The Bush Administration’s initiative to reform the Social Security system has been criticized recently as being premature because the system is not really in crisis and there are more pressing fiscal problems, such as reforming the health care finance system. Well, Social Security is clearly not in as bad a shape as say, Medicare, but to put off reforming Social Security for that reason is akin to reasoning that there is no need to tend to that long overdue tune up of the family’s better car because it seems to be driving better than the family’s clunker.
In this Wall Street Journal ($) Capital column, David Wessel interviews Edward “Ned” Gramlich, a U.S. Federal Reserve governor who chaired the Social Security advisory commission during the Clinton Administration and is the former dean of the University of Michigan’s School of Public Policy. Although not enamored of the Bush Administration’s initial proposal for reforming Social Security, Mr. Gramlich nevertheless is a strong proponent for Social Security reform now:
I don’t think the system is in crisis. But we can make much more desirable changes if they’re made early. The problem with waiting until the car is about to go off the road is that our options are constricted. It’s hard to make sensible benefit cuts if people have already retired or are close to retirement. It’s easier to do if cuts are well-advertised. In the past, we have waited, the benefit system has expanded and we’ve raised the payroll tax. At some point, we can’t do that.
We can do much more sensible things if we act early. But it’s hard to generate the requisite urgency when the system is projected to be paying full benefits for the next 40 years or so. I’m not an advocate of the president’s general approach, but I have sympathy for arguments that the president’s people are making about the wisdom of acting now.
Mayflower Compact Coalition (Wangstas Fo’ Shizzle My Nizzle)…
RNC Chairman Ken Mehlman today attended the unveiling of the 21st Century Mayflower Compact at the Mayflower Hotel in Washington D.C.. The nine-point agenda includes support for school choice and private social security accounts. The Coalition is advised in part by former House Speaker Newt Gingrich?s consulting firm.
African Americans often reach different and surprising conclusions on social issues that the casual (Caucasian) observer just won?t understand. For example, Black folks still want to see Michael Jackson find happiness. His high-pitched voice and soulful delivery is the soundtrack of generations and has a permanent place in the Black community?s psyche, no matter the plastic surgery, skin bleaching and alleged child molestation charges. Possibly, it?s the ?he?s still Black? phenomenon that African Americans well understand. They want Michael Jackson?s name cleared. In short, they want him to make good music and just leave the damn kids alone.
Likewise, Blacks see Old Age Survivors and Disability Insurance Program, popularly known as Social Security, as an entitlement forced into place during a period when ?bigots? wanted to run things. And against the odds, a well respected Franklin Roosevelt was able to established needed protection for the public from the economic fears of old age, sickness, accident, and unemployment. As its original name suggest, African Americans believe the insurance program was created to do much more than provide an old age benefit.
Wangstas (whites and uh oh oreos) are extremely white people who attempt to be ?gangsta? (cool with Black people) in order to ?pimp out.? They dress, speak and act for all practical purposes as an African Americans aside from the fact that they are not. Normally they are hated by the fam for being fake.
The White House and its oreos who support overhauling Social Security have launched a highly targeted campaign to convince Black people that President Bush?s plan to create private investment accounts will have special benefits for them. The ghetto fab element about the GOP message to African Americans: ?The shorter life expectancy of Black males means Social Security in its current form is not a favorable deal.?
Proponents of privatizing social security who claim no group has as much at stake in the debate over reform as African Americans, in fact, are right. Black families of workers who become disabled or die are much more likely than their Caucasian counterparts to be dependent on the grip available from disability and/or survivor benefits. Blacks make up 12 percent of the U.S. population, but 23 percent of African American children receive survivor benefits, and 18 percent of the community are disability beneficiaries.
Although the wangstas are making a special effort to appeal to the strizzeet with the 21st Century Mayflower Compact, the ?lower life expectancies? illusion appears to reached every one except the African American senior. Their attempt to focus on a very narrow element of the system (current program based on longevity is unfair) is misplaced and doesn?t gain cool points. What the oreos fail to realize is their attempt to be ?down? for da brothas… is just ?gosh-darn? obnoxious (using their vernacular) and another clue identifying the new face of segregation.
?A?ight??
Social Security is an insurance program that protects workers and their families against the income loss that occurs when a worker retires, becomes disabled, or dies. All workers will eventually either grow too old to compete in the labor market, become disabled, or die. President Roosevelt created the program to insure all workers and their families against these universal risks, while spreading the costs and benefits of that insurance protection among the entire workforce.
It is a ?pay as you go? program, which means the Federal Insurance Contribution Act (FICA) payroll tax paid by today?s workers are not set aside to pay their own benefits down the road, but rather go to pay the benefits of current recipients. The tax is progressive. The low-wage workers receive a greater percentage of pre-retirement earnings from the program than higher-wage workers. And, in the 1980’s, Congress passed reforms to raise extra tax revenues above and beyond the current need and set up a trust fund to hold a reserve.
As was the case when the program was established, higher-wage workers still oppose the social nature of the program. They argue low rates of return as a reason to switch from the current ?pay-as-you-go? system to one in which individual workers claim their own contribution and decide where and how to invest it. In short, rather than sharing the risk across the entire workforce to ensure that all workers and their families are protected from old age, disability, and death, higher-wage workers want to enable opportunity to reap gains from private investment without having to help protect lower-wage workers from their disproportionate risks.
Allowing high-wage workers (who are more likely to live long enough to retire) opportunity to opt out of the general risk pool and devote all their money to retirement without having to cover the risk of those who may become disabled or die, is da fo? shizzle identifying the republican party?s desire to return to a segregated society.
Roosevelt?s benefit formula currently in place intentionally helps low income earners. Lifetime earnings directly factor into the formula. And, thirty-five percent of Black workers born between 1931 and 1940 had lifetime earnings that fell into the bottom fifth of earnings received by workers born in these years. African Americans? median earnings (working-age in jobs covered by Social Security in 2002) were about $21,200, compared to $28,400 for all working-age people.
HNIC, President Bush, does acknowledge the difficulty Blacks will have in accumulating enough savings in their individual accounts to provide for a secure retirement once the progressivity of the current system is eliminated. However, he has only suggested allowing lower-income workers to place higher portions of their income into the uncertainties of investment accounts (creating even more risk).
Yes! Private accounts would be passed on to children or other heirs. But, what the HNIC and his oreos doesn?t explain is lower-income workers would be forced to buy an annuity large enough (when combined with their traditional Social Security benefit) to ensure that they would at least have a poverty level income for retirement.
Yo? playa… da new private Social Security account fizzle sucks!
Social Security Fraud Goes Unprosecuted, Even When Evidence is Handed to the Office of the Inspector General.
With the push for social security privitization, we can get a glimpse of the kind of treatment private citizens can expect. The United Airlines pension funds debacle is a great example of private
management: “In a devastating blow to 122,000 workers and retirees, a federal
bankruptcy judge ruled May 11 that United Airlines may default on its pension
obligations and turn over control of its pension funds to a federal agency
that is already swamped by corporate pension defaults.”
So how ironic is it that the current administration will not prosecute social
security fraud, even when it it pointed out. Case in point:
Edgar Henry Ariza, Plantation, FL man originally from Colombia (7300 nw 13 ct,
according to public records, 954 316 7372), Bellsouth employee, brings his
father to the US in summer 1995. Father gets green card, works for 30 days at
EL Harvey’s Recycling Center, Westborough, MA, and gets sick. Edgar applies
for and gets immediate social security disability benefits for father, Jose
Ariza Castillo. Jose starts benefits in September, gets oncology treatments,
and goes home to Colombia to die in November, 1995.
Edgar continues to receive the direct deposit ssi payments for the NEXT SEVEN
(7) YEARS. Son impersonates father and completes paperwork regarding and
maintaining father’s disability until 2002 when payments stop.
In 2004, father’s death certificate and copies of 7 years of direct deposit
bank statements are delivered to OIG Special Agent Rick Montero, (Federal
Courthouse, Fort Lauderdale). Montero says SSA probably won’t be interested
in prosecuting because aggregate amount only adds up to about $40,000 but if
it were $50,000 they would prosecute.
E. Clay Shaw, self touted watchdog of SS benefits, is informed but declines
interest. Robert Wexler seeks information from Montero but is refused
information as to status. US Treasury department sends letter to Ariza asking
for money back. Nothing.
Following is an excerpt from the South Florida Coalition of Social Security
Equity:
According to Shaw’s website, they claim that Shaw is the foremost
watchdog
of social security affairs. Direct quote from Shaw’s website:
“After 25 years in Congress, Mr. Shaw is the second most senior Republican
on the Committee on Ways and Means. Before ascending to the Trade
Subcommittee in 2005, Congressman Shaw was the Chairman of the Social
Security Subcommittee. Since January 1999, Mr. Shaw has been one of seniors’
and Social Security’s greatest advocates, spearheading Congressional efforts
to save our nation’s sacred contract between it’s [sic] citizens and their
federal government. Clay Shaw is one of the leading voices in Congress for
Social Security Reform. Through his leadership, the earnings penalty was
repealed for working seniors, new opportunities for individuals with
disabilities were created by removing return to work barriers, and the House
repealed the so-called Tier II tax on Social Security benefits. You can find
out more about Congressman Shaw’s Social Security Guarantee Plus Plan (H.R.
75) by accessing the Social Security section of his website.”
According to the official U.S. Government Social Security website, the
maximum sentence for converting money belonging to the United States is 10
years in prison and a $250,000 fine. The charge of concealing information
from the Social Security Administration carries a maximum penalty of 5 years
in prison and a $250,000 fine.
“The viability of our social security system depends, in part, on
individuals not defrauding the system,” said U. S. Attorney Alice H.
Martin. “When a social security recipient dies it is incumbent on the
family to notice the Social Security Administration of this death and not to
cash checks made payable to the deceased.”
awaters
South Florida Coalition for Social Security Equity