Monday, July 27, 2015

Trustee's Report Shows Social Security Has Enough Money to Expand Benefits Now

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The Social Security Board of Trustees has just released its annual report to Congress. The most important takeaways are that Social Security has a large and growing surplus, and its future cost is fully affordable.

It is sometimes reported that Social Security's current costs exceed its revenue, but if that happened, we wouldn't need a report to tell us. The whole country would know, because 59 million beneficiaries would not get their earned benefits as they now do every month. By law, Social Security can only pay benefits if it has sufficient revenue to cover every penny of costs - administrative as well as benefit costs. The claim that Social Security is running a deficit counts only Social Security's income from its premiums, often called payroll contributions or taxes, and disregards one or both of its other two dedicated sources of income: investment income and dedicated income tax revenue. When income from all of Social Security's revenue sources is counted, Social Security ran a $25 billion surplus in 2014.

Social Security is projected to run a surplus again this year. And next year. And the year after that. And the year after that. These annual surpluses simply add to its large and growing accumulated surplus.

Over the next 5 years, Social Security has sufficient funds to pay every penny of benefits and every penny of associated administrative costs. That is true for the next 10 years. And also the next 15 years. Over the next 25 years, Social Security is projecting a modest shortfall of just .51 percent of GDP. Over the next 50 years, the projection is just 0.8 of GDP. And over the next 75 years, the shortfall is projected to be just 0.96 percent of GDP. Let's put those percentages in perspective. Military spending after the 9/11 terrorist attack increased 1.1 percent, of GDP. Spending on public education nationwide went up 2.8 percent of GDP between 1950 and 1975, when the baby boom generation showed up as school children.

The fact is that, as the richest nation in the world at the richest point in our history, not only can we afford the current levels of Social Security protections, we can afford to greatly expand Social Security. At its most expensive, in 2035 when all baby boomers are all over age 70, and indeed at the end of the 21st century, we are projected to spend considerably less, as a percentage of GDP, than Germany, France, Japan, Austria and most other industrialized countries spend on their counterpart programs today.

It is time to expand Social Security. Social Security's benefits are modest and don't cover a number of eventualities, such as parental leave and sick days, which the Social Security programs of other countries cover. It is time to bolster the economic security of America's working families.

Social Security is a solution. It is a solution to a looming retirement income crisis where most workers [3] will be unable to retire without a drastic reduction in their standards of living. Social Security is the most universal, secure, and efficient source of retirement income that we have, providing a guaranteed, inflation-protected source of income that one will never outlive. And, expanding Social Security helps more than retirees. Because disability and survivor benefits are derived from the same benefit formula, increasing its benefits automatically improves the income of non-aged workers and their families. Adding new benefit protections, such as paid family leave and paid sick days would do even more.

Virtually all politicians have expressed concern about growing income and wealth inequality. Expanding Social Security and requiring millionaires and billionaires to pay their fair share will begin to put brakes on this dangerously and rapidly growing upward redistribution of wealth.
Although today's Congress does not seem likely to expand Social Security benefits, the Democrats could force their hand. Though one single payment is deducted from paychecks for Social Security, its revenue is divided into two separate trusts. From time to time rebalancing is required. One would think that Social Security trustees have the authority to do this simple rebalancing themselves. But that is not how the law works. Instead, rebalancing requires an act of Congress.

The Trustees Report once again projects that Congress must act before the end of 2016 to rebalance Social Security's trust funds. If that is not done, Social Security's disability benefits will be cut by around 20 percent. Rebalancing should be routine and has been so in the past.
However, today's Republican leaders have already made clear, through a rule adopted on the very first day of the new Congress [4], that they plan to hold rebalancing hostage this time around. Presumably, they are seeking a bipartisan deal, worked out behind closed doors, that cuts Social Security and enacts other unpopular changes. Instead, the Democrats should hold firm for winning policy and politics. They should propose enactment of one of the many Democratic bills which expands Social Security.
For example, The Social Security Expansion Act, sponsored by Senator Bernie Sanders (I-VT), expands benefits in important ways while ensuring that all benefits, including disability insurance benefits, can be paid through 2065. The Social Security 2100 Act, introduced by Representative John Larson (D-CT), expands benefits while ensuring that all benefits, including disability insurance benefits, can be paid through 2090. Indeed, 43 Senators and 116 House members are on record in favor of expansion, in conjunction with ensuring that the wealthiest among us at long last pay their fair share.

Expansion is excellent policy. It is extremely popular. It solves many challenges - including the upcoming, manufactured crisis occasioned by the simple need to rebalance. If Democrats are smart, they will make this an issue in 2016 and smoke out their Republican opponents. Since the Trustees Report tells us that Social Security legislation must pass before 2016, Democrats should force Republicans to choose. Republicans in Congress can join with Democrats, backed by the majority of Americans, including their own base, in expanding Social Security. Or Republicans can seek to use their majority in Congress to enact the ideologically-driven, irresponsible and unpopular effort to undermine this bedrock of working families' economic security.

Social Security is a solution to our looming retirement income crisis, the increasing economic squeeze on middle class families, and the perilous and growing income and wealth inequality. In light of these challenges and Social Security's important role in addressing them, the right question is not how can we afford to expand Social Security, but, rather, how can we afford not to expand it.

Kids Count report: 22 percent of US children live in poverty

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Twenty-two percent of all children in the United States live below the federal poverty line, significantly higher than during the height of the 2008-2009 economic crisis, according to a report issued Thursday by the Annie E. Casey Foundation.
The latest edition of the Kids Count Data Book found that the number of children living in poverty rose by almost 3 million between 2008 and 2013, the latest year included in the data: from 13.2 million to 16.1 million. The US child poverty rate remains four percentage points higher than it was in 2008, when it stood at 18 percent.
“Especially worrying” to the authors is the fact that the percentage of children in high poverty neighborhoods has risen from 11 percent in 2006-2010 to 14 percent in 2013, the highest level since 1990. The report notes that children living in high-poverty areas are more likely to drop out of school or develop behavioral or emotional problems.
The percentage of children in high-poverty neighborhoods is significantly higher in former industrial centers such as Detroit, where 81 percent of children live in poor neighborhoods. This figure is also higher for African-American, Native American and Latino children, at 32, 30 and 24 percent respectively.
The report reflects the fact that Obama’s economic “recovery,” which has seen a massive increase in stock values and profits of major corporations, has been a catastrophe for the American working class, who have seen their living standards and those of their children decline precipitously during this period.
“Although we are several years past the end of the recession, millions of families still have not benefited from the economic recovery,” said Patrick McCarthy, president and CEO of the Casey Foundation. “While we’ve seen an increase in employment in recent years, many of these jobs are low-wage and cannot support even basic family expenses.”
“Only the most highly educated and highly paid workers have seen their wages grow, while inflation-adjusted wages for the lowest-income workers have slowly but gradually fallen,” the report states. This shift toward unskilled, low-paid professions since the “recovery” has led to an additional 1.7 million children living in “low-income working families” between 2008 and 2013.
It is widely acknowledged among researchers that “at a minimum, families need an income of at least twice the federal poverty level to cover basic expenses,” the report states. A total of 45 percent of all US children lived beneath this threshold in 2013.
The bleak job situation facing the US population “remains one of the primary obstacles to further reducing economic hardship among children and families,” according to the report. In addition to low wages, the number of jobs created after the 2008 financial crisis has not been sufficient to keep pace with the natural growth of the labor force. Thirty-one percent of children in 2013 had parents that lacked access to secure employment, defined as having a full time, year-round job. This is an increase from 27 percent in 2008, or 2.7 million additional children.
Income levels for US workers remain far below what they were prior to the recession. Median household income fell by 8 percent between 2007 and 2013, according to figures from the Federal Reserve.
Even industries which were once associated with a decent standard of living, especially those in manufacturing, have now been opened up as low-wage platforms. In a move spearheaded by the Obama administration’s auto restructuring, auto makers have institutionalized a “second tier” of employees who now make less, in real terms, than autoworkers a century ago. Wages have been lowered to the point where manufacturers are now “insourcing” some production back into the United States, eager to exploit the emerging and highly profitable low-wage economy.
The difficult economic conditions faced by American children are among the worst of any country in the industrialized world. A report by UNICEF last year found that the United States has one of the highest rates of child poverty in the developed world, as measured by the percentage of children beneath the median national income. The United States has the sixth-highest child poverty rate out of the 41 countries in the study, lower only than countries such as Mexico and Greece.
The social crisis has hit major urban centers particularly hard. An earlier report also released by the Annie E. Casey Foundation found that child poverty had risen in 35 of the 50 largest cities in the United States since 2005. In six American cities: Detroit, Cleveland, Miami, Milwaukee, Fresno and Memphis, the child poverty rate was higher than UNICEF’s figures for Greece, with Detroit and Cleveland topping 50 percent.
Even as the incomes of US workers have plunged, the profits of major corporations and the value of the stock market have soared. Major US stock indices have tripled since 2009, despite the fact that the real economy is still mired in slump, with the US economy barely growing over the first half of the year.
The wealth of the super-rich, meanwhile, continues to grow. A recent Forbes report found that the wealth of the world’s billionaires, 536 of whom live in the United States, surged past $7 trillion earlier this year for the first time.
Even as millions of people have slid into poverty, the White House and Congress have slashed funding for social programs year after year. Total cuts to food stamps implemented over the past two years alone have added up to $13.7 billion. Meanwhile, federal extended unemployment benefits have been continually slashed, resulting in a smaller share of the unemployed receiving jobless benefits that at any point in the history of the program.

Wesley Clark’s internment proposal: The specter of military dictatorship

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The statements made by retired four-star general and former NATO commander Wesley Clark to MSNBC News last Friday in support of placing “radicalized” and “disloyal” Americans in World War II-style internment camps must be taken as an urgent warning by the working class.
Clark, America’s most prominent political general, was speaking not just for himself, but for powerful layers within the US military/intelligence apparatus and ruling oligarchy who fear the growth of social opposition and are preparing to defend their interests, no matter what the cost.
The event that prompted Clark’s televised remarks was the recent killing of four Marines and one sailor at an armed forces recruiting center in Chattanooga, Tennessee. Clark’s proposal for mass internment was advanced as a response to the so-called “self radicalized,” “lone wolf” phenomenon—labels that have been applied to a handful of terrorist incidents over the course of more than a decade. The vast majority of such “lone wolf” incidents have involved hapless and, in some cases, mentally disturbed individuals who were set up by FBI and police agent provocateurs.
If Clark’s proposal were implemented, such “sting” operations and subsequent frame-up trials could be dispensed with, as the “self-radicalized” were identified by their thoughts, statements or Internet postings and summarily thrown into concentration camps.
The scale of his proposed response is so disproportionate to the actual threat—which has claimed far fewer victims than mass shootings carried out by individuals who have shown no sign of being “radicalized”—that it is impossible not to conclude that there are deeper and hidden motives and processes at work.
If one takes Clark’s statements at their face value, the term “Orwellian” does not do them justice. “We have got to identify people who are most likely to be radicalized,” he said in his television interview. “We’ve got to cut this off at the beginning.” In other words, the massive and ongoing surveillance of the American population must be intensified to identify potential radicals and jail them based on their alleged thoughts or expressions.
“In World War II, if someone supported Nazi Germany at the expense of the United States, we didn’t say that was freedom of speech, we put him in a camp, they were prisoners of war,” he added.
Making the implications of his reasoning unmistakable, Clark continued: “If these people are radicalized and they don’t support the United States and they are disloyal to the United States, as a matter of principle, fine. It’s their right, and it’s our right and obligation to segregate them from the normal community for the duration of the conflict.”
People are to be imprisoned in camps for the “duration” of the never-ending “war on terrorism” for being deemed “disloyal” or insufficiently supportive of the United States, a charge that could be leveled against anyone expressing opposition to US imperialist war abroad, police repression at home or even the profit interests of US corporations and banks.
There is no small irony in Clark citing supporters of Nazi Germany in World War II as a precedent for mass internment. Of course, the greatest number of those interned—some 110,000—were Japanese-Americans, imprisoned for nothing more than their national background in what is widely acknowledged as one of the greatest crimes against basic rights in US history.
More fundamentally, Clark’s proposal is entirely in line with the actions of the Nazi regime after it came to power in 1933. Justifying its measures by invoking a non-existent threat of “terrorism,” the Nazis suspended democratic rights, including habeas corpus. The regime opened the first of its concentration camps at Dachau to hold tens of thousands of political prisoners—socialists, trade unionists and others—deemed “disloyal” to the Third Reich.
Wesley Clark is no Adolf Hitler, but the measures he proposes are entirely in line with the actions taken by the Nazi regime.
Clark is far from a Rush Limbaugh-style media fulminator. Following his military career, he has become a leading figure in the Democratic Party and prominent supporter of presidential front-runner Hillary Clinton. He has had a lucrative career as an investment banker and heads Wesley K. Clark & Associates, an international consulting firm geared to the needs of the big oil companies, defense contractors and investment bankers. The firm touts Clark’s “reputation” and “relationships” as its main asset.
Moreover, the retired general is not the only one invoking internment camps. In his dissent to last month’s US Supreme Court decision legalizing same-sex marriage nationwide, Justice Clarence Thomas, responding to the majority’s argument that its decision would advance the “dignity” of same-sex couples, argued that the government could not take away dignity. He cited the mass imprisonment of Japanese-Americans during World War II, writing, “Those held in internment camps did not lose their dignity because the government confined them.”
The statement was greeted with astonishment from the media and outrage from survivors of the camps and other civil rights groups.
However, only last year, Thomas’ fellow right-wing justice, Antonin Scalia, referred to the high court’s 1944 decision upholding the legality of the mass internment camps during World War II—which has never been overturned—and commented that “you are kidding yourself if you think the same thing will not happen again.”
It would appear that the subject of internment camps is under intense and ongoing discussion within the top echelons of the state and the US ruling establishment.
Perhaps even more revealing is the corporate media’s stony silence in the face of Clark’s proposal for internment camps. Like other prominent media outlets, the New York Times published not a word on his statement, which came only days after the newspaper mocked as “paranoid” and “conspiracy theorists” residents of Texas who have expressed concern about Jade Helm 15, a seven-state exercise by the military’s elite Special Operations Command in which assassination, detention and internment of civilians are all being practiced.
The alleged ubiquitous threat of terrorist attack is the pretext for, rather than the real motive behind, the extraordinary police state measures that have already been implemented—the establishment of the Department of Homeland Security, the enactment of the USA Patriot Act and wholesale spying on the population of the US and the entire planet, the creation of the Pentagon’s Northern Command overseeing the US itself, and the unceasing militarization of US police departments—as well as even more sweeping fascist-style measures like those proposed by Clark.
Over the past two years, beginning with the imposition of virtual martial law in Boston following the Boston Marathon bombings, military-police lockdowns have taken place in Ferguson, Missouri and Baltimore, Maryland.
At its heart, this process is driven by the insoluble contradiction between basic democratic rights and the unprecedented levels of social inequality and continuous eruptions of US militarism that are the sharpest expressions of the historic crisis of American capitalism.
The corporate and financial aristocracy is acutely aware of the immense chasm that separates it from the broad mass of working people and lives in thoroughly justified fear that the policies it is pursuing are sowing the seeds of social revolution. Clark’s statements are one more indication that the ruling establishment is preparing accordingly. The working class must do likewise. It must recognize that no section of the political establishment will defend basic democratic rights. That depends on the independent political organization and mobilization of the working class