UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

January 16, 2009

FLOTSAM & JETSAM: OBAMA JOINS WAR AGAINST SOCIAL SECURITY & MEDICARE

Sam Smith

Meeting with fellow critics of Social Security and Medicare at the Washington Post, Barack Obama has given his strongest indication yet that he will soon be cutting both programs:

|||| President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs. That discussion will begin next month, Obama said, when he convenes a "fiscal responsibility summit" before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."

Five days before taking office, Obama was careful not to outline specific fixes for Social Security and Medicare, refusing to endorse either a new blue-ribbon commission or the concept of submitting an overhaul plan to Congress that would be subject only to an up-or-down vote, similar to the one used to reach agreement on the closure of military bases.

But the president-elect exuded confidence that his economic team will succeed where others have not. "Social Security, we can solve," he said, waving his left hand. "The big problem is Medicare, which is unsustainable. . . . We can't solve Medicare in isolation from the broader problems of the health-care system." |||||

Obama is joining a war on Social Security and Medicare that has long been underway from the right, including by Wall Street interests that have backed the new president so strongly.

One of the few journalists who steadily challenged this attempt to dismantle two of the best programs of the past century has been Dean Baker, who wrote recently in the Guardian:

|||| The classic definition of "chutzpah" is the kid who kills both of his parents and then begs for mercy because he is an orphan. The Wall Street crew are out to top this. After wrecking the economy with their convoluted finances, and tapping the US Treasury for trillions in bail-out bucks, they now want to cut Social Security and Medicare because we don't have the money. . .

Unlike Robert Rubin's Citigroup, Social Security is solidly funded long into the future. According to the latest report from the Congressional Budget Office, it can pay all promised benefits through the year 2049, with no changes whatsoever. Even after that date it will always be able to pay benefits that are far higher than what current retirees receive.


So, the claim that Social Security is going broke is inaccurate, or in less polite circles, a lie. Workers in their 40s 50s, and 60s have already paid for their Social Security benefits. . .


Although Social Security is paid for long into the future, Medicare does face problems due to the explosion of private sector healthcare costs. The way to address Medicare's shortfall is to fix the private healthcare system, as Barack Obama has pledged to do. If healthcare costs are contained, so that they only grow due to the aging of the population, and otherwise move in line with per capita income, then Medicare will be an affordable program. The problem is not the aging of the population. The problem is a broken healthcare system.


Every other wealthy country in the world has managed to contain its healthcare costs and provide care to its population that is as good or better than what people in the
US receive. If it were not for the political power of the pharmaceutical, insurance and doctors' lobbies, we would have fixed healthcare long ago. If Congress cannot stand up to these special interest groups, then why not just let retirees take advantage of the healthcare systems in countries with less corrupt political systems.

The latest round of attacks on Social Security and Medicare are especially pernicious because they come at a time when the baby boom cohorts have just seen much of their wealth disappear due to the collapse of the housing bubble and the stock market plunge. Tens of millions of baby boomers who thought they were well-prepared for retirement two years ago, now find themselves with little or no home equity and very little left in their retirement funds. As a result, they will be almost totally dependent on Social Security and Medicare.


The attacks are made even worse by the fact that the attackers, people like Robert Rubin and Peter Peterson, promoted policies that led to this collapse and personally profited to the tune of tens or even hundreds of millions of dollars. In other words, after pushing the economy into a severe recession and destroying the life's savings of tens of millions of working families, the Wall Street crew now wants to take away their Social Security and Medicare. This can almost make killing your parents look like a petty offence. ||||


There are other signs that Social Security and Medicare would be in trouble under Obama. His healthcare plan offers no meaningful challenge to the private interests that are driving costs up. He has named a budget director who wants to cut Social Security benefits for those under 60. And he has named a "special watchdog" to cut government costs, with Social Security and Medicare prominently mentioned in the AP account:

|||| Pointing with concern to "red ink as far as the eye can see," President-elect Barack Obama pledged to tackle out-of-control Social Security and Medicare spending and named a special watchdog to clamp down on other federal programs - even as he campaigned anew to spend the largest pile of taxpayer money in history to revive the sinking economy. . . He said Wednesday, without details, that his initial budget proposal next month will include "some very specific outlines" of how he plans to tackle spending. That extends to the ballooning and so-far unsolvable fiscal problem presented by the Social Security and Medicare programs, which Obama promised would be "a central part" of his deficit-reduction plan. ||||

Similarly, in the New York Times:

|||| President-elect Barack Obama said that overhauling Social Security and Medicare would be "a central part" of his administration's efforts to contain federal spending, signaling for the first time that he would wade into the thorny politics of entitlement programs. . .


Speaking at a news conference in Washington, he provided no details of his approach to rein in Social Security and Medicare, which are projected to consume a growing share of government spending as the baby boom generation ages into retirement over the next two decades. . .

Mr. Obama also promised a more intensive effort to weed inefficient and bloated programs out of the federal budget in the short run, creating a White House position to "scour this budget, line by line, eliminating what we don't need, or what doesn't work, and improving the things that do." He named Nancy Killefer to the post, called chief performance officer. ||||

If Obama is successful he will have damaged two of the most successful programs ever devised by the Democratic Party. He will receive plaudits from the corporate media such as the NY Times, Washington Post and Wall Street Journal and from his major backers on Wall Street. But for other Americans it will be a continuation of the decay of social democracy that flourished under FDR and LBJ and has been collapsing (along with our economy and world standing) under Reagan, the Bushes and Clinton.

On the other hand, the game is a little different than when the Pete Petersons and others started their war on Social Security. Then it was possible to play the young against the old, blaming the latter for the former's difficulties. But the fiscal collapse has changed all that, and many more younger Americans may realize that its not senior citizens who are the problem, but senior officials and their campaign contributors.


5 Comments:

Anonymous Philip Shropshire said...

Hey, nice new look Sam!

January 16, 2009 1:58 PM  
Anonymous Anonymous said...

Could we please keep social security and medicare - and LOSE THE FUCKING PENTAGON AND WALL STREET?

Obama is a TROJAN HORSE...fit to be despised and exposed as such!

Dear Bar-ache: we KNOW where all the money is being WASTED.

January 17, 2009 9:56 AM  
Anonymous Anonymous said...

The president elect is a Stealth Bama for Wall Street!

January 17, 2009 10:07 AM  
Blogger Dave said...

He is just like all the rest. Once you are no longer a profit-producing cog in the giant corporate machine you should just go somewhere, crawl in a hole and die. This country has no respect for and sees no need for elders; the youngsters know everything. (Can you tell that I am angry ?? :-{ )

January 17, 2009 11:30 AM  
Anonymous Keesha said...

Thanks for covering Barack's war on Social Security.

I'm not sure how links work in your comments so I'll put what I'm linking to in my name as well in case this doesn't click here
http://thecommonills.blogspot.com/2009/01/iraq-snapshot_16.html

That's C.I.'s snapshot for January 16th. You're quoting The Washington Post article. There's also a recording of Barack's remarks. On Social Security, C.I. transcribed Barack stating this:

"We're also going to have a discussion about entitlements and how we get a grasp on those. Uh and uh, you know, like i think everybody here is familiar enough with the budget problems to know that as bad as these deficits that we're running up over the next -- that have already been run up -- have been and despite the cost of both TARP and the stimulus, the real problem in our long term deficit actually has to do with our entitlement obligation and the fact that historically uh if our revenues ranged between 18 and 20% of GDP they're now at 16. It's just not sustainable so we're going to have to uh craft a uh what George Stephanopoulos called a grand bargain and I-I try not to use the word grand in anything that I say but uh but we're going to have to shape a baragain. This, by the way, is where there are going to be some very difficult choices and issues of sacrifices and responsibilty and duty are going to come in because what we have done is kick this can down the road. We're now at the end of the road and uh we are not in a position to kick it any further."

January 26, 2009 10:59 AM  

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