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OpEdNews Op Eds    H3'ed 12/4/17

Call to locked arms: Time to Organize a Mass Movement in Defense of Social Security and Medicare for All

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By Dave Lindorff

Rally at Minneapolis Social Security Office
Rally at Minneapolis Social Security Office
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Now that it looks like President Trump and the Republican Congress will succeed in ramming through the most regressive tax bill (not "reform" bill as the media keep slipping into calling it) in the history of the income tax, it's time to gear up for the real battle -- a battle that calls for not more lame Soros-funded, Democratic Party-led "resistance," but rather a deadly serious mass movement to defend and expand Social Security, Medicare, Medicaid and what remains of federal welfare assistance.

The Republicans have made it clear that their claim that this tax bill, in slashing taxes on corporations and the rich, will "pay for itself" through supposed higher economic growth is bogus and that the real goal is to, as conservative strategist Grover Norquist once put it, "to shrink government down to the size that we can drown it in the bathtub."

But make no mistake, the Republicans aren't talking about shrinking the biggest drain on the federal budget -- the military -- which consumes 54% of each year's discretionary budget. No, they're talking about cutting social spending, or in other words the key elements still left from Franklin Roosevelt's New Deal (the Social Security program) and Lyndon Johnson's Great Society (Medicare and Medicaid).

This campaign will be based upon a lie which the corporate media tend to repeat uncritically: that Social Security is "bankrupt" and more importantly that it is the main cause of the nation's $20-trillion deficit (soon to be a $21.5-trillion or higher deficit after the new tax law works its magic). In fact, Social Security benefits are, always have always been and will through 2019 continue to be fully funded by payments made into the program by past and current workers' FICA payroll taxes. The program has over its 81-year history contributed exactly nothing to the federal deficit. Rather, that deficit is the result primarily of the nation's massive military budget and endless series of wars and cold wars since the end of World War II, as well as to a gutless Congress that continually adds to to the red ink by refusing to fully fund government programs, preferring to borrow and push the costs onto future generations. (Truth to tell, Congress has since World War II cravenly used borrowing from the Social Security Trust Fund to finance US wars without having to raise income taxes to pay for them.)

The strategy for going after what Republicans scornfully (and Democrats ignorantly and lazily) deride as "entitlements" such as Social Security and Medicaid, are actually earned benefits that workers have, over their lifetimes, paid for with taxes taken from both their paychecks and from their employers, is to claim that the government just can't afford these programs anymore.

It's true that because of demographic changes and medical advances -- a declining birthrate, a major increase in life expectancy, and the arrival of a massive wave of so-called "Baby Boomers" born in the two boom decades that followed the end of World War II -- there is a bulge in the number of people reaching retirement age and eligibility for both Medicaid and Social Security retirement benefits. We know that is happening (the first Baby Boomers reached 62, the earliest age for claiming benefits, in 2007, and reached 66, the age of eligibility for what is known as "full retirement," in 2011). That bulge in elderly citizens claiming benefits will continue enrolling for retirement and Medicare eligibility until the period 2026 through 2034, when the last Boomer babies, born in 1964, will be reaching, respectively, either age 62 or age 70, the latter being the age one can file and receive maximum monthly benefit checks. (Then, left unsaid, is the reality that the shortfall problem will begin to go away as older retirees in the bulge begin to die off. In therwords the system isn't a "ponzi scheme" -- it simply has a cash-flow hiccup caused by the Boomer population bulge.)

Coincidentally, 2034 is also the year that, if nothing is done by Congress to bolster the Social Security Trust Fund in advance, the system as currently established under the 1936 SSA Act, will have to draw on just the FICA tax receipts from then current workers. That, we're told, would mean cutting benefits by some 21%. That's hardly going bankrupt, but it would be a hard blow for the elderly who depend upon only Social Security benefits to survive on, as they have no retirement savings and no pensions thanks to America's poverty-level minimum wage and the termination of most traditional pensions. But the countries of Europe, as well as Japan and Taiwan, all face these same issues and have dealt with them, keeping their much more generous systems solvent. Here the story is different.

Ten years ago, this temporary shortfall in the Trust Fund and this predictable extra draw on the system's resources because of the retirement of Baby Boomers could have been dealt with by a few simply tweaks, such as eliminating or even just raising the cap on income subject to the FICA tax (it's currently capped at the first $127,000 of earnings). But Congress has refused to deal with such a fix, and longer allegedly people's deliberative body waits, the more dramatic and costly that fix will have to be. Today, the shortfall could be eliminated by changing the law so that all income -- even multi-million-dollar incomes -- be made subject to the payroll tax, and by a few smaller tweaks, like adding a transaction tax of perhaps 0.25% to every short-term stock trade -- something many countries in Europe (where retirement systems are much better funded) do. Or the amount employers pay into worker accounts could be raised from the current matching 6.2% to 7.2% or 8.2%.

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Dave Lindorff, winner of a 2019 "Izzy" Award for Outstanding Independent Journalism from the Park Center for Independent Media in Ithaca, is a founding member of the collectively-owned, journalist-run online newspaper (more...)

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