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Forum Post: The CEO Plan to Steal Your Social Security and Medicare

Posted 2 years ago on July 30, 2012, 8:15 p.m. EST by PeterKropotkin (1050) from Oakland, CA
This content is user submitted and not an official statement

By Dean Baker

Many people are following the presidential election closely with the idea that the outcome will have a major impact on national policy. However, according to Steven Pearlstein, a veteran Washington Post columnist and reporter, it may not matter who wins the election. In a column last week, Pearlstein told readers that the top executives of some of the country's largest companies are getting together to craft a budget package that they will try to push through Congress and get the president to sign.

While Pearlstein clearly sees these backroom meetings of corporate chieftains in positive terms (he refers to them as "grown-ups" who have been noticeably absent from the conversation about the budget), the rest of us might view this plotting a bit differently. As Pearlstein openly acknowledges, this corporate coup is an end-run around the electorate. As corrupt as the political process may have become, at least we will get a vote in the election. Pearlstein's plotters are not inviting the rest of us into the conversation.

Many of the same folks who brought the economy to ruin just a few years ago are now going to come up with a plan that is supposed to set the budget and the economy on a forward path. At the center of their proposal are big cuts in Social Security and Medicare.

The most popular Social Security cut among this gang is a reduction in the annual cost-of-living adjustment (COLA) by 0.3 percentage points. They are betting that ordinary people are too dumb to notice this cut since it is a relatively small amount each year.

However, the effect of this cut accumulates into a much bigger deal over time. After 10 years it is roughly 3 percent, after 20 years it would be close to 6 percent, and after 30 years it would be close to 9 percent.

If we assume that an average retiree collects benefits for 20 years, this implies an average cut in their benefits of 3 percent. Is that a big deal? Well, there are a lot of would-be Social Security cutters who are screaming bloody murder because President Obama wants to increase the tax rate on a portion of their income by a bit more than 3 percentage points. This means that if President Obama's proposal to increase taxes on the richest 2 percent is a big deal, then the plan to cut the Social Security COLA is also a big deal.

The corporate CEO crew is also considering a plan to raise the normal retirement age for Social Security to 69. And, they want to reduce the benefit formula for high income workers which, incredibly, they define as people who earn more than $40,000 a year.

Their main trick for Medicare is to raise the age of eligibility from 65 to 67. Apparently our CEO gang has not discovered that the health insurance market for older people is a disaster. They also continue to promote the misconception that the problem is Medicare and Medicaid.

These programs are actually much more efficient than private insurers. The real problem is our private sector health care system, which already costs more than twice as much per person as the average in other wealthy countries, with few obvious benefits in outcomes.

The scary budget projections that our CEOs like to tout assume that health care costs will exceed 20 percent of GDP in a decade. That would imply costs of more than $34,000 for a family of four in today's economy. And these costs are projected to keep growing through time.

The normal response to this situation would be to focus on the need to fix the health care system. But many of Pearlstein's CEOs profit from the waste in the health care system, so they would rather cut our Medicare benefits.

So there you have it, the richest people in the country -- the big gainers from economic growth over the last three decades -- have plans to cut Social Security and Medicare benefits for current and future retirees.

To get some perspective on this story, the typical near-retiree has about $180,000 in wealth including everything, such as the equity in their home, their 401(k) and any other savings. That is what our CEO gang makes in a week. The average Social Security check of $1,200 a month is more than half of the income for two-thirds of seniors and more than 90 percent for one third. Yet, the CEOs think seniors are living too well.

But wait, there's more. We're all paying for their campaign to take away our Social Security and Medicare. We do this through several different channels.

First, many of these CEO- and honcho-types come from Wall Street. For example, Erskine Bowles, the co-chair of President Obama's deficit commission, is a director of Morgan Stanley in one of his day jobs. Had it not been for the taxpayers' generosity, the bank that Mr. Bowles directs would have died in the fall of 2008, so it would not be around to pay him his six-figure stipend.

The other way we are paying for this corporate effort to cut our Social Security and Medicare is by virtue of the fact that we allow the CEOs to pay for their campaign with pre-tax dollars. If most of want to give $100 to a political candidate or political cause we have to first pay taxes on our income and then make the campaign contribution out of what we have left.

However, if you are a CEO who wants to cut Social Security and Medicare, the Supreme Court says you can make your contributions with pre-tax dollars, in effect deducting this contribution as if you were giving money to charity. According to Pearlstein, the CEOs "charitable" contribution for cutting Social Security and Medicare will be on the order of $278 million.

For most of us, that sum would be real money, but not for CEOs who control trillions of dollars. And, with the rest of us subsidizing through our tax dollars this effort to cut our Social Security and Medicare, how can the CEOs not take up Pearlstein's call?

http://www.commondreams.org/view/2012/07/30-11

36 Comments

36 Comments


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[-] 3 points by shadz66 (19985) 2 years ago

'PK', re. your great post & fyi : "Social Security is Strong" : by Sen. Bernie Sanders (I-Vt.) :

fiat lux ...

[-] 0 points by beautifulworld (20469) 2 years ago

When are Americans going to stop lionizing these CEO's who are robbing them blind? When are we going to decide to run our economy in such a way that it benefits all people and not just the wealthy and corporations? When?

[-] 1 points by gnomunny (6647) from St Louis, MO 2 years ago

Yeah. It almost sickened me recently when one of the men questioning Geithner called him a "stellar public servant." I almost expected him to get on his knees, unzip Geithner, and . . . . oh, jeez, never mind. The visual just made me soil my keyboard.

[-] 1 points by beautifulworld (20469) 2 years ago

LOL! It's all too much, I agree.

[-] 1 points by gnomunny (6647) from St Louis, MO 2 years ago

It's disgusting the way they worshiped the scumbag. Both times. It was less an interrogation and more a bunch of pals chumming at the country club.

[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

Hey BW - I kinda had that same thought - though I didn't express it quite as nicely as you.

http://occupywallst.org/forum/give-em-all-a-madoff-makeover-from-riches-to-rags-/

[-] 3 points by beautifulworld (20469) 2 years ago

Hi DKA. Disturbing isn't it that so many people seem to want our nation to be run by corporations? I just don't get it.

[-] 1 points by shadz66 (19985) 2 years ago

Maybe "Astroturf Politics" has something to do with it !!!

Consider :

Your initial comment on this very important thread 'bw', was at +6 very soon after you wrote it but it was then concertedly down-voted. Quite a few of the left / progressive / anti-crapitalist / anti-corporate (and that is probably the key point!) types on this forum, are being clearly concertedly voted down and there is no doubt about that in my mind. Further, with November only 4 months away, this will only increase !!

Anyway for DKAt, you & all the others : http://www.youtube.com/watch?v=t-l91O9VxN0 :-)

per aspera ad astra ...

[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

Again a very perceptive analysis of what is happening on this forum - and as usual some great links to compliment your straightforward - hammer on the head of the nail easy for anyone to understand/comprehend analyses. I bow to the master of fostering open eyes awareness education. OOoop's almost forgot critical thinking. My bad - I'm gettin old and forgetful.

[-] 1 points by beautifulworld (20469) 2 years ago

They can vote us down as much as they like, but what they can't do is change our minds.

That first link you sent is too funny. And, yes I plan to keep on keeping on. Thanks.

[-] 1 points by shadz66 (19985) 2 years ago

That's The "Spirit" 'bw' & thus : http://www.youtube.com/watch?v=QoL2WMtMb_0 !! I shall be trying to secure a working link for "(Astro)Turf Wars" - 'asap' and again thanx for your determination & optimism.

I'll end by quoting the late, great Gore Vidal, who passed away today (1st Aug.'12) :

  • "The genius of our ruling class is that it has kept a majority of the people from ever questioning the inequity of a system where most people drudge along, paying heavy taxes for which they get nothing in return" & ...

  • "We should stop going around babbling about how we're the greatest democracy on earth, when we're not even a democracy. We are a sort of militarised republic."

veritas vos liberabit ...

[-] 2 points by beautifulworld (20469) 2 years ago

Nice quotes. Thanks.

[-] 2 points by shadz66 (19985) 2 years ago

For some more Gore Vidal quotes : http://www.bbc.co.uk/news/entertainment-arts-19075751 .

abiit ad maiores ...

[-] 1 points by beautifulworld (20469) 2 years ago

: ) Thank you.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Beautifulworld, whats the alternative .. no one wants total anarchy ?

Most of the people like orderly function .. where as OWS offers nothing .. but "disobedience " ..who could possibly be in favor of that !!

[-] 3 points by shadz66 (19985) 2 years ago

WTF is "Total Anarchy" ?!!! What are you talking about ?!! Did you read this 'forum post' ?!

A momentary reactionary moment 'FOB' or a temporary inability to see past the persistent pernicious propaganda of 'TINA' (there is no alternative) OR an indication of a much deeper malaise ?!

ad iudicium ...

[-] 2 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

Because of propaganda most people will have confused Anarchy with Chaos. More PTB brainwashing.

[-] 2 points by shadz66 (19985) 2 years ago

Yep , "propaganda" IS the right word !!! The close ties between Mass Non-Violent Action and Anarchism are little known or appreciated and it is news & information that 'Consensus (Pseudo)Reality' Purveying State Education and Corporate MSM will NEVER give to The 99% !!

Some links :

Resistance Is Fertile !

per aspera ad astra ...

[-] 2 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

In compliment - a definition I found and like :

What is anarchism?

Anarchism is the movement for social justice through freedom. It is concrete, democratic and egalitarian. It has existed and developed since the seventeenth century, with a philosophy and a defined outlook that have evolved and grown with time and circumstance. Anarchism began as what it remains today: a direct challenge by the underprivileged to their oppression and exploitation. It opposes both the insidious growth of state power and the pernicious ethos of possessive individualism, which, together or separately, ultimately serve only the interests of the few at the expense of the rest.

Anarchism promotes mutual aid, harmony and human solidarity, to achieve a free, classless society - a cooperative commonwealth. Anarchism is both a theory and practice of life. Philosophically, it aims for perfect accord between the individual, society and nature. In an anarchist society, mutually respectful sovereign individuals would be organised in non-coercive relationships within naturally defined communities in which the means of production and distribution are held in common.

Anarchists, are not simply dreamers obsessed with abstract principles. We know that events are ruled by chance, and that people’s actions depend much on long-held habits and on psychological and emotional factors that are often anti-social and usually unpredictable. We are well aware that a perfect society cannot be won tomorrow. Indeed, the struggle could last forever! However, it is the vision that provides the spur to struggle against things as they are, and for things that might be.

Whatever the immediate prospects of achieving a free society, and however remote the ideal, if we value our common humanity then we must never cease to strive to realise our vision. If we settle for anything less, then we are little more than beasts of burden at the service of the privileged few, without much to gain from life other than a lighter load, better feed and a cosier berth.

Ultimately, only struggle determines outcome, and progress towards a more meaningful community must begin with the will to resist every form of injustice.

In general terms, this means challenging all exploitation and defying the legitimacy of all coercive authority. If anarchists have one article of unshakeable faith then it is that, once the habit of deferring to politicians or ideologues is lost, and that of resistance to domination and exploitation acquired, then ordinary people have a capacity to organise every aspect of their lives in their own interests, anywhere and at any time, both freely and fairly.

Anarchism encompasses such a broad view of the world that it cannot easily be distilled into a formal definition. Michael Bakunin, the man whose writings and example over a century ago did most to transform anarchism from an abstract critique of political power into a theory of practical social action, defined its fundamental tenet thus: In a word, we reject all privileged, licensed, official, and legal legislation and authority, even though it arise from universal suffrage, convinced that it could only turn to the benefit of a dominant and exploiting minority, and against the interests of the vast enslaved majority.

Anarchists do not stand aside from popular struggle, nor do they attempt to dominate it. They seek to contribute to it practically whatever they can, and also to assist within it the highest possible levels both of individual self-development and of group solidarity. It is possible to recognise anarchist ideas concerning voluntary relationships, egalitarian participation in decision-making processes, mutual aid and a related critique of all forms of domination in philosophical, social and revolutionary movements in all times and places.

Elsewhere, the less formal practices and struggles of the more indomitable among the propertyless and disadvantaged victims of the authority system have found articulation in the writings of those who on brief acquaintance would appear to be mere millenarian dreamers. Far from being abstract speculations conjured out of thin air, such works have, like all social theories, been derived from sensitive observation. They reflect the fundamental and uncontainable conviction nourished by a conscious minority throughout history that social power held over people is a usurpation of natural rights: power originates in the people, and they alone have, together, the right to wield it.

[-] 3 points by shadz66 (19985) 2 years ago

This is a highly educational and enlightening article. Thanx :-)

fiat lux ...

[-] 2 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

U R welcome.

Spread awareness - People.

[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago
[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

Excellent - funny though this Gandhi fellow - well - he seems to quote a lot of my thoughts. Cool. {;-])

http://www.gandhifoundation.net/ ,

http://en.wikipedia.org/wiki/Satyagraha &

[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

Yes - people need to learn about peace and peaceful living.

http://www.gandhiserve.org/e/

another gr8 link - thanks shadz.

[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

GR8 - tweeted - http://wagingnonviolence.org/

Thanks.

[-] 2 points by beautifulworld (20469) 2 years ago

I know you mean well, FOB, but OWS is not calling for total anarchy. I don't even know what you mean by that. OWS is calling for a society that is run by the people, for the people, directly.

[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

Which would also be a happy place for anarchists.

[-] 1 points by beautifulworld (20469) 2 years ago

Happy for all, lol.

[-] 2 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

LOL - With Continuous process improvement - it would start out being so much better then what is happening today - but there is still a lot of individual growth and maturity to achieve.

[Removed]

[-] 0 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

Lets ask the A-Hole who downvoted your comment. ( I gave you back your twinkle ). I guess the A-Hole would have some thoughts on the wonderfulness of corpoRATions.

[-] 0 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

They who would support the CorpoRAT rule do not have an understanding of what the corpoRATions are doing to this country or to the world. They are blinded by the propaganda they get from MSM.

[-] 1 points by beautifulworld (20469) 2 years ago

True.

[-] 1 points by DKAtoday (28165) from Coon Rapids, MN 2 years ago

It is a main reason I love this forum - plenty of people whose eyes are open - and now we have social media buttons right here to share good posts to the general internet public at large - as they are posted.

Education outreach - fostering of awareness open eyes critical thinking.

[-] -1 points by JPB950 (2254) 2 years ago

I don't see where it matters, Congress left on it's own hasn't been able to come up with a budget. Changes have to be made to Social Security, Medicare, and Medicaid.

People are living longer, moving the retirement age back a bit to compensate for that makes a certain amount of sense.

[-] 1 points by PeterKropotkin (1050) from Oakland, CA 2 years ago

You're an asshole

[-] 0 points by JPB950 (2254) 2 years ago

You're certainly entitled to that opinion. As long as what business leaders propose isn't being done in secret and pawned off as coming from congress, what is the problem?