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Posted by on Oct 17, 2012 in At TMV | 3 comments

96 Groups and Social Security Stalwarts Take on COLA Cuts

WASHINGTON – The report comes as “grand bargain” hucksters take to CNBC regularly to push putting Social Security on the chopping block. If you’re not watching CNBC you’re simply not seeing the media blitz by the elite to offer up Social Security as part of the “grand bargain” push. It comes at the same time Cost of Living Adjustment (COLA) is lowered yet again.

Social Security benefit payments will rise by only 1.7 percent in 2013, down sharply from a 3.6 percent increase in 2012’s cost of living adjustment (COLA). That boost followed two years of no COLA increase. The Social Security Administration said next year’s COLA would raise the average monthly benefit payment by $21, to $1,261 from $1,240. [US News]

The report is from Ryan Grimm and Arthur Delaney:

A coalition of 96 organizations representing veterans, the elderly, minorities and labor unions on Tuesday used the occasion of the annual Social Security cost of living adjustment to plead with Congress not to manipulate the measurement as a way to reduce the deficit in coming negotiations over tax and spending policy.

Leading members of both parties have hit upon the cost of living raise to help pay for extending parts of the Bush tax cuts as part of a new “grand bargain” to reduce future deficits. By swapping out the current measurement for a new, stingier method of gauging inflation, politicians hope to reduce Social Security benefits over the long term, enabling more of the tax cuts to remain in place.

The coalition of Social Security defenders argued that such cuts would be devastating to seniors, more than 40 million of whom received Social Security benefits in August, according to the program’s latest monthly statistical snapshot. The average senior on Social Security receives $1,235 per month. The benefits lifted nearly 14.5 million seniors out of poverty in 2011, according to the U.S. Census Bureau.

Women need to wake up. I’ve quoted “feminist economist” Susan F. Feiner before, but here she is again:

Listen up, sisters! Deficit hawks will eat your lunch, your kids, your jobs and your retirement. […] Today’s deficit hawks (and way too many Democrats are flying with this flock), fundamentally and deliberately misinform by insisting on a fictional symmetry between private sector (household and corporate) bookkeeping and the U.S. federal debt.

… Here are the facts: U.S. government borrowing creates interest-bearing assets. The bonds are bought with dollars, the interest on them is paid in dollars and, at maturity, the bonds are paid off in dollars. Since the U.S. government is both sovereign in its own currency and the sole issuer of dollars, it can never run out of them. How could it?

Don’t think printing presses here: Federal debts are paid off by Treasury clerks making a few clicks on computer keyboards—keyboards identical to the one I’m typing on now.

In contrast, families and businesses have to earn income or sell assets to get dollars to pay off debts. The federal government does not face any such constraint. It can spend as much as it likes and borrow as much as it likes. With so many people out of work—nearly 30 million and counting–and so many firms operating well below capacity, there is no danger of inflation. So, right now, government borrowing and government spending will do one thing and one thing only: It will pump up aggregate demand, call jobs into being and reduce economic pain. Our children will be better off.

Meanwhile, the ceiling limiting the federal debt is an arbitrary constraint.

[…] Fiscal austerity—aka, reducing the deficit—endangers our lives. Deficit spending lies behind virtually all the social services, public amenities, and consumer safety standards that distinguish the U.S. from Rwanda, Bangladesh or Guyana. The Chicago Tribune recently reported that Congress is “moving to eliminate the only national program that regularly screens U.S. fruits and vegetables for the type of E. coli that recently caused a deadly outbreak in Germany.” Clearly, this $4.5 million program is too expensive. (Note to reader: $4.5 million is just over half the median pay for top executives at the nation’s 200 largest firms, according to The New York Times. Executive pay is up 23 percent over 2009. What if each of these guys chipped in a measly $22,500 so the rest of us could eat untainted food?)

The possible COLA (Cost of Living Adjustment) cuts impact women more than anyone.

Research from IWPR has shown the current Social Security program is a mainstay for women, and these findings have been supported by research from other organizations. Adult women are 51 percent (27 million) of all beneficiaries, including retirees, the disabled, and the survivors of deceased workers (52.5 million). Women are more likely to rely on Social Security because they have fewer alternative sources of income, often outlive their husbands, and are more likely to be left to rear children when their husbands die or become permanently disabled. Moreover, due to the recession many women have lost home equity and savings to failing markets. Older women—and older low income populations in general—have become more economically vulnerable and dependent on Social Security benefits. – IWPR

The lame duck Congress is the target, as elite conservatives, both Democratic, from Obama on down to Sen. Udall and others, to Republicans, are hoping to convince people that a deal must be done before January. It’s the reason the term “fiscal cliff” was created. To scare people into believing there is no choice, that if we don’t cut Social Security and other entitlements in the “grand bargain” scheme it’s tantamount to throwing the country over the cliff.

If you are not in contact with your senator and congressperson you need to get busy.

Taylor Marsh, a veteran political analyst and former Huffington Post contributor, is the author of The Hillary Effect, available at Barnes and Noble and on Amazon. Her new-media blog covers national politics, women and power.

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Copyright 2012 The Moderate Voice
  • Jim Satterfield

    Absolutely correct, Taylor. Everyone should remember that whenever deficit hawks or their supporters make analogies between federal debt and household debt or even the debt of EU members like Spain and Greece they are making horribly flawed analogies. They should look at what’s happened to the U.K. Their conservatives decided to follow the path of austerity and pushed their country back into a deep recession.

  • slamfu

    I have an idea, lets not extend the Bush tax cuts. And yes, anyone who compares personal household debt to the national debt is a moron whose opinion can be completely ignored to your benefit. Things change with scale.

  • Jim Satterfield – It’s stunning that American politicians, no matter the party, have to learn this again, even after watching austerity crash & burn across the pond.

    The Bush tax cuts should *never* have been extended.

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