Politicians 1 – Press 0

When it comes to Social Security and the deficit, you just can’t believe what you hear on the news. And sometimes you can believe what you hear from politicians.

Trudy Lieberman, in her piece, “The Budget Narrative: the press goes astray on Social Security” in the Columbia Journalism Review, spells out just how wrong some of our most respected news sources can be.

NPR:

On Marketplace, after commenting that the president’s 2,500 page budget explanation is “kind of a big yawn,” host Kai Ryssdal turned the program over to John Dimsdale, who noted that the budget freezes domestic spending for five years, cuts help for the poor to pay for heat, and raises interest on student loans. Then he lamented that “there’s no fix in this budget for the big deficit generators like Medicare, Social Security or tax loopholes.” At another spot in the segment, he said Obama’s budget director Jack Lew was asked “why the budget doesn’t reflect some of the dramatic entitlement and tax reforms recommended by the president’s deficit commission.”

And The New York Times:

The New York Times got into the swing of it, too, with a piece by Jackie Calmes. In the fourth graph of her story, she wrote: Neither party has put forward specific proposals to begin grappling with the most pressing long-term budget problem: the huge costs in Medicare, Medicaid and Social Security programs as the population ages and medical costs rise, a bill that could overwhelm the government and crimp the economy if not addressed.

But guess who got it right this week? The politicians–both right and left:

…at his [the president’s] budget press conference when Ben Feller of the AP asked: “Your plan does not address the long-term crushing costs of Social Security, Medicare, Medicaid—the real drivers of long-term debt. Can you explain that?” The president explained: “The truth is that Social Security is not the huge contributor to the debt that the other two entitlements are.” Then it was Wisconsin congressman Paul Ryan’s turn, and he said pretty much the same thing. Paul Ryan, the hawkish, influential chair of the House Budget Committee? In an interview with Politico, Ryan said, with a bit of garble: Social Security is a big part of the problem of future debt. Now as people know—now Social Security is not a contributor to our deficit of any material right now. Social Security is not a big driver of our debt problems. Medicare and Medicaid are the biggest drivers of our future debt problems. Maybe this is one time when the media should be taking their cues from the pols as they craft their stories.

Women to Obama: Hands Off Social Security

By Susan Feiner

WeNews commentator

Monday, September 27, 2010 [Cross-posted at http://www.womensenews.org/story/retirement/100924/women-obama-hands-social-security]

Obama’s discussion of the economy on CNBC last week included what Susan Feiner sees as an alarming reference to Social Security as an “entitlement.” In fact, it’s a self-funded insurance program that women can’t afford to lose.

(WOMENSENEWS)–Anyone who watched President Barak Obama defend his handling of the economy in the televised town-hall discussion last week might have come away remembering the exchange with the hedge-fund manager. He had the nerve to ask when Obama would stop giving Wall Street “the treatment.”

The president’s answer: “If you’re making a billion dollars a year after a very bad financial crisis where 8 million people lost their jobs and small businesses can’t get loans, then you shouldn’t feel put upon.”

Obama’s retort drew warm applause, and rightly so. But minutes earlier the president made a remark that should terrify the majority of Americans–especially women.

In responding to a question about closing the federal deficit he said that after you set aside “security spending”–whatever that may mean–the biggest part of the national budget is “entitlements.”

Ominously, he specified Social Security as one of those “entitlements,” along with Medicare.

Stop right there Mr. President.

Women Should be Horrified

Women in this country should be horrified by your comment for the following reasons:

• Women still earn less than men, so their opportunity to save for retirement is more limited.
• Only 13 percent of women aged 65 or older currently receive a pension.
• Social Security provides 90 percent of the income for 42 percent of women, but only 28 percent of men rely on Social Security for 90 percent of their income.
• Women are more likely than men to be single, widowed or divorced in retirement.

Adding up these facts leads to one conclusion: The health and dignity of women over age 65 depends on their continued receipt of monthly Social Security checks.

Moreover, Social Security is not an entitlement program as it’s paid for entirely by payroll taxes. It is an insurance program, not an entitlement. Not one penny of anyone’s Social Security comes out of the federal government’s general fund.

Social Security is, by law, wholly self-financing. It has no legal authority to borrow, so it never has.

If this incredibly successful and direly needed program hasn’t ever borrowed a dime, why is the president and his hand-picked commissioners putting Social Security cuts (and/or increases in the retirement age) in the same sentence as deficit reduction?

Fully Paid Until 2037

Social Security insurance is fully paid until 2037.

The program began in 1935 and is considered the greatest achievement of Frances Perkins, labor secretary under President Franklin Delano Roosevelt and the first woman to hold a cabinet level position in the U.S. government.

In every decade of its existence, lawmakers have adjusted its funding formula to ensure its solvency.

President Ronald Reagan, for instance, in the mid-1980s appointed the “Greenspan Commission” (Greenspan later became the chairman of the Federal Reserve, the nation’s central bank), which recommended significant increases in Social Security payroll taxes to ensure the build up of a trust fund to finance baby boomers’ retirements.

The Greenspan Commission was honest; it looked at Social Security and figured out how much was needed to pay future retirees’ benefits. The necessary changes were made, the needed dollars flowed in and the trust fund grew. The fix engineered by the Greenspan Commission worked: the Social Security ‘trust fund’ is valued at $2.54 trillion today. By 2024 its projected value will be $4.2 trillion.

Nothing in the accounting future of the program warrants any major changes.

Enemies of Social Security have juicy private pensions, but few women enjoy this perk.

Social Security is as essential to older Americans today as it was 75 years ago when it was founded. Leave it alone.

Susan F. Feiner is a professor of women’s studies and economics at the University of Southern Maine. She is co-author of the 2004 book, “Liberating Economics: Feminist Perspectives on Families, Work and Globalization.” She is also a board member of the Frances Perkins Center.

For more information:

Older Women’s League: http://www.owl-national.org/Welcome.html

Frances Perkins Center: http://www.francesperkinscenter.org

Cross-posted at http://www.womensenews.org/story/retirement/100924/women-obama-hands-social-security

Imperfect healthcare bill compared to 1935 Social Security Act

In a blog post today at the New Yorker, Henrik Hertzberg pointed to a Politico article by Bruce Schulman, “House should grit teeth, pass Senate bill” in which Schulman describes how far short of its original goals the 1935 Social Security Act fell, yet how influential its impact since then has been.

Of course, the final product scaled down all FDR’s original ambitions. It excluded agriculture, domestics and small shops with fewer than 10 workers — a decision ensuring that African-Americans, large numbers of whom toiled as farm workers and domestics, would be without protection. It took three decades of gradual expansion before Social Security covered every worker — a long, hard slog.

[…]

By the time the last compromise was made, Perkins expressed the disillusionment of many reformers. The thing,” she lamented, had been “chiseled down to a conservative pattern.”

[…]

Even with the compromises present at its creation, FDR, Perkins remembered, considered Social Security “the cornerstone” of his legacy. President Barack Obama and the Congress might well remember that model.

Thanks to Bruce Schulman for putting political compromise–particularly as it relates to major reform efforts–into perspective, and thanks to Henrik Hertzberg for bringing Schulman’s article to our attention.

“You cannot have a strong middle class without a strong labor movement.”

President Obama made the above statement today as he signed a series of executive orders in the White House that are meant to “level the playing field” for labor unions.

According to the New York Times report of the meeting:

The orders he signed, which union officials say will undo Bush administration policies that tilted toward employers, would require federal contractors to offer jobs to current workers when contracts change, and would make it more difficult for federal contractors to discourage union activities.

The president also announced a new task force on the problems of middle-class Americans, and he named Vice President Joe Biden to chair it. Jared Bernstein, a liberal economist, has been tapped to lead the task force. More information can be found at AStrongMiddleClass.gov.

President Obama and VP Biden at White House ceremony (Stephen Crowley/The New York Times)

More from the Times:

The president and vice president did not define the “middle class” precisely in terms of income or standard of living, but it seemed clear that they were not speaking of Wall Street people.

“These are the men and the women who form the backbone of our economy, the most productive workers in the world,” Mr. Obama said.

Mark Green: Who will be Obama’s “Frances Perkins”?

Mark Green has published an article in The Nation that lists an ambitious but doable series of ten goals for the first term of the Obama presidency. They are: (1) Reduce poverty one-third by 2016; (2) Enhance democracy to stop special-interest vetoes; (3) Get economic growth rates back to at least 3 percent; (4) Move to a clean, green low-carbon economy; (5) Reduce the costs–and expand the coverage–of healthcare; (6) Elevate science over politics in federal decision-making; (7) Restore the rule of law and human rights as American values; (8) Educate children better for the global economy; (9) Fight terrorism by working more cooperatively with allies; (10) Reduce nuclear proliferation.

These are all worthy goals but what caught my eye was Green’s mention of Frances Perkins:

No president can go much farther than his constituency wants. Historian Doris Kearns Goodwin put it well in The American Prospect: “When you look at the periods of social change, in each instance the president used leadership not only to get the public involved in understanding what the problems were but to create a fervent desire to address these problems in a meaningful way.” Recall here the oft-told story how Labor Secretary Frances Perkins was urging a sympathetic FDR to adopt labor reforms, and the politician-in-chief replied: Fine. Now make me do it.

Perhaps we all should be Obama’s “Frances Perkins.” Our voices together can help “create a fervent desire to address these problems in a meaningful way.”

The New New Deal and the 21st Century Workforce

The Frances Perkins Center is working on the agenda for a conference May 2nd at the Hutchinson Center in Belfast, Maine. (Email bburt@francesperkinscenter.org to get on the list for information.) Yesterday, I met with Maine’s Commissioner of Labor, Laura Fortman, and Deputy Commissioner of Labor, Jane Gilbert, to discuss potential conference topics. Our ideas centered around what’s being called the “New New Deal,” focusing specifically on the changes in the U.S. workforce since 1933 and how this new version of a works progress program would affect workers who didn’t fit the 1933 profile.

Today, President-elect Obama released a YouTube and radio address that speaks directly about what he’s considering in this 2009 stimulus package:

To recap what President-elect Obama says, there are the three major pieces of the package at this point:

a massive effort to make public buildings more energy-efficient.

the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.

a sweeping effort to modernize and upgrade school buildings that this country has ever seen. As we renew our schools and highways, we’ll also renew our information superhighway.

Those are important goals. But as we look at the kinds of jobs they’ll create and the workers who will benefit from those jobs, we need to ask ourselves, “Who is being left out?” Will part-time workers benefit? Will women workers be fully represented? Will “contract” workers get any help? How can we make sure that the benefits of a stimulus package reach the broadest possible spectrum of workers?

That’s what we’ll be considering on May 2nd.

Labor’s feeling unappreciated by Obama

Back before Thanksgiving, Ben Smith at Politico published this story: Labor sec. not on econ team. Here are a few excerpts:

Obama’s team of treasury secretary and four top economic advisers, introduced as the hands that will steer America’s economy, had no particular ties to the labor movement. And Obama’s secretary of labor was not introduced as part of that team — a suggestion that that post will retain its second-tier status and quiet voice in matters central to economic policy.

“I wish that [the secretary of labor] would have been among them,” former Michigan congressman David Bonior, a labor stalwart and member of Obama’s transition team, said of the group at the Chicago press conference. “I hope they take that job seriously.”

Meanwhile, today, Steve Fraser at The Nation is unhappy with all the ex-Clintonites in the new administration. He writes about the Obama appointees in Beyond the Bailout State,

A suffocating political and intellectual provincialism has captured the new administration in embryo. Instead of embracing a sense of adventurousness, a readiness to break with the past so enthusiastically promoted during the campaign, Obama seems overcome with inhibitions and fears.

and contrasts that with FDR’s transition:

Meanwhile, Felix Frankfurter (another confidant of FDR’s and a future Supreme Court Justice), aided by the behind-the-scenes efforts of Supreme Court Justice Louis Brandeis, fiercely contested the influence of the corporatists within the new administration, favoring anti-trust and then-new Keynesian approaches to economic recovery. Secretary of Labor Frances Perkins used her extensive ties to the social work community and the labor movement to keep an otherwise tone-deaf president apprised of portentous rumblings from that quarter. In this fashion, she eased the way for the passage of the Wagner Act that legislated the right to organize and bargain collectively and that ended the reign of industrial autocracy in the workplace.

Is there just cause for handwringing? That remains to be seen. Keep in mind that Roosevelt didn’t officially appoint FP as his secretary of labor until just five days before his inauguration, which took place on March 4th, 1933.