Ezra Klein-- A Veritable William Jennings Bryan
Yesterday, we saw how overrun Congress is with very rich people and how the lack of empathy by rich politicians for normal working families is a policy disaster going into the Grand Bargain. Not many people think of Ezra Klein as some kind of raging populist. In the crucial election of 1896, are you sure where Ezra would have stood? The disgust he expressed on The Last Word Friday (above) and in his Washington Post column over the weekend for the super-wealthy trying to undermine Social Security, gave me some hope that maybe, just maybe, enough Democratic corporate shills could be deterred from voting for the Obama-Boehner Grand Bargain that seeks to balance the budget on the backs on working families. I think the chance is slim because the media is so firmly clinging to the elite gestalt that Ezra suddenly recognizes as inherently unfair. But I never really even thought that there might be any chance at all.
“'Cutting' Social Security, writes Ezra, "is unpopular and people don’t like to talk about it. So folks who want to cut the program"-- like Goldman Sachs CEO Lloyd Blankfein-- "have instead settled on an elliptical argument about life expectancy. Social Security, they say, was designed at a time when Americans didn’t live quite so long. And so raising the retirement age isn’t a 'cut.' It’s a restoration of the program’s original purpose. It doesn’t hurt anything or anyone." Expect to hear a lot of this coming out of that transpartisan list of congressional multimillionaires we looked at yesterday. Ezra's response is worth remembering for the pushback:
The first point worth making here is that the country’s economy has grown 15-fold since Social Security was passed into law. One of the things the richest society the world has ever known can buy is a decent retirement for people who don’t have jobs they love and who don’t want to work forever.And lifting the cap is exactly the solution progressives in Congress, led by Bernie Sanders in the Senate and Raul Grijalva in the House, are pushing. You'll notice that neither Sanders nor Grijalva is on our list of multimillionaires-- nor has either of their political careers been underwritten by wealthy corporate interests. In the end this is precisely the argument that kept Blue America from endorsing corporate shills in blue t-shirts like newly elected "Democrats" millionaire Patrick Murphy (FL), millionaire Suzan DelBene (WA), millionaire Ann Kirkpatrick (AZ), millionaire Joyce Beatty (OH), millionaire Elizabeth Esty (CT), millionaire Bill Foster (IL), millionaire Brad Schneider (IL), millionaire John Delaney (MD), or millionaire Scott Peters (CA). Better than Republicans? Not particularly if you've worked like a dog all your life and want a dignified retirement.
The second point worth making is that Social Security was overhauled in the ’80s. So the promises the program is carrying out today were made then. And, since the ’80s, the idea that we’ve all gained so many years of life simply isn’t true. ... [S]ince 1977, the life expectancy of male workers retiring at age 65 has risen six years in the top half of the income distribution. But if you’re in the bottom half of the income distribution? Then you’ve only gained 1.3 years.
If you’re wealthy, you do have many more years to enjoy Social Security. But if you’re not, you don’t. And so making it so people who aren’t wealthy have to wait longer to use Social Security is a particularly cruel and regressive way to cut the program.
It’s also a cut that’s particularly tough on people who spend their lives in jobs they don’t enjoy.
You know what age most people actually begin taking Social Security? Sixty-five is what most people think. That’s the law’s standard retirement age. But that’s wrong. Most people begin taking Social Security benefits at 62, which is as early as the law allows you to take them.
When they do that, it means they get smaller benefits over their lifetime. We penalize for taking it early. But they do it anyway. They do it because they don’t want to spend their whole lives at that job. Unlike many folks in finance or in the U.S. Senate or writing for the nation’s op-ed pages, they don’t want to work till they drop.
As Peter Diamond, the Nobel laureate economist and Social Security expert, told Dylan Matthews:
What do we know about the people who retire at 62? On average, shorter life expectancy and lower earnings than people retiring at later ages. If anyone stood up and said, “Instead of doing uniform across the board cuts, let’s make them a little worse for people who have shorter life expectancies and lower earnings,” they’d be laughed at. Anything that reduces benefits is going to hurt everybody. It’s going to hit people with short life expectancies, it’s going to hit people with high life expectancies. But we should not make it worse for those retiring earliest.That’s what’s galling about this easy argument. The people who make it, the pundits and the senators and the CEOs, they’ll never feel it. They don’t want to retire at age 65, and they don’t have short life expectancies, and they’re not mainly relying on Social Security for their retirement income. They’re bravely advocating a cut they’ll never feel.
But you know what they would feel? Social Security taxes don’t apply to income over $110,000. In 2011, Lloyd Blankfein’s total compensation was $16.1 million. That means he paid Social Security taxes on less than 1 percent of his compensation.
If we lifted that cap, if we made all income subject to payroll taxes, the Congressional Budget Office estimates that it would do three times as much to solve Social Security’s shortfall as raising the retirement age to 70. In fact, it would, in one fell swoop, close Social Security’s solvency gap for the next 75 years. That may or may not be the right way to close Social Security’s shortfall, but somehow, it rarely gets mentioned by the folks who think they’re being courageous when they talk about raising a retirement age they’ll never notice.