A Texan Reforming Social Security? How Precedented!

September 12th, 2011 at 8:52 am | 23 Comments |

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In an editorial in USA Today, Governor Rick Perry doubled down on his message that we need to reform Social Security to insure the security of future retirees.

Although I agree that the more pressing crisis is obviously jobs, I am also aware that the Social Security shortfall means it’s highly, highly unlikely that I will retire after a lifetime of either 1. paying the same payroll tax rate I have been for the past few years (even before the Obama payroll tax cut), 2. receiving the same benefits, structured the same way (hell, it’s possible I won’t get them at all!).

It’s a funny thing when my generation is being crushed by both the short-term crisis (which has exploded unemployment among the 18-29 cohort) and the long-term crisis (which will leave us with greatly reduced social insurance 40 years down the road).

So the more plans on the table with entitlements, whether it’s the Chilean Model, changing the way we index benefits from wage growth to inflation, or even raising the payroll tax cap; color me as Ross Perot: all ears. Frankly, I look forward to Governor Perry’s actual plan (as opposed to him just noticing that the math doesn’t add up).

However, what irked me a bit in Perry’s post was the suggestion that his rhetoric about Social Security was something new and innovative. Specifically, he said that “[f]or too long, politicians have been afraid to speak honestly about Social Security. We must have the guts to talk about its financial condition if we are to fix Social Security and make it financially viable for generations to come.”

Of course, there was this other Texan, fellow was actually President of the United States not that long ago, who also talked about Social Security reform. He boldly declared, in his 2005 State of the Union address that “I know that none of these reforms would be easy. But we have to move ahead with courage and honesty, because our children’s retirement security is more important than partisan politics.”

I’m all for political honesty. A little intellectual honesty wouldn’t hurt either.

PS: A message for the Governor. The reason everybody is ganging up on you now has a lot to do with what happened politically to that other Texan after he started talking Social Security. Just a heads up.

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23 Comments so far ↓

  • Watusie

    “A message for the Governor. The reason everybody is ganging up on you now has a lot to do with what happened politically to that other Texan after he started talking Social Security. “

    Just once I’d like to see someone on the right acknowledge the real problem. Bush was too stupid to handle the complexities of the office, and the result was 8 years of disaster for the country. Perry is quite obviously cut from the same cloth. Who cares “what happened politically to that other Texan” compared to the immense damage he inflicted on the country?

    • Smargalicious

      Watusie, right now we’ve got a community organizer/reparationist/half-term Senator/half-Kenyan/fatherless welfare constituency Chicagoan/reparationist in.

      I’d say that GWB beats him any day, and so will any Repblican on the ticket. And our present economy and debt confirms it.

      • Rob_654

        Looks like someone is suffering form OBS… Obama Derangement Syndrome.

      • Rossg

        I think Ronald Reagan said it best in his debate with then President Carter: “Well, there you go again!” If the quote is not absolutely correct, I apologize.

  • Elvis Elvisberg

    I am also aware that the Social Security shortfall means it’s highly, highly unlikely that I will retire after a lifetime of either 1. paying the same payroll tax rate I have been for the past few years (even before the Obama payroll tax cut), 2. receiving the same benefits, structured the same way (hell, it’s possible I won’t get them at all!).

    That’s really not true. Here’s the long-term SS problem:

    As Kevin Drum put it: “Social Security is a very manageable problem. It doesn’t need root-and-branch reform. The trust fund makes up Social Security’s income gap for the next 30 years, so all it needs is some modest, phased-in tweaks that cut payouts by a fraction of a point of GDP and increase income a fraction of a point. … Any plan for fixing Social Security requires only tiny benefit cuts and tiny revenue increases.”

    America hated Bush’s proposal to divert funds from Social Security because it was a terrible and dangerous idea.

    • Sinan

      Or we grow the tax base to include all income regardless of source and leave the rates as they are today…or grow the economy….or raise the cap….but what these folks really mean to say is that they have decided that we do not owe the fund for the trillions we have borrowed and they want to default on the debt owed SS…that is what they are really saying btw…

  • sweatyb

    Bush’s proposal for reforming Social Security would have had a better chance had it not been for the disaster that was every other thing his administration did or tried to do.

  • FosterBoondoggle

    Well, the problem will get a lot worse if the majority of the bloggers here get their way and the GOP ends up running all three branches of gov’t. We’ll end up with much lower long term economic growth, even more utterly valueless spending on the military and a greater divergence between a tiny class of super-wealthy (who “earned” every penny, unlike the mass of “takers”) and an enormous and growing underclass.

    But hey, Zac, you, like everyone else blogging here, will surely be part of that tiny upper crust, so of course you should plan and vote accordingly.

  • Graychin

    Removing the cap on Social Security taxable wages pretty much solves any shortfall in he Social Security trust fund (which, by the way, is invested in the safest investments on Planet Earth – US Treasury securities!)

    So Mr. Morgan is right – he might have to pay a bit more in taxes to keep his existing benefit and retirement age.

    Perry has shot himself in the foot over a non-issue. Shall we move on to the next problem now? This is getting tiresome.

  • armstp

    Zac,

    I think you need to do some homework on the real issues around Social Security.

    Your statement: “hell, it’s possible I won’t get them at all!” is a complete exaggeration and shows you have no idea what you are talking about.

    You do not know that tax payers will always continue to pay into SS? That means that there is a continual flow of revenue into SS, even if revenues no longer match expenditures. They will continue to mostly match expenditures.

    You do know that the SS is currently in a surplus and is not contributing one cent to the deficit (in 2010, 54 million people were receiving Social Security benefits, while 157 million people were paying into the fund)? It should remain in surplus until 2023.

    You do know that SS should have enough funds to meet 100% of payments through 2036?

    >SS assets in 2010 were $2.6 trillion, an amount that is expected to be adequate to cover the next 10 years. In 2023, total income and interest earned on assets are projected to no longer cover expenditures for Social Security, as demographic shifts burden the system. The trust fund would then be exhausted by 2036 without legislative action.

    What you do not seem to understand is that after SS is no longer in a surplus and the trust fund is exhausted, you will still receive most of what you put in.

    Most economists think that if we do absolutely nothing SS will still pay-out 75-80% of what people put in after 2036. This is just the difference between those that are receiving benefits are receiving at that time versus those paying into the system.

    There is no chance at all, zero, that you will not get your SS benefits “at all”! If nothing happens you will still always get at least 75-80% of your benefits (which is nothing when the average person today is only receiving about $13,000 per year from SS).

    In fact, a slight increase in payroll taxes could probably cover the 20-25% difference. And moving the retirement age up is no different then a cut in benefits or doing absolutely nothing. SS is not a huge problem.

    • Frumplestiltskin

      ouch, Armstp, it is going to take a while to wipe poor Zac off from underneath your shoe.

      • Zac Morgan

        Yes, I’m aware of the math. I was just off-handedly remarking something along the lines of “Maybe the program will be dismantled.” It was meant to be somewhat flippant.

        Thank you for your fact-checking though, I’m glad to know folks do read the columns! :)

        • Watusie

          Zac, surely there has never been any doubt that the commentators read the columns. The question is: do the columnists read the comments? And if they do, why do they turn a blind eye to the damage done by having unrepentant liars like John Vecchione in your midst? Or the impossibility of having intelligent conversation when prolific, racist trolls like Smarg are allowed to run a muck?

        • Nanotek

          “I am also aware that the Social Security shortfall means it’s highly, highly unlikely that I will retire after a lifetime of either.” ZM

          “You do know that the SS is currently in a surplus and is not contributing one cent to the deficit (in 2010, 54 million people were receiving Social Security benefits, while 157 million people were paying into the fund)? It should remain in surplus until 2023.” armstp

          “Yes, I’m aware of the math.” ZM

          really?

          good luck in law school

  • Smargalicious

    For all you liberal pukes out there, let me remind you that GWB did try to reform SS but the liberal Dims rebuffed him.

    Hats off to Perry who speaks the truth: SS is busted and we’ve got to fix it.

    The Ryan Plan is probably the best solution, IMHO.

  • Frumplestiltskin

    The reason everybody is ganging up on you now has a lot to do with what happened politically to that other Texan after he started talking Social Security. Just a heads up.

    Oh bullshit, Obama offered up entitlement reform during the debt crisis, did you really imagine he could get 4 trillion in savings without SS being in the mix? Has anyone, anywhere ganged up on him with regards to that? Gov. Goodhair said Social Security was a Ponzi scheme, that was simply an idiotic thing to say. A Ponzi scheme is pyramidal with all the money flowing to the top needing an ever increasing base. Social Security is just a modest wealth transfer via taxes from the young to the old. If it is a pyramid, it is a mighty small one since 2 1/2 workers support one senior, this unlike the past where children had to support their elderly parents, in todays world of 2 children this means 2 children supporting 2 parents.

    And Bush’s own plan was FUBAR. It was both modest in terms of total revenues, so would have made little initial difference, and idiotic in its design (yeah, turn tax dollars over to the financial services industry, they certainly are the most ethical and honest people in America). Democrats recognized it as getting the foot in the door and were right to oppose it, and even Republicans fled in terror of its horrendous designs.

    There are plenty of good reform proposals out there. Calling Seniors criminals standing on top of a Ponzi scheme pyramid is not a promising start from little Ricky.

    • Graychin

      After the 2008 meltdown, I bet that even Bush is glad that his scheme to privatize Social Security never got off the ground.

  • Watusie

    As an aside – if there was a picture of the current president making the gesture shown in the photo, Drudge and Fox News would running banner headlines screaming “Obama Throws Up Gang Sign”. Followed by demands for an apology and possibly congressional hearings.

  • Slide

    Zak: “Yes, I’m aware of the math. I was just off-handedly remarking something along the lines of “Maybe the program will be dismantled.” It was meant to be somewhat flippant.

    ahhhh… yes, just what we need, flippant remarks that are not based on anything resembling reality and which “low information voters” can gleefully repeat ad nauseum spreading your flippancy from moron to moron. (i.e. Death Panels, Get Your Government Hands off of my Medicare”, Obamcare’s take over of health care, Kenyan Anti-Colonial Mentality, PRODUCE THE BIRTH CERTIFICATE !, ooops).

    Oh, and as for “your generation” being “crushed”. All my sympathies. But my generation was being drafted to fight in a war on the other side of the planet. My father’s generation fought in a war in which 60 million died. My grandfather’s generation fought a brutal economic Depression that makes today look like boom times. Man up spunky and get over yourself.

  • » Rick Perry explains himself

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  • StreetSign

    Ponzi Perry will of course pivot in a general election. By then he will be saying, “the science about Social Security is not complete” so not to act right now. Notice he has already substituted the word “honest” for “provocative”.

  • Bebe99

    I’d like to hear some honest talk about Social Security. With a large amount of money still in the trust fund, why is there talk of a crisis, unless the government intends to default on it’s debt to the fund? This seems to be the unstated assumption. The government spent SS money in lieu of collecting enough tax revenue in other areas, and now that boomers are retiring, and the SS fund needed, they don’t want to pay the debt.