Looks like Randy Hultgren is finally trying to make good on some of the promises and agendas he offered at an Oswego Town Hall Meeting the summer of 2012 when he said “I’m not planning on Social Security. Most people my age aren’t planning on Social Security.” At the time, Hultgren actually paused a few moments and looked around for cheers which did not come forth. His pronouncements fell on dumbfounded ears–people could hardly believe he was attacking Social Security.
But now, over a year later, Hultgren has found about fifty other like-minded people in the House of Representatives. After joining the Suicide Caucus in August to shut down our government in their effort to defund Obamacare, Hultgren has additionally joined with fifty other Republican House members to demand Boehner use the government shutdown to negotiate Social Security reductions.
In a letter drafted by Wisconsin Representative Reid Ribble, and signed by Hultgren and 49 other House Representatives, the signers demand Boehner use the “ongoing fiscal discussions” and “this window of opportunity” (i.e. government shutdown), to address the “long-term viability of Social Security.” The letter has four demands, three which would clearly lower retiree benefits. Hultgren, Ribble and the rest, call for upping the retirement age, cutting retiree benefits by changing calculations, and for using ‘means testing’ for recipients.
To see how the American Association of Retired Persons view these ideas, check out their website. Just a quick spoiler alert–they would not like these ideas at all. Their website has a wealth of information related to issues important to senior citizens, their children, and anyone who expects to become a senior citizen at some point in their lives–which is–I do sincerely hope–all of us.
Republicans have long framed their discussion about Social Security in the language that Social Security contributes to the nation’s debt–which is not true. Currently the Social Security Trust Fund has a $2.7 trillion surplus–yes that’s $2.7 TRILLION. The fund itself is not part of our nation’s budget and does not contribute to our nation’s debt. It actually contributes to our nation’s economy.
Social Security adds $1 trillion to our economy each year. Every $1.00 in Social Security money paid out generates $2.00. This is on the AARP website. And according to Jon Perr of the Daily Kos, “…the program provides 40% of the cash income for retirees, reducing the poverty rate among the elderly from 43% to just 9%.”
Aside from not contributing to our nation’s debt and contributing to our nation’s economy, SOCIAL SECURITY IS NOT RUNNING OUT OF MONEY. David Cay Johnston’s asks us all to consider “[w]hich federal program took in more than it spent last year, added $95 billion to its surplus and lifted 20 million Americans of all ages out of poverty?”
At the current funding status, even with paying out all benefits, the amount in Social Security will CONTINUE to GROW until 2021. Johnston explains it is only by 2033, if still funded at the current level, that Social Security will begin to pay out (by about 25%) more than it would be taking in.
So while it’s pretty clear that at some point in the future, the issue of Social Security funding should be addressed, it is certainly no emergency. And it is certainly no reason for holding our government ransom in a continuing shutdown, as Hultgren and the rest of the Ribble contingent demand.
But here’s where the fourth demand comes in. In the Ribble Letter, the fourth demand is to move toward “…gradually restoring the cap on wages subject to FICA to its Reagan era levels.”
This wording itself presents somewhat of a conundrum. There are two dramatically different definitions of “Reagan era levels.” Does Hultgren, Ribble and his contingent mean to “restore” FICA deductions to the same 1980 actual dollar amount present during the Reagan era? If that is what they mean, that would be a dramatic reduction in money available for Social Security. And a great way to completely undermine Social Security and force everyone into Wall Street investment accounts–long a dream of Wall Street and the Republican Party.
But if they mean restoring the tax to the same percentage of wages that were taxed during the Reagan era, while that would be a small tax increase on somewhat higher wage earners, it would mean a dramatic increase to the Social Security Trust Fund. That would mean RAISING the tax to 90% of wages rather than the current 83% of wages.
According to Johnston, “If we went back to the Reagan standard, the Social Security tax would apply to close to $200,000 of wages this year instead of $110,000.” That one change alone would bring billions more dollars into the Social Security Trust Fund–ensuring its viability for decades and decades. Many progressive groups have long advocated for raising the cap on Social Security taxes, seeing it as the secure path to ensuring Social Security. But it’s really odd to consider that idea may also be coming from Republican circles generally advocating the complete opposite. So what’s up?
The Ribble Letter has three demands to cut Social Security reimbursements to senior citizens. But this fourth demand either decimates the Social Security Trust Fund with a reduction in FICA taxes or it demands a tax that dramatically increases the size of the Social Security Trust Fund.
Hum … Sounds a little fishy.
Republicans in general have long advocated privatizing the Social Security Trust Fund in order to allow Wall Street investors access to the very sizable account. In its current form, Social Security is required by law to be invested on non-marketable securities issued and guaranteed by the federal government. It cannot be privatized and invested on Wall Street.
It would be a huge victory for Republicans and their financial contributors to reduce Social Security payments to vulnerable senior citizens while at the same time dramatically increasing the funds available for privatization of Social Security. Perhaps their next ransom agenda?
It would also be a huge victory for Republicans to decimate Social Security (long a program they have argued against) and thereby delivering significantly more citizens into alternative Wall Street investment accounts.
Hultgren’s primary campaign contributors come from the financial services industry. And in checking out the information regarding his campaign donors, it’s pretty clear individual contributions have decreased and financial services contributors have increased. Check it out at OpenSecrets.org.
Hmm … remember when Wall Street crashed our economy?