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— by Igor Volsky
On Monday, the Heritage Foundation published a widely panned study arguing that comprehensive immigration reform that allows undocumented immigrants to earn citizenship would cost taxpayers $6.3 trillion, as the population will take advantage of an array of government programs, including, Social Security, Medicare, unemployment benefits, Medicaid, public education, and population-based services like police and parks.
But the study, which comes out under the leadership of conservative former Sen. Jim DeMint (R-SC), is a sharp departure from a “Backgrounder” the Foundation published in 2006. Then, Heritage noted that “worker migration is a net plus economically” and warned lawmakers against succumbing to “a lopsided, ideological approach that focuses exclusively on border security while ignore migrant workers (or vice versa) is bound to fail.” Below is a comparison of the two:
|Heritage in 2013||Heritage in 2006|
|“[F]ormer unlawful immigrant households would likely begin to receive government benefits at the same rate as lawful immigrant households of the same education level. As a result, government spending and fiscal deficits would increase dramatically.”||“An honest assessment acknowledges that illegal immigrants bring real benefits to the supply side of the American economy, which is why the business community is opposed to a simple crackdown… Most immigrant families have a positive net fiscal impact on the U.S., adding $88,000 more in tax revenues than they consume in services.“|
|“Amnesty would also raise retirement costs by making unlawful immigrants eligible for Social Security and Medicare, resulting in a net fiscal deficit of around $22,700 per retired amnesty recipient per year.”||“Social Security payroll taxes paid by improperly identified (undocumented) workers have led to a $463 billion funding surplus.”|
|“Many conservatives believe that if an individual has a job and works hard, he will inevitably be a net tax contributor (paying more in taxes than he takes in benefits). In our society, this has not been true for a very long time. “||“Whether low-skilled or high-skilled,immigrants boost national output, enhance specialization, and provide a net economic benefit.”|
|“Unlawful immigration appears to depress the wages of low-skill U.S.-born and lawful immigrant workers by 10 percent, or $2,300, per year. Unlawful immigration also probably drives many of our most vulnerable U.S.-born workers out of the labor force entirely.”||Studies show that a 10 percent share increase of immigrant labor results in roughly a 1 percent reduction in native wages-a very minor effect… [C]ritics of this type of insourcing worry that jobs are being taken away from native-born Americans in favor of low-wage foreigners. Recent data suggest that these fears are overblown.”|
The author of the 2006 Heritage report disputes the 2013 analysis: “Unless they expect readers to believe all this household income (a) generates no productive work (e.g., makes product, mows lawns, nurses the sick, and starts businesses that hire other Americans) and (b) is 100% remitted abroad, consuming nothing in the U.S. macro economy, then the report is misleading.” Like the other fiscal conservatives today, he argues, “The net effect of this Special Report does real damage to the cause of dynamic analysis. For more than a decade, Heritage has called on CBO to add dynamic analysis to its tax reform studies.”
This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.
Dean Baker, Op-Ed: At this point everyone has heard the story of how Social Security and Medicare are going to bankrupt our children. There is a whole industry dedicated to promoting the idea that our kids risk having much lower standards of living than their parents or grandparents because of these programs. This story is routinely repeated in various forms by politicians and columnists who decry the fact that we don’t care enough for our children and that the elderly have too much political power. The remarkable part of this story is that there is no conceivable way that it is true and every economist knows it.
Anthony Gucciardi, News Analysis: It’s called the Monsanto Protection Act among activists and concerned citizens who have been following the developments on the issue, and it consists of a legislative ‘rider’ inside (Farmer Assurance Provision, Sec. 735) a majority-wise unrelated Senate Continuing Resolution spending bill. You may already be aware of what this rider consists of, but in case not you will likely be blown away by the tenacity of Monsanto lobbyist goons.
Fritz Kreiss, News Report: Monsanto has yet another case pending in the court system, this time before the U.S. Supreme Court on the exclusivity of its genetically modified seed patents. Narrowly at issue is whether Monsanto retains patent rights on soybeans that have been replanted after showing up in generic stocks rather than being sold specifically as seeds, or whether those patent rights are “exhausted” after the initial planting. But more broadly the case also raises implications regarding control of the food supply and the patenting of life—questions that current patent laws are ill-equipped to meaningfully address.
Dhruv Shah and Fritz Kreiss, News Report: “1 in every 250 persons in the UK are affected by inflammatory bowel diseases. Two years ago, I was diagnosed with a type of inflammatory bowel disease called Ulcerative Colitis. It affects up to 120,000 people in the UK, that’s about 1 in 500 and between 6,000 and 12,000 new cases are diagnosed every year.(i) For me it meant that I had to keep running to the bathroom up to 25 times a day. My large bowel at the worst of times would produce bloody mucus and I would have severe cramps. Due to the toxins created by the inflammation it also meant that I would be severely nauseous and could not hold down liquids, let alone food.”
Amy Goodman, Video Interview: In part two of our interview, Al Jazeera reporter Dahr Jamail discusses how the U.S. invasion of Iraq has left behind a legacy of cancer and birth defects suspected of being caused by the U.S. military’s extensive use of depleted uranium and white phosphorus. Jamail has also reported on the refugee crisis of more than one million displaced Iraqis still inside the country, who are struggling to survive without government aid, a majority of them living in Baghdad.
Amy Goodman, Video Interview: On the tenth anniversary of the invasion of Iraq, we look at how U.S. military veterans and Iraqi civilians have come together to launch “The Right to Heal” campaign for those who continue to struggle with the war’s aftermath. The video interview features U.S. Army Sgt. Maggie Martin, who was part of the invading force in March 2003 and is now director of organizing for Iraq Veterans Against the War. Also Yanar Mohammed, president of the Organization of Women’s Freedom in Iraq, joins the conversation and describes how the condition of women has deteriorated in Iraq.
Isaiah J. Poole, Op-Ed: The Congressional Progressive Caucus Back to Work Budget, as expected, did not prevail on the floor of the House of Representatives today. It went down to defeat, 84-327. In fact, it did not even win support from a majority of Democrats. But it did win a dramatic outpouring of support from ordinary Americans, which was demonstrated when one of the sponsors of the Back to Work Budget, Progressive Caucus co-chair Rep. Raul Grijalva, D-Ariz., held a stack of papers representing the more than 102,000 people who signed our petition calling for a “yes” vote for the budget and a “no” vote on the Republican budget of Rep. Paul Ryan, D-Wis.
Kevin Zeese and Margaret Flowers, Op-Ed: The economic news this week highlights what happens when governments are unable to confront the root cause of the financial collapse—the risky speculation and securities fraud of the big banks. What happens? They blame the people, cut their benefits, tax their savings and demand they work harder for less money. In the U.S. there have been no criminal prosecutions for securities fraud in the big banks. Just as the Justice Department has made it clear that the big banks are too big to jail because doing so jeopardizes the stability of the banking system; financial fraud investigator Bill Black points out that the SEC cannot institute fines that are too big for the same reason.
Robert Scheer, Op-Ed: Yes, a majority of Americans, 53 percent according to this week’s Gallup poll, think it was “a mistake sending troops to fight in Iraq” 10 years ago. But the lessons of our folly will likely not stick for long. The memories fade as we now see in that same Gallup poll with perceptions of the Vietnam War. A majority of Americans ages 18-29 believe sending U.S. troops to Vietnam was “not a mistake.” By contrast, 70 percent of those 50 and older, the generation with contemporary knowledge of the war, think it was.
Arnie Saiki, News Report: Currently, U.S. military contractor Lockheed Martin is negotiating with Fiji’s Bainimarama administration to fast-track and sponsor new legislation that would allow the private U.S.-based transnational titan to delve into experimental deep seabed mining. Because the U.S. has not ratified the U.N. Convention on the Law of the Sea (UNCLOS), U.S. industries cannot engage in deep seabed mining in international waters, outside of a country’s Exclusive Economic Zone (EEZ).
— by Robert Reich, former Labor Secretary under President Bill Clinton
Disturbing reports that the White House is already caving on Social Security and Medicare — telling Republicans it’s willing to cut yearly inflation adjustments to Social Security (thereby stranding seniors who must already pay 20-40% of their incomes for drugs and healthcare, whose prices are surging faster than inflation); and means-test Medicare (thereby greasing the way for it to become akin to Medicaid, a program for the poor). Nancy Pelosi and other Democratic leaders are on board.
But these so-called entitlement programs aren’t entitlements; people have paid into them their whole working lives. They’re the nation’s key programs of social insurance — and they’re wildly popular. Democrats are and should be the protectors of these programs, not the first proponents of reducing them. Republicans, meanwhile, won’t give an inch on closing giant tax loopholes for the rich (such as Mitt Romney’s “carried interest” boondoggle) or raising capital gains on the rich or capping the mortgage interest deduction for the wealthy or adopting a wealth tax or a tax on financial transactions. Why do Democrats always negotiate with themselves? Please send a message to the White House: Stop giving away the store!
Read more from Robert Reich here.
Instead of attacking struggling seniors, veterans, children and the working poor by slowing the inflation growth rate of an average $1,200/month Social Security check, shifting more healthcare costs to 65 and 66-year-olds and their employers, or slashing food stamps and Medicaid that are lifelines for working poor families, how about we try these 10 budget fixes first? By contrast, these policies primarily or exclusively affect the wealthy, while achieving lots more revenue/savings.
As President Obama has previously criticized the mean, brutish Republican cuts: “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.”
Or to borrow from Bill Maher, the GOP budget plan goes after children, the poor, the jobless, the old and the sick. This is picking on the weakest kid on the playground and getting called courageous. Courage would have been going after the rich and the defense department.
The Republican fixation with cutting Social Security benefits or raising the eligibility age for Medicare fail to achieve much savings and have absolutely nothing to do with the “fiscal cliff.” (Social Security doesn’t even have anything to do with the deficit/debt generally). They are, as Nancy Pelosi described them, simply “trophies” that the GOP want to claim in their ceaseless war on FDR’s New Deal and President Johnson’s Great Society.
Why are policy makers thinking about cutting Social Security behind closed doors? Because it’s easier for them if you don’t really know what’s happening.
Well, the cat is out of the bag.
According to recent news reports, the chained CPI is officially on the table and gaining buzz in the current deficit reduction negotiations. If the chained CPI (a new and lower Consumer Price Index) is adopted the cost-of-living adjustments (COLA) that Social Security recipients depend on would be calculated in a new way that cuts the value of benefits each year. And no matter how Washington insiders try to spin it, it means a CUT to Social Security benefits.
Act now: Call/eMail your Members of Congress and ask them to take the chained CPI off the table during budget negotiations.
Need a reason to take action? How about five?
- The chained CPI will cut the value of benefits each year.
- The cuts add up — quickly. The cut in the value of benefits will be equivalent to the cost of a week’s worth of food each month by age 80 and nearly two weeks’ worth by 95 for the typical single elderly woman.
- The chained CPI cuts everyone’s benefits — including today’s beneficiaries — as soon as it goes into effect.
- It particularly hurts women because, on average, they live longer than men and are already more likely to be poor.
- It’s less accurate because it doesn’t account for the real increases in the cost of living the elderly face each year.
Oh, and there’s a 6th! As the White House has pointed out, Social Security isn’t the cause of our deficits. So switching the COLA to the chained CPI is just an underhanded move to balance the budget on the backs of the elderly, especially elderly women.
— by Joan Entmacher, VP-Family Economic Security, National Women’s Law Center
— Jim Ferrell, Nye County Democrats, Pahrump
Many citizens just don’t understand the urge by the Republican controlled House to give the poor people the shaft while twisting it when it comes to their earned benefits, (not entitlements as redefined by Republicans). Medicare and Social Security are not welfare benefits, as some Republicans would like you to believe. These programs were and are being funded by workers and their employers.
Not one dime of taxpayers’ money has gone into these funds. Social Security has enough left, $2.6 trillion, to last at least another 20 years and Medicare has something like 12 years left before it becomes insolvent. The future insolvency issue can easily be solved by merely extending the income level from $ 110,000. annual income to $ 200,000. or higher from which these benefits are paid. Instead of standing up and being responsible for government waste by requiring those who benefited most from government corruption, mostly the super rich. The Republicans want to steal from the poor so as to line the pockets of the rich. Republicans are actively advocating cutting our ‘earned benefits’ — monies that came out of each paycheck we earned and which are held in trust. Those monies held in trust belong to US—the middle class—not the government.
Republicans insist that the rich should not have to sacrifice a thing. However, they expect our seniors to sacrifice their security, and our young people to spill their blood or lose their lives in wars that profit corporations and the rich. In their minds, those are the only sacrifices that are necessary to resolve the entirety of our fiscal issues. It’s the equivalent of pillaging the 98% to keep the monied 2% from having to make any sacrifices whatsoever for America.
The Social Security fund and the Medicare fund don’t have the money which we paid into them because our government has borrowed this money and spent it on such things like two undeclared and unfunded wars and an unfunded drug prescription program—all under former Republican President Bush. In fairness, it was not the Bush administration that started using the peoples’ trust fund money. It actually began with Eisenhower in 1957 when the Russians scared the wits out of us with their launching of Sputnik, and continued with Johnson’s war on poverty. The end result is that, now, all expenses are paid out of the general fund with Social Security and Medicare holding government IOUs, in the form of special issue government bonds, instead of cash.
The Republicans let the deficit get so huge under former Bush that now there is no stopping it from becoming even larger — unless we raise taxes on those who benefit from government waste and corruption. For example, Haliburton was on the verge of bankruptcy until Bush, Cheney, and Republicans lied to Americans about Iraq having weapons of mass destruction, thus making Cheney a multi-millionaire and Haliburton rich with its no bid government contracts from the Republicans. A whole book could be written about the fat cats unfairly cashing in on taxpayers’ dollars —like the multi-billion dollar rip-off by pharmacy companies with no bid contracts for Medicare. Plus, there’s all that corporate welfare going to health insurance companies, with all their fat CEOs and bloated bureaucracies. Billions upon billions could be saved by a simple single payer health plan, but that won’t happen — because it would prevent Republicans from feeding at the government trough.
To understand this better, let’s recap an example. John Doe started working at age 25. Our government with held $ 100,000 over 40 years and John’s employer also matched John’s contribution with another $ 100,000, totaling to $ 200,000. Our government had agreed to hold these funds in trust for John and give him a social security pension of at least $ 2,000.00 per month and medical care for the rest of John’s life. If John’s + millions of other citizens funds had been left in those trust funds as cash dollars, the social security fund alone would have 2.6 trillion dollars, plenty to continue giving John his $ 2,000. per month income, plus his medical coverage. But Democrats and Republicans took the trust money and spent it. Democrats spent it for social programs. Republicans wasted it on unfunded wars and government corruption. But, some Republican billionaires (along with a few Democrat billionaires) insist “we” with our promised pension benefits are bankrupting our government unless John, et. al., pony up and pay yet more toward medical costs. In addition, the GOP believes that, to fix our fiscal dilemma John’s social security income should be reduced to $ 1,500. per month, so that the super rich, including the crooks who stole from the taxpayers, wouldn’t be required to pay slightly higher taxes.
Unfortunately, most people will not take the time to do just a little research to understand the issues at hand. Republicans continue to not only protect the super rich, but at enabling them to continue to rip-off our citizens.
The 2010 elections should have taught us one thing — that uninformed voters vote against their own self interests. They watch Fox News which often distorts the truth and clearly promotes the Republican agenda. Rupert Murdock is the owner of Fox News and The Wall Street Journal. Fox News has never been recognized as an outstanding source of news that gives unbiased reporting, and in fact, has defended itself in court by claiming that it is not against the law for a news organization to lie — and they’ve won using that specific defense.
To paraphrase Thomas Jefferson, “A democracy cannot stand unless its citizens are educated.” Propaganda networks like Fox News, unfortunately, do not educate the citizens. In the long run, their propaganda will actually harm America and Americans in general.
There has been a lot of discussion about Congress enacting a “grand bargain” during the lame duck session of Congress. Many members of Congress have talked about using the plan put forward by Alan Simpson and Erskine Bowles as an outline for a “balanced” approach to deficit reduction.
Let me take this opportunity to tell you a little about Alan Simpson and Erskine Bowles and what their plan would do.
As many of you know, Alan Simpson is a former conservative Republican Senator from Wyoming who has wanted to cut Social Security benefits for decades.
Here are just a few of the rude, inaccurate, and derogatory statements that Alan Simpson has made about Social Security:
- On August 24, 2010, Alan Simpson wrote in an e-mail to the head of the Older Women’s League: “And yes, I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ‘em too. It’s the same with any system in America. We’ve reached a point now where it’s like a milk cow with 310 million tits! Call when you get honest work!”
- On Friday, May 6, 2011, Alan Simpson told the Investment Company Institute, that Social Security is a “Ponzi scheme”, “not a retirement program.” Simpson went on to say that Social Security “was never intended as a retirement program. It was set up in ‘37 and ‘38 to take care of people who were in distress — ditch diggers, wage earners — it was to give them 43 percent of the replacement rate of their wages. The [life expectancy] was 63. That’s why they set retirement age at 65.”
- On June 19, 2010, Alan Simpson said: “Social Security was never a retirement. It was set up to take care of poor guys in the depression who lost their butts who were getting butchered.”
Erskine Bowles has been a board member of Morgan Stanley since 2005 and made a fortune as a Wall Street investment banker as many of you know.
However, you may not know that Erskine Bowles made the following statement in 2011 at the University of North Carolina: “Paul Ryan is honest, he is straightforward, he is sincere. And the budget that he came forward with is just like Paul Ryan. It is a sensible, straightforward, honest, serious budget and it cut the budget deficit just like we did, by $4 trillion.”
You may also be unaware that Erskine Bowles and Alan Simpson endorsed Congressman Charles Bass (R-NH) against progressive Democrat Ann McClane Kuster.
In their endorsement of Rep. Bass, Bowles and Simpson wrote: “Charlie supported a plan that demonstrated it is possible to raise revenues for deficit reduction through pro-growth tax reforms that reduce tax rates for individuals and businesses. Likewise, it is possible to reform entitlement programs … He is a brave leader who deserves the thanks of everyone who really cares about our nation’s future.”
Rep. Bass voted for the Paul Ryan budget that every Democrat in the Senate has voted against. In contrast, Kuster, who went on to defeat Rep. Bass, has said: “Let me be clear: I will never cut Social Security and Medicare benefits. My Tea Party opponent will.”
Even more distressing, in my opinion, is the belief that the Simpson-Bowles plan is a “balanced approach” to deficit reduction that we should be using as a model.
Here are the major elements of the Simpson-Bowles plan that I believe the Democratic Caucus should strongly oppose:
- Cutting Social Security benefits for current retirees. The Simpson-Bowles plan would reduce Social Security benefits for current retirees by using a “chained-CPI” to determine cost-of-living-adjustments (COLAs). According to the Social Security Administration, enacting a chained CPI would cut Social Security benefits by $112 billion over 10 years meaning that the average Social Security recipient who retires at age 65 would get $560 less a year at age 75 and would get $1,000 less a year at age 85 than under current law.
Two-thirds of senior citizens rely on Social Security for more than half of their income, and the average Social Security benefit today is about $1,200 a month. At a time when seniors haven’t received a Social Security COLA in two out of the last three years as the price of prescription drugs and healthcare have gone up, the Simpson-Bowles plan would make it harder for today’s average senior citizen to make ends meet.
- Cutting veterans’ benefits. Not only would enacting a chained-CPI be harmful to senior citizens, it would also make substantial cuts to the VA benefits of more than 3 million veterans. The largest cuts in benefits would impact young, permanently disabled veterans who were seriously wounded in combat. According to the Social Security Administration, permanently disabled veterans who started receiving VA disability benefits at age 30 would see their benefits cut by more than $1,300 a year at age 45; $1,800 a year at age 55; and $2,260 a year at age 65. That would be simply unacceptable.
- Raising the retirement age to 69 years. Increasing the retirement age to 69 would reduce lifetime Social Security benefits for workers by about 13 percent. This would be particularly harmful to construction workers, nurses, factory workers and other labor intensive jobs. According to the Center for Economic Policy and Research, 45 percent of workers who are 58 years of age and older work in physically demanding jobs or jobs with difficult working conditions. Moreover, older Americans have a higher rate of long-term unemployment than any other age group.
- Cutting Social Security benefits for middle class workers. According to the Social Security Administration, all of the Social Security policy changes in Bowles-Simpson would cut average annual Social Security benefits for middle-income workers (with average annual lifetime earnings of between $43,000 and $69,000) by up to 35 percent.
- Reducing tax rates for the wealthy and large corporations. The Simpson-Bowles plan would significantly reduce income tax rates for the wealthiest Americans and largest corporations to between 23 and 29 percent — even lower than the top rate of 35% under the Bush tax cuts. Simpson and Bowles claim that some $1.2 trillion in revenue would be increased under their proposal by eliminating or reducing tax expenditures, such as the mortgage interest deduction, and the tax exclusion on employer health insurance and pension plans. However, a March 22, 2012 Congressional Research Service report has suggested that federal income tax rates could be reduced by no more than two percentage points under a realistic scenario of reducing tax expenditures in order to be deficit neutral, and could not reduce the deficit.
The President and almost all Democrats have supported repealing the Bush tax breaks for the top two percent. That means that the top individual income tax rate would be increased from 35 percent to 39.6 percent – the same level under President Clinton when over 22 million new jobs were created. We should eliminate corporate tax loopholes and tax breaks for the wealthy — and use this revenue to reduce the deficit and create jobs, not to lower tax rates.
Other harmful provisions in the Simpson-Bowles plan include:
- Increasing the regressive gas tax by 15 cents starting next year;
- Increasing premiums for Medicare, Medicaid, and the Children’s Health Insurance Program;
- Increasing interest rates on student loans;
- Increasing co-payments for middle class veterans receiving health care through the VA;
- Cutting 450,000 jobs in the federal workforce and private companies under contract with the federal government;
- Eliminating or limiting the exclusion of taxation on employer provided health insurance and pensions;
- Encouraging companies to ship jobs to China and other low wage countries by adopting a “territorial” tax system allowing corporations to evade U.S. income taxes by establishing subsidiaries overseas;
- Increasing taxes on low-income workers making between $10,000 to $20,000 a year by 14.5% in 2021 by moving to a chained-CPI; and
- Reducing the number of Americans eligible for Medicaid, SSI, the Children’s Health Insurance Program, WIC, Head Start, LIHEAP, the Earned Income Tax Credit, the Refundable Child Credit, and the Savers’ credit by shifting to a chained-CPI.
Those are the major elements of the Simpson-Bowles plan. If enacted, they will cause major economic pain to virtually every American, while lowering tax rates for millionaires, billionaires and large corporations even more than President Bush.
For all of these reasons, I hope you will join me in opposing the Simpson-Bowles approach to deficit reduction.
Bernie Sanders is an independent U.S. senator from Vermont. This was written as a “Dear Colleague” letter to members of the U.S. Senate and was published on the Campaign for America’s Future Blog
As I’m sure you are aware, there is currently a major effort being waged by Wall Street CEOs, Republicans and some Democrats to do deficit reduction on the backs of the middle class and working families.
President Obama and the Democrats won a decisive victory on Election Day. The people have spoken and the Democratic Leadership must make it very clear that they intend to stand with the middle class and working families of our country, and not the Big Money interests. This means that in the coming weeks and months the Democrats must hold the line in demanding that deficit reduction is done in a way that is fair — and not on the backs of the elderly, the sick, children and the poor.
As Congress reconvenes and addresses the so-called "fiscal cliff," I have outlined several ways that we can do deficit reduction without cutting the programs that working families rely on most:
- At a time when the wealthiest people in our country are doing phenomenally well, we must eliminate the Bush tax cuts favoring the top 2 percent.
- At a time when corporate profits are soaring, we must end the absurd tax policy that allows about one-quarter of large, profitable corporations to pay nothing in federal income taxes.
- At a time when the federal treasury is losing over $100 billion annually because the wealthy and large corporations are stashing their money in tax havens in the Cayman Islands and elsewhere, we must pass real tax reform that ends this outrage.
- At a time when we spend almost as much as the rest of the world combined on defense, we must cut defense spending. There is also waste in other governmental agencies which must be eliminated.
Now, is the time to hold Democrats accountable and ensure that we do deficit reduction in a way that is fair, while also protecting Social Security, Medicare and Medicaid.
Let me be clear. Social Security has not contributed one penny to the deficit because it is funded independently by the payroll tax. In fact, the Social Security Trust Fund today, according to the Social Security Administration, has a $2.7 trillion surplus and can pay 100 percent of all benefits owed to every eligible American for the next 21 years. Social Security, as well as Medicare and Medicaid, must be protected.
Poll after poll shows that the American people want to see deficit reduction done in a way that is fair. They do not want to see cuts in Social Security, Medicare and Medicaid while millionaires, billionaires and large corporations continue to receive huge tax breaks.
In my view, if the Republicans continue to play an obstructionist role, the president should get out of the Oval Office and travel the country. If he does that, I believe that he will find that there is no state in the country, including those that are very red, where people believe that we should give huge tax breaks to millionaires and billionaires, while cutting Social Security, Medicare and Medicaid.
Right now, the Bush tax cuts are set to expire at the end of this year. That means the only way that Republicans can extend tax breaks for the wealthy and cut vital programs is if Democrats let them.
Sadly, virtually all Republicans and some Democrats are too willing to do deficit reduction in a way that hurts those who are already hurting.
I look forward to working with President Obama and all members of Congress to do deficit reduction in a way that finally asks the wealthiest people in our country to pay their fair share, and that recognizes the needs of working families.
Despite the fact that we just won a major electoral victory over Big Money, Wall Street CEOs, big corporations and the millionaires and billionaires are not giving up. Defeating them will take a major grass-roots effort with millions of people getting involved in this fight.
Please, stand with me today.
Senator Bernie Sanders
Beware of wealthy CEOs who are lecturing the rest of us about tightening our belts.
While America’s CEOs are fretting about the government’s so-called "fiscal cliff," millions of American workers face a financial disaster that gets much less media attention. There’s a half-trillion-dollar deficit in the nation’s worker retirement benefits.
The Great Recession, which decimated retirement assets, played a big role in building this lesser-known cliff. But many corporations could have avoided the problem by shoring up these funds during the boom years. Instead, they siphoned pension assets for other profit-boosting purposes. When the pension deficits started to balloon, many corporations responded by slashing back their benefit programs.
The Ant and the Grasshopper, an OtherWords cartoon by Khalil Bendib
As a result, Americans today are more reliant on government-funded Social Security and Medicare programs than at any other time in the last 60 years.
What’s even more outrageous is that the very same CEOs who have contributed to rampant retirement insecurity are now calling for cuts to these earned-benefit programs for senior citizens.
Nearly 100 CEOs have banded together to convince the American public that Social Security and Medicare lie at the root of America’s fiscal challenges. Their "Fix the Debt" campaign features plain-spoken Americans in their ads and sounds moderate because they call for both spending cuts and revenue increases.
But the real objectives of the campaign include massive new corporate tax cuts and reduced spending on Social Security and Medicare, which would likely involve raising the retirement age.
American workers, at present, cannot collect Social Security and Medicare until age 66, the highest retirement age among rich countries. In 2020, the Social Security retirement age will rise to 67, assuring that American workers will be toiling longer than any other industrialized country for years to come. In contrast, Japanese and Chinese workers can collect their equivalent of Social Security starting at age 60.
The Fix the Debt campaign’s CEO supporters need not worry about Social Security because they’re members of the "I’ve Got Mine Club." Fifty-four of the CEOs leading Fix the Debt directly benefit from lavish executive retirement programs. Their collective pension assets total $649 million, which comes to more than $12 million per CEO. That’s enough to garner a $65,000 retirement check each month starting at age 65 that will continue for as long as they live, according to a new report by the Institute for Policy Studies, which I co-authored. In contrast, the average retiree receives just $1,237 from Social Security each month.
Yet, the firms headed by Fix the Debt CEOs owe their U.S. pension funds more than $100 billion, according to the IPS study. U.S. law requires corporations to keep their pension debts to manageable levels, but this pressure has often resulted in benefit cuts.
General Electric, which has a staggering $22 billion pension deficit, shut down its pension fund last year, saying it had become a "drag on earnings" (at a whopping cost of 13 cents per share, according to their estimates). Like many other firms, GE has shifted new employees to a less costly 401(k) plan, putting the risk for poor stock market performance onto employees.
Beware of wealthy CEOs who are lecturing the rest of us about tightening our belts. American workers would be far better off if CEOs worried more about fixing their own companies’ pension debts.
Scott Klinger is an Associate Fellow at the Institute for Policy Studies, and co-author of A Pension Deficit Disorder: The Massive CEO Retirement Funds and Unfunded Worker Pensions at Firms Pushing Social Security Cuts. IPS-dc.org