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Progressive Issues for Progressive Democrats
"Health care is a fundamental right." (Ted Kennedy, 8/26/08)
* * * * * * *
The Progressive Platform Project

Social Security and Medicare: A Matter of Trust

by: Michael Conrad

Tue Oct 04, 2011 at 06:24:02 AM EST

A look at major developments in the fight to truly strengthen Social Security and Medicare, and proposals for the ongoing battle.
Michael Conrad :: Social Security and Medicare: A Matter of Trust
State of Play: Social Security

President Obama finally took needless cuts to Social Security -- in the form of raising the retirement age or the Chained CPI scheme -- off the table. While this is definitely a welcome development, it's important to remember that Social Security shouldn't have been on the table in the first place.

Here's the president talking about Social Security last week.

This is a noticeable improvement over the misleading rhetoric of the recent past. The president suggests lifting the cap on taxable income as a solution to the manageable long-term problem.  

I would be remiss if I didn't reiterate how destructive these needless cuts would have been. The Strengthen Social Security coalition consists of every group that votes for Democrats and works to elect them. A Democratic president signing off on the Wall Street-championed effort to needlessly cut the program would be abject political malpractice, on top of being just plain wrong. It would have triggered an unprecedented redirect of effort, if not an outright fracturing of the progressive coalition. By not including cuts to Social Security in the plan he submitted to the "Super Committee," the president dropped a really bad idea that is antithetical to the core values and identity of the Democratic Party, the people it represents, and the president's ability to win an uphill battle for re-election.

Broken record time here: Social Security is very popular across the board. The support is especially strong among groups the president needs to fire up or win over to put re-election within reach: populist swing voters, older voters, and progressives.

A brief side note on the "Ponzi scheme" polling there's a good chance we'll be hearing more about, as Social Security will play a prominent role in the Rick Perry-Mitt Romney Republican nomination contest.

Two nights ago I watched a Rick Perry town hall in New Hampshire on C-SPAN. A veteran told the crowd that he agreed with Perry that Social Security was a Ponzi scheme. His reasoning: it's not enough to live on. An elderly woman who brought up retirement security in general called attention to how not getting their COLA increase has hurt seniors.

While the plural of anecdote is not data, I think these examples are broadly reflective of a significant amount of the "Ponzi shceme" sentiment. Along with answers from Tea Party Republicans who know they're supposed to say Social Security is a Ponzi scheme and respond accordingly, there are people who fear the benefits they've earned will be cut; or won't be sufficient; or the money they've paid into the system will be spent on endless wars, tax cuts for the most wealthy, or other things they consider to be wasteful or understandably not nearly as important to them as their retirement security.

Social Security itself is extremely popular. In fact, despite the well-financed nonstop scare campaign from Pete Peterson, and politicians and pundits echoing Peterson's lines, 61 percent of women and 54 percent of men support increasing benefits according to a new poll.

While this round of the Social Security fight appears to be over, deceptive talking points linger. Among them:

"You can't tell me there isn't waste that can be eliminated."

Social Security is all needed benefits. (It's not like Medicare where there's 
a need for something like an IPAB.)

"Means testing!"

First off, means testing would have to cut into middle class benefits to save real money. Second, means testing pushes Social Security into "welfare" territory, which weakens political support for it.

"It runs out of money in 2038."

That's just not true. After 2038 it can pay out around 80% of benefits. There are simple ways to fix this easily manageable problem, like lifting the income cap.

State of Play: Medicare and Medicaid

Joan McCarter's two headlines summed it all up:

Benefit cuts largely left out of Obama's Medicare/Medicaid proposals

Democrats need to keep holding the line against Medicare benefit cuts

Building Trust

Warren Buffett's now famous op-ed has been rightfully applauded for shining a light on warped tax rates for the most wealthy. The exception to the generally good rule is Buffett's promotion of the idea that DC needs to cut "promises" (read: Social Security and Medicare), and that doing so will restore people's trust in government.

Needlessly cutting the 76-year old success story that is Social Security will be seen by many as a sanitized form of theft. And you don't build trust by breaking promises, especially a  high-profile, vital promise that does not need to be broken.

There are three much better ways for Democrats to build trust.

1. Get results (see: unemployment, income, foreclosures)

From unemployment to health care, the main question for elected Dems should be "Can our approach get the necessary results?" This is a pretty basic standard, but one some DC Dems seem to lose sight of all too easily.

2. Get aggressive about campaign finance and lobbying reform

This is crucial. And it's something that resonates in a big way with almost everyone who doesn't have a vested interest in keeping the undeniably broken status quo. K Street and Wall Street will hate it. Main Street recognizes that it must be done.

3. Make our case

We need to be constantly aware of the story we're telling and the story the Tea Party GOP is telling. Again, this is basic, but it's an area our side needs to improve on.

Part of this involves pointing to our successes, like Social Security; not ignoring or downplaying them, or lending credibility to efforts to discredit and eventually dismantle them. Making our case also requires letting go of the "invisible government" notion from the 90's -- a counterproductive response to that right-wing charge that progressives are in favor of "big government." No progressive that I know wants government for government sake. What we strongly support is effective, responsive government; "not on your back, on your side" as the saying goes. We have very good example of how this works in Social Security, infrastructure, and clean air and clean water laws. They make a concrete difference in people's lives, which in turn makes them broadly popular. This is not a legacy to run from but achievements that we should, to borrow a phrase President Obama has been using, wear as a badge of honor.

Social Security, Medicare, education, infrastructure, consumer protection, civil rights, the right to organize and the building of the Middle Class -- that's us. All the right has ever done is try to block or tear down those things and redistribute more wealth and power upward to the already super wealthy and well-connected in exchange for political support. It's in the interest of the right-wing Republicans to duck this fight. It's in the interest of Democrats and the country as a whole to have it.

Buffett's argument mirrors one that has been made in Democratic circles before. Jimmy Carter made it to Congressional Dems in the late 70's, it reportedly informed the Clinton White House's approach, and the Obama Administration fell victim to it as well.  

Step 1:Talk about balancing the budget a lot (even if it's demonstrably not the right time to focus attention on this) through a lens specific to Beltway Goggles.
Step 2: ?????????
Step 3: Trust in government restored!  

This has never worked and there's no reason to think it ever will. It amounts to playing a game the Republicans have rigged against us. In the current context it makes for disastrous policy. The politics of it are equally self-defeating. Not only will the GOP refuse to give any credit for steps taken in their direction, they'll erase the deficit reduction as soon as they get in power because they don't really care about the deficit (or are beyond clueless about what drives it and when and how it becomes harmful). They very much do care about sabotaging Democratic presidents. Republicans being hypocritical and nonsensical on the budget is like Social Security: you can count on it.

Republicans and the movement conservatives who fund them do not want to "tweak" Social Security and Medicare. The conservative establishment hates these insurance programs because they work. Conservatives don't believe in Social Security, but they can't all come out and admit it, so they play the game they're playing now and hope Democrats play along.

If any Democrat were to cut Social Security, within minutes the right's cries of "It's a bankrupt Ponzi scheme" would emerge again, and those who are at heart mortal enemies of Social Security would claim vindication and move on to the next phase emboldened. Giving up important ground today in the hopes of being in a better position later isn't a coherent plan, it's a fantasy.

Winning The Always

Stated concern about the deficit is a largely a placeholder for economic insecurity. Social Security, which is a key component of economic security, is intensely popular. Progressive ways to reduce the long-term deficit, much like truly strengthening Social Security, are very popular. So why not use both contrasts? Social Security has no place in an honest discussion about the deficit anyway. Republicans are for privatizing or abolishing Social Security and they're being aggressively dishonest about long-term deficit reduction. They should be held accountable for both.  

I don't fully understand why some Dems in DC tremble at the thought of developing something close to the political equivalent of killer instinct. But it shouldn't be too much to ask for them to avoid political suicide.  

Related: Rick Perlstein's "How Democrats Win"  

Just In Case

Though it appears Social Security and Medicare are safe for now, the White House mindset that has been a huge gift to John Boehner, Mitch McConnell, and Eric Cantor is still very much present in the president's inner circle.

Ezra Klein's reporting on why the White House changed course is a head-desk inducing look at what the president and his team were and still are thinking:

The first-best outcome is still striking a grand bargain with the Republicans, and it's more likely to happen if the Republicans worry that Democrats have found a clear, popular message that might win them the election. The better Obama looks in the polls, the more interested Republicans will become in a compromise that takes some of the Democrats' most potent attacks off the table.

If the White House is still under the impression that striking a Beltway Grand Bargain would have helped the president politically, they should consult whoever convinced them that voters want results more than they want compromise for its own sake and have another epiphany or five.

The president's views on Social Security and Medicare were reportedly shaped by his former OMB Director Peter Orszag, a false choice Social Security cutter who writes op-eds that basically argue that it's cuts or privatization. But who is shaping the president's view about the politics of pursuing the Beltway Grand Bargain? If the president were to push and sign off on needless cuts to Social Security, it would put his re-election out reach. The case for writing off the president's re-election campaign as a lost cause would be incredibly strong.

Let's be clear, any Republican president would be terrible. Jon Huntsman, who is overrated because he cleared an extremely low bar by not being virulently anti-science or rabidly regressive on all social issues (and has practically no chance of winning the nomination) would be a disaster for the economy and the middle class. Any one of the Republicans would be a disaster for the Supreme Court, the DOL, the EPA, you name it. But this is one of the many reasons why the White House shouldn't virtually lock in the outcome a Republican president by resurrecting the so-called "Grand Bargain."

A brutal economy + a fractured base + furious swing voters = it's over.
The election would become a question of not just whether the president loses but by how much and how bad of a toll he takes down ticket.

And for the record, needlessly cutting Social Security or raising the Medicare eligibility age is not a "hard choice." It's a craven one. It would be pandering to the fetishes of some of the most out of touch people in the country; people with horrible track records. If the president wants to tell a vocal group with truly outsized influence a hard truth, he should tell Pete Peterson and David Brooks that Social Security and Medicare aren't the problem, no matter how badly Peterson and Brooks-types want to pretend that they are.

The Obama 2012 campaign's new, more pronounced populist streak is the most credible path to re-election. For the sake of all involved, they should stick with it.  

Moving Forward: The Baker Rule (FTS FTW)

Dean Baker makes an excellent point in "Why Don't the Deficit Hawks Want to Tax Wall Street?"

The intensity with which the country's leading deficit hawks continue to ignore financial speculation taxes (FST) is getting ever more entertaining.


[F]inancial speculation taxes are a route to reducing long-term deficits that has won support both among the general public and among policy experts and leading political figures around the world.


[I]t is hard to understand why taxing financial speculation never appears on the agenda of the deficit hawks or gets mentioned in budget reporting if the issue really is deficit reduction. On the other hand, if this is all about using an economic crisis to push a longstanding agenda to cut Social Security and Medicare, then everything suddenly makes sense.

So here's a proposal I'll call the "Baker Rule": Every time one of the usual suspects argues that Social Security and Medicare benefits be cut, progressives and populists advocate for and press the usual suspects on the FST.

Keep Social Security strong, enact a modest tax on Wall Street speculation vs. Gut or privatize Social Security and refuse to do any thing that might hurt the precious fee fees of the people who crashed our economy.

Moving Forward: A Primary Issue

The entire rank and file Democratic coalition can work together to ensure that a Democratic candidate who isn't a reliable supporter of Social Security and Medicare doesn't win a nomination of consequence, whether for a post-Obama presidential nomination or down ticket-races. There's no good reason for Congressional Democrats, even and especially majority makers, to be lame on this.  

You show me a part of the country where cutting Social Security is popular and well, I'll remind you that picking a room full of people on Wall Street or in DC is clearly not in keeping with the spirit of the challenge. Voters are opposed to cuts to Social Security.

David Brooks and company would positively freak out over this "Noooooooo! Bipartisanship 'responsibility' No Labels. This will make it much more difficult for us to reach our goal of maiming Social Security and Medicare under the guise of 'reform.'"

And yes, that's the point. The Democratic base should go all out to protect Social Security and Medicare.The false equivalence machine will inevitably accuse those who make sure Democrats are solid on these issues of being the flip side of Grover Norquist's Club for Growth.

Differences between the "Club for Growth" agenda and Social Security and Medicare:

CfG Agenda: Colossal failure
SocSec-Med: Proven success

CfG Agenda: Serves narrow interests of extreme right-wing ideologues
SocSec-Med: Essential to broad working middle class

CfG Agenda: Views are decidedly outside the mainstream, to the far right of all but the Republican base  
SocSec-Med: Hugely popular, receives broad support

While I'm sure the coming up with best way to go about this would be the subject of considerable discussion, the progressive and Democrat coalition could make sure Social Security are elevated during primaries. Maybe endorsements aren't the way to go unless it's a two-person race and one candidate is unreliable, but we could see a new standard that makes a statement that someone is reliable from an organization like the National Committee to Preserve Social Security and Medicare a must-have for Democratic candidates.

Democratic candidates need to understand the history of vital insurance programs, how they're financed, how they're attacked, and who attacks them and why. Those who seek to protect and truly strengthen this legacy need to be just as proactive and determined as those who seek to undo it. Make no mistake about it, they are committed to the destruction of what we hold dear. What are we going to do about it?

Moving Forward: Social Security

Lift the income cap.

Moving Forward: Medicare, Health Care Costs

When we talk about Medicare and Medicaid, what we're really talking about is rising health care costs, which are the real driver of the long-term budget problem.

Actual deficit hawks would be championing Medicare for All, addressing the special deals for PhRMA, and establishing something like an Independent Payment Advisory Board.

As far as the politics go, Montana's Democratic Governor Brian Schweitzer gets it exactly right.

Paul Waldman:

(Schweitzer) wants to fold all Montanans currently getting insurance through the government (Medicare, Medicaid, government employees, etc.) into one program, and-and this is critical-let anyone else who wants buy into that program. But unlike a true single-payer plan, people would still be able to get insurance from private insurers. He predicts "It'll be a lonely place over there at Blue Cross/Blue Shield, I'm afraid."

This is pitch perfect. It's a strong public choice people are familiar with. If insurance companies can't compete, they don't get to be propped up. I've (perhaps annoyingly) called this idea Medicare Choice in the past. It's a compromise in that it's not the single-payer system many progressives would prefer, but it's still strong enough to get the job done. It's a good compromise: effective, straightforward,
and thoroughly mainstream.

Schweitzer has set the standard for national Dems moving forward on health care. This is how we win.  

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Great diary, MC (3.00 / 2)
I'm glad Obama is moving away form the really one deaf stupidity on SS he once openly supported, though I still don't trust him with SS or Medicare.

Here's the latest about Obama's tone deafness to be pissed about covered by Keith Olbermann well, but dday really goes after the notion that "there was nothing Obama could have done to push Holder to prosecute Wall Street" because Obama says "technically they just found loopholes and didn't break the law" which is BS considering the foreclosure fraud happening I have documented. He says this while acknowledging the only hopeful thing about politics which is the Occupy Wall Street movement and making lame excuses for the failures of his administration to reign in Wall Street. It's pretty sickening actually.

I love the Baker rule I am seeing it in the protests(even at Occupy Houston where I went yesterday) while the media is pretending #OWS doesn't have any coherent platforms.

That is a good move by Brian Schweitzer too. I think now though, this nation wide protest is going to decide what happens and what doesn't as it always has historically and then the politicians follow the outcome and i dearly hope it's a good one because we really are the 99%.

Thanks! (3.00 / 2)
How was the Houston protest?

With you on what will (hopefully) be the trajectory, politicians following the movement -- because that's where the energy is.

Yeah, many of the OWS protesters are remarkably informed.

That's waaaaaaaaaaaay ahead of Joe the Not Plumber and "Bargle Garggle Tort Reform" and "MAKE ENGISH R OFICAL LANGUWAJ NAO K!" (Ostensibly a tax protest that is both completely ignorant about tax rates and very willing to shift the conversation about how not-white people are to blame for pretty much anything and everything) and "NO GUVMNT HEALTH CARE EVER EVER NEVER EVER EVER. AND KEEP YOUR HANDS OFF MAH MEDICARE!" and all that garbage.

As for the president and accountability for ffraud, the foreclosure crisis in general has been one of this administrations biggest and most consequential failures -- and it has been in their hands.

Also on Twitter  

[ Parent ]
It was great! I enjoyed chanting "We got sold out! They got bailed out!" at J.P Morgan bankers and marching to City hall with 690 people... (3.00 / 2)
which is a good showing for Houston, I think.

That electrician was very informed. every once in awhile you will get a smug dismissal about Glass Steagall(even though it wasn't the only cause of the crisis but a huge one), but when that happens I love to cite Citigroup.

"Mwah ha ha! You really think Glass Steagall was a problem? Parts of it were actually already repealed and there are bigger banks in Europe and the UK. So ha!"

I say do you know what a derivative is? Do you know anything about AIG? What is Citigroup?


What is the significance?

"They were bailed out."

That's no the only significance. Glass Steagall separated insurance from banking. Citigroup is Citibank, Citicorp, and Travelers insurance company together which literally could not exist unless you repealed glass steagall and they were bailed out 3 times. They like AIG were involved with credit default swaps which are insurance contracts on collateralized debt obligations which are bundled mortgage securities, sub prime toxic mortgages that were probe to collapse but no one wanted to honor the contracts so AIG and Citigrop were bailed out. Derivatives are still a problem and have rung up more than the entire worth of the entire world economy which is ridiculous.

So for those smug pseudo financial bloggers(I'm looking at you Megan McArdle and Tyler Cowan) they don't know what the fuck they are talking about and this electrician does.

Thanks, MC.

[ Parent ]
Ugh!!! Now for the bad news about Occupy Houston (3.00 / 2)
Alex Jones is really toxic for this movement and will hurt it.

[ Parent ]
Alex Jones (3.00 / 2)
Is their anything that idiot won't take credit for?

An open door for a movement is good, but the Alex Jones/Paulies already have their own thing going, and their goals are diametrically opposed to the broadly voiced goals of OWS. Not sure how to deal with it, but "toxic" describes Alex Jones perfectly.

The Legion of Paulbots sent this to me; they must have thought it was persuasive.

Dear "Let's Make This About Ron Paul" Dude,

You and your RonPaulRonPaulRonPaul buddies are freaking out about inflation? Now?!?! What are you smoking and where can Rand Paul get some? For the love of Austrian Aqua Buddha... Crazy Goldbug is Crazy. And no, do NOT end the fed. The problem is that the Fed has leaned away from one half of its dual mandate (unemployment) and there is a general lack of transparency. The problem is not that the Fed exists.

A person you all send these videos too

With you all the way on Megan McArdle. Don't read Marginal Revolution frequently so can't speak to Cowan, but sure you've got it pegged)

Glad you had a good time in Houston!

Also on Twitter  

[ Parent ]
yep. That was pathetic, but he didn't take over Occupy Houston and neither did the Paulites, luckily. Great response to that crap, MC (3.00 / 2)
Man that guy looks insane. I am also unimpressed.

I was like no no no no no no yeah(local production) no no no no no yeah(end the wars) no Good God NO!!!

Fractional reserve banking is not the problem. It's raised living standards. Our currency is not being debased and inflation is too low hurting manufacturing as Dean Baker says.

good luck with those state governments during a hurricane or any natural disaster.

[ Parent ]
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