Contest Backfires on Social Security Privatizer

(via AFL-CIO Now)

Oh, the sweet irony.

Pete Peterson is the conservative billionaire who is a major financier in the effort to dismantle, cut and privatize Social Security, Medicare and Medicaid. Recently he and his foundation held a contest asking folks to submit videos on why it is important to “fix” the national debt of which, he and his foundation falsely claim, Social Security is a major contributor.

Sometimes the best-laid plans for a propaganda campaign can go awry. The winner of the $500 grand prize determined by popular vote on the website came from the completely opposite side of Peterson’s cut Social Security argument.

The “Just Scrap the Cap” winning video features rapping seniors rhyming their way to the conclusion that the way to shore up Social Security’s long-term finances isn’t through cuts or privatization but by scrapping the payroll tax cap on Social Security. That means billionaires like Peterson and rich CEOs would pay the same Social Security tax that low- to upper-middle-income workers do. Currently, any income above the $113,700 cap is exempt from the Social Security tax.

Peterson’s check went to Robby Stern of Social Security Works, the group that produced the video. Stern signed it over to Social Security Works and said:

“We will use the $500 to finance our education efforts and our Scrap the Cap campaign. We want to save Social Security from Peterson and his band of wealthy supporters.”

‘Scrap the cap’ to keep Social Security fair

From the Everett Herald:

Grandpa and childThe kids are all right. And so are their grandparents. Why? Because Social Security is there — for all of us. And we can make that promise even better by making sure we all pay the same tax rate for the same guarantee.

The Social Security Trustees report shows solid funding for the next 23 years. Signed into law by Ronald Reagan, one purpose of the 1982 Social Security reforms was to build up a trust fund to fund the retirement of the baby boomers. As they retired, the trust fund would eventually be spent down. Right now, the trust fund holds $2.7 trillion and is projected to grow to $2.9 trillion. After that, it will slowly shrink, as designed. And after us baby boomers fade away, Social Security will continue to be funded through payroll taxes, as it has for much of the past 75-plus years.

We need Social Security more than ever today. Half of private sector workers work for employers who don’t have any retirement plans. Only three percent of workers in the private sector have a defined benefit pension. A typical worker between the ages of 55 and 64 with a deferred contribution account has $40,000 in that account. That’s good for a monthly payment of about $280! So the only thing that soon-to-be retirees can depend upon, without question, is Social Security.

In Snohomish County, 101,000 people receive Social Security benefits — one out of seven people. Of those, seven out of 10 are retirees over age 65; 7,000 are children who have lost a working parent or live with their disabled parent or retired grandparents; and 15,000 are disabled workers.

Altogether Social Security pumps $1.5 billion a year into the Snohomish County economy. So if you want to hobble our economy and take away a job multiplier, just start cutting Social Security benefits. Unfortunately, that is exactly what President Obama, House Speaker John Boehner, most Republicans, and some Democrats, all buried inside the Washington D.C. beltway, are proposing to do.

They are trumpeting a new way of calculating inflation called the “Chained CPI.” It’s an apt name, because it chains retirees to the edge of poverty. Most of us know at least a few Social Security recipients. Their average benefit is $1,215 a month. That’s less than $15,000 a year. Two-thirds of all retirees depend on Social Security for more than half of their retirement income. Under the “Chained CPI” proposal, if you retire at age 65 and live to 90, you stand to lose over $20,000 in benefits.

Proponents tout the Chained CPI as a more accurate index of inflation. But the fact is, the existing index already underestimates necessary cost-of-living adjustments, because it assumes seniors are buying things like iPads and cars — for which prices are falling — while not giving enough weight to the cost of drugs, health care, and housing.

Taking an already inaccurate measure of inflation and reducing it further is both immoral and irresponsible. Instead of planning back-door cuts, our leaders should be working on increasing benefits. Luckily, there is an easy way to do this: it’s called “Scrap the Cap.”

Right now we pay Social Security taxes (FICA) on all wages up to $113,700. Anything above that amount is not taxed. As more income has migrated from middle class workers to the already wealthy, a lesser amount of national income is contributed to Social Security. A simple way to solve this problem is to just “scrap the cap” — that is, get rid of the tax cap on wages, so high-income executives pay the same Social Security tax rate as the typical clerk, barista, machinist, nurse, teacher, or sanitation worker. Then those additional contributions could be used to switch to the CPI-Elderly inflation index, which takes into account the spending of retirees on health care. Sen. Maria Cantwell has proposed this very idea.

Congressman Rick Larsen, for his part, has cosponsored legislation to oppose switching to the “chained CPI” and has pledged his support for “scrapping the cap.” Rep. Larsen understands the value of Social Security, and he doesn’t just proclaim this as a campaign slogan to get votes. With more people like him and Sen. Cantwell representing us in Congress, perhaps our kids’ kids will be all right, too.

John Burbank is the Executive Director of the Economic Opportunity Institute ( He can be reached at

Selling Social Security to young people: Today vs. the 1960s

From Washington Policy Watch:

Online news magazine Slate recently posted scans of comic books published by the Social Security Administration in the 1950s and 1960s designed to inform young people about the importance of Social Security – a common strategy to reach youth at that time. Slate writes:

Why should young people care about Social Security? Some of these comics sold the program as a way that the government could help free young people from familial obligation. The crew-cut young men and well-dressed girls wanted to help parents in dire straits, but they shouldn’t have to. Social Security would make sure Tom wouldn’t have to skip engineering school to take over the family farm, and Janet wouldn’t have to postpone her wedding to earn money for her family. (Yes, Janet’s “dream” was marriage, even in a comic published in 1965; the 1950s died hard.)

Here’s one of the comics Slate posted:

For a more updated take on Social Security, check out the music video Just Scrap the Cap, also aimed at educating young adults about the importance of Social Security.

Video: An easy fix for Social Security – Scrap the Cap!

An educational event at Highline Community College on April 12th highlighted some of the common misconceptions about Social Security – and showed how easy it would be to strengthen the program and improve benefits.

The event was taped and edited together by the Washington State Labor Council’s Kathy Cummings. Please enjoy this brief video featuring highlights from the event!

Social Security reform: Kucinich and coalition say ‘scrap the cap’

Representative Dennis Kucinich

From the Federal Way Mirror, by Editor Andy Hobbs:

One in four Washington state households rely on Social Security benefits, along with 54 million people nationwide. As demand for benefits grows, so does the call for reforming the system.

Social Security Works Washington, a new statewide coalition of labor and retiree groups, is hammering home the idea of “scrapping the cap.”

That cap is the Social Security collection limit on incomes above $106,800 per year (that number becomes $110,100 in 2012). All citizens earning incomes at that level and below are taxed 6.2 percent.

An April 12 forum at Highline Community College promoted the lifting or outright removal of this cap. Doing so, proponents say, will increase benefits and strengthen Social Security by trillions of dollars.

Ohio Congressman Dennis Kucinich delivered a fiery pitch for Social Security reform at Thursday’s forum.

Kucinich, a Democrat, opposes the privatization Social Security as well as any cuts to benefits or a later retirement age. He says lifting the cap is a simple solution that will make Social Security solvent.

As the retirement population increases, the ratio of working adults to retirees decreases, prompting fears that Social Security will go broke.

“The Social Security debate today is very class-based,” he told a crowd at the Highline campus. “Social Security is not going broke. … It has money in a trust fund to pay 100 percent of benefits through 2036 without any changes whatsoever.”

Kucinich was referring to the Social Security trust fund, which is worth about $2.6 trillion, enough to help fully fund the system until 2037. Other factors such as a full-employment economy, he said, will mean more people pay into the system.

One of the warmup speakers at Thursday’s forum was Federal Way resident Deanna Kirkpatrick. Her struggles and triumphs with multiple sclerosis were recently profiled in The Mirror.

Six years ago, Kirkpatrick was diagnosed with transverse myelitis, a rare onset to multiple sclerosis. At one point, she was paralyzed up to her earlobes.

At the Highline forum, Kirkpatrick said Social Security disability benefits were her safety net when battling the disease. She hopes that Social Security disability benefits will continue to be available to people in similar situations.

The Social Security Works forum contained hints of a political stump speech by Kucinich. The former presidential candidate linked Social Security’s solvency to ideas such as a national manufacturing policy and a not-for-profit health care system. He also blamed the war in Iraq for wasting trillions of dollars.

“It’s time we stood for peace in the world,” he said.

Kucinich has generated political buzz about running for office in Washington state. Kucinich has not confirmed or dismissed whether he will seek the Congress seat being vacated by Jay Inslee, the Democratic candidate for governor. The liberal Kucinich, a former mayor of Cleveland, has served in the U.S. House of Representatives since 1997. His 10th congressional district in Ohio and that state’s 9th district were collapsed into one district due to the 2010 Census.


Other guest speakers at the April 12 forum at Highline include Pramila Jayapal, executive director of OneAmerica; Marilyn Watkins, policy director, Economic Opportunity Institute; and Magdaleno Rose-Avila, executive director, The Latino Equality Initiative.

Back in Washington, D.C., lawmakers including Vermont Sen. Bernie Sanders have proposed legislation for Social Security reform that specifically addresses the tax cap. Sanders recently announced the formation of the Defend Social Security Caucus, which includes Washington Sen. Maria Cantwell.