Debunking the Latest Attack on Social Security

[Celerity]

https://prospect.org/economy/2023-10-31-debunking-latest-attack-social-security/

The political logic of Social Security is simple. Everyone pays in, and everyone gets a retirement benefit back.

For decades, the right wing has been warning that Social Security is on the verge of going broke and that old people are taking too large a share of the national income and wealth at the expense of the young. The grand old man of this fable was Peter G. Peterson, an investment-banker billionaire and former Nixon Cabinet official, who spent more than half a billion dollars of his fortune to create the Peter G. Peterson Foundation to propagate the myth. One of Peterson’s most insidious tactics was to try to persuade the young that Social Security would not be there for them when they retired.

Therefore, Congress should make it possible for younger people to take the money and run, by moving their Social Security taxes to fund private accounts (that would profit Peterson’s investment-banker chums). Bill Clinton was on the verge of opening the door to this caper when the Lewinsky scandal intruded. House Democrats, who held their noses and stood by their randy president, warned Clinton not to mess with Social Security. Clinton backed off. (Thank you, Monica.) By focusing on trumped-up generational conflict, Peterson and his billionaire allies could divert attention from the true divisions in America—divisions of class.



Lately, with Social Security heading for a deficit, we have been getting echoes of the same claims about the old doing too well at the expense of the young. The New York Times recently published a piece by Eugene Steuerle and co-author Glenn Kramon explaining how much richer the old are than the young (on average) and arguing that the remedy is for old people to work longer and to take less from Social Security. Steuerle’s ID says that he co-founded the Urban-Brookings Tax Policy Center. That’s true as far as it goes, but he was the longtime vice president of the Peter G. Peterson Foundation and one of its prime propagandists.

The Times then doubled down on these arguments with a piece by regular columnist Peter Coy, praising the Steuerle article and adding some misleading data of his own. Coy provides charts from a number of sources, showing that consumption increases with age. He concludes that “postwar policy has taken from the young and given to the old.” This is nonsense, but it is influential nonsense at a time when Congress will have to decide how to address the projected shortfalls in Social Security and Medicare, and House Speaker Mike Johnson wants to destroy both. For starters, one needs to look beneath the averages.

snip


related flashback to November 1996:

https://www.motherjones.com/politics/1996/11/end-social-security-we-know-it/

Democratic Senator Bob Kerrey of Nebraska is agitated. Surrounded by lobbyists at a private strategy session on Social Security, he fumes, “I don’t know what the president thinks, but I know it’s going to take presidential leadership.”

You might think Kerrey, a prominent Democrat, would want a re-elected President Clinton to go to the mat to protect Social Security, the crown jewel of Franklin Delano Roosevelt’s New Deal.

But in fact, Kerrey is the chief sponsor of legislation that would begin to “privatize” Social Security, and he wants Clinton’s support. Asked whether he’s worried about progressive Democrats mobilizing to defend Social Security, Kerrey bristles, “I’ll kick the shit out of any liberal who tries that.”

[Bayard]

1. Taxing the rich

A 2021 report from the White House's Office of Management and Budget and Council of Economic Advisers found that as of now, the U.S.'s 400 wealthiest billionaire families pay an average federal tax rate of 8.2%.

Compare and contrast:
The top individual marginal income tax rate tended to increase over time through the early 1960s, with some additional bumps during war years. The top income tax rate reached above 90% from 1944 through 1963, peaking in 1944 when top taxpayers paid an income tax rate of 94% on their taxable income.