Planned Austerity for America is the Wrong Solution for a Sick Economy

Barbara Burt, executive director of the Frances Perkins Center, named for the original architect of Social Security, was among multiple observers who worried that raising Social Security’s full retirement age would unfairly burden vulnerable Americans, while doing nothing to increase the national debt.

“There's no reason why Social Security should even be considered in this discussion, as it is a pay-as-you-go program by law, and thus has no impact on the deficit,” she said.

Still, as the debt panel’s Republicans and blue-dog Democrats close in on social entitlement programs, the stale joke uttered by Federal Reserve Chairman Ben Bernanke may resound with little laughter.

When asked, during his Senate confirmation, why he’d consider going after Social Security to help reduce the National Debt, Bernanke quoted bank robber Willie Sutton. He said,

“That’s where the money is.”

Flashback: Destructive Neoliberal Austerity (Excerpt)

November 23, 2010

thepeoplesvoice.org - Typical elitist boilerplate, proposing punishing measures on working households for greater enrichment for themselves. They include:

• Indexing Social Security benefits to life expectancy to reduce benefits as longevity increases; in other words, "incentiviz(ing) people to work longer to compensate for lower benefits;


• Eliminating annual cost of living adjustments (COLAs), justified by claiming inflation is overstated when, in fact, it's higher, especially for retirees facing costly medical expenses;


• Over the next 38 years, "rais(ing) the amount of wages subject to payroll taxes (now capped at $106,800) to cover 90% of all wages" — suggesting bonuses, capital gains, dividends, and other executive compensation be exempt, for many, the lion's share of their earnings;


• Instituting a one-year payroll tax holiday for workers and employers, Social Security to get no funding for 12 months to save an estimated $650 billion; supposedly, future general revenue will replenish the shortfall;


• Cutting Medicare benefits, including by higher Part B premiums (from 25 to 35% of total program costs), co-pays, and fees for outpatients services; also establishing privately owned, lower-cost, health insurance exchanges to be given competitive cost advantages over Medicare — a de facto Trojan horse to replace it eventually, leaving recipients at the mercy of predatory insurers that profit by denying expensive care;


• By 2018, cutting Medicaid by the amount it grows faster than GDP, providing less care to the indigent, perhaps eventually none;


• Shielding insurers and drug giants from malpractice lawsuits by making it harder to file them; then capping non-economic and punitive damage awards, suits to be adjudicated in "specialized malpractice courts," that may, in fact, be civilian equivalents of military commissions, used to deny so-called "terrorists" due process and judicial fairness;


• Instituting a 6.5% national sales tax (called a Debt Reduction Sales Tax — DRST); like European VATs (value added taxes), they'll hit ordinary people hardest and can be incrementally raised anytime to hit harder;


• Simplifying the tax code to two brackets (15 and 27%), favoring the rich; regressively cutting the top personal and corporate tax rate from 35% to 27%, claiming it "will make the tax system more progressive;"


• Eliminating home mortgage and most other deductions and credits;


• Taxing employer provided health insurance to encourage less comprehensive coverage and make healthcare cost more;


• Freezing non-defense discretionary spending for four years, then capping it according to GDP growth — a prescription to slash social benefits, perhaps eliminating them later;


• Freezing "discretionary" defense spending for five years, then capping it with GDP growth; doing it, among other ways, by "reforming military health care;" in other words, cutting veterans' (and perhaps active duty forces') health benefits; and


• Various other schemes hitting working households hardest.

Appointees, National Commission on Fiscal Responsibility and Reform:

Presidential Appointments: The President appointed former White House Chief of Staff Erskine Bowles and former Senator Alan Simpson as co-chairs of the Commission. He also appointed to the panel: Andy Stern, President of the Service Employees International Union; Dave Cote, CEO of Honeywell; Alice Rivlin, former Vice-Chair of the Federal Reserve and former Director of the Congressional Budget Office; and Ann Fudge, former CEO of Young and Rubican Brands.

Senate Majority Leader Harry Reid's Appointments: Richard J. Durbin of Illinois; Max Baucus of Montana; and Kent Conrad of North Dakota.

Senate Majority Leader Mitch McConnell's Appointments: Tom Coburn of Oklahoma; Judd Gregg of New Hampshire; and Michael Crapo of Idaho.

Speaker of the House Nancy Pelosi's Appointments: John Spratt, Jr. of South Carolina; Xavier Becerra of California; and Jan Schakowsky of Illinois.

House Minority Leader John Boehner's Appointments: Paul Ryan of Wisconsin; Dave Camp of Michigan; and Jeb Hensarling of Texas.

Critics worry that the debt panel includes too many deficit hawks — both Republicans and Democrats — and that even if they concur on some tax hikes desired by the President, the potential entitlement reductions, such as by raising the age for full Social Security benefits, would inflict disproportionate harm on lower- and middle-income Americans most in need.