Democrats Seek Political Advantage in Rejecting Entitlement Reform (Update)

posted at 9:45 am on January 28, 2011 by John Sexton

For decades, money collected through Social Security payroll taxes has gone via “securities” into the Treasury’s general fund. From there, the money was spent on all sorts of things including payouts to current retirees. Fortunately, Social Security has always brought in more money than it has paid out.

At least that was the case until this week when it was announced that starting this year (and for perpetuity) Social Security will pay out much more than it takes in. The net cost this year alone is going to be $45 billion, and over the next decade the figure will mount to well over half a trillion dollars.

Looking at the financial state of the union–$14 Trillion in debt, high unemployment, low growth, states facing bankruptcy–you might think Democrats would be getting ready to sit down with Republicans and figure out how to avoid piling on more debt. You would be wrong. Instead, they’ve got their new messaging team figuring out how to turn the issue into a political goldmine:

Senate Democrats led by Sen. Chuck Schumer (D-N.Y.) and Sen. Bernie Sanders (I-Vt.) are gearing up for a battle with House Republicans over Medicare and Social Security benefits.

Schumer and other Democratic strategists see Medicare and Social Security as winning political issues that can help them regain the momentum they lost over the last two years…

“They want to privatize Social Security,” Schumer said of Republicans. “Privatize equals end, no more.”

You have to admire the brazenness of that line, i.e. privatization equals nothingness. I suspect Hugo Chavez could waft that one into his nose and pronounce the odor it gives off heavenly, but then he is a socialist not a US Senator. In any case, that is apparently the message they’ve settled on because Harry Reid echoed the same line yesterday:

“Simply said, it’s off the table,” Reid said at a press conference with Social Security recipients Thursday. “As long as I am majority leader, I will do everything within my legislative powers to prevent privatizing or eliminating Social Security.”

The prospect of another half trillion in debt doesn’t even make these guys flinch.

The President, for his part, has already made clear through his total bypass of the topic on Tuesday that he’ll do nothing to aid any Republican who steps into the Democrats line of fire. Simply put, it’s going to be two more years before we, maybe, get a chance to have an adult conversation about entitlement reform.

Update: This story encapsulates the risk inherent in waiting for two more years on serious reform:

Moody’s has warned that it may have to apply a negative outlook to America’s top-notch AAA credit rating because of the US government’s failure to tackle its growing budget deficit.

The report from the ratings agency, which came hours after a downgrade of Japan by Standard & Poor’s and an IMF warning on growing budget deficits in both countries, reiterated previous comments made in December.

Moody’s said then that the extension of Bush-era tax cuts would increase the likelihood of a negative outlook on the US to credit rating in the next two years. A negative outlook makes a rating downgrade more likely in the next 12 to 18 months, which would push up the country’s borrowing costs.

That’s just what we don’t need as we try to climb out of the debt quicksand we’ve fallen into as a nation. While it would certainly be ironic if the President’s dithering on reform now led to a downgrade just as he resumes office in 2012, this is one area where I’d much rather see him succeed. For everyone’s sake, let’s hope he has a bit more foresight than his party’s top Senators.


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I wonder, W tried with a gop congress and he couldn’t get it done ….the gop needs to fight back against the dems lies….they win the message war

Fight back!

cmsinaz on January 28, 2011 at 9:49 AM

OK fine. Republicans … do nothing, call their bluff.

Tell nation you’re going with the democrats plan and back off.

darwin on January 28, 2011 at 9:49 AM

darwin on January 28, 2011 at 9:49 AM

Yup.

And constantly remind the public about it.

Like everyday.

artist on January 28, 2011 at 9:52 AM

As long as we have idiots in the Republican who believe that they are due every penny that they’ve had promised to them through SS, this is an uphill battle.

Never mind the damage it will do to our children, who didn’t vote for the politicians and therefore have suffered taxation without representation.

But that’s okay, I guess. As long as these idiot Republicans get their money out of this ponzi scheme.

beatcanvas on January 28, 2011 at 9:54 AM

As long as I am majority leader, Until 2013 I will do everything within my legislative powers to prevent privatizing or eliminating Social Security.”

Akzed on January 28, 2011 at 9:54 AM

The GOP should NOT get into a debate about entitlement reform with the Dems since it is not going anywhere! Dems will shut it down in congress and Obama will veto it if it gets that far.

They should concentrate on cutting the fat from government by defunding every pet project the Dems have put in place since 2008. Leave entitlement reform for when the GOP has the White House.

TheRightMan on January 28, 2011 at 9:55 AM

Put the Deficit Commissions recommendations up for a vote. Will Reid/Pelosi/Obama disavow the results of their own hand-picked commission?

KW64 on January 28, 2011 at 9:57 AM

The program is already heading into insolvency…. trust me, after 2012, the Dems will have no choice but to sit down and talk. NOW, just keep on hammering dthem on how they have sunk the country into debt through overreach of the federal government.

TheRightMan on January 28, 2011 at 9:57 AM

Well, the Democrats are consistent.
I can see how they think this is political goldmine for them. Like Obama they count on the public’s stupidity and the media’s help.
Even people counting on these entitlements know that the end is near. If the Dems overplay this, which they will, it’s going to get interesting.

ORconservative on January 28, 2011 at 9:58 AM

As the Democrats are finding out, it’s easy to hide the science from idiots, but hiding the snow is an entirely different matter … LOL

SS is now in the red permanently …

tarpon on January 28, 2011 at 9:59 AM

One word:gridlock!

Don L on January 28, 2011 at 9:59 AM

The GOP had better go on the offensive with this one. We know the fascists are going to pull out the ‘granny’ card.

madmonkphotog on January 28, 2011 at 10:00 AM

Put the Deficit Commissions recommendations up for a vote. Will Reid/Pelosi/Obama disavow the results of their own hand-picked commission?

KW64 on January 28, 2011 at 9:57 AM

Sure. They lie for a living. In fact I’m beginning to believe most democrats in Congress are sociopaths with not even the tiniest shred of a conscience.

darwin on January 28, 2011 at 10:01 AM

Democrats = Nero

Fiddling while the country goes down the tubes.

darwin on January 28, 2011 at 10:02 AM

The GOP was scared of health care and look what it got them – the Tea Party. If the GOP continues to refuse to be opinion leaders – then why do they exist?

rock the casbah on January 28, 2011 at 10:02 AM

Well, one cannot expect the democrats not to fight for their nation killing entitlement programs. After all, this is all about them and the future of their party. Entitlements are all democrats do. They steal from the productive to give to the unproductive and create a reliable, dependent base of voters.

Take away entitlements and the democrats have absolutely nothing to offer. Who in the hell would vote for a democrat then?

darwin on January 28, 2011 at 10:09 AM

The democrats shouldn’t even be allowed at the table in discussions of managing the debt after their performance the past dozen or so years.

If the Republicans let the democrats own the message of ‘fixing’ the debt problems, they write their own obituary.

cntrlfrk on January 28, 2011 at 10:12 AM

Folks, the Progs think that if the country goes bankrupt and defaults, or if we end up in runaway inflation, -they win. They believe that out of that chaos will naturally evolve a socialist reorganization, a Sorosian New World Order.

That’s why they are content to do nothing.

slickwillie2001 on January 28, 2011 at 10:13 AM

all the Republicans need to say is that you can pick any 30-40 year range throughout the history of the DJIA and show that the stock market has never lost value over that period of time. Hell even from 1900 to the nadir in 1932 the stock market gained value. There is simply no way that Americans would lose money through privatization

MFn G I M P on January 28, 2011 at 10:16 AM

They won’t talk about it, because that’s not part of their agenda.

They want to destroy it, along with everything else. When that task is done, they remake the country in the image they see as just, and right. If that means adding more debt to achieve the goal….so be it.

People need to decide. What awaits us, if they achieve their goals? I and I think most here, know what it means, and it’s not good!

capejasmine on January 28, 2011 at 10:16 AM

Great…

Democrats claim they have the greatest President of all time in the White House and still hold the majority in the Senate….

…….the Republicans need to demand a plan from Mr. FDR/JFK?/Lincoln/..and now Reagan.

Get off your a$$ Mr. Hope and Change and provide a credible solution for once.

Baxter Greene on January 28, 2011 at 10:19 AM

The party of NO?

mjbrooks3 on January 28, 2011 at 10:22 AM

From The Hill article cited above:

Democrats say the growing influence of the Tea Party in Congress poses a threat to entitlement programs.

As if that wasn’t the point to begin with. Lol

OkieDoc on January 28, 2011 at 10:29 AM

Reid is probably the biggest liar in the Senate, can”t stand him. Why hasn’t anyone investigated his election victory. He constantly trailed Angle by at least 4 points and then he wins by 5. I call bull sh**. There is no way he won that race.

rjoco1 on January 28, 2011 at 10:32 AM

O/T:


New Black Panther Party case: The facts are in

http://voices.washingtonpost.com/right-turn/2011/01/the_us_commission_on_civil.html

The statements indicate several points: 1) the New Black Panther Party case brought by career Justice Department employees was meritorious on the law and the facts; 2) there is voluminous evidence of the Obama administration’s political interference in the prosecution of the New Black Panther Party case; 3) there is ample evidence that the Obama administration directed Justice Department employees not to bring cases against minority defendants who violated voting rights laws or to enforce a provision requiring that states and localities clean up their voting rolls to prevent fraud; 4) the Justice Department stonewalled efforts to investigate the case; and 5) vice chairman Abigail Thernstrom has, for reasons not entirely clear, ignored the evidence and tried to undermine the commission’s work.

….The Republicans need to go full blast on this corruption of the DOJ…..

Baxter Greene on January 28, 2011 at 10:35 AM

I love how the commies say that privatization is more risky than overtly taxing in order to pay for the retirees and then spending whatever is left for decades

I just can’t see how people don’t see the math

Sonosam on January 28, 2011 at 10:35 AM

In the argument between fighting back or laying back, I’ll take fighting back. Laying back hasn’t worked any of the other times we tried it before. That approach just allowed them to drag us closer to the cliff. Now that we’re at the cliff’s edge, and I’m not of the mind to see if the Dems are brazen enough to pull us off the edge solely for their own interest, because that’s not the end of it. They’ll still be demagoguing the issue during the fall and then again after we hit bottom.

It’s time for fighting. We need to hang them with this ponzi scheme they’ve profited from for over 70 years. Now more than ever because people’s lives are at stake. Lives the Dems could care less about because their only interest is in the power to rule over everyone else’s lives for their own benefit.

Dusty on January 28, 2011 at 10:36 AM

all the Republicans need to say is that you can pick any 30-40 year range throughout the history of the DJIA and show that the stock market has never lost value over that period of time. Hell even from 1900 to the nadir in 1932 the stock market gained value. There is simply no way that Americans would lose money through privatization

MFn G I M P on January 28, 2011 at 10:16 AM

Unfortunately, in this day and age of 10-second soundbytes, that kind of logical, thoughtful discussion doesn’t register in the gnat-like attention spans of Americans too busy working three jobs to pay their taxes. “Throwing Grandma out on the street” is much more effective.

fossten on January 28, 2011 at 10:38 AM

What bugs me is the media saying that everyone wants to do something about the deficit but when you ask us if we would reform Social Security and Medicare we say no.

No one has ever asked me, ever, and I am 60 years old. I haven’t received a letter, a questionnaire or phone call asking or polling me on this. Has anyone else?

Candy Crowley of CNN was on our local radio station this morning spouting this line.

Vince on January 28, 2011 at 10:42 AM

Have the socialists (Dems) so little confidence that ObaMao can bring the economy back to roaring life that they fear even partial privatization? Why do the Dems have so much difficulty supporting choice?

onlineanalyst on January 28, 2011 at 10:55 AM

The liberal Democrat dirtbags would willingly bankrupt the nation just to save the slimy political butts.

rplat on January 28, 2011 at 10:58 AM

Only half a trillion?

Heck, that is chump change in Obamadollars.

percysunshine on January 28, 2011 at 11:02 AM

They are taking the lead from the SOTU: If the GOP is going to hammer them on the debt, they are going to fight back with Social Security and amnesty. They are hoping to carve out that 10% of independents necessary for another 4 years of socialism.

The campaign has begun. I hope the GOP is up to it.

PattyJ on January 28, 2011 at 11:08 AM

“Simply said, it’s off the table,” Reid said at a press conference with Social Security recipients Thursday. “As long as I am majority leader, I will do everything within my legislative powers to prevent privatizing or eliminating Social Security.”

Biggest. Strawman. In. History.

Who has propsed “privatizing” Social Security? Who has proposed “eliminating” it?

Republicans should play some jujitsu here and immediately introduce a one-page bill to repeal the Social Security Act, and vote against it unanimously.

rockmom on January 28, 2011 at 11:16 AM

What bugs me is the media saying that everyone wants to do something about the deficit but when you ask us if we would reform Social Security and Medicare we say no.

No one has ever asked me, ever, and I am 60 years old. I haven’t received a letter, a questionnaire or phone call asking or polling me on this. Has anyone else?

Candy Crowley of CNN was on our local radio station this morning spouting this line.

Vince on January 28, 2011 at 10:42 AM

You’re the exception. Most people want to have less government but not at their own expense but someone else’s.

In other words, they want entitlement reform but they still want to keep getting their checks too. They’re fine with it if it guts another person’s SS check and not their own.

When people are willing to wean themselves off of entitlements they receive, then we can have entitlement reform.

But until then, lame scare tactics like “grandma is going to starve” keep Americans from supporting welfare reform.

Conservative Samizdat on January 28, 2011 at 11:16 AM

TheRightMan on January 28, 2011 at 9:55 AM

You may be on to something! I think a good strategy for the GOP might be to use the Dem’s refusal to address entitlement reform as the reason they have to downsize or eliminate departments, bureaus, commissions and programs.
“Here’s the budget deficit, here’s the total debt and here’s what (entitlement) is responsible for. But since the Dems won’t allow us to fix (entitlement) we just can’t afford the Interior, commerce, education, HHS, HUD, transportation, energy EPA, departments…”

cartooner on January 28, 2011 at 11:17 AM

Take away THEIR lavish Pensions, put THEM on SSI and see how fast the rat bastids come to the table!

dhunter on January 28, 2011 at 11:28 AM

Unfortunately, in this day and age of 10-second soundbytes, that kind of logical, thoughtful discussion doesn’t register in the gnat-like attention spans of Americans too busy working three jobs to pay their taxes. “Throwing Grandma out on the street” is much more effective.

fossten on January 28, 2011 at 10:38 AM

I like to think the American people are smarter than the Democrats think they are. And that they would respond well to being talked to like adults instead of having everything sugarcoated and would welcome a rational discussion. But i’m an idealist so i’m probably wrong.

MFn G I M P on January 28, 2011 at 11:32 AM

The GOP had better go on the offensive with this one. We know the fascists are going to pull out the ‘granny’ card.

Yep. We need the GOP to scream with one voice “Social Security is BROKE! The system is broken and bankrupt. There’s no money in the Trust Fund!”

Stage a big show, throw empty money bags onto the House Floor, tell the public the truth — that the “trust fund” was raided by past Congresses to pay for everything and anything other than Social Security. That there’s no money, so we need to fix it NOW before partially collapse becomes total. And then demand the Democrats join them in making sure our elderly are REALLY taken care of instead of shoveling false promises at them.

EasyEight on January 28, 2011 at 11:38 AM

Present Harry Reid with this offer: your choice of SSA reform or the Dept. of Agriculture getting axed.

Its gotta be paid for, and chopping off the other limbs of government should be the exchange system.

Do that with Medicare/Medicaid, too.

In no time at all you will see ‘reform’ either ‘on the table’ or a much smaller federal government.

Force these bozos to choose.

The House and ONLY the House can do this.

ajacksonian on January 28, 2011 at 11:46 AM

Congresscritters should be forced to define where the government is required to provide “entitlements” in the first place. When I was born in the USA, the only thing I was entitled to was life, liberty, the pursuit of happiness, the Bill of Rights, and my rights and freedoms as enumerated in the Constitution. Social Security was never meant to be a retirement fund but only as a supplement to what people may have saved up. The simple fact is all entitlement programs are ways for poliltians to perpertually buy votes and strengthen the power of their incumbency — nothing more.

Bob in VA on January 28, 2011 at 11:51 AM

Just out of curiosity, if the social security had been tied to the stock market on Jan. 1st of this year, what would the gains have been…or the losses?
If they had done this in 2000, what would have been the gains vs. losses.
I would venture to say the gains would have been substantially more then the measly 2%.

right2bright on January 28, 2011 at 11:59 AM

Take away THEIR lavish Pensions, put THEM on SSI and see how fast the rat bastids come to the table!

dhunter on January 28, 2011 at 11:28 AM

Every congress person should have the same programs they have foisted on the “common people”.
Health care, SSI, pensions, taxes, franking privileges, travel, tie it to the private sector, and watch the private sector receive more incentives…

right2bright on January 28, 2011 at 12:02 PM

Entitlement reform “debate”… More of the same…

TEA Party: There’s a cliff there, we need to change the direction of our country now! We need to adhere to the principles, enshrined in our Constitution that made us great!

Republicans: There’s a cliff there, and we need to reach across the aisle and form a bi-partisan agreement. I’m sure our Democrat friends will see reason, and work with us…

Democrats: Republicans lie! They’re liars! Your children will be slaves under them! They’re crazy, insane TEA Party racists! Keep on going, we’ve got your back! We’re headed to the promised land!
(But before you go over the edge, vote for us!)

dominigan on January 28, 2011 at 12:38 PM

This is just too easy.

GOPers should say, “we are doing everything possible to avoid touching social security” — and then gut the rest of The Beast up, down, and sideways. Every time some Dem whines, “oh, that will kill my subsidies for left-handed cornhuskers of Inuit extraction growing fuzz on the back of amphibians — who, by the way, is unionized,” the GOP can turn around and say, “you beast! You’d rather starve grandma!”

We all know that entitlements have to go — keeping them is like swimming with 50-pound anvil. But the Dems’ big strategy is to pretend otherwise — so, fine, eviscerate the rest of the nonsense first…..and when that doesn’t do the job, turn to the American people and sadly say, “we tried, but now we’ve gotta do what we’ve gotta do.” The whole strategy only buys entitlements a couple of months — and the can’s been kicked down the road for decades. Plus, as an added bonus, the dynamic of using grandma against agribusiness, or grandma against propaganda organs, or grandma against other special interest groups, can leave the Statists fractured.

cthulhu on January 28, 2011 at 1:43 PM

The prospect of another half trillion in debt doesn’t even make these guys flinch.

Why would they care. People keep voting them in to steal other people’s money & give it to them.
Every vote for a Dem does this. Every vote for a(n) (un)fiscal RINO does this.

In other words, they want entitlement reform but they still want to keep getting their checks too. They’re fine with it if it guts another person’s SS check and not their own.

Conservative Samizdat on January 28, 2011 at 11:16 AM

See I look at SS & Medicare as a TAX. Bcs that is really what it is. A tax that I may, or may not get back. And I do NOT look at it as my pension in old age. Not like my parents & grandparents did.
So I think to wean people off SS who depended upon it as a pension, you need to implement a slow phasing out, i.e. lower amounts based on income & assets, higher retirement age etc.
For the rest of us poor schmucks, let us have our $$ back that we are paying as a TAX so we can invest in 401Ks etc.
Bcs really, if people did understand investment at all, they could think for a moment that they would get a much higher return on their $$ that why than by letting the govt steal it from you one day & give it to someone else the next.
And just think. Without this SS BS, we wouldn’t have to jump through all the stupid govt hoops, paperwork etc when we get old enough to retire.

Badger40 on January 28, 2011 at 2:23 PM

In fact, every young person in school needs to be brought up balancing checkbooks, taking basic accounting & investment classes etc throughout their school years until they graduate.
ONe class in your Sr year is not going to cut it.

Badger40 on January 28, 2011 at 2:24 PM

What we really need is to get a right-leaning Hollywood type to make a movie about what would happen in America without solving these financial problems. We need to get this into the popular culture.

trigon on January 28, 2011 at 2:31 PM

Every Republican, in every TV appearance, should tell the public exactly what’s going on:

The Democrats’ strategy is to play political gotcha. They’ll lie to Americans, telling them SS and Medicare are healthy—when everyone knows they’re not—-and that Repbublicans want to eliminate both programs and throw Grandma out in the snow. If you let them get away with it, it will be too late.

The GOP has a chance to defand their tactic ahead of time. With the media on the Dems’ side, it’s the only hope we’ve got.

jeanneb on January 28, 2011 at 3:32 PM

defand = defang

jeanneb on January 28, 2011 at 3:33 PM

Social security was probably the only good thing that has come out of socialist schemeing. It met a need of the day in which families taking care of their old was become less common, the lack of displine of most people to save for when they retired, or loss of saving and those who could not longer work becoming a burden on society. It also provided a sense of security to the working people that no matter what, they would not be penniless when they retired.

For all it was worth to the people contributing, it was worth more to the legistlators who created it. The legistlators knew that at the time, most of the people would not live to the retirement age and those that did would not live much beyond it. They saw the social secutity fund as a source of funding to pay for other programs, most of which were welfare and entitlement programs to cover needs other than retirement.

It might have worked if the ratio of workers to retirees had remained steady, medical advances had not increased life spans, and the baby boomers had not been born. I believe the baby boomers are the bigger of all the current problems. Not because they are now retireing but because they increased the contributions which inturned increased the expansion of social and entitlement programs. Those programs are scared cows. Retires will be sacrifices before the entitlements are cut. One only need to look at Obamacare to see intentions of reducing life spans and medical entitlements expendures of retirees.

Not well known is that Texas teachers are not part of the social security systen and do not pay the social security tax. When social security was created, they took the academic option and opted out. The retirement system they created in its place is almost a twin to the original system. There are some major differences. It is not a federal program, a plus in a state that is part of the union by treaty. It has a constitutional admendment that prohibts the state government from accessing and using the retirement funds as has happen with social security.

Teachers contribute by pay check deductions the same as everyone does Social Security, but it is a contribution to their retirement account rather than a tax. It is possible to add additional contributions to the retirement account. Retirement is age 65 but it is possible to retire earlier base on age and number of years of service. The pension amount is calculated on how much was contributed and how long it has had to mature, much the same as an annuity would be. Baby boomers are not the problem that the social security ponzi system is having. TRS does not pay for entitlements, does not pay for disablities and does not cover anyone that has not paid into the system.

The federal SS could be as solvent and focused as TRS if the politicians had not used it as a piggy bank to pay for welfare, entitlements and budget balancing.

Of course I am not an ecomomist and don’t see the whole picture and then there is the politics, but I propose a fix to the system, and one the socialist will chock to death a thousand times be fore swallowing it.

The young workers have no faith or hope that the social security they are paying for now will be there when they retire. The social security tas is just an additonal income tax that can not be written off. Create a new social security for them based on the Texas modle and a constitutional admendment to insure that the politicians have no access to their contributions. Make the fund openly accountable to the public.

The current workers who are too old to join the new system will need to have their pensions covered. In the current state of economy there are no easy answers on how to do that.

First Congress needs to be barred from further use of the older workers contributions to social security.

Additional funding for the program should come from the source that the orignal funds were loand to; the entilement and welfare programs by reducing them to free up funds needed by Social Security to cover retirement needs.

Reducing entitlement and welfare programs is not an easy task, but one that would be best done by the states. They should be freed of federal restraints and allowed to figure out how to best use the available funds and way to reduce the need for them.

State corruption is expected if the states are not accountable to oversite. This again is best done by the states themselves in a collective effort.

An added note. Congress can not let the Texas teachers go unpunished for withholding “their” money from them. They forbid any teacher who contribures to TRS from recieving any Social Security benefits. That is reasonalbe if they are not contributing. However if a teachers worked or works outside of the school system and social securtiy taxes were [aid, the federal government simply confiscates tax without compensation.

Franklyn on January 28, 2011 at 6:51 PM

beatcanvas is an evil person. We need to get rid of payment to parasites. after that, it is easy.

proconstitution on January 28, 2011 at 10:10 PM

Start raising retirement age in stages/brackets. Means testing to focus on those in need.

Dandapani on January 30, 2011 at 9:45 AM