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Posted at 12:19 PM ET, 01/27/2011

Boehner backs off Social Security cuts

By Ezra Klein

The big concern that progressives had going into the State of the Union address was that President Obama would propose cuts to Social Security. That didn't happen. And now, a few days after the State of the Union, John Boehner is backing off the cuts he'd previously proposed to Social Security.

Before the election, Boehner had said we should raise the retirement age to 70; he now says that proposing cuts was putting the cart before the horse. "I made a mistake when I did that because I think having the conversation about how big the problem is is the first step," Boehner told CNN's Kathleen Parker. "And once the American people understand how big the problem is, then you can begin to outline an array of possible solutions." I take this as another example of the GOP's flight from specificity.

By Ezra Klein  | January 27, 2011; 12:19 PM ET
Categories:  Social Security  
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Comments

Let me translate this into English: "We can't tell the marks our ideas before we have laid down the propaganda (i.e. "had a conversation with the American people").

Posted by: ciocia1 | January 27, 2011 12:36 PM | Report abuse

way to keep the partisanship up Ezra! Actually what he said was that we should do is cut spending to where we can and then do things to get people back to work

"You're not going to get people back to work by taxing the very people we're expecting to reinvest in our economy."


"You can't raise taxes enough to solve this problem and you can't cut enough spending to solve this problem"

That's what a non-partisan would have heard.

Posted by: visionbrkr | January 27, 2011 1:17 PM | Report abuse

A real non-partisan would have actually examined the numbers and broken down Social Security's financing gap in terms of dollars per week per worker and found that the cost of a FICA based solution across covered workers (i.e. with no raise in the cap) starts at 48 cents a week for the median income household, and projects to go up at less than 10% of increases in real wage if the fix is installed over 20 years, or a significantly smaller percentage if the fix is installed over 60 years or longer.

The problem with Boehner's new formulation is that if we actually frame the cost of 'crisis' in real terms workers would laugh him out of the room. We CAN tax our way out of Social Security 'crisis' for the equivalent of couch change. Which is why Bush took any such fix off the table when he created his CSSS in 2001. The enemies of Social Security simply didn't want anyone doing the arithmetic.

48 cents a week in year one. For a household earning $50k. Commensurately less for people making closer to minimum wage. That is the dirty secret of Social Security 'reform'.

Posted by: BruceWebb | January 27, 2011 1:33 PM | Report abuse

Regardless of Boehner's comments, something has to be done to cut the costs of social security, medicare, and medicaid! Entitlements are out of control. I collect social security and am on medicare....and while I would hate to see a negative impact on me, personally, we ALL need to make some contributions to healing a sick economy. Smaller, more efficient government is the only real answer! $4BILLION per day in interest on the national debt is a KILLER!

www.eclecticramblings.wordpress.com

Posted by: my4653 | January 27, 2011 1:42 PM | Report abuse

There are some specifics worth running from and this is certainly one of them. Per BruceWebb the problem is readily manageable -- and Social Security isn't even part of the budget.

Medicare/medicaid is something else. But that too would be no problem if we didn't choose to pay two and three times what other countries pay for decent healthcare.

Posted by: jtmiller42 | January 27, 2011 1:56 PM | Report abuse

You're right that Boehner made separate arguments about cutting spending and not raising taxes at another point in the interview, vision, but that doesn't make his retreat on SS cuts less newsworthy, and pointing out when leading politicians change their positions in important policy matters is my job, not partisanship. This is particularly true given that I've mentioned Boehner's preference for raising the retirement age previously.

Posted by: Ezra Klein | January 27, 2011 2:24 PM | Report abuse

Keep the top-bracket tax cuts in place, and remove the earnings cap on SSI.

Correct the "carry interest" loophole, and tax fund managers on their earnings. Gains on other people's money is INCOME, and should be taxed as such.

Posted by: OldUncleTom | January 27, 2011 3:32 PM | Report abuse

A real non-partisan would have actually examined the numbers and broken down Social Security's financing gap in terms of dollars per week per worker and found that the cost of a FICA based solution across covered workers (i.e. with no raise in the cap) starts at 48 cents a week for the median income household, and projects to go up at less than 10% of increases in real wage if the fix is installed over 20 years, or a significantly smaller percentage if the fix is installed over 60 years or longer.

The problem with Boehner's new formulation is that if we actually frame the cost of 'crisis' in real terms workers would laugh him out of the room. We CAN tax our way out of Social Security 'crisis' for the equivalent of couch change. Which is why Bush took any such fix off the table when he created his CSSS in 2001. The enemies of Social Security simply didn't want anyone doing the arithmetic.

48 cents a week in year one. For a household earning $50k. Commensurately less for people making closer to minimum wage. That is the dirty secret of Social Security 'reform'.

Posted by: BruceWebb | January 27, 2011 1:33 PM | Report abuse
==========================================
Except that the way the current social security program is designed, any increase in taxes, under any system or theory, would either increase payments to current beneficiaries, reduce the current budget deficit but increase the federal liabilty to the Social Security Trust Fund (sic), or incrase payments due to higher income benficiaries, as social security payments are based on "contributions"(taxes) previously paid by benficiaries (taxpayers).

Change it to means testing, and you have a federal welfare system of progressively increasing complexity which pays about the same as a dirt-poor annuity run by fairly crooked financial advisors. It's guaranteed to draw more and more moneys from the Treasury beginnign this year, to a point where within a litle more than a generation, it will have a -25% yield on payments received (100% payments, 75% return).

The question on payments? Private citizens may pay more on a GNP basis here, but health care is progressively increasing as a demand on countries GNP from Canada to France without effective answers. There were riots where the retirement age in France was proposed to be raised to 62. What will it be when entitlement payments plus entitlement borrowing begin to crowd out other necessary government programs (within probably less than a generation).

Don't want to be near that train wreck. Last year's recession was just a bump compared to what will be happening.

Posted by: PALADIN7E | January 27, 2011 3:35 PM | Report abuse

A problem is that the American electorate takes what's offered, via "sound-bites" or other government officials' published- or broadcast-statements, as truthful and/or accurate. Nothing like what any official says about an issue is true, until that issue has survived the "federal legislative processes". By the time any legislation arrives at the POTUS' desk to be signed (or vetoed) it usually looks nothing like what was promised to the electorate, and contains multi-million-dollar hand-offs to their business and family friends--earmarks. Unfortunately, the voting public is more idealistic than bright, and most often believes in what's been promised; but the promises are rarely what the politicos deliver.

Posted by: marc85 | January 27, 2011 3:45 PM | Report abuse

Nice try Ezra - you are picking words out of a conversation. No matter - massive cuts are coming before the Spending cap is increase and you will get all the details you need then......and you and your little "progressive" buddies will squeal like pigs.

Posted by: Realist201 | January 27, 2011 4:07 PM | Report abuse

No surprise the republicans like the Democrats know that the median voter rules and the median voter wants SS.

Posted by: jwogdn | January 27, 2011 4:10 PM | Report abuse

He and republicans have already started to backtrack on healthcare as well. Republican talking points now maintain they support prohibiting insurance companies from refusing people for pre-existing conditions. Thats funny, rupublicans never did before but they do now, wonder why? He will also backpeddle if asked if seniors will have to give the United States the $250 back they got from Obama for perscription drugs in the first part of the healthcare reform. Want to ask for that back when you "repeal" the healthcare bill, John? I thought not.

Posted by: treefrog2 | January 27, 2011 5:29 PM | Report abuse

Boehner backtracks on Social Security cuts
========================================
When I look at Boehner, I get a feeling that he is a good dancer, and perhaps can do the moonwalk such that you wouldn't know whether is coming or going!

Posted by: kishorgala | January 27, 2011 6:28 PM | Report abuse

It really looked like Boehner was going to cry at the end of that vid after the interviewer made him listen to a clip from Obama's SOTU.

Posted by: ReggieH1 | January 27, 2011 7:18 PM | Report abuse

Liberals need to learn the facts.

It is refreshing to hear a politician say ‘I made a mistake’ especially before it was carried out. Raising the retirement age to 70 would be totally unjust to future retirees. When you look at the golden parachute, retirement package that Congress has it makes me furious. It was Congress who pilfered the funds from SS and issued IOU’s in the form of U.S. Treasury Bonds which have never been paid back and if they were, would only add to the deficit. If this theft had not occurred, SS would have a surplus and be solvent for many years to come. Please take the time to educate yourself with these facts just as the Congressional Budget Committee made mention of today.

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:
1.) That participation in the Program would be Completely voluntary,

No longer voluntary

2.) That the participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program,

Now 7.65% on the first $90,000

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

No longer tax deductible

4.) That the money the participants put into the independent 'Trust Fund' rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

Under Johnson the money was moved to the General Fund and Spent.

5.) That the annuity payments to the retirees would never be taxed as income.

Under Clinton & Gore Up to 85% of your Social Security can be Taxed.

Since many of us have paid into FICA for years and are now receiving a Social Security check every month and then finding that we are getting taxed on 85% of the money we paid to the Federal government to 'put away' you may be interested in the following:

Q: Which Political Party took Social Security from the independent 'Trust Fund' and put it into the general fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House and Senate.

Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the US

Q: Which Political Party decided to start giving annuity payments to immigrants?

A: Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

Then, after violating the original Contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

Posted by: takebackamerica1 | January 27, 2011 7:41 PM | Report abuse

Treefrog2 We shore do have short memories don’t we? Republicans have always been in favor of not allowing insurance companies from refusing people for pre-existing conditions along with tort reform and allowing people to buy insurance across state lines. The reason some do not know these facts may be because Republican participation was not invited into the writing of this bill and all attempts at amendments failed due to the majority in both houses being held by Democrats. The process in which the Obama Care Health Bill was passed into law was a disgrace.

Posted by: takebackamerica1 | January 27, 2011 8:11 PM | Report abuse

Treefrog2 My what short memories do we have. Republicans have always been in favor of not allowing insurance companies from refusing people for pre-existing conditions along with tort reform and allowing people to buy insurance across state lines. The reason some do not know these facts may be because Republican participation was not invited into the writing of this bill and all attempts at amendments failed due to the majority in both houses being held by Democrats. The process in which the Obama Care Health Bill was passed into law was a disgrace. To date we still do not know what all is in this bill and how detrimental it will be to the economy and the doctor-patient relationship.

Posted by: takebackamerica1 | January 27, 2011 8:17 PM | Report abuse

Treefrog2 My what short memories do we have. Republicans have always been in favor of not allowing insurance companies from refusing people for pre-existing conditions along with tort reform and allowing people to buy insurance across state lines. The reason some do not know these facts may be because Republican participation was not invited into the writing of this bill and all attempts at amendments failed due to the majority in both houses being held by Democrats. The process in which the Obama Care Health Bill was passed into law was a disgrace. To date we still do not know what all is in this bill and how detrimental it will be to the economy and the doctor-patient relationship.

Posted by: takebackamerica1 | January 27, 2011 8:22 PM | Report abuse

I think the point here is that there are still not enough people that see the coming collapse to do anything. Numbers on a chart are meaningless. We're in a debt trap- our current national lifestyle is driven by excess debt. We need to make an adjustment downward. This could result in lower unemployment, but we'll all be seeing lower wages.

Thinking of the recent downgrade of Japan, what happens in a world where there is no AAA rated debt?

Posted by: staticvars | January 27, 2011 11:51 PM | Report abuse

Takebackamerica1:

The so-called "facts" that you believe that Liberals need to learn are all Internet myths about the Social Security system. In the future, before lifting such things from right-wing websites and reposting them here, please engage in a modicum of research.

Posted by: co8906 | January 28, 2011 12:14 AM | Report abuse

Wow...."raise the retirement age to 70" !!

I am 63 years old and am working in Information Technology and I have been harrassed and demeaned since day one about my age.

My coworker, on first meeting me, said "I didn't know they were hiring seniors." As if that was a bad thing.

Fortunately, for me, I have had to prove myself in each new assignment I accept. I am still here....so far so good.

Still, give me a break. Imagine what they would say were I 70 y/o. As with most Republican ideas....this one hasn't been thought out. Actually, I think, Republicans don't care whether raising the retirement age benefits us or not. I sense, they would prefer NOT!!

Posted by: celested91 | January 28, 2011 4:45 AM | Report abuse

@Ezra,

thanks for your reply and clarification but to me it wasn't the fact that he changed his mind (or seemingly wants to review the possible options) but that when he said this, a non-partisan might have looked at that as a postive that he was coming around to other's beliefs on the subject and you took it as a negative. Don't get me wrong you're less partisan (IMO) than most that I hear on Democratic/Republican issues (which is why I stick around here to view both sides of the debates) but to me that was a little over the top (ie. "I take this as another example of the GOP's flight from specificity.')

IMO he should have seperated Medicare and Medicaid from SS as they're on two totally different cost structures and two totally different problems with SS being a small one compared to Medicare and Medicaid.

Posted by: visionbrkr | January 28, 2011 7:40 AM | Report abuse

takebackamerica1
---------------------------
Me Thinks you repost a Chain email devoid of REAL facts about Social Security.
http://www.socialsecurityreform.org/history/index.cfm

1937 - The Federal Insurance Contribution Act (FICA) required workers to pay taxes to support the Social Security system. Payroll taxes were 2%.

Reagan Administration:
1983 - The National Commission on Social Security Reform was created in response to the actuarial unsoundness of the system. The commission called for 1) and increase in the self-employment tax; 2) partial taxation of benefits to upper income retirees; 3) expansion of coverage to include federal civilian and nonprofit organization employees; and 4) an increase in the retirement age from 65 to 67, to be enacted gradually starting in 2000. Again, Social Security was declared actuarially sound. Payroll taxes were 10.8%.

1985 - The Social Security Trust Funds were moved "off-budget" so that the funds earmarked for the Social Security system would be tracked separately from the rest of the budget. Payroll taxes were 11.4%.

1986 - COLAs were increased to respond to minor levels of inflation. Payroll taxes were 11.4%.

Clinton:
1993 - The amount of taxable benefits for upper income retirees was increased to 85%. Payroll taxes were 12.4%.

WASHINGTON, Aug. 15, 1994 — Using Franklin D. Roosevelt's pen, President Clinton today signed into law a bill to make the Social Security Administration an independent agency.

Posted by: ddoiron1 | January 28, 2011 9:09 AM | Report abuse

The problem is Republicans gave away the store to the rich. They manufactured this fiscal crisis by giving away $3 trillion in tax cuts that the government couldn't afford. And now they're using the fiscal crisis of their own making to justify eliminating Medicare and Social Security. In a few years there will be elderly people begging on street corners again, elderly people dying by the millions for lack of medical treatment. I hope when that day arrives, Republicans will be will be honest enough to claim credit for doing it. Enjoy those tax cuts, buy a new car or more junk from China -- I'm sure it's worth whatever human suffering it brings about.

Posted by: tboyer33 | January 28, 2011 10:47 AM | Report abuse

Simple solution to strengthening the Social Security trust fund and sustaining current benefit levels at current age limits:

Remove the SSN income tax cap!

Why should a person earning $110k per year pay the same SSN tax as a Billionnaire?

Remove the cap that limits SSN taxes to the first $106k of income. Don't Millionnaires and Billionnaires get enough tax breaks already?

TGIF

Posted by: free-donny | January 28, 2011 11:19 AM | Report abuse

Posted by: takebackamerica1
-------
Many of the statements you made is completely falsehood coming from the chain email that you took as gospel. Research the fact before you sprout off.
-------------------
Nice try Ezra - you are picking words out of a conversation. No matter - massive cuts are coming before the Spending cap is increase and you will get all the details you need then......and you and your little "progressive" buddies will squeal like pigs.

Posted by: Realist201
------------
Here's the problem, many things they will cut will affect you and I in a bigger way then you will realize.
There's a saying, you reap what you sow...

Posted by: beeker25 | January 28, 2011 12:11 PM | Report abuse

BOEHNER: "When I said we need to raise the retirement age to 70, I was actually referring to the speed limit. When I was talking about how we need to make drastic cuts, I was talking about cold cuts like bologna. We need to have a conversation with the American people to find out what kinds of cold cuts they want. Do they want ham, turkey, roast beef, olive loaf, pimiento loaf, head cheese? People just confused Social Security with sandwich meats. I do it all the time. You can't choose the bread you want for sandwich until you choose the meat. That's putting the cart before the horse. We have to remember this is a Sputnik moment. Alvin Sputnik owns a great delicatessen that serves great sandwiches and absolutely no horse meat, so he really never puts his deli cart before the horse... Let's have an adult conversation and one that just doesn't get too specific."

Posted by: jade_7243 | January 28, 2011 3:51 PM | Report abuse

Social Security collects $6200 a year ($119.23 a week) for a $50,000 salary. (6.2 for employer and employee).

Raising each by 1.1% results in long run actuarial balance.
http://www.ssa.gov/OACT/solvency/provisions/charts/chart_run267.html

However, that results in $7300 per year ($140.38 a week) or roughly $20 a week more.

How on earth did you calculate 50 cents a week, Bruce W?

Posted by: AndrewDover | January 29, 2011 8:02 PM | Report abuse

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