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Life Arts    H1'ed 12/27/13

Sen. Warren Shifts Debate on Social Security and Medicare

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Dean Baker
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My guest today is long-time OpEdNews contributor, Dean Baker, macroeconomist and co-director of the Center for Economic and Policy Research.  

Joan Brunwasser: Welcome back to OpEdNews, Dean. You wrote a piece recently entitled The End of the Assault on Social Security and Medicare.  That assault has been going on for years. Don't you think you're being overly optimistic?

Dean Baker: The enemies of these programs are not about to give up, but I think we have seen a major turning point. It is now acceptable to serious Washington circles to talk about increasing Social Security benefits. This is a conversation we need to be having given how many workers are approaching retirement with nothing other Social Security to support them. 

I give Elizabeth Warren enormous credit in this respect. She has enough stature that her endorsement of higher benefits was enough to get this idea on the Washington political agenda. This isn't to take anything away from so many others who have worked for years to protect Social Security, people like Bernie Sanders, Sherrod Brown, Tom Harkin, Dennis Kucinich, and thousands of activists in Washington and around the country. 

Anyhow, this battle is not going away, but I think we have hit a turning point. In addition to Senator Warren's comments, we also have the reality of millions of baby boomers being added to Social Security and Medicare every year. These people can be counted on to be staunch defenders of the program. We also have been getting very good news recently on health care costs with sharply lower projections of Medicare and Medicaid expenses even for the peak years of the baby boomers' retirement. This is taking the scare out of the scary budget stories that the deficit hawks have been pushing.

JB: There's been a sort of Trojan Horse in this debate. Tell us about Third Way, Dean. 

DB: Third Way is one of a long list of organizations that have come into existence largely to push a Wall Street agenda. The head of Third Way, Jonathan Cowan, got his start in Washington running an outfit called "Lead or Leave" back in the early 1990s. This was a Wall Street funded group of young people who were insisting that politicians reduce the deficit by cutting Social Security and Medicare or get out of the way. 

As it turned out, most of the people in Lead or Leave left, but Cowan stuck around to head another Wall Street front group. Third Way is ostensibly about pushing new ideas that get around the orthodoxies of the left and right. Unfortunately, most of their proposals look like the orthodoxies of the right in new wrapping paper. They have been pushing for cuts to Social Security and Medicare since they came into existence. 

JB: What about that odious meme pitting the young workers against their grandparents? Where did it come from and how effective has it been? 

DB: I'm not sure how effective it is since it so much runs against most people's experiences, but the Wall Street gang is pushing this quite openly and getting a big assist from its supporters in the media. This is pernicious from so many different angles. I don't know about these folks' families, but in most families, there is substantial sharing across generations. If the grandparents are comfortable, and the grandchildren are not, then they help the grandchildren. Alternatively, if the grandparents can't make ends meet on their own, then they will be cared for by their children. More than one in ten Social Security beneficiaries lives in the same household with one or more grandchildren. It's hard to see how we benefit these grandchildren by taking away their grandparents' benefits.

This is also pernicious because it is a pretty blatant effort to hide the redistribution from the middle and poor to the rich that is going on right in front of our faces. The upward redistribution of income since 1980 is the equivalent of roughly a 30 percentage point increase in the Social Security tax. If this upward redistribution continues, then its impact on our children and grandchildren will swamp any impact associated with higher Social Security taxes.

And describing Medicare as a generous benefit to seniors is just dishonest. Medicare is expensive because we pay our doctors (almost half of whom are in the one percent), our drug companies, our medical equipment suppliers, twice as much as their counterparts in Germany, Canada, and elsewhere. These overpayments benefit the wealthy not our grandparents and parents. 


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JB: I agree that widening economic inequality is the real issue here. I highly recommend that our readers watch Robert Reich's new documentary*, Inequality for All. It explains the dangerous trend you mention so lucidly that even the economically illiterate will get it. 

Speaking of the press, where are they in all this? Shouldn't they be covering what you're talking about? 

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Joan Brunwasser is a co-founder of Citizens for Election Reform (CER) which since 2005 existed for the sole purpose of raising the public awareness of the critical need for election reform. Our goal: to restore fair, accurate, transparent, secure elections where votes are cast in private and counted in public. Because the problems with electronic (computerized) voting systems include a lack of (more...)
 

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