GEORGE OCHENSKI: Obama sells out on Social Security

2013-04-08T06:45:00Z 2013-04-08T06:50:15Z GEORGE OCHENSKI: Obama sells out on Social SecurityBy GEORGE OCHENSKI
April 08, 2013 6:45 am  • 

There’s a reason why more voters now identify themselves as Independents than as either Democrats or Republicans. Namely, the Democrats and Republicans have both been breaking campaign promises for so long that people simply don’t want to be associated with those labels these days. And as the nation will see when President Barack Obama releases his budget on Wednesday, another key campaign promise goes down the tubes with his proposal to cut Social Security benefits.

For 78 million baby boomers now hitting retirement age, Social Security means more than just some promises to be kept in the far distant future. It means they begin to recoup some of the money that the federal government has taken from them every year since they began work in their teens. For most people, that amounts to about 50 years’ worth of deductions from every paycheck ranging from 7 1/2 percent for those employed by others to 15 percent for those who were self-employed.

The revenue derived from those payments does not go into the federal government’s general treasury funds, but to the Social Security Trust Fund that is supposed to be kept inviolate to earn interest and be available to meet the obligations of the Social Security program. Payments are proportional to how much any individual paid into the fund and are distributed accordingly, adjusted to when that individual retires. Those retiring “early” at 62, get lower payments than those who defer until “full” retirement age of 66.

It’s well-known that both Obama and most Democrats ran on campaign promises to protect Social Security. In the meantime, with good reason, they heaped condemnation on Republicans for their efforts to derail not only Social Security, but Medicare and Medicaid. That promise to save Social Security from the rapacious Republicans had everything to do with Obama and the Democrats winning at the polls last fall.

Significantly, since Social Security payments do not go into the general treasury, the program shouldn’t even be part of the discussion on the nation’s burgeoning debt problem. The program is self-supporting and should remain so far into the future. But for some bizarre reason, President Obama has decided to offer it up on the altar of budget cuts in his effort to strike yet another odious deal with Republicans.

But when the head of the Democratic Party, which President Obama certainly symbolizes, reneges on major campaign promises, it causes tremendous problems for those who also made the pledge to protect Social Security and who, unlike Obama, actually intend to keep their word. For Montana, that would mean our Democratic Sens. Jon Tester and Max Baucus, who will now be pitted against their own president’s proposal.

The dichotomy between promises made and promises broken will be particularly poignant for Baucus, who is up for re-election next year. And when it comes to Social Security, it will be a singularly important issue to the ever-increasing proportion of Montana’s aging electorate that will likely find those monthly checks their main source of income once they quit working. Moreover, as the powerful Chairman of the Senate Finance Committee, Baucus will be a key figure in whether the president’s bad idea goes forward or dies in the Senate.

It would be great to say that for Democrats a promise made is a promise kept. But as myriad critics point out, when the middle-class workers of America get thrown under the bus, it is by the very Democrats they helped elect. As prime examples, they point to the Clinton administration’s treacherous betrayal of organized labor through NAFTA, which shipped millions of jobs overseas and helped destroy the nation’s manufacturing base.

And then there was the repeal of the Glass-Steagall Act, which Clinton signed into law. As noted in the New York Times in 1999: “The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation’s financial system.

The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.” As it turned out, the “dissenters” were right about deregulating Wall Street – and Clinton and the vast majority of Democrats who voted for the repeal were wrong.

They say history repeats itself. And sure enough, with Obama’s sell out on Social Security, it looks like we’re about to witness another Democrat-backed tragedy.

Copyright 2015 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(8) Comments

  1. K Johnson
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    K Johnson - April 09, 2013 1:28 pm
    Great chat. The only thing I would coment on is the remark that the Admin is "moving" large numbers of unemployed onto SSI and Medicaid. What is happening is that they are "falling" to that status. SSI income amounts to a few hundred dollars a month, and in order to qualify and survive, one must have an offshore account and live in a hut with no more than $2,000 worth of possessions. If that. These people, many of us well-educated noncorporate citizens, are another mass offload to the detritus of society, (myself among them) representing another mass failure of human integrity. I would rather have us scrapping around on a few hundred dollars a month, supporting the Saturday Market farmers with Food stamps, than attacking folks downtown and breaking into houses with mother's ar-14s. Or whatevet the frack they are. eh. Why do I feel like a Welsh coal miner right now?
  2. Kevin T
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    Kevin T - April 08, 2013 9:16 pm
    There is no trust fund - as Donald M correctly points out, they are IOU's - not even regular treasuries - they are non-marketable special treasuries. Basically, it amounts to a ledger accounting of money that has been spent.

    As Donald M also correctly points out, SS is not the issue - Medicare is...and it is a HUGE problem. As long as we are talking about Medicare, you should know that you will get far, far more out of Medicare and SS than you ever put in. And as long as we're on the subject, for someone turning 65 and having worked 50 years (which not many people do), their average tax rate is 6.64, not 7.5 as you state. I did the calculation, but you can find the historical rates here:

    This is a generational issue - the younger have actually paid that 7.5% rate...and they are likely to get far, far less than you will. At the same time, wages have been flat since the 80's - they have less to save. They are in far more danger than today's seniors. This is the first time in history that we have seen seniors willing to take so much from the young as to leave them worse off than they were. Please research your topic carefully and try to look at the big picture. We need less incendiary pieces and more attempts to truly educate - only once we all have the facts can we even begin to have a real conversation about intergenerational equity....only then can we begin to find a solution that is fair to all.
  3. Bob Marshall
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    Bob Marshall - April 08, 2013 12:37 pm
    I'm hoping Obuyme keeps sticking the knife in his gullible supporters. The Democratic Party is now as bad on every issue as the GOP, yet its mindless constituency keeps voting to enable it and and to encourage it to continue to move to the right. Only when these naifs are finally circling the toilet bowl will they finally get the idea that voting for corporate fascism is not a good idea. The Democrats have to know that we will withhold our votes and let them lose before we will start getting candidates, again, who are actually progressives.
  4. Bob Marshall
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    Bob Marshall - April 08, 2013 12:33 pm
    Riiiiight, knew you'd be hearing that mindless parrot squawk coming from some knee jerk right winger. Tell us all about how the private sector has been taking care of the aging population in the US. SS has been one of the most efficiently run and successful programs anywhere to be found in world history. But now that we've got government off the backs of corporations like you tools wanted to do, corporations have climbed on the back of government and are destroying these programs.
  5. claudius
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    claudius - April 08, 2013 12:27 pm
    @pthor - You might ask retired employees of Enron or Patriot Coal how their pensions worked "just fine in the private sector!"
  6. claudius
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    claudius - April 08, 2013 12:26 pm
    @DonM - Do you ever bother with actual facts? Or is that just too much bother?
  7. DonaldM
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    DonaldM - April 08, 2013 9:36 am
    Is it possible that you are starting to see the light?

    Re Social Security: "The revenue derived from those payments does not go into the federal government’s general treasury funds, but to the Social Security Trust Fund that is supposed to be kept inviolate to earn interest and be available to meet the obligations of the Social Security program."

    You apparently didn't notice that The Congress has been robbing the Soc Sec Trust Fund for decades, leaving only IOU's. To honor the obligations of the Soc Sec Program, General Fund money must be returned to repay those IOU's. That is the connection.

    Also, the Admin has been moving large numbers of the unemployed from the overextended Unemployment Insurance Program to SSI, so they are now permanently "disabled" and will draw money from the Soc Sec Trust Fund for the remainder of their natural lives-But that will keep the unemployment level down. The actual unemployment level in this Country is 13%, not 7.7%, as reported. Isn't book keeping fun?

    Greedy unions are responsible for the demise of numerous industries in this Country long before NAFTA: Textiles, steel, consumer electronics, automobiles, airplanes(we're down to Boeing), and the unions and Obama are trying to destroy them, too. Just to mention a few.

    Are those ion batteries all that dangerous, or is the decision to ground the 787 more a function of Boeing's decision to build them in a right-to-work State?

    A more serious problem is Medicare/Medicaid. Medicare is similar to Soc Sec in that the recipient has paid into the fund since 1965, and continues to pay premiums as long as they live. Those benefits are earned and not welfare.

    Medicaid is welfare, not earned and the recipients didn't pay into it, yet the Medicare Fund is tapped to pay for Medicaid. Medicaid benefits are substantially superior to Medicare, except the Program reimburses providers at such a low level that many providers won't accept Medicaid patients. Obama plans to reduce payment to providers for Medicare patients, also, which will cause many providers to not accept Medicare patients either. Isn't "fairness" fun?

    ” As it turned out, the “dissenters” were right about deregulating Wall Street – and Clinton and the vast majority of Democrats who voted for the repeal were wrong."

    You're correct there, but you failed to mention Dodd and Frank and their corruption of Freddie and Fannie, which along with those Wall Street Bankers, are the cause of our current recession/depression.

    Then there was the pressure/threats from the Govt(Democrat Admin.) to make sub-prime mortgage loans to inner city(minority)residents-which included threats of prosecution if they didn't.. And now Obama wants to start making sub-prime loans for home purchases, again.

    Soc Sec is the easiest to fix. Medicare is the big problem to save, and Obama-Care is designed to destroy that program. If major changes aren't made we will all be on a Medicaid-like health program, but no providers will accept patients because they will lose too much revenue on each patient.

    Even not-for-profit organizations have to have more income than outgo or they go out of business.

    If you are starting to see that Democrats are at least part of the program, that is progress.
  8. pthor
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    pthor - April 08, 2013 8:44 am
    And yet another example of why the government should never run ANYTHING that works just fine in the private sector!
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