Socialist Action /August 1999
Clinton, Congress Work to 'Save' Social Security - but
from Whom?
By NAT WEINSTEIN
President Bill Clinton and his bipartisan Congress initiated a decade-long
assault on Social Security based on a big lie cut from the whole cloth.
Starting even earlier, the news media had discovered that waves of "baby
boomers," born at the end of World War II, would soon start reaching
retirement age. The pretext for the attack on Social Security that followed
was that taxes paid-in would not be enough to meet the pension demands
of the flood of baby boomers beginning to retire after the first decade
of the new millennium.
Since then, the media has declared with one voice that Social Security
was doomed to go broke.
But you don't have to be a rocket scientist to figure out that the Social
Security "bankruptcy" myth is mainly intended to serve as a rationalization
for steadily cutting benefits and postponing the age of retirement. These
cuts, to be sure, hit hardest on those most dependent on Social Security
pensions and Medicare for mere survival.
Last year, the capitalist assault on Social Security was escalated by
the amazing "discovery" that for the first time in many years
instead of a deficit in 1998, a surplus of federal tax income of all kinds
over all expenditures occurred and surpluses would continue for the foreseeable
future!
Thus, the bankruptcy of the system deriving from a shortfall in income
over expenditures seems to have been turned into its exact opposite by
the alleged budget surplus "windfall.
But rather than this "windfall" being used to restore the
age of retirement to 65 years and restoring cuts in cost-of-living and other
less visible reductions in pensions and related benefits, it will wind up
being just another gift to corporate America.
When the first alleged budget surplus was discovered last year it was
arbitrarily projected to be followed by further surpluses in the foreseeable
future. On the basis of the projected windfall of trillions of dollars well
into the new millennium, it was first proposed to invest the bulk of it
in the stockmarket.
That plan appears to have been put on the back burner, for the time being
at least, since soaring stock prices are already inflated far above their
real values and scores of billions of dollars of the system's funds invested
in stocks would rocket the stock market into orbit around the moon.
Reports since then also predicted a total budget surplus calculated over
the next 10 years adding up to $2.9 trillion (The New York Times editorial,
July 12, 1999). The editors also report that "Democrats and Republicans
agree in principle that the $1.9 trillion generated by Social Security taxes
[in the same 10 year period] should go back into that system to keep it
solvent well into the next century."
That meant, they concluded, that the two capitalist parties would "fight
over the remaining $1 trillion.
What the media seemed not to notice was the de facto astounding admission
that the money spent on Social Security benefits of all kinds is more than
paid for by its beneficiaries. It proves that Social Security taxes deducted
from weekly paychecks in just 10 years is more than enough to pay for the
costs of pensions and related benefits "well into the next century."
And that means that there never was an impending bankruptcy of the Social
Security fund!
But it also means that a multiple of that $1.9 trillion estimate in past
Social Security taxes that now exist as IOUs on pieces of paper sitting
on the "asset" side of the financial ledger of the Federal Treasury
could have been used to expand, not reduce, benefits for pensioners and
Medicare patients.
It's important to note that the mythological Social Security shortfall
and, now, the budget surplus windfall, was accepted as good coin by virtually
the entire capitalist establishment.
Just the briefest glance at how this astounding "budget surplus
windfall" was calculated will show it to be full of ambiguities and
outright contradictions. It all adds up, in the end, to an absolute contempt
for truth by the ruling capitalist class and its political servants.
For instance, an earlier report in the June 29 Times estimated next
year's budget surplus to be $25 billion. It calculated the surplus over
the next five years increasing to $179 billion, and the surplus over the
next 10 years growing to $517 billion.
Accordingly, after 15 years (not 10), they estimated a total surplus
of only $721 billion, much less than the numbers cited by The Times' editors
a couple of weeks later, as cited above.
This inconsistency, alone, raises a huge question mark over even a single
year's estimate. And when projected as long as five, 10, or 15 years into
the future, it becomes the kind of prediction we can expect from a fortune
teller gazing into a crystal ball. This and numerous other inconsistencies
in the alleged facts have to my knowledge never been adequately explained.
In any event, whatever the actual facts will turn out to be, the method
used to arrive at a $721 billion total tax windfall is a text-book case
of counting chickens before they are hatched.
The Social Security hoax
Virtually everything that the capitalist government does is designed
to advance the interests of its class. And high on their agenda is to systematically
work to decrease the costs of doing business in this country and thus boost
the rate of profit of corporate America relative to their competitors everywhere
else in the world. And, to be sure, every such gain for capitalists is
a loss for workers.
And the proof that it has benefited capitalists at the expense of working
people is registered by the decades-long decline in the living standards
of the American working class. This attack on living standards is carried
out both at the point of production and afterward by capitalism's tax policies.
Since just before World War II, the tax burden has been steadily shifted
from capitalists to workers. A further shift in the tax burden results from
the systematic reduction in social benefits which are paid for directly
and indirectly by working class.
Reducing taxes on American capitalists increases their net after-tax
profits. It contributes to lower costs, and higher profits for American
capitalists-absolutely and in relation to the costs and profits of their
global competitors.
That's why the one sure thing to result from the diabolical machinations
in Congress surrounding the Social Security hoax, is a further cut in taxes
on the rich, a rise in taxes on the poor, and a continued real decline in
Social Security pensions and Medicare benefits.
And to top that off, the $1.9 trillion reportedly to be generated by
Social Security taxes over the next 10 years, and allegedly slated to go
back into the system, may possibly occur.
But like the Social Security funds that now exist as IOUs on pieces of
paper now sitting as if they were real money in the system's balance sheet,
the alleged "repayment," even if it happens, will undoubtedly
also be repaid in IOUs as well.
Clinton's Medicare scam
President Bill Clinton, seeking to take full credit for the alleged budget
surplus windfall, now promises a new "voluntary" prescription
drug coverage "gift" to Medicare patients.
The word voluntary is another deception, since it focuses on benefits
but refers-in the fine print-to premiums to be paid by Medicare beneficiaries
for the new prescription coverage. For instance, the added costs Medicare
clients must pay to be eligible for prescription drug benefits is an additional
$24 dollars a month in 2002, rising to $44 by 2008. That's no small sum
for those retirees barely getting by on poverty-level pensions.
Furthermore, the extended prescription coverage requires a 50 percent
copayment, with the total cost to government limited to only half the $2000
allotted for prescription costs in any one year.
As the saying goes, "the devil is in the details." Thus, additional
costs to those signing on to the proposed prescription plan, such as a
20 percent copayment by Medicare patients for laboratory services, whereas
no such copayment is required in the existing Medicare plan. If past practice
is any guide, when all the details see the light of day, the costs are more
likely to outweigh any benefit at all to patients from the vaunted prescription
drug payment plan.
What really appears to be the case, however, is that the real beneficiaries
will not be the tens of millions dependent on Social Security and Medicare.
Rather, it will be the HMOs and insurance and drug companies, who will simply
have more room for raising prices charged Medicare patients in exchange
for so-called "free" drug prescriptions and other alleged benefits.
Meanwhile, Democratic and Republican Party politicians seek political
advantage for themselves and their parties, and to line their own pockets
from what promises to be prolonged negotiations over what to do with the
"surplus."
Hard-cop, soft-cop game continues
Endless bickering and bartering between the good guys and the bad guys
in Congress has already begun-although determining who is who will appear
only in the eyes of the beholders.
Experience has long since convinced at least 40 percent of American voters
that there is no difference between capitalist politicians. This is a fact
made known by the tendency of ever fewer eligible voters bothering to register
or vote.
Experience also suggests that the legislation concerning what to do
with the alleged budget surplus bonanza is preordained. That is, assuming
that the great budget surplus myth hasn't been punctured well before the
presidential election. In any case, it can be safely predicted that the
promises to the rich will be kept, and the promises to the rest of us will,
as usual, be left unkept.
The "battle-lines" between bad guys and good guys have already
been drawn. Democrats, with Clinton leading the pack, have staked out their
territory. First, they pledge to use the imaginary budget bonanza to pay
down the $5.6 trillion national debt and second, to give the rest of us
the aforementioned prescription drug benefit plan. (Which, by the way, ignores
the plight of the reported 40 million Americans with no medical coverage
whatsoever.)
Republicans, who have long staked out the role of hard cop for their
party, have focused their demands on a massive tax reduction that will leave
little room for paying down the national debt or the prescription drug
benefit.
In line with their role in the game of hard cop, soft cop, Republicans,
moreover, are demanding more than a lion's share of tax reductions on taxes
only paid by the very rich. First on their list is a reduction in capital-gains
tax rates, a complete phase-out of the estate tax, and a wide swath of special-interest
breaks for corporations.
Experience also tells us that the bad-guy, good-guy charade always ends
in a compromise substantially closer to the demands of the bad guys because
that simply is the reason for, and the goal of, the game.
But there is another greedy side-line game that goes on in all bargaining
in Congress over new legislation. Intimately tied into the bickering and
bargaining will be the "amendments" each politician will demand
before agreeing to vote for any legislation that results.
Such amendments are designed to serve no one but the interests of each
and every "public servant"-and, most important, the interests
of their corporate patrons who have bought and paid for their services.
Socialist Action /August 1999 |