SOCIAL SECURITY: THE FIGHT AHEAD

by Robby Stern

The “compromise “ that was struck by the Obama administration and Republican leadership, and for which most Republicans and far too many Democrats voted, has done significant damage to Social Security. The “one year” 2% reduction of the worker contribution to the Social Security Trust Fund and the decision to reimburse the Trust Fund from the general fund has demonstrated the willingness of our President to use Social Security in political horse trading.

The damage to the integrity of the program is extensive and permanent since Social Security will no longer be considered the “Third Rail”. It is now, as a result of this deal, just another government program that can be part of what is considered a “reasonable” political compromise.

Some proponents of the compromise argue that the reduction is only for one year and the Trust Fund will be reimbursed. That argument is lacking in political reality. It is unlikely that Congress will allow the tax reduction to lapse in 2012, an election year. The argument that Social Security will be reimbursed is hollow. Congress will simply robbing Peter to pay Paul by cutting other essential social programs to provide this reimbursement? Meanwhile, Social Security simply has become, for the first time, another bargaining chip.

In listening to PSARA members it is clear that many consider this compromise an act of political betrayal. Many thought the election of President Obama would herald a time of progressive policies and that Social Security would be immune from the attacks of the former administration. When President Obama appointed Timothy Gietner and Lawrence Sommers, two Wall Street insiders, many of us were concerned that the foxes had been put in charge of the hen house and the Wall Street agenda for privatization of Social Security funds might be revitalized. Nevertheless, many of us significantly modulated our criticism as we wanted to give the newly elected President the benefit of the doubt.

Sadly, the month of December, 2010, has provided those of us who are committed to the protection and improvement of Social Security a bitter dose of reality. First, President Obama’s Fiscal Commission issued recommendations that would do severe damage to Social Security recipients. While the recommendations failed to get the necessary votes to force a “fast track’ vote, they nevertheless did receive bi-partisan support. These recommendations promise to be part of the debate that is coming in the next Congressional session over deficit reduction.

Then, President Obama, negotiated the reduction in the worker share of the Social Security tax for 2011, as part of a package that extended Unemployment Benefits for 13 months, extended Bush era tax cuts and tax credits, and reduced the estate tax that was scheduled to return to the pre-Bush era tax rates..

A statement from the Strengthen Social Security Coalition, a national coalition of 250 organizations said in part, “Using treasury funds to pay for a payroll tax ‘holiday’ is unprecedented in Social Security’s 75 year history – and dangerous. Social Security is very popular with the public because workers pay dedicated contributions and count on the promise of Social Security to be there when they retire, become disabled or die, thereby leaving their benefits to their survivors.”

The statement goes on to say, “The debate over the Bush tax cuts illustrates how difficult it is to return taxes to original levels once tax cuts have been enacted, even when the law includes an expiration date. This will likely be the case again in 2011 as the payroll tax ‘holiday’ expires and the 2012 election campaign begins. Restoring the payroll tax to 6.2% from the reduced rate of 4.2% under the ‘holiday’ will constitute a 48% increase in the payroll tax of every worker. By comparison, the debate over extending the Bush tax cuts involves just a 13% increase to income over $384,000.”

Clearly, the “compromise” has seriously threatened the long term funding for Social Security. We must now gear up for an extended fight to preserve this program at a level that will provide its recipients the income they need to lead lives of dignity. It is truly disheartening that an administration for whom we had such hope has proven itself to be, at best, unreliable and at worst in the pocket of Wall Street interests who would like nothing better than to see Social Security funds invested in Wall Street or else wither on the vine.

We recognize there was a desperately needed extension of unemployment benefits that was intended to make the “compromise’ somewhat attractive. Nevertheless, we are disappointed that Senators Murray and Cantwell voted for the “compromise” as did Rep. Rick Larsen and Rep. Norm Dicks. The poison pill attack on Social Security made this “compromise” unpalatable. We express our gratitude to Reps. McDermott, Inslee, and Smith for their recognition of the damage this “compromise” will do to the majority of people in our country who rely on Social Security or will rely on Social Security in the years to come.

The next step in this battle begins when the new Congress convenes. We can be sure that the new House leadership will move to raise the retirement age and make other cuts to Social Security as part of their deficit reduction proposal . They will try to frame it as cutting Social Security to save it.

A significant group of Democrat and Republican Senators have publicly announced their support for the Commission recommendations. PSARA will join a national effort beginning early January, 2011, to urge President Obama to make no offers of compromise or concession related to Social Security in his State of the Union address. Such a statement will do enormous damage. We will need the help of our Congressional Representatives and Senators, major organizations in our state and all of us individually calling on the White House to do no damage during the State of the Union address.

Our fight promises to be long and demanding. Please get ready to be very active!