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U.S. Republican presidential candidate and former Governor of Massachusetts Mitt Romney addresses supporters during his Wisconsin and Maryland primary night rally in Milwaukee, Wisconsin, April 3, 2012. REUTERS/Darren Hauck
Romney's gunning for your Social Security
Speaker Pelosi project bug
Mitt Romney likes to say he has a plan for Social Security, and President Obama does not. He definitely has a plan, Bloomberg's Deborah Solomon explains, one that typically favors the wealthy at the expense of the middle class.

With Romney's insistence that he won't raise taxes, lifting the cap on payroll taxes to income over $110,000 (the current ceiling) is out of the picture. So his plan, based on one proposed by former Utah Sen. Bob Bennett in 2006, rests solely on benefit cuts: raising the retirement age and a price indexing scheme that on the surface looks progressive, but ends up benefitting top earners. The percentage of income that wealthy people would have to save to offset the benefit cut is miniscule compared to what a middle-income earner would have to save. Solomon explains how this is ultimately a kind of tax hike on middle-income workers, using an analysis done by Social Security actuaries of the Bennet plan Romney is copying:

For an average earner, saving 1 percent of wages a year, investing it in Treasuries and cashing it in for an annuity would offset a 10.3 percent benefit cut. That means a $45,000 earner would have to save 2.3 percent of income, or $1,000 a year, to offset the 24 percent cut. [...]

Meanwhile, someone earning $110,000 would have to save 2.1 percent of pay to offset a 35 percent benefit cut [and] a $1 million earner, who pays Social Security taxes on only $1 of every $9 earned, would have to save just 0.23 percent of income to offset benefit cuts.

Goal Thermometer
That's an "implicit tax hike" on middle-income workers, who have to save much more out of every paycheck in order to secure their standard of living in retirement. It's yet another middle-class squeeze. And with Romney and Ryan, that's a best case scenario, because both have championed privatization schemes for the program that would certainly doom it.

Every candidate on our Orange to Blue endorsement list has pledged to protect Social Security and Medicare, explicitly saying that they will oppose both raising the retirement age and eliminating or reducing the cost of living adjustment as Romney is proposing.

Help send these people to the House to protect Social Security.

Originally posted to Joan McCarter on Thu Oct 25, 2012 at 08:45 AM PDT.

Also republished by Social Security Defenders and Daily Kos.

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Comment Preferences

  •  Tip Jar (18+ / 0-)

    "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." —Warren Buffett

    by Joan McCarter on Thu Oct 25, 2012 at 08:45:04 AM PDT

  •  Republican arithmetic: designed to look good (1+ / 0-)
    Recommended by:
    OooSillyMe

    but it never adds up. Republicans 'count' on the masses to fail to do the addition and subtraction. I've encountered this failure with many of the Romney voters to whom I speak. even when we sit down and go through the numbers I still get resistance to the simple arithmetic.

    I've not given up, but it sure is frustrating. And it isn't just people who are not terribly smart, even some bright people are just too lazy to confront their own preconceived notions even when objective proof is but on paper and held up to their faces.

    Roman Catholic by birth---thoroughly confused by life.

    by alasmoses on Thu Oct 25, 2012 at 08:57:32 AM PDT

  •  And what's the President's plan? (7+ / 0-)

    According to digby he seems to believe that his vaunted Grand Bargain is the best thing he could do in a second term:

    1.2 trillion in agency cuts, smaller cost-of-living increases for Social Security recipients, nearly $250 billion in Medicare savings achieved in part by raising the eligibility age. And $800 billion in new taxes.
    It was in an interview for the Des Moines Register that he expressed his continued commitment:
    But I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I’ve been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs.
    It's horrible policy but we seem hell-bent for austerity no matter who wins.

    "The smartest man in the room is not always right." -Richard Holbrooke

    by Demi Moaned on Thu Oct 25, 2012 at 08:59:34 AM PDT

  •  Des Moines Register Interview tells all (4+ / 0-)
    Recommended by:
    TimmyB, Gooserock, Jim R, gila

    Dave Dayen takes a look:

    So really, what the President’s saying here is that he would keep the level of cuts in the sequester through other means, and then generate around $1 trillion in tax increases, which is roughly what the increase of the high end Bush tax cuts would do. That sounds simple enough. It does not require this “bipartisan tax reform” that would lower the rates. But Obama said to the Register that he would look at a corporate tax reform agenda – rate-lowering, base-broadening – in a “non-ideological way” once the grand bargain is off the plate.

    If it’s truly the same offer made to Republicans, then it would entail all of the things, like the increase to the Medicare eligibility age and the changing of the cost of living adjustment in Social Security to cut benefits, that were around in the last conversation. This is the “bait” to get Republicans on board, as Chuck Schumer (last seen blowing up the tax reform part of the deal) predicted.

    We are doomed totally.

    Digby honestly reports the bad news too.  Comments are now disabled at her site "for maintenance" until after the vote.

    •  Lambert Strether (2+ / 0-)
      Recommended by:
      greenbell, TimmyB

      Catfood Watch:

      Grand Bargain™-brand Catfood Watch. Interview: “Initially, the White House had asked that the conversation [with the Des Moines Register] be considered off-the-record and its details not shared with readers. … Interview: “[OBAMA:] I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I’ve been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs. And we can easily meet — “easily” is the wrong word — we can credibly [to whom?] meet the target that the Bowles-Simpson Commission established of $4 trillion in deficit reduction, and even more in the out-years, and we can stabilize our deficit-to-GDP ratio in a way that is really going to be a good foundation for long-term growth [yeah, like FDR in 1937]. Now, once we get that done, that takes a huge piece of business off the table.” … The deal (2011): “But the major elements of a bargain seemed to be falling into place: $1.2 trillion in agency cuts, smaller cost-of-living increases for Social Security recipients, nearly $250 billion in Medicare savings achieved in part by raising the eligibility age. And $800 billion in new taxes” (via Digby). … Interview: “After paging it through it, one question is obvious: Why would the White House seek to suppress something so innocuous? It’s little more than boilerplate stump speech yada-yada-yada.” Well, only if throwing elders and the sick under the bus for the sake of arbitrary financial ratios that having nothing to do with the real economy is “innocuous.” … Betrayal: “Major labor unions and dozens of liberal groups working to elect Obama are worried he could ‘betray’ them in the lame-duck session by agreeing to a deal to cut safety-net programs. The liberal groups are planning to launch an aggressive campaign immediately after Election Day to pressure Obama and Senate Ds not to endorse any deal that cuts Medicare and/or Social Security benefits.” Typical liberals. Try for leverage only when you don’t have it. The gays and hispanics did better, earlier.
      What a show....  The 1% truly rule.
  •  Raising Medicare eligibility is a killer (2+ / 0-)
    Recommended by:
    TimmyB, splashoil

    And how many poor desperate people are going to vote for him unaware they are voting to be stabbed in the back? People do not know this!  They are being conned with bafflegab.  

  •  Saving Social Security (2+ / 0-)
    Recommended by:
    TimmyB, ichibon

    It seems to me that the only thing we need to do is remove the cap on earnings to increase the trust fund.   Implementing a means test would also be a good thing, and if really rich people balk at removing the cap, they can opt out of social Security altogether.    The very idea of a millionaire collecting social security benefits simply boggles my mind.  

    •  or just wait until it's a problem (2+ / 0-)
      Recommended by:
      lakehillsliberal, TimmyB

      The last time we tried to solve the problem 30 years in advance, we got deficits and massive tax cuts for the rich paid for by the increased payroll tax.

      Instead, when the annual SS goes into deficit (around 2018), make the tweaks then to keep it in balance for the next 2-4 years. And keep doing that. Go back to the tweak-as-you-go original plan.

      That way, they have to justify the changes, instead of putting the pain on retirees 20 years in the future.

      The whole point of the trust fund is to allow that kind of just-in-time fix.

    •  Just remove the cap (1+ / 0-)
      Recommended by:
      DSPS owl

      on SS taxes. Never should have been there anyway.
      Screw raising it, remove it.
      There I fixed SS.

      Severely Socialist

      by ichibon on Thu Oct 25, 2012 at 07:48:58 PM PDT

      [ Parent ]

  •  If you need a chuckle tonight (0+ / 0-)

    Check out grassleydeer on twitter....pretty cute.

    Republicans===the party of the 1% rich people in America. Or in other words..The Party of NO!

    by jalapeno on Thu Oct 25, 2012 at 07:23:26 PM PDT

  •  here is the deal, they need to raise the cap until (0+ / 0-)

    inequality gets corrected.  The problem is that so much of our our income is not taxed correctly.  The system absolutely depends on income distribution being more balanced.  The private sector is not doing a good job of creating well paying jobs so the government HAS TO DO IT.

  •  I'm Even More Terrified About Medicaid (2+ / 0-)
    Recommended by:
    Jim R, splashoil

    because I puke when changing elder diapers.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Oct 25, 2012 at 07:30:14 PM PDT

    •  Me too (0+ / 0-)

      but the silver lining is when the grannies start showing up on their crazy tea partier offspring's door steps, suitcase in hand.

      "extravagant advantage for the few, ultimately depresses the many." FDR

      by Jim R on Thu Oct 25, 2012 at 07:39:58 PM PDT

      [ Parent ]

  •  Devil's Advocate (0+ / 0-)

    This is one of many reasons Mitt Romney is the devil incarnate.  Anytime he can speak with a forked tongue he will.  But his actions are what speak louder than words.

    He puts his money outside the U.S. He outsourced American jobs to Chinese companies he invested in.

    He failed to work as a bipartisan as Governor - having over 500 of his vetoes overridden by the Democrats.

    Avoiding divulging his tax returns. Rigging his 2011 tax returns so he would pay 13% rate rather than the under 10% rate he would be entitled to, that he can get refunded after the election.

    Avoiding comment on his belief that conception through rape is God's will.

    Wanting to make life a living hell for undocumented aliens to force them out of the U.S.

    Not caring about 47% of people in the US who receive government assistants.

    That is the person he is. Satan.

  •  Ya know (1+ / 0-)
    Recommended by:
    Slightly Wobbly

    Just for starters, I'd like to know how anyone thinks that someone earning $45,000 (and has rent or a mortgage, taxes, groceries, gas, clothes, utilities and maybe a college tuition to pay for) could possibly find another $1,000 (after taxes) a year to save . . . and I'd also like to know how ANYONE could think that asking that person to carve out this amount each year is a somehow FAIR alternative to asking high earners to kick in a bit more instead.

    Proud Member of the Big Bird Wing of the Democratic Party.

    by noweasels on Thu Oct 25, 2012 at 07:41:11 PM PDT

  •  he and Lurch have a plan all right: get rid of it (1+ / 0-)
    Recommended by:
    DSPS owl

    The GOP has been fighting tooth and nail to get rid of SS since 1935, and Medicare since 1965, what kind of idiot would believe they would give up on that now??

  •  I was surprised to see the debt clock displayed (0+ / 0-)

    at the Republican convention since they are responsible for a big chunk of it.  Could someone explain to me how increasing the age of Social Security beneficiaries would save anything?  The fund currently owns 2.5 trillion (and counting) of the U.S. debt and is receiving interest credits from that debt asset every month.  Every interest credit to the fund simply increases the amount of the debt.  If the age of beneficiaries is increased, that adds to the amount of U.S debt the fund owns.  Unless there is a move to decrease a reciprocal amount of tax the fund collects from Social Security contributors, and I don’t hear that suggestion anywhere, the fund will swell and buy more U.S Bonds and the debt will increase.  Is my sixth grade math wrong?  If you keep putting the same amount in, but take less out, the fund and thus the debt will increase.        

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