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Of course, because they solve any long-term solvency problems without making people who receive Social Security or Medicare suffer tremedous pain, they are outside the scope of the beltway and pundit discussions.  They are not on the table because only severe pain inflicted on Americans constitutes a serious plan.  

Today, Thomas Edsall, in a New York Times article entitled "The War on Entitlements," describes how to solve long-term solvency issues without gutting the benefits people need (and which they paid for over a lifetime of work with a very regressive tax)

First, we must face some key facts.  Many in Washington DC refuse to look at the hard facts, but we will:  

1.  "Two-thirds of Americans who are over the age of 65 depend on an average annual Social Security benefit of $15,168.36 for at least half of their income."

2.  "Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year."

What does that mean?  Many folks are dependent on their social security income for basic necessities, and if you cut benefits, as many pundits think is necessary, many real people will suffer real pain.

But if you eliminate the cap, problem solved for 75 years, which is pretty damn long time:

Simply by eliminating the payroll tax earnings cap — and thus ending this regressive exemption for the top 5.2 percent of earners — would, according to the Congressional Budget Office, solve the financial crisis facing the Social Security system.

Well, that was pretty easy.

But what about Medicare?  Surely we must put poor elderly people on melting ice floes (because of global warming there are plenty available, thanks Exxon) and send them off to sea to die before they use up Medicare funds to stay alive another paltry 10 or 15 years, right?

But long-term Medicare solvency issues also can be solved.

Medicare, in turn, is financed by a flat 1.45 percent tax on the first $200,000 of earnings for a single person and $250,000 for a married couple, matched by the employer, after which it rises by a modest 0.9 percent on all income above the $200,000 and $250,000 levels.


Cutting benefits is frequently discussed in the halls of Congress, in research institutes and by analysts and columnists. The idea of subjecting earned income over $113,000 to the Social Security payroll tax and making the Medicare tax more progressive – steps that would affect only the relatively affluent — is largely missing from the policy conversation.

Instead, the only options for most beltway pundits seem to be how deep the benefit cuts should be.  Making folks starve or just suffer malnutrition?  Making elderly people choose betweeen food and health care?

Why is that?

Theda Skocpol, a professor of government and sociology at Harvard and an authority on the history of the American welfare state, contended in a phone interview that policy elites avoid addressing the sharply regressive nature of social welfare taxes because, “at one level, it’s very, very privileged people wanting to make sure they cut spending on everybody else” while “holding down their own taxes.”
There is plenty of room for more revenue:
Federal tax revenues in 2009, 2010 and 2011 have been 15.1 percent, 15.1 percent and 15.4 percent of Gross Domestic Product, lower than any level since 1950.
Yes, we have a taxing problem.  Taxes are too low and especially so on the wealthier folks. It's just another aspect of class war that the rich have waged on the rest of us:
Elite anxiety over entitlement-driven budget deficits and accumulating national debt has created a powerful class in the nation’s capital. The agenda of this class is in many respects on a collision course with mounting demands for action by those lower down the ladder to address the threat to government social insurance programs. Intransigent opposition by the better off and their representatives to raising the necessary revenue means that not only Social Security and Medicare face a budgetary ax.


In this kind of conflict over limited goods, one of the most valuable resources that can get lost in the fray is the wisdom of the electorate at large. In this case, the electorate is pointing toward progressive tax increases for those closer to the top far more readily than members of the political class, for whom high-earners are a crucial source of campaign contributions.

It's an excellent article, well worth reading in its entirety.  There is much more, incuding cool graphs.  

Even if one does not go all the way (raise the cap for social security rather than eliminate it; smaller increases to the progressivity of medicare tax), these are clear solutions that can help continue the viability of the programs for the foreseeable future.  They are not on the table for the most part because Republicans do not seek defict reduction, they seek the destruction of the New Deal and Great Society (of which Medicare was a key part).

Originally posted to TomP on Thu Mar 07, 2013 at 10:33 AM PST.

Also republished by Social Security Defenders.

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Comment Preferences

  •  Tip Jar (194+ / 0-)
    Recommended by:
    gchaucer2, ericlewis0, Iberian, figbash, leeleedee, srkp23, Gooserock, rukidingme, geordie, KVoimakas, elwior, tardis10, MinistryOfTruth, poopdogcomedy, Paleo, Lying eyes, Pam from Calif, kurious, Penny GC, pat bunny, jediwashuu, Polly Syllabic, TheOrchid, Simplify, thenekkidtruth, milkbone, Gary Norton, sfbob, MJ via Chicago, bobswern, Ian Reifowitz, kck, rigcath, BachFan, Justus, howd, carpunder, Catte Nappe, theKgirls, TAH from SLC, Byron from Denver, ferg, david mizner, Mary Mike, effervescent, Gowrie Gal, HeyMikey, Vico, greenbell, chicating, kingneil, ratzo, devis1, MV Kid, Ed in Montana, rivercard, viral, FG, puakev, foucaultspendulum, missLotus, SilentBrook, irishwitch, Over the Edge, Albanius, salmo, jennybravo, Brian82, GeorgeXVIII, Senor Unoball, Quicklund, StellaRay, Sybil Liberty, daddybunny, fumie, cybersaur, hubcap, poliwrangler, VirginiaBlue, arizonablue, SingerInTheChoir, quagmiremonkey, fixxit, Gemina13, Kitsap River, sebastianguy99, surfbird007, basquebob, wonkydonkey, blueyedace2, Chaddiwicker, Dartagnan, science nerd, Brooke In Seattle, Bob B, DRo, janmtairy, NoMoreLies, hester, Haf2Read, howabout, YucatanMan, SoCalSal, VTCC73, TX Unmuzzled, wdrath, yorkiedoglover, Unbozo, emal, asterkitty, johanus, northerntier, wader, ChemBob, Grandma Susie, 4kedtongue, rapala, Marjmar, Chi, dkmich, Williston Barrett, Heart of the Rockies, zaka1, gof, Involuntary Exile, LamontCranston, Shockwave, Angie in WA State, slowbutsure, yella dawg, OleHippieChick, squarewheel, Mark Mywurtz, Sapere aude, duhban, Jeffersonian Democrat, Mad Season, cynndara, S F Hippie, BradyB, Arlys, howarddream, David PA, codairem, jamess, elginblt, Meteor Blades, joedemocrat, Ray Pensador, randallt, stevenwag, tofumagoo, lcrp, begone, willyr, countwebb, Aaa T Tudeattack, high uintas, Bob Duck, bunsk, qofdisks, lostinamerica, 2laneIA, night cat, peachcreek, thomask, Aunt Martha, Larsstephens, CalBearMom, mungley, jm214, YellerDog, Rosaura, Steveningen, TracieLynn, BarackStarObama, rebel ga, CarolinW, deepeco, fou, Lefty Ladig, wu ming, outragedinSF, Calvin Jones and the 13th Apostle, Jim P, asym, DWG, OIL GUY, Onomastic, BoiseBlue, Oh Mary Oh, Azazello, ladybug53, grollen

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Thu Mar 07, 2013 at 10:33:54 AM PST

  •  It is most unfortunate that these (16+ / 0-)

    "reforms" are not a part of the discussion. It seems, on the other hand, that the reforms that will be a part of the Grand Bargain will leave us all in the bar and the top Ten will see all the gain.

    Inspiration is hard to come by. You have to take it where you find it. --- Bob Dylan.

    by figbash on Thu Mar 07, 2013 at 10:47:53 AM PST

  •  There is no solvency problem. (11+ / 0-)

    Money is a tool, a measuring tool. It is an artificial construct that is created out of thin air. Indeed, every dollar is nothing more than a certifie d IOU, signifying that somebody owes somebody something.
    Congress is tasked with managing the currency. But, instead of just making sure there is enough to go around, they insist on rationing the stuff and then add the pretense that they have to collect before they can spend.
    In effect, the Congress has been rationing dollars for a long time, mostly to use what should be a tool to reward and punish. While it comes as a bit of a surprise that rationing something that is in pentiful supply has the same result as rationing naturally scarce resources, it seems that rationing leads to hoarding by the private sector. (Passing dollars around in stock investment accounts is also a form of hoarding, since no new products or services are involved).
    Anyway, the result is that the velocity of the dollar has crashed.

    What I would argue is that while, since Congress issues the dollars, sending dollars to Washington might seem like taking coals to Newcastle, because of the propensity to hoard, taxes are necessary just to keep the currency in motion. So, the message to hoarders should be

    "spend or send"

    Dollars need to be recycled, if they're not being used to lubricate trade and exchange.

    We organize governments to deliver services and prevent abuse.

    by hannah on Thu Mar 07, 2013 at 11:13:39 AM PST

  •  Aggregate taxes are higher than your diary... (6+ / 0-)

    ...suggests.  I received a bonus a few days ago, and Federal taxes (including income, FICA, SS and Medicare) and state taxes ate up 44% of it.

    44%.  That's a pretty considerable percentage.

    I already max out on SS taxes over the course of a year, and I can't say I'm hurting because of that 44%.  In fact, I'm happy to help out.  But simply raising taxes isn't going to solve anything, long-term.  You're just going to piss off the people already shouldering a significant chunk of the tax burden.

    The only way out of this dilemma is to aggressively bring jobs--good jobs--back to the US, and punish companies sending jobs, or creating jobs, overseas.  Hell, nationalize a few companies that don't play ball.  If they can't create good jobs here rather than overseas, fuck 'em.  Make the middle class the middle class again, and there will be enough tax receipts to fix the problems we're facing now.

    The road to Hell is paved with pragmatism.

    by TheOrchid on Thu Mar 07, 2013 at 11:13:59 AM PST

    •  Those were taxes on you, not on everyone. (7+ / 0-)

      Cap Gains and dividends are only 20% now and were 15% in the years mentioned.  Instead of working, you could hgave reduced your taxes by being born wealthy and living off of investments.  :-)

      I don't know if your last para is the only way, but it certainly is a good idea.

      Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

      by TomP on Thu Mar 07, 2013 at 11:22:32 AM PST

      [ Parent ]

    •  I agree. I often have a hard time with tax rates (2+ / 0-)
      Recommended by:
      TomP, TracieLynn


      and then I remember they're so high because those 1% are paying diddly on capital gains.

      tax capital gains as income.  institute a transaction tax.

      then lower the rates on people who actually have to work for a living.

      big badda boom : GRB 090423

      by squarewheel on Thu Mar 07, 2013 at 04:03:48 PM PST

      [ Parent ]

    •  Taxes withheld not necessarily = final lliability. (1+ / 0-)
      Recommended by:

      Because of the way some employers calculate withholding of income tax on bonuses, it's often in excess of what it should be (cumulatively with annual base salary.)

      My Karma just ran over your Dogma

      by FoundingFatherDAR on Thu Mar 07, 2013 at 04:23:33 PM PST

      [ Parent ]

  •  Great points, Tom! (6+ / 0-)

    Thank you.

  •  Edsall's one of my favorites at the NYT... (11+ / 0-)

    ...and the solutions to this mess are really quite simple. Thanks for the post!

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Thu Mar 07, 2013 at 11:25:51 AM PST

  •  Yes and no. Of course there are simple remedies... (2+ / 0-)
    Recommended by:
    Upper West, Bruce Webb

    ...for shortfalls in Social Security and Medicare. However, filling those future gaps in funding was never the goal for Republican and Democratic calls for "entitlement reform". The goal shared by all of them was privatization, or partial privatization, shifting billions of dollars into the stock market.

    Wall St. and banks have worked together with Repubs and DLC Dems for more than 15 years to accomplish this. Since Boomers "pre-paid" into SS then initially they planned to use the "surplus" during the Clinton admin to fund the transition costs (i.e., avoid benefit cuts) to partial privatization - the compromise they reached with the Pete Petersen contingent of fully anti-SS forces to get the DLC on board.

    GWBush was against the "partial" plan, of course, and wanted to privatize SS completely.  Once Bush/Cheney spent the surplus by tax cuts they forced the hand of "reformers". There was no way to hide the grab of Americans' money with temporary transition funds. The compromise was no longer an option and Bush's full privatization cronies took the helm of "entitlement reform" since now cuts would have to happen to privatize with a higher deficit, assuming their rigid opposition to raising the caps would hold.

    Sperling and the DLC Dems fully bought in to the goal of Wall St. and the banks to gain control over a portion of SS withholdings as long as "the most vulnerable" would be covered and SS would not be dismantled entirely.

    •  One more piece of history is raising retirement... (2+ / 0-)
      Recommended by:
      zaka1, TracieLynn

      ...age to 70. Why should corporate America want to raise the eligibility age for SS/Med? To fund SS for longer? Of course not. And the business case for keeping workers over 65 employed longer is pretty weak.

      Well, the reason Wall St., banks, DLC, Repubs, and the Business Roundtable are in agreement with raising retirement age, despite greater employer contributions, is that it make a huge pot of payroll contributions enormously larger with both fewer and later payouts with which to fatten the pie of private investment accounts out into the market - billions. Again, privatization. More capital shifted from worker to investments, more loads, fees and admin costs, more profit for the investor class. Certainly no less risk for insolvency or worse given today's high rollers who routinely roll right off cliffs.

      •  Life expectancy is declining among women (1+ / 0-)
        Recommended by:

        in many counties especially in the south according to a study released this week.  Apparently this is not the first study to report these results. I linked to an article about this yesterday.  

        The age thing is just another of the big lies that go unquestioned.  Oh, we're living longer, I heard it from Bowles Simpson, and the serious people pundits and Ed Rendell flapped his mouth about it so it must be so.  Well maybe not.  

        The reason I'm hostile to any of these so-called reforms is that I believe we are being deliberately deceived by both parties unfortunately.  We get spin.  We get half truths.  We get clever labeling of cuts as like "superlative CPI".  

        We are not being presented objective facts or options.

        •  We women (2+ / 0-)
          Recommended by:
          greenbell, FoundingFatherDAR

          lived longer prior to going into the work force.  I think our life spans are getting cut shorter due to being paid a pittance over men and being stressed out of our minds for years on end trying to make ends meet.  Moreover, more women are probably uninsured and women's healthcare as gotten more expensive through the years and how do women save money, they cut back going to the doctor.  

          "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

          by zaka1 on Thu Mar 07, 2013 at 03:56:05 PM PST

          [ Parent ]

        •  Do you trust the Trustee reports? (0+ / 0-)

          If you can't trust the political parties and you can't trust the Trustees then it must be difficult to come to an objective view on how to keep the promise of SS and Medicare for all generations in an equitable fashion.

          We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

          by theotherside on Thu Mar 07, 2013 at 04:56:19 PM PST

          [ Parent ]

  •  can someone get ed rendell and Rachale Maddow to (10+ / 0-)

    read this.
    STOP ED RENDELL's constant free lobbying time on msnbc now!!!

    Rachel, Alex, Lawrence, why are you deceiving your viewers with having Ed Rendell posing as a democrat yet working for "fix the debt"

    I am so disgusted with my channel that I have quit watching.

  •  Immigration reform could help a bunch, too (6+ / 0-)

    Much of the doom and gloom is the shrinking number of young people left to support the growing number of old people. Immigrants tend to be younger, and if allowed legal status and a living wage they will begin paying big money into the system.

    "No one life is more important than another. No one voice is more valid than another. Each life is a treasure. Each voice deserves to be heard." Patriot Daily News Clearinghouse & Onomastic

    by Catte Nappe on Thu Mar 07, 2013 at 11:55:12 AM PST

    •  if our economy wasn't immiserating young people (0+ / 0-)

      in such a brutal and systematic way, their rising wages over time would make things add up well enough.

      •  Not as demographics currently stand (0+ / 0-)

        The ratio of workers to SS recipients has been declining, and will decline further.

        Today 12 percent of the total population is aged 65 or older, but by 2080, it will be 23 percent. At the same time, the working-age population is shrinking from 60 percent today to a projected 54 percent in 2080. Consequently, the Social Security system is experiencing a declining worker-to-beneficiary ratio, which will fall from 3.3 in 2005 to 2.1 in 2040

        "No one life is more important than another. No one voice is more valid than another. Each life is a treasure. Each voice deserves to be heard." Patriot Daily News Clearinghouse & Onomastic

        by Catte Nappe on Fri Mar 08, 2013 at 08:21:32 AM PST

        [ Parent ]

        •  this is only a problem (1+ / 0-)
          Recommended by:
          Catte Nappe

          if unemployment and underemployment reduce the hours worked, wages stagnate and there is inadequate inflation. which is the exact results of austerity, but need not be The Way Things Are.

          •  Disagree (0+ / 0-)

            Even with full employment and living wage levels of income, the effect of going from 16 to 8 to 4 to 2 workers for every retiree becomes unsustainable. Average SS payment is 12,300/mo. For two workers to support that with full time 40/hr week job, they will have to contribute nearly $4 per hour.  At $15 hour the current SS tax is closer to $2

            "No one life is more important than another. No one voice is more valid than another. Each life is a treasure. Each voice deserves to be heard." Patriot Daily News Clearinghouse & Onomastic

            by Catte Nappe on Fri Mar 08, 2013 at 12:38:11 PM PST

            [ Parent ]

  •  There is literally NO way to cut benefits, period (11+ / 0-)

    It literally can't be done, once you look at the externalities. Even if they cut SS and Medicare benefits in half, it would end up costing the economy as much if not more in other ways, in terms of a loss of business activity (seniors spend most of their SS checks, and Medicare usage is a business activity in economic terms), and in terms of the inevitable need to make up for these benefit losses in other, far more costly ways, such as ER visits, welfare, etc.

    An economy is ultimately a closed system. Cut here and you pay there. Beyond how cruel it would be to cut already too-low benefits even more, simply from a cost savings POV it makes no sense. In fact I'd argue that current benefits are already too low, not just in terms of seniors' needs, but in terms of economic efficiency. Raise benefits, and the economy benefits from it.

    How to pay for it? Well, this diary lists some obvious ways. Another obvious way is to cut out the waste, in terms of unjustified and unnecessary subsidies to insurers, facilities, device makers and providers, and unnecessary tests, procedures, devices and drugs, or ones that might be necessary but are vastly overpriced at present. Bring in more money, cut out the far, increase benefits, and everyone but the cheats will benefit from it, way beyond just seniors.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Thu Mar 07, 2013 at 12:21:15 PM PST

    •  Most people, long ago, dismissed zero sum game (0+ / 0-)

      theories regarding the economy.  And, while I could certainly be wrong, I think greater than 95 percent of economists would disagree with you that "an economy is a closed system".   At best there is one economy that is a closed system and it isn't the one that your post would either infer or for which your comment would be applicable to.

      We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

      by theotherside on Thu Mar 07, 2013 at 05:18:57 PM PST

      [ Parent ]

      •  It's a closed system (0+ / 0-)

        in the sense that everything affects everything and there are all sorts of multi-order feedback loops that constrain one's ability to escape its limitations, especially at the societal level. I.e. if we cut her, we pay there, so the net savings isn't what we think it is, if at all. Are you saying that there's no external cost to cutting benefits? That's simply impossible.

        "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

        by kovie on Thu Mar 07, 2013 at 05:47:13 PM PST

        [ Parent ]

        •  Please don't pin your hyperbolic statement on me (0+ / 0-)

          Of course there are feedbacks into the system and if you give more (or less) money to senior citizens then there are repurcussions for the economic system as a whole.  But, seriously, that is not remotely what you said.

          You went "a(n) economy is a closed system" route which, to my understanding, is only supported by a really, really, really fringe subset of economists.   If you want to support the, rather absurd, notion that the American economy is a closed system, then, by all means let's hear your analysis that flies in the face of every economist that I have ever heard of.   I'll grant you that I do not have a BS, a Masters, let alone a PhD in economics, but I am confident enough in my understanding of economics that the US economy is not a closed system, as you proclaimed.

          There is no harm in withdrawing your statement.  The point of internet debates, at least IMO, is not to "win" the debate but to better understand the issues at hand.  You stated, essentially, that the US economy is a closed system (or can you cite another economy that you think is a closed system?) and then you revised your statement to the obvious that there are "external costs" which is not really the correct term but which I understand you meaning that payments to recipients that largely and immediately are then spent into the economy create positive economic outcomes to the economy as a whole is not really controversial regardless of your political outlook (at least amongst serious economists).

          I don't particularly have any desire to debate the issue further because I think it is clear that you seriously overstated the issue at hand.  If you have a rebuttal I'll likely respond but a simple concession that you overstated the economic evidence is fine by me.

          Be well.

          We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

          by theotherside on Thu Mar 07, 2013 at 06:42:36 PM PST

          [ Parent ]

          •  Oh dear (0+ / 0-)

            You are quite the literalist, aren't you? I thought I was obviously speaking in a general, global sense and didn't have to qualify that with footnotes and links. Where did I say that I was referring to only the US economy? Although, in terms of the implications of lowering benefits, there are closed loop aspects to the US economy, in that most of the money that seniors spend goes to local economies, e.g. stores, utilities, rent, doctors, etc. Lower their benefits and all of these suffer for it fairly quickly. Over time, so do the seniors themselves, with their reduction in quality of life costing the system over time.

            I thought it was obvious that that was the point I was making. If I had written that Bush was the dumbest person in the history of the world, would you also have assumed that I meant that literally?

            I think you need to fine tune your reading between the lines skills. And not take misunderstandings so personally. Having a bad day?

            "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

            by kovie on Thu Mar 07, 2013 at 06:59:08 PM PST

            [ Parent ]

  •  TomP, my grandchildren are still waiting for (3+ / 0-)
    Recommended by:
    TomP, zaka1, wu ming

    funding of last semester's tuition grants.  One was fortunate to receive a scholarship, the other forced to delay education.

  •  Virtual tip and rec (2+ / 0-)
    Recommended by:
    Upper West, TomP

    maybe raise the cap to 1 mil, progressively index the benefits increase so that the more affluent receive less of an increase, but so they get something.

    Think of creative ways to combat the "means-testing" frame/screeching which will inevitably follow, no matter how modent the proposal.

    The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

    by ozsea1 on Thu Mar 07, 2013 at 12:37:48 PM PST

  •  I am very disappointed knowing that the... (0+ / 0-)

    lawmakers are so spasmatic and disconnected from us that they had the audacity to jack us up twice in three months.  There does not seem to be a method of getting by hurdles bases on what ever.  

    They sit on their asses from left to right, republican to democrat and get mics poked in their face and invited to Fox or CNN.  I am thinking that we vote for them to serve our best interest.  So what is going on.  

    This is rediculous. If they can not do their jobs, then we need to have some method of being able to hold them accountable.  I am becoming more and more less concerned about democrat or republican and more about being able to live inside and be able to eat.  I don't think I am the only one.  We are pawns and should not allow this to happen to us.  If people continue to treat you like we are being treated by the House, Senate and President we will never get this right.  

    Something is broken and it is not a black democrat in the white house or is it?  I have always been able to go to sleep and not even consider politics or the economic systym that runs the world as I do now.  We are teetering on the brink of a finanical disaster as we are being told.  And these guys are not able to do what they need to do.  

    I have grown to the point where I do not feel that this government is trust worthy or at least those who are in office to perform government over sight or what ever.  

    Rather that all the crap about resolutions and laws and that bs we need to begin with the persons who have the tools provided to operate the government for us.  I vote no confidence.  We need to have some recourse before things potentially get chaotic...

    I may not be deep, but I am very wide... Honree Balzac

    by meknow on Thu Mar 07, 2013 at 12:55:01 PM PST

  •  What about the donut hole? (1+ / 0-)
    Recommended by:

    a cap at 113K that picks up again at 250K after which there is no cap.

    Also -- what about applying the tax to investment income?

    The GOP: "You can always go to the Emergency Room."

    by Upper West on Thu Mar 07, 2013 at 12:56:35 PM PST

    •  Why have a break at $113,000 and then (3+ / 0-)
      Recommended by:
      Willa Rogers, zaka1, TracieLynn

      no SS Tax until $250,000?  I don't understand why?

      People earning $120,000 can afford the tax much more than those earning only $10,000 total.  They should pay it on their income over $113,000 too.

      "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

      by YucatanMan on Thu Mar 07, 2013 at 02:22:18 PM PST

      [ Parent ]

      •  Well (0+ / 0-)

        People making over 250K can afford it better than those making between 113K and 250K.  

        Plus those between 113K and 250K likely subject to the AMT, which gave them no benefit from any of the tax cuts initiated in 2001.

        If any shortfall can be remedied by the revenue from above the donut hole, why punish those making in that range.  113K is not a princely sum in NYC.

        The GOP: "You can always go to the Emergency Room."

        by Upper West on Thu Mar 07, 2013 at 02:37:58 PM PST

        [ Parent ]

    •  Donut Hole is Obama/Biden 2008 (0+ / 0-)

      Obama hamstrung himself by a blanket promise not to raise taxes on people making less than $250k and then freely decided that HAD to apply to the SS cap as well which led to the logically absurd proposal to create the donut hole.

      Since by all evidence the $250k number itself was just drawn out of a hat this was just a self inflicted wound and one that took an approach that would backfill the entire actuarial gap (simple cap increase) to one that would only backfill a portion and so require additional "superlative" "common sense" "shared sacrifice" measures like Chained-Catfood.

      I would like to support Obama but his self appraisal of "smartest guy in the room" too often translates to "too smart by half". And the SS donut hole is a perfect example. - SocSec.Defender at - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

      by Bruce Webb on Fri Mar 08, 2013 at 07:10:00 AM PST

      [ Parent ]

  •  One wonders why Obama doesn't talk about (2+ / 0-)
    Recommended by:
    YucatanMan, TracieLynn

    these solutions.  Why is he happy to talk about a chained COLA solution?  Could be that ol' n-dimensional chess again or simply his moderate Republican self.

    The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

    by accumbens on Thu Mar 07, 2013 at 01:02:05 PM PST

  •  Great diary, Tom. (4+ / 0-)

    Concentrates on the issue, avoids Obama pie, and offers possible solutions. It's diaries like this that inspire my letters to my reps and the White House.

    Knowing what's possible, what should be discussed is a huge help. Knowing how to frame the discussion with others in our lives is a huge help.  

    What inspires me in political activism is knowing WHAT to fight for in terms of real policy ideas and possibilities, as opposed to arguing about whose fault it is that the world sucks.

    "A typical vice of American politics is the avoidance of saying anything real on real issues." Theodore Roosevelt.

    by StellaRay on Thu Mar 07, 2013 at 01:07:17 PM PST

  •  Entitlement cuts for the 1% (4+ / 0-)
    Recommended by:
    TomP, YucatanMan, zaka1, squarewheel

    Their 1% entitlements like:
    Executive bonus stock option tax write offs that saved a $1.1.Bn  profit company from paying ANY taxes and even getting a $400+Mn refund... That company is FaceBook.

    Development abd Research costs writeoff and Federal grants: Drug and Gas & Oil companies.

    Great deals on profits from drugs that are not allowed to become "generic..... Thanks Washington!

    Offshore and onshore drilling leases that are on VERY favorable terms to the Industry. Thanks State and Federal lawmakers.

    All you 1%ers can add your Entitlements as you wish, all you have to do is fund a thinktank or six and have them write the legislation that bakes your entitlements into law [Alec] and then get your trainied dogs in the local, state, and federal legislatures to pass them for you.

    It has been said that the definition of an honest politician is one who stays bought and refuses other offers to change their vote. I believe that that is pretty accurate.

    "You can tell 'Monopoly' is an old game, it has a Luxury Tax and rich people can go to jail." - George Takei

    by daddybunny on Thu Mar 07, 2013 at 01:15:49 PM PST

  •  Here's to being proactive instead of reactive! (2+ / 0-)
    Recommended by:
    TomP, northerntier

    This is an opportunity that can be used to our advantage as well. It amazes me that the Republicans have been after the safety net for decades yet the Left can only play defense.

    It should be made clear to D.C. that the reform discussion must include more ideas.

    "There is nothing more dreadful than the habit of doubt. Doubt separates people. It is a poison that disintegrates friendships and breaks up pleasant relations. It is a thorn that irritates and hurts; it is a sword that kills.".. Buddha

    by sebastianguy99 on Thu Mar 07, 2013 at 01:31:04 PM PST

  •  And most Democrats say ??? (0+ / 0-)

    Plato's " The Cave" taught me to question reality.

    by CTDemoFarmer on Thu Mar 07, 2013 at 01:40:48 PM PST

  •  Allow Medicare to negotiate prices w/ pharma (6+ / 0-)
    Recommended by:
    Bob B, TomP, ljm, northerntier, zaka1, willyr

    Funny how the brilliant folks in DC keep forgetting that one of Medicare's biggest problems is the fact that it's prevented from negotiating prices on prescription drugs.

    That's a fairly new concept, added by the GOP Congress to cripple Medicare with high costs while subsidizing the pharma industry.  

    It's an easy fix that would cut Medicare costs by hundreds of millions of $$$.

    So why does everyone in DC keep forgetting to bring it up?

    It is an old strategy of tyrants to delude their victims into fighting their battles for them. FDR

    by Betty Pinson on Thu Mar 07, 2013 at 01:42:08 PM PST

  •  Declining living standards (2+ / 0-)
    Recommended by:
    TomP, zaka1

    Why do we have two political parties that are embracing a decline in the standard of living?  Why is it that we are rushing to a Grand Bargain to make Americans be poorer than their parents? There is a legacy for sure in reversing the American Century but it's not the kind of legacy I'd want to have.

    For the first time since the New Deal, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation’s elderly, according to a growing consensus of new research.
  •  Thanks, Tom. Those are great points which (2+ / 0-)
    Recommended by:
    TomP, zaka1

    I wish more of our politicians could grasp.

    There is no reason to cut back on benefits or entitlement age.

    The life expectancy of many Americans is falling not rising.  Our nation is being damaged by all this right wing trickle-down tax-cut economics.  It has to stop, or we'll be on the path to 3rd world nation status.  We are already far behind most modern nations in most every measure.

    We're Number One only counts for the military these days and no other measure. (oh wait! prison populations!)

    "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

    by YucatanMan on Thu Mar 07, 2013 at 02:17:09 PM PST

  •  Thanks Tom (1+ / 0-)
    Recommended by:

    Just a question, your stats stated that only 1/3 of Americans are supported solely on SS and Medicare, I was just wondering if that number isn't higher?  I say this because many women and men will not have a second income such as a retirement to provide a second income in addition to social security.

    May I just add:

    Social Security also covers more people than any other type of retirement benefit. The great majority of retired Americans age 65 and older (87%) received Social Security income in 2009, up from 69% in 1962. In contrast, only about half (53%) of older Americans have asset income in retirement, a proportion that is unchanged since 1962. The proportion of retirees receiving private-sector pension income has grown from 9% to 28%. And 14% of seniors have government pension income, up from 9% in 1962. The proportion of older Americans with income from work has fallen from just over a third in 1962 to about a quarter in 2009.
    I think since 2008 there are going to be more people in crisis if we cut social security and medicare instead of building it up to support those who are going to need something to sustain themselves in old age or disability.

    "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

    by zaka1 on Thu Mar 07, 2013 at 03:43:43 PM PST

    •   I think it was two thirds rely on it forw (1+ / 0-)
      Recommended by:

      at least half their incomes.  I agree that more will be dependant on it because fewer people have pensions.

      Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

      by TomP on Thu Mar 07, 2013 at 07:15:35 PM PST

      [ Parent ]

      •  I think especially (1+ / 0-)
        Recommended by:

        with all the divorces (I believe it is up around 60% now) that many women whom did not remarried and were underpaid and usually did not receive a pension are especially going to be dependent on SS as income.  It wasn't until about 35 years into my working life that I received an income that wasn't a complete pittance.  

        I know many widows my Mother's age (83) have received their husband's pension and social security (many didn't work outside the home in those days), but there are many more women now who won't have those sources of income.  I'm not saying that men don't have financial problems because since 2008 many older men are now in the same boat as many women are.  There are just too many things that have been done in the past forty years through bad politics that are getting many of us caught in the middle with little resources.

        Social Security should be increased to a livable income and it should come from those that have profitted off of our stagnant wages, poor cost of living increases, and lost pensions.  Oh the top people have taken pensions for themselves, but have not given the same benefit to others.  

        The ecomony today is so completely different than when most of us were earning a median income of about $20,000.00 in the late 1970s which maintained there through out most of our working years.  Trying to sustain oneself on less than $17,000.00 a year because you worked decades earlier, in a different ecomony, is going to increase poverty among the elderly.

        Plus shouldn't all of the money invested have been collecting interest in order to keep up with present day costs?  Or did they really put IOUs in the fund and that is part of the problem?

        "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

        by zaka1 on Thu Mar 07, 2013 at 08:29:59 PM PST

        [ Parent ]

  •  these are not the reforms the president is looking (0+ / 0-)


    that's the problem.

    big badda boom : GRB 090423

    by squarewheel on Thu Mar 07, 2013 at 04:01:22 PM PST

  •  Ok, I'll come from this from a totally (0+ / 0-)

    different angle.

    I'm a "conservative" and, contrary to many progressive stereotypes, I don't want to kill Medicare or SS.  I actually want them to be there for my kids and our posterity.  I also want it to be "fair" to my parents, my generation, my kids' generation, and all the generations to come.  From that point of view, I think I share a lot in common with my progressive friends.

    I personally am open to almost any type of reform or combination of reforms that aim to make both of these programs financially secure and fair.  

    And I can appreciate that progressives would first want to first tax the wealthy to secure the future of these programs but why, in an age when we all acknowledge that life spans are increasing, do progressives so vehemently oppose raising the retirement age?

    I do understand the argument that not all work is equal and those with blue collar jobs are not increasing life span as those with white collar jobs and I would be fine with adjusting for that in as fair a way as actuarial science would dictate.  But the nearly full opposition to re-balancing work years and retirement years doesn't make much sense to me.  

    We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

    by theotherside on Thu Mar 07, 2013 at 04:21:23 PM PST

    •  Except that there was a study out just this week (0+ / 0-)

      that in many areas of the country life expectancy for women is actually declining not increasing.   I mean there are lies, damn lies, and statistics and it's unclear how much lying is going on to skew the debate on these so-called reforms.  Are there actually jobs available for most people over 65 to make raising the retirement age realistic or are you just going to force people into spending down their assets for years in which they are unemployed or underemployed so that they need a larger Social Security benefit?  Besides, other studies show they have few assets anyway.  I mean if corporations hadn't done away with the defined benefit pension maybe you could raise the retirement age.  But they did away with the pension and they did away with job security.  

      I mean if we were designing a program to just cover accountants, attorneys, professors, and physicians raising the retirement age might make sense.

      •  I saw those same reports (0+ / 0-)

        And we could go into the specific findings (mostly white, disadvantaged, rural women in about 50 percent of the counties) but the evidence is pretty solid that since the inception of the programs the life expectancy has radically risen and the eligibility dates have barely budged.  I want sustainable environmental policies and sustainable (and fair) "entitlement" programs.  

        So even if we take into account the findings that you cite I think it would be prudent to consider raising the eligibility age.  Now, with that said, I had hoped, and you actually raised a very good point.  Many companies will not hire people past a certain age.

        What I would ask you to consider is whether or not those people can actually contribute anything despite being relatively unemployable.  If they have something to contribute (which I believe they do) then perhaps we should think outside the box and allow them to contribute to society in ways that would offset their "costs".   I have found that most people do not react well to this "new" idea.

        Conservatives claim that I'm speaking of "socialism" and progressives reject the idea since they think they have a "better" idea (which pragmatically speaking has exactly 0% chance of being enacted) and, on top of that, the progressives claim it smacks too much of "personal responsibility" to be enacted.

        Anyway, I think my tagline is very apropos in the current situation but as long as we each only read news that favors our point of view, there is little chance that ideas that are both "reasonable" and "out of the box" can be enacted.

        We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

        by theotherside on Thu Mar 07, 2013 at 05:31:57 PM PST

        [ Parent ]

    •  Let's imagine medical science defeats so many... (0+ / 0-)

      diseases that the average American life span increases to 125.

      How does that change how old a 75 yr. old is? So what if he hasn't been struck by cancer or arthritis by 85. Actuarial science says nothing at all about 80 yr. old mechanics or 90 yr. old sales managers.

      Old is still old. If 45 years of working your ass off is enough to tire people out now, that won't magically adjust to 60 years just because we add a few more decades onto the end.

      If the math inherent in the current system can't handle that, we need to change the fundamentals of the system. Because expecting the fundamentals of human life - that we get worn out and need a goddamned break after all those decades - to change will get you nowhere productive.

      "The Democratic Party is not our friend: it is the only party we can negotiate with."

      by 2020adam on Thu Mar 07, 2013 at 11:30:38 PM PST

      [ Parent ]

  •  but, but, but, people will stop working (1+ / 0-)
    Recommended by:

    if their wages > current limit are taxed more, because they won't get any corresponding increase in their SS benefits when they retire.
     ( That's the ridiculous argument conservatives use to fight against raising SS limit.)

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Thu Mar 07, 2013 at 04:30:33 PM PST

  •  When did this happen? (1+ / 0-)
    Recommended by:
    2.  "Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year."
    Did Reagan do this or was it in the original law that FDR passed?
  •  Edsall's article is really good. (1+ / 0-)
    Recommended by:

    Which is why it will be ignored by the Pain Caucus in DC.  Also too, the President.  But I repeat myself.

  •  I can't tip your jar, but ... (1+ / 0-)
    Recommended by:

    ... I can tip my hat! Great diary, TomP!

    That's the kind of "word" that needs to "get out." We need to get the word out!

    I would tip you, but the man took away my tips.

    by Tortmaster on Thu Mar 07, 2013 at 09:26:11 PM PST

  •  medicare is even easier than that to fix (1+ / 0-)
    Recommended by:

    extend it to people starting at birth, and the system's solvent forever.

  •  did anyone else notice (0+ / 0-)

    that when occupy wall street put bodies in the streets and made trouble for the powers that be, they dropped all this austerity and debt stuff, and then the moment the protests went away, this crazy bullshit came roaring back?

    it seems to me that this country needs another round of jeffersonian rebellion, to rattle those politicians' cages and remind them that there is an "or else" if they try to starve us to death.

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