that if the individual wage earner CAN afford it, there’s no reason why the government can’t pay for it. This isn’t socialism, and the US government doesn’t have to come up with $ Trillions all at once.

Social Security was not designed to be welfare. It isn’t an “entitlement”, as though it’s an unearned benefit. People contribute a hefty portion of their annual income for their entire working lives to the SS fund, and they have the right to their SS payments in retirement. The original intent was for workers to save enough money to pay benefits when they were too old to work. Today, even the “rich” are not paying in more than they will get back with reasonable interest.

The Times article doesn’t mention that the easiest, and most obvious solution is raising or eliminating the SS cap. Most people forget that only the first $132,900 are taxed. Anyone earning more than that is paying into Social Security at the same rate as the rest of us.

Here’s a message to Jeff Sommers, who wrote the NYT article: You are fanning the flames of a false emergency when there is a sound solution to be implemented.

Several studies have shown that simply removing the cap, which affects less than 10% of US taxpayers, would solve the SS program’s solvency issues indefinitely. No benefit cuts needed. No political horse trading needed between the Republicans and Democrats, except that the GOP base will scream bloody murder if they are forced to pay in more than they will get back.

But, why should we give a pass to the rich, when the rest of us depend disproportionately on social security income to meet basic needs?

Now all we need is the political courage to get it done, which is in absurdly short supply these days.

The Democrats’ Closing Argument

The Daily Escape:

Autumn in full, near Hopkinton MA – 2018 photo by Karen Randall

We’ll know soon whether all the money and energy spent on the 2018 mid-terms have produced a good outcome for the Dems, or for the Republicans.

And what is the Democrats’ closing argument? The “closing argument” is a cliché for the final messaging of every campaign. Many voters only tune in for the last few days before Election Day, and candidates make closing appeals to those newly opened ears.

The plan for the Democrats’ closing argument, as Carter Eskew says in the WaPo:

Run on issues such as health care, especially the Republican threat to not cover preexisting conditions, to win over independents, and then to rely on President Trump’s daily outrages to stoke Democratic turnout. I am sure that Democrats all across the country have millions of polling cross-tabs that show that the best way to build a winning coalition is not by attacking Trump, but by presenting solutions that help “everyday Americans.”

There is some logic to what Eskew is saying. Yesterday, we showed polling from the Kaiser Family Foundation about the top issues for Democrats, Republicans and Independents. Here it is again:

The top issues for Dems align with the top issues for Independents, but not with Republicans. A report by the Wesleyan Media Project, which tracks political advertising, supports both the Kaiser survey and Eskew’s viewpoint:

Trump came up in just 10% of ads from Sept. 18 to Oct. 15 — and only 5.5% of them were negative. That’s by far the lowest proportion of attack ads against a sitting president since the 2002 midterms, when George W. Bush’s soaring popularity after 9/11 made him off-limits for Democrats.

Dems have downplayed dislike of Trump in favor of a closing argument focused on health care, taxes and protecting entitlements. The Wesleyan article suggests why Democrats have chosen to focus on the issues voters care most about, rather than on Trump: Dems think that likely voters have heard enough about Trump, and have made up their minds about whether or not they buy him, or his closing argument.

Meanwhile, Brian Stelter wraps up Trump’s closing argument for the midterms:

— Fear the caravan
— Hate the media

Trump is saying that a vote for Republicans is a vote for Trump, while a vote for Democrats is a vote for higher taxes, open borders, recession, and socialism.

So the question is, do the Dems have a winning closing argument? More from Eskew:

Democrats need to urgently remind their base and independents of the deeper and more emotional stakes of this election. They need to show their base and potential converts that there is a way to convert anger, malaise and resignation about Trump into an affirmative and liberating action.

To win a majority in the House next Tuesday, and have any chance of winning the Senate, Democrats need to raise the stakes of this election higher than simply who better preserves protections for preexisting conditions.

The stakes are very high. If the Dems fail to take back the House, the GOP and Trump will be emboldened to attack Social Security, Medicare and Medicaid. The Democratic Party should act like those programs are already in play.

With the midterm elections only a few days away, those are the closing arguments from Democrats and Republicans.

Mazlow’s hierarchy of needs will probably decide the mid-terms. Fear for survival and hate of those threatening it are what Trump is using to motivate his base. If you are betting person, take hate. Hate doesn’t always win, but in today’s America, it usually covers the point spread.

If you doubt that, try naming a single compelling emotion that comes to mind when you say “Democratic strategy.” When the NYT is putting photos of the “migrant caravan” on the front page above the fold every day, you’ve got to wonder what the Democrats are thinking.

While Trump inflames the immigration issue, Dems are ducking it. They are refusing to clarify how the US should deal with the caravan when it arrives, except to say that kids shouldn’t be in cages, which is an easy answer.

Should we let the illegals in or not? A few Dems say abolish ICE, but that’s a losing argument. The Party leaders instead change the subject to health care.

Is refusing to be drawn into the caravan debate part of a winning closing argument?

We’ll see.

If it isn’t, Wrongo’s message to Democrats is: Reform the party, kick out the dinosaurs, build a platform that truly helps the people.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Social Security