The Good News About Social Security

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Democrats created Social Security in 1937 over the usual Republican opposition. People with jobs put money in while they work and take money out (usually more than they put in) when they retire. The program has been in the news lately because President Biden pointed out that at least one leading Republican had suggested Social Security and all other government programs should cease to exist every year unless the president and Congress agreed to renew them in some form or other (he seems to have backed away from that position after more people heard about it).

Since Social Security and its finances are a big deal, it helps to know the truth. Josh Marshall of Talking Points Memo explains:

Political reporters remain way behind when it comes to seeing through the flimflam of Republicans’ schemes to cut or dismantle Social Security. [Too often,] press accounts of the financing of the program [aare] trapped in Republican talking points. In X number of years, we hear again and again, Social Security will become “insolvent.”

But this isn’t true. At best, it’s a totally misleading way to describe how the federal government pays for things.

Social Security and Medicare are funded (almost entirely) by a payroll tax of approximately 15% on wage and salary income up to a statutory cap, which currently stands at $160,200. That tax is split between the employer and the employee. It funds the two programs. A couple generations ago, Congress increased the tax to build up a surplus to pay for the benefits of the Baby Boom generation. That’s the “trust fund.” Social Security “lent” that extra money to the rest of the federal government, i.e., it purchased government bonds. Eventually the Trust Fund will run out of bonds to cash in. The current estimate is that it will happen in the mid-2030s. This is when Social Security supposedly becomes “insolvent.”

But that’s a meaningless term. The federal government has to pay its promised benefits. If they can’t all be paid out of payroll taxes, the remainder can and will be paid out of general revenues. This was actually the assumption about what would eventually happen back when the program was founded almost a century ago. (Look it up.)

This doesn’t mean it’s a non-issue. It means there will be a funding gap and that’s a budgetary issue to be resolved. It’s not “insolvent.” That’s just scare talk. Now, how can the funding gap be resolved? You could just pay the remainder out of general revenue (the general tax base of income, corporate, capital gains and other taxes that are not tied to any specific program). But there’s another more straightforward approach: just rejigger the payroll tax.

You could simply raise the payroll rate. But that’s a bad idea….Payroll taxes are really regressive. You’re paying about 7.5% on the first dollar you make up to $160,200. No deductions or anything. Every dollar. Most economists would say you’re actually also paying the employer side too because that’s money that goes to the cost of employing people that would otherwise go to the employee. So there’s a good argument that low- and middle-income workers are paying a flat tax of 15% on every dollar they make. It makes no sense to raise that rate. The simpler and more equitable solution is just to raise the cap.

It gets raised every year by a calculus tied to cost of living and related measures… But I mean raise it to a higher level, beyond the annual increase. There are various ways to do this. You can just raise the number from $160k to say $200k or $250k. Or, perhaps more equitably, you could leave the cap at $160k and have it kick in again starting at $500k. That way you put most of the burden on very high income earners.

Obviously there are a limitless number of ways you can do this. The point is that there are really basic budgetary changes that solve the problem — the problem being that there is a larger share of retirees to younger workers. (Another way to help with this problem is to welcome more working-age immigrants.)

Of course, you could just start cutting benefits — as Republicans want to do. But that’s a values question more than an economics one. Who should carry the burden of this shortfall, seniors on fixed incomes or the people getting rewarded most in the current economy? Income inequality is a key part of this equation on every front, both as a matter of equity and adjusting Social Security finances and because rising income inequality has itself weakened Social Security financing. As more income has been pushed into the higher tax brackets, more income has been removed from the Social Security tax base.

The global point is that there’s no “insolvency” or “bankruptcy.” That makes the whole thing sound like some looming crisis, which it’s not.

For example, Senators Elizabeth Warren and Bernie Sanders have proposed changes that would keep Social Security fully funded for 75 years (and increase benefits).

More from Mr. Marshall:

Since we’re talking about whether Social Security survives for future generations, we should start with understanding the various ways the program’s foes propose to limit or get rid of it. Since Social Security is one of America’s most popular government programs, virtually no one says they want to get rid of Social Security…. Plans to cut it or phase it out entirely are almost all framed as ways to “improve it” or “save” it….

For years, the Republican policy of choice was converting Social Security into a 401k-like system of private accounts. This was billed as a way to avoid the program’s inevitable “bankruptcy” and make it “better”…. This is what President Bush tried and failed to do in 2004 and 2005. There’s nothing wrong with a 401k….But it’s not Social Security. [A] 401k places the risk on the individual rather than socializing the risk, which is the heart of what social insurance [like] Social Security is….

The other approach Republicans look toward is to leave the structure of the program more or less as it is and just reduce the benefits. There are three different ways benefit cuts are usually proposed…

The first is simply to increase the age of eligibility [since] people live longer than they did when the program was first created… Regardless, it’s still a cut. Fewer years of eligibility means fewer total dollars you receive. It also means needing to work longer [note: which is fine for people in Congress but not so great if you work in construction or some other physically taxing job].

The second approach is to change the formula that determines the annual increases that allow security benefits to keep up with the cost of living… There is actually some real debate about whether the current cost of living formula is the most “accurate” way to calculate cost of living and purchasing power. It’s highly, highly technical, but the technical issues are mostly beside the point… It’s still a cut from the current formula. A beneficiary in 2060 will get a smaller check than they would have with the current system…

The third broad category is what’s called “means testing”. You save money by seeing how much people really need the money when they retire. Advocates of this approach point out that Bill Gates doesn’t need his Social Security check….In practice, of course, [means testing would have] to apply to a lot more people than  Bill Gates… Otherwise you’re not saving any money….

This very broad overview leaves out a lot of detail, and not just technicalities. Social Security supports a lot of people across the age spectrum [including the disabled], not just retirees. Because my mother died when I was a child, my father (or whoever had been my legal guardian) received Social Security checks to support the costs of raising me until I turned 18….

No one is going to argue with “making Social Security better”. But it’s hard to see how cutting benefits make it better….The only way you can make the argument that cuts make Social Security “better” is if you start with the claim that it’s currently “going bankrupt.” But it’s not.

And one last thing:

Despite the fact that Republicans have been demanding cuts and a phase-out for years and despite the fact they will continue to do so after the current burst of media attention abates, they are now demanding that President Biden not say what their policy is….Indeed, what’s especially weird is how many Republicans can’t help restating their demand for cuts [such as increasing the age of eligibility and means testing] even while denying their demand for cuts….

What You Can Get Away With When the System Gives You an Edge

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The Republican governor of Arkansas was chosen to give the party’s response to President Biden’s State of the Union address. Jamelle Bouie of The New York Times says she wasn’t speaking to most voters and she didn’t care:

… Sanders’s folksy affect notwithstanding, this was harsh and hard and was delivered with an edge. But then, there’s nothing wrong with giving a partisan and ideological State of the Union address; that is part of the point. The problem was that most of [her] complaints were unintelligible to anyone but the small minority of Americans who live inside the epistemological bubble of conservative media. Sanders’s response, in other words, was less a broad and accessible message than it was fan service for devotees of the Fox News cinematic universe…..

It was not the kind of speech you give if you’re trying to build a political majority. The best evidence for this is that her speech was a version of the message Republicans used in last year’s midterm elections. The result was a historic disappointment, if not a historic defeat, for an opposition party [in a midterm election]… The most unsuccessful candidates … were, in the main, the right-wing culture warriors who tried to make the midterms a referendum on their reactionary preoccupations.

I should say that this critique of Sanders’s response rests on the supposition that Republican politicians want to build a national political majority. And why wouldn’t they? Political parties are supposed to want to win the largest possible majority….“Unless there’s a countervailing force,”  the historian Timothy Shenk notes [that] “parties bend toward majorities like sunflowers to the light.

But what if there is a countervailing force? What if the structure of the political system makes it possible to win the power of a popular majority without ever actually assembling a popular majority? What if, using that power, you burrow your party and its ideology into the countermajoritarian institutions of that system so that, heads or tails, you always win?

In that scenario, a political party might drop the quest for a majority as a fool’s errand. There’s no need to build a broad coalition of voters if — because of the malapportionment of the national legislature, the gerrymandering of many state legislatures, the Electoral College and the strategic position of your voters in the nation’s geography — you don’t need one to win. And if your political party also has a tight hold on the highest court of constitutional interpretation, you don’t even need to win elections to clear the path for your preferred outcomes and ideology.

Sanders did not deliver a broad and accessible response to the State of the Union for the same reason that congressional Republicans refuse to moderate or even acknowledge the existence of the median voter; she doesn’t have to, and they don’t have to. The American political system is so slanted toward the overrepresentation of the Republican Party’s core supporters, rural and exurban conservatives, that even when their views and priorities are far from those of the typical voter, the party is still more competitive than not….

When It’s Time to Throw in the Towel

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Imagine you are one of the millions of high school students who take the Scholastic Aptitude Test in your senior year. You get your results and believe the company that administers the test, the College Board, made a serious mistake. You must have scored much higher than they say. A few people you know think you could be right, but most people you talk to are doubtful. You sue the College Board and a judge, citing your lack of evidence, quickly dismisses your case. So you spend thousands of dollars hiring a respected research firm to confirm your suspicions. They find out if other students are disputing the results. They look at your grades and previous test results. They even give you a practice test and your score is no better than the official result you got in the mail. Would anybody believe you if you said you just know you scored much higher?

Now imagine that you ran for president and lost. From The Washington Post:

Former president T____’s 2020 campaign commissioned an outside research firm in a bid to prove electoral fraud claims, but never released the findings because the firm disputed many of his theories and could not offer any proof that he was the rightful winner of the election, according to four people familiar with the matter. A person familiar with the findings said there were at least a dozen hypotheses that T____’s team wanted tested.

The campaign paid researchers from Berkeley Research Group, the people said, to study 2020 election results in six states, looking for fraud and irregularities to highlight in public and in the courts. Among the areas examined were voter machine malfunctions, instances of dead people voting and any evidence that could help T____ show he won, the people said. None of the findings were presented to the public or in court.

About a dozen people at the firm worked on the report, including econometricians, who use statistics to model and predict outcomes, the people said. The work was carried out in the final weeks of 2020, before the Jan. 6 riot of T____ supporters at the U.S. Capitol….

“They looked at everything: change of addresses, illegal immigrants, ballot harvesting, people voting twice, machines being tampered with, ballots that were sent to vacant addresses that were returned and voted,” said a person familiar with the work who, like others, spoke on the condition of anonymity to describe private research and meetings. “Literally anything you could think of. Voter turnout anomalies, date of birth anomalies, whether dead people voted. If there was anything under the sun that could be thought of, they looked at it.”

The findings were not what the T____ campaign had been hoping for, according to the four people. While the researchers believed there were voting anomalies and unusual data patterns in a few states, along with some instances in which laws may have been skirted, they did not believe the anomalies were significant enough to make a difference in who won the election….

“None of these were significant enough,” this person said. “Just like any election, there are always errors, omissions and irregularities. It was nowhere close enough to what they wanted to prove, and it actually went in both directions”….

The research group’s officials maintained privately that they did not come into the research with any predetermined conclusions and simply wanted to examine the data provided by the T____ campaign in the battleground states….

The findings from Berkeley were among the many streams of information after the election that showed T____ he lost. According to testimony presented to the Jan. 6 committee, T____ was repeatedly told by advisers that he did not win the election, but continued to cast about for others who would entertain his theories and say that he had won. Dozens of judges — including many T____ appointees — rejected his campaign’s attempts to challenge election results in court….

The Berkeley research was done through a subsidiary company called East Bay Dispute and Advisory. FEC filings show the T____ campaign paid East Bay Dispute and Advisory more than $600,000 in the final weeks of 2020. A person familiar with the matter said there were also other researchers commissioned to help prove electoral fraud from outside Berkeley Research Group…..

Those who worked on the report included Janet Thornton, who has about 40 years of experience in accounting and investigations, according to Berkeley Research Group’s website. [The] professional biographies [of others] describe decades of experience in accounting, investigating corporate fraud and handling other complicated inquiries.

They didn’t make the company’s findings public because they just know he won.

There Was a Balloon. Other Things Have Happened Too.

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President Biden’s Chief of Staff for the past two years, Ron Klain, is leaving the White House. He talked about the administration’s accomplishments last week. I haven’t been able to find the text of his remarks myself but someone at Post.News provided this:

The most significant economic plan since FDR, while managing the largest land war in Europe since Truman.  The biggest infrastructure bill since Ike, the most first-year judges since JFK, the second largest health care bill since LBJ.  The most significant gun control bill since Clinton and the largest climate change bill in any country at any time anywhere on the planet.  All while managing the worst public health crisis since Wilson, with the narrowest Democratic majority in Congress for a new President in 100 years.

But it doesn’t stop there. Student loan debt relief.  Record low black and brown unemployment. The PACT act for veterans. A sweeping marijuana pardon. The Respect for Marriage Act. The most Americans ever with health coverage. Ending the longest war in American history. We’ve seen a dramatic drop in child poverty, the lowest unemployment rate in 50 years, the deficit cut more than any President.  And the most jobs created in any two years in US history.

Not bad for a team and a President that was written off for dead in the winter of 2019, and again in the winter of 2020, the winter of 2021, and again in the first week of November 2022. 

The media reported Klain’s departure, but it what really got people’s attention is that he started to cry at one point. How dare he become emotional when leaving one of the most important, most challenging jobs in the country, especially when you consider the Biden administration’s somewhat amazing list of accomplishments! Clearly, Klain is not the kind of manly man we need near the top of our government. Far better to have a macho guy like our former president, a real tough guy whose principal emotion is anger, who doesn’t understand the concept of personal responsibility and who, during his last year in office, paid more attention to his hair than the pandemic.

Anyway, having read some of Klain’s speech, it was disturbing but not surprising to see the results of a new poll.

The poll finds that 62 percent of Americans think Biden has accomplished “not very much” or “little or nothing” during his presidency, while 36 percent say he has accomplished “a great deal” or “a good amount.” On many of Biden’s signature initiatives — from improving the country’s infrastructure to making electric vehicles more affordable to creating jobs — majorities of Americans say they do not believe he has made progress, the poll finds.

Breaking those numbers down, 77% of Democrats thought Biden had accomplished “a good amount or a great deal”. 32% of “independents” thought he had. Only 7% of Republicans agreed.

Now, not all Democrats pay much attention to politics. That partly explains why 22% didn’t think much of the president’s accomplishments. As for “independents”, they’re the people who pay even less attention to politics and/or don’t see any meaningful difference between the parties, even after the past six years. That 7% of Republicans thought Biden has done well can be seen as a positive result given the politicians Republicans prefer and the “news” they consume.

The journalistic community will see this poll as a problem for Biden. It demonstrates a bigger problem with the journalistic community. Their principal job is to inform the public. But many more Americans know that a Chinese balloon — nothing more than a curiosity, which the Pentagon easily took care of — traveled across the US than that inflation is way down and we have the lowest unemployment rate in 50 years.

People in Congress Vote, But They Don’t All Believe in Democracy

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Yesterday, I posted part of a pro-democracy, pro-majority rule speech given this week by a Democratic congressman, Sean Casten of Illinois. He argues that Congress doesn’t do what most voters want it to do because our government has a built-in bias toward minority-rule. Given how we elect presidents and members of Congress and how the Supreme Court functions, a minority of voters and a minority in Congress can make it difficult, sometimes impossible, for the government to do things most of us want it to do. He therefore recommends changes to the House of Representatives, Senate, Supreme Court and Electoral College that would make each of those institutions more democratic, i.e. more responsive to the will of the majority.

At the beginning of his speech, however, he said something about his colleagues in the House that just isn’t true:

Now everybody in this body has different policy views, different ideas of what a better position in that relay might look like. But I submit that we do have some universal goals that we all agree on or else we wouldn’t be in this line of work.

We all want a government that delivers the greatest good for the greatest number. We all want a government that upholds our founding promise of freedom and equality.

We all, I think, believe Abraham Lincoln’s admonition to us that a government of, by, and for the people should not perish from this Earth. And we all, also, I think agree that on those really hard questions, … the single best way to resolve those disputes is through a democratic process.

A few bedrock principles of democracy are that the vast majority of adult citizens get to vote, each of their votes counts the same, the person or proposal getting the most votes wins and people should be encouraged to vote (otherwise we won’t know what the majority wants).

It’s hard to know what Rep. Casten was thinking when he suggested that everybody in Congress believes in democracy. Maybe he was being collegial or sarcastic. But it simply isn’t true that his Republican colleagues accept the democratic principles he thinks are universal.

I just finished a book by two sociologists called The Flag and the Cross. It’s a great book if you want to understand American politics, since it deals with the rise of White Christian nationalism, the ideology that’s become dominant in the Republican Party. In a nutshell, White Christian nationalists think America should be a Christian country and White people who profess to support Christianity (mainly White men) should be in charge. You can immediately see there’s a conflict here with democracy and majority rule. Republicans don’t always admit they oppose majority rule, but sometimes they do. This is from The Flag and the Cross (pp. 96-98):

White Christian nationalism designates who is “worthy” of the freedom it cherishes, namely, “people like us.” But for the “others” outside that group, white Christian nationalism grants whites in authority the “freedom” to control such populations, to maintain a certain kind of social order that privileges “good people like us”….

Both legal and illegal voter suppression have long been a tactic of white conservatives to tilt elections in their favor. Yet political scientists and sociologists often forget the ideological support for such efforts since the civil rights movement has come from white Christian nationalism. Just months before the 1980 election, Paul Weyrich, cofounder of the American Legislative Exchange Council and the Moral Majority, spoke at a Dallas conference to an audience that included evangelical leaders … as well as GOP presidential candidate Ronald Reagan.

Weyrich told his audience, “Now many of our Christians have what I call the ‘goo-goo syndrome.’ Good government. They want everybody to vote. I don’t want everybody to vote. Elections are not won by a majority of people. They never have been from the beginning of our country, and they are not now.” He went on, explaining: “As a matter of fact, our leverage in the elections quite candidly goes up as the voting populace goes down.”

Here before his Christian Right audience, Weyrich explained the strategy: our group stays in power if fewer people—especially our opponents—are able to vote. The policy implication is clear: make it harder for “problem” populations to vote, or at least don’t make it easier.

Weyrich’s antidemocratic sentiment has been repeated on the Christian Right for decades since. Also among those in attendance at that 1980 meeting was longtime conservative activist Phyllis Schlafly. Leading up to the 2012 presidential election, Schlafly underscored why limiting early voting was so critical. “The reduction in the number of days allowed for early voting is particularly important because early voting plays a major role in Obama’s ground game. The Democrats carried most states that allow many days of early voting.”

Several years later, former Baptist pastor, governor of Arkansas, and GOP presidential candidate Mike Huckabee echoed Weyrich’s words: “I know that most politicians say we want everyone to vote, I’m gonna be honest with you, I don’t want everyone to vote. If they’re so stupid—that’s right, if they’re gonna vote for me they need to vote, if they’re not gonna vote for me they need to stay home. I mean, it’s that simple . . . But in the big picture, there are people who vote and they have no idea what our Constitution says.” This last part of Huckabee’s quote is instructive in that he ties citizens’ worthiness to vote not only to their support for him, but to their knowledge of the Constitution.

Undergirding these views is an understanding of democratic participation that has deep historical roots, namely, that only certain groups (i.e., people like us) are “worthy” to have a say in government and it is perfectly acceptable to make it more difficult to vote, and particularly for those who might be “undeserving” (i.e., people like them). Indeed, we find the connection between white Christian nationalism and these attitudes is exceptionally strong.

In October 2020, just before the election, we asked Americans a series of questions about voter access…. Christian nationalism is the strongest predictor that white Americans believe we already make it too easy to vote in this country and that they would support hypothetical laws restricting the vote….By contrast, as white Americans’ affirmation of our Christian nationalism indicators increases, their likelihood of believing voter suppression in presidential elections is a real problem plummets.

Why would we see these patterns even after we account for relevant political characteristics? Because White Christian nationalism is fundamentally antidemocratic for “others,” that is, those who are “unworthy” of participation. This is how order is maintained: freedom for us, restraint for them.

If you’d like to see more recent examples, this (gift) Washington Post article from two years ago quotes several Republican politicians who admit their party “needs voting restrictions to win”. It concludes:

In this age, in which one party in particular has embraced an all’s-fair-in-politics approach, they’re bothering less with arguing that this is the right policy for government, and more that it’s the right policy for Republicans being able to control government.