The Blog of the Frances Perkins Center

Good news, bad news

In Legislation Today on September 9, 2010 at 1:01 pm

We often ask ourselves, “What would Frances Perkins do?” as we watch the news from Washington. Here are two stories that bring up that question. You can easily guess what her response to each would be.

The good news first: President Obama is starting to speak out on the economy and jobs:

Mr. Obama’s newest proposals to help the flagging recovery, like his earlier proposal for a small-business bill, include ideas that typically have strong Republican and business backing. The new proposals, which the administration had previewed in the days before his speech on Wednesday, would increase and make permanent a tax credit for businesses’ research expenses, allow businesses to write off the full costs of equipment purchased through 2011, and provide $50 billion more for infrastructure construction projects. [from the NY Times]

It’s not a sweeping proposal on the scale of the WPA, but it’s a move in the right direction.

Unfortunately, behind closed doors, secret negotiations are taking place that may ultimately weaken and diminish one of the most effect economic programs the U.S. has, Social Security. According to Richard Eskow in the blog of the Campaign for America’s Future, back-channel sources say that:

the Deficit Commission is finalizing a deal that would increase Social Security benefits slightly for low-income recipients while cutting them for everyone else. The Commissioners apparently believe that putting this “progressive” gloss on a package of unneeded cuts would allow them to move forward with their predetermined anti-Social Security agenda. This new proposal would pit middle-class seniors against the elderly poor, forcing them to compete for a stripped-down pool of dollars. The end result would be the one that many Commission members have pursued for years: to cut the most stable and successful program in the Federal government’s history.

Here are a few reasons why this idea is such a bad one:

First and foremost: Social Security and the deficit don’t belong in the same sentence. The fact that this group is fiddling with Social Security is a travesty. Social Security BY LAW cannot run a deficit; therefore, it can’t contribute to the federal deficit.

Second: How does the president’s commission get off tinkering in secret with a program that touches every single working person in the United States? Any proposals changing the way Social Security is run should be made in the blazing sunlight. Its millions of participants need to know what is going on. In fact, we know how voters feel about Social Security — they don’t want to cut it. Eskow quotes some recent poll results.

Third: Social Security’s financial condition is monitored very closely. Every year, the trustees issue a report on its health. This year, the trustees stated that the system could pay full benefits for the next quarter century or so with no changes to the current system. There is no need to panic; there’s plenty of time to act prudently and cautiously. In addition, if new revenue is desired, the easiest change would be to lift the cap on contributions. Right now, if you make more than $106,800, you don’t pay Social Security tax on that additional income. Lifting the cap would be easy from an administrative standpoint and would provide enough income to take us well beyond the next quarter century.

Finally, I really like this point that Eskow makes:

If this were a public debate and not a secret one, this latest move could be used to start the debate we should be having: Why don’t we strengthen and increase Social Security, rather than cut it?


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