Dumping Reagan - The New GOP
1983? That was then. This is NOW.
1983: Ironclad commitment to Social Security
It's not unreasonable for people who paid into a system for decades to expect to get their money's worth--that's not an "entitlement," that's honoring a deal. We as a society must also make an ironclad commitment to providing a safety net for those who can't make one for themselves.
On April 20, 1983, Reagan signed a bill to preserve Social Security. At that bill signing, the president said words every Republican should heed:
"This bill demonstrates for all time our nation's ironclad commitment to Social Security. It assures the elderly that America will always keep the promises made in troubled times a half a century ago. It assures those who are still working that they, too, have a pact with the future. From this day forward, they have one pledge that they will get their fair share of benefits when they retire."
POLITIFACT: George W. Bush and the Social Security Trust
2020 -- Reserve the date. It will be "payback" time, and our names are on the note.
Now, there have been plenty of claims made by various progressive voices that Bush W. "extracted" money from the Social Security Trust to pay for his schemes without raising taxes. This is so serious that it deserves a long, cold look based on the facts. The following POLITIFACT article is full of facts, and at the end POLITIFACT ruled that the precise claim that: "Bush "borrowed" #1.37 Trillion to pay for his tax cuts for the rich and the war in Iraq and never paid it back." was, in fact, "MOSTLY FALSE."
However, the "MOSTLY FALSE" verdict was issued exclusively for this claim. Everyone will relieved indeed to know that the actual amount was only a measly $700 Billion.
Did George W. Bush 'borrow' from Social Security to fund the war in Iraq and tax cuts?
By Linda Qiu on Monday, August 3rd, 2015
[All links in the POLITIFACT article remain enabled.
Visit the original article here POLITIFACT]
Evoke George W. Bush, his income tax cuts and the war in Iraq, and you’re sure to arouse some liberal ire. Suggest that Bush financed those projects by plundering Social Security’s retirement coffers, and you’ve got yourself a popular meme.
"Next time a Republican tells you that ‘Social Security is broke,’ remind them that Pres. Bush ‘borrowed’ $1.37 trillion of Social Security surplus revenue to pay for his tax cuts for the rich and his war in Iraq and never paid it back," reads one version of the meme, which appeared on the Facebook pages of Occupy Democrats and Americans Against the Republican Party.
A number of readers asked us to check out the claim, so we decided to take a look. The meme seems to extrapolate a point made in a 2009 newsletter post by Allen W. Smith, a professor of economics emeritus from Eastern Illinois University.
"Bush spent every dime of Social Security surplus revenue that came in during his presidency. He used it to fund his big tax cuts for the rich, and much of it was spent on wars," Smith wrote.
The meme’s claim and Smith’s argument circle back to how Social Security funds are managed. Experts say words like "borrow" and "raid" don’t really capture how the system works.
Bonds, ‘borrowing,’ and Bush
For about 50 years, Social Security was a "pay-as-you-go" system, meaning annual payroll taxes pretty much covered that year’s benefits checks. Then in 1982, President Ronald Reagan enacted a payroll tax hike to prepare for the impending surge of retiring baby boomers, and a surplus began to build.
By law, the U.S. Treasury is required to take the surplus and, in exchange, issue interest-accruing bonds to the Social Security trust funds. The Treasury, meanwhile, uses the cash to fund government expenses, though it has to repay the bonds whenever the Social Security commissioner wants to redeem them.
In this broad sense, Bush technically did "borrow" Social Security surplus to pay for the income tax cuts and the Iraq war. But even if we use this loose definition of the word, we still run into a few issues.
First, the amount of surplus Bush "borrowed" is actually around $708 billion, a little more than half of the $1.37 trillion claimed in the meme. While around $1.52 trillion in bonds was added to the trust funds from 2000 to 2008, the Treasury only has access to the cash revenue collected every year, not the interest accrued on the entire surplus.
Second, Bush didn’t exclusively spend on the war, which has an estimated cost of $1.7 trillion. Other big costs include the financial bailout in 2008.
"Since all money is green, the cash that the Treasury received from the Social Security surplus was not earmarked for any specific government program," said Andrew Eschtruth, a former Social Security research analyst at the U.S. Government Accountability Office and current spokesperson for the Center on Retirement Research at Boston College.
The larger question is whether the existence of the surplus influenced Congress’ spending decisions, but Eschew pointed out that no one can prove what was on the lawmakers’ minds.
"The idea that lawmakers consciously thought, ‘We can only go into Iraq because of the surplus’ is a stretch," he said.
Third, if we characterize the entire trust fund system as the government borrowing from Social Security, Bush is by no means the only debtor.
"That’s how the Social Security trust fund has worked ever since the program started, so there’s no point in focusing on Bush," said Andrew Biggs, an economist at the conservative American Enterprise Institute. "You could focus on pretty much any president."
That being said, some nonetheless contend that Bush’s case is unique. Smith, a self-described progressive, told us in an interview that the tax cuts wouldn’t have been possible without the surpluses funded by payroll taxes.
Maintaining payroll taxes (everyone pays the same rate) while cutting income taxes (rates are much higher for the rich) effectively streams the money from lower- and middle-income earners into the pockets of millionaires, according to Michael Hiltzik, a financial reporter with the Los Angeles Times.
"Bush was able to do whatever he wanted without raising income taxes," he said.
Replenishing the coffers
As for the claim that Bush "never paid back" what he reaped, experts told us that doesn’t really make sense.
The meme’s language implies that Bush bailed on a loan, but no one was really pressing him for repayment. During his presidency, the Social Security trust fund was still running surpluses (which stopped in 2010), enough to cover the benefits checks, and had no need to cash in their bonds (which won’t happen until 2020).
The larger question posed by critics of the trust fund system is if and how the government will provide cash for all the bonds, now totalling $2.8 trillion. These bonds are a special class of securities unique to the Social Security fund that can’t be sold. Because they’re not-marketable, some contend that they’re "worthless IOUs."
"These special-issue things, they’re all in a filing cabinet in West Virginia. That’s the entire trust fund," Smith said in an interview. "There’s no trust, and there are no funds."
Experts told us there's no question that the Treasury will repay the Social Security surplus (including what was accumulated during the Bush years) when the trust fund starts redeeming the bonds in 2020. Otherwise, says Hiltzik of the Los Angeles Times, "you’d have to march 40 years worth of Treasury, Labor, Health and Human Services secretaries, Social Security commissioners, and public trustees -- Republicans and Democrats -- into prison."
To Paul Craig Roberts, the assistant Treasury secretary under Reagan, the bonds are harbingers of more tax hikes and more public borrowing to come.
Biggs said the bonds are like money that we owe ourselves. "The bonds are worthless to the taxpayer as a way of actually paying for Social Security, since those bonds must be paid off by the taxpayer," he said.
Hiltzik, though, dismisses these concerns as alarmism. He pointed out that taxpayers who would foot most of the bill for surplus repayment are those who pay higher income tax rates and who reaped the benefits of the Bush tax cuts. As for borrowing to cover the bonds, doesn’t the meme suggest that’s what the government's been doing the whole time?
"You’re not actually increasing the public debt. If you have to redeem $100 million bonds and you do it by borrowing $100 million, the net change is 0," Hiltzik said.
A Facebook posts says, "Bush ‘borrowed’ $1.37 trillion of Social Security surplus revenue to pay for his tax cuts for the rich and his war in Iraq and never paid it back."
By law, the Social Security surplus is converted into bonds, and the cash is used by the Treasury to pay for government expenses. If we agree that this is "borrowing," every president since 1935 has done it, to fund all sorts of things. Even if Bush "borrowed" from the surplus, the amount is more like $708 billion, and the borrowing wasn’t earmarked for a special purposes.
As for not "paying back," the bonds won’t need to be repaid until 2020.
Overall, the claim is misleading and confuses many points. So we rate it Mostly False.
Now, MeanMesa visitors can think about the POLITIFACT article -- especially the part about having to "cash out" Bush's "special Treasury notes" in 2020. The "war money" has been spent. The humongous "tax cut" money is still being spent.
When Treasury faces the task of paying back the bonds, we need to remember where the Treasury will get the money to do that. That will be us. Further, there will be a new President in 2020.
Maybe this will be high on his or her "to do" list. Maybe not.
|Why Paul Ryan claims that it is ABSOLUTELY NECESSARY |
to starve Grandma. [ALTERNET and Daily KOS]
The "horrendous Obama Administration debt" now facing the new Republican overlords actually had very little to do with anything that occurred during Obama's term. For embarrassingly greedy nobodies such as Paul Ryan to now, suddenly, claim that the only possible solution is to cut "entitlements" is, essentially, treason.
Of course, none of this will represent any sort of problem -- perhaps something "ethical" or even "moral" -- for the "fact free" lunatics now in command of the country. Also, by the way, there is currently NO Supreme Court in case anyone has forgotten [4 Fascist Supremes, and 4 Regular Supremes. The GOP hardliners in the Senate blocked Obama from completing his usual Constitutional duty to appoint a new Justice after Scalia died.].
The Republican Healthcare Plan:
Gut Medicare and Blame Obama
By Charles P. Pierce, November 11, 2016
[Links from article remain enabled. Visit the original here ESQUIRE]
By Charles P. Pierce, November 11, 2016
[Links from article remain enabled. Visit the original here ESQUIRE]
Ladies and gentlemen, introducing Paul Ryan.
If you weren't so sick, you could just starve to death, Grand Ma.
My Walk To Work, November 11, 2016: Part Two.
Every few days, when I walk to the Blog Cave, I stop at a local McDonald's for one of their Triglyceride Festival breakfasts. Every time I've done this, there has been a table full of elderly gents sitting at the same table by the side door. (Yeah, elderly. They're older than me.) All of them wear baseball caps. One of them always wears a cap that marks him as a "Vietnam Veteran." Sometime last summer, I noticed that a couple of them had taken to wearing those familiar red baseball caps that told the world that the elderly gents were ready to Make American Great Again. Presumably, most of these guys, if not all of them, benefit from Medicare.
Gentlemen? May I introduce you to Paul Ryan, the zombie-eyed granny starver from the state of Wisconsin? Jonathan Chait in New York would like to explain to you all how you are about to get bamboozled into a worse life than you have right now.
"Your solution has always been to put things together, including entitlement reform," says Baier, using Republican code for privatizing Medicare. Ryan replies, "If you're going to repeal and replace Obamacare, you have to address those issues as well. … Medicare has got some serious issues because of Obamacare. So those things are part of our plan to replace Obamacare."
Yep. That's what's going to happen to your healthcare, gentlemen. And he's going to blame the black guy for it, and my money's all on you guys buying that wholesale. It is, of course, a blatant lie, because Paul Ryan is the…say it with us now…Biggest. Fake. Ever.
The Medicare trust fund has been extended 11 years as a result of the passage of Obamacare, whose cost reforms have helped bring health care inflation to historic lows. It is also untrue that repealing Obamacare requires changing traditional Medicare. But Ryan clearly believes he needs to make this claim in order to sell his plan, or probably even to convince fellow Republicans to support it.
One of the few positions on which the President-elect was marginally consistent during the campaign was that he would not touch entitlements. However, his economic plan was so stuffed with vague nonsense that I am fairly sure this is what's going to happen: Ryan will come up with some bullshit "stimulus" program that is larded with tax-cuts and other goodies, and he will offer it to the White House in exchange for his life's dream of shredding what's left of the social safety net. He will put together a big pot of offal, slap a label reading "Medicare" on it, and then peddle it to the suckers.
The guys at McDonald's will find themselves choosing between cat food and insulin and it will be Barack Obama's fault. Lovely.
A Closing Note from MeanMesa
However, after listening to the Short Current Essays Command Center podcast of Randi Rhodes for a few sessions, the fire flickered faintly and then burst into a new flame with almost all of its previous, robust rigor.
Although there is still a lingering sensation of sheer hopelessness flitting about in this subconscious back ground, MeanMesa has reached a new state of revived determination to do all that is possible to make things...well, better. Trump and his fascists have their sight set on vulnerable Americans like this old blogger, but until they manage to complete their fevered mission, Short Current Essays should have plenty to say about it.
Watch this blog.