Skip to comments.David Axelrod: “This is not the time” to have a plan to reform Social Security
Posted on 09/24/2012 9:10:05 AM PDT by SeekAndFind
David Axelrod ran into a buzz saw this morning, and on MSNBC, of all places. Time's Mark Halperin asks a rather predictable question of Axelrod, noting that Barack Obama never mentioned Social Security reform in his 60 Minutes interview last night (and Steve Kroft apparently never asked about it, either). Where's the plan, Halperin asks --- and Axelrod makes not one but two huge gaffes in answering:
TIMEs MARK HALPERIN: David, Social Security came up last night on 60 Minutes. Let me ask you in a second term, what is the president proposing to do to reform Social Security, save it for future generations, and will it involve lower benefits for anyone or higher taxes for anyone?
OBAMA ADVISER DAVID AXELROD: Well I think that there, too, Mark, the approach has to be a balanced one. Weve had discussions in the past. And the question is, can you raise the cap some? Right now Social Security cuts off at a lower point. Can you raise the cap so people in the upper incomes are paying a little more into the program? And do you adjust the growth of the program. Thats a discussion worth having. But again we have to approach it in a balanced way. Were not going to cut our way to prosperity. Were not going to cut our way to more secure entitlement programs Social Security and Medicare. We have to have a balance.
HALPERIN: So what is his proposal?
AXELROD: Mark, Ill tell you what, when you get elected to the United States Senate and sit at that table — this is not the time. Were not going to have that discussion right now unless the Congress wants to sit at a table and says okay were ready to move on a balanced approach to this. The reality of Social Security is this is a much less imminent problem than Medicare. We have extended the life of Medicare for close to a decade through the changes that weve made and Governor Romney wants to repeal. But Social Security is a more distant problem. One that needs a solution. But it isnt as pressing as a Medicare issue.
First, Axelrod insists that “this is not the time” to have a proposal to address the critical unfunded liabilities of Social Security. Really? Isn’t an election a time to discuss plans for the nation’s future, especially on pressing fiscal issues? Furthermore, Obama has been president for most of four years now, and Axelrod is all but admitting that Obama hasn’t got a plan at all on this issue. He’s tossing the issue back to Congress, and in his snotty way telling Mark Halperin that he doesn’t have any standing even to ask the question.
Next, Axelrod admits that Medicare is a bigger problem. That’s true, but that’s not been the position of the Obama administration. They keep claiming that ObamaCare has fixed the problem in the short term and bent the cost curve downward over the long term. Now Axelrod admits to reality, which is that ObamaCare didn’t help save Medicare at all — and that it’s on the same decade-long trajectory to collapse as it was when Obama took office.
What have we found out from today’s episode of Morning Joe? Obama has wasted four years while the entitlement collapse continued to pick up steam, and even after four years, he still doesn’t have a plan to address it.
Not the time to fix social security; not the time for opening up drilling in America and not the time to draw a line in the sand for Iran...the only time in this President’s mind is his next tee time.
Idiot. The cap goes up automatically almost every year. In fact, under the Obama administration, the cap remained at $106,800 for the years 2009-11. In 2012 it is $110,100. By comparison, in 2000 the cap was $76,200 and in 1991 when Clinton took office, the cap was $53,400. And there is no earnings cap on Medicare (HI) payments.
Take it out of General Fund ... problem solved !
Take what out of the general fund?
What IS it time for Axlegrease?
This is not the time to have a muslim invader and his rat in the WH.
Arrest and prosecute.
Generals. And whip them good.
Right! We’re supposed to wait until it totally collapses and no one gets anything. Got it.
The creepily damp moustache speaks...
Nope that won't solve the problem with SS. Here is how the system works"
SS is a pay as you go system. Today's workers pay for today's retirees. Money taken in thru the payroll tax is used to pay benefits. Any "surplus" is put into the General Fund and the Treasury issues non-market, interest bearing T-bills in the amount of the "surplus" and deposits them into the SS Trust Fund, which currently has about $2.6 trillion. The SSTF is part of the $16 trillion national debt and is held under "Intragovernmental Holdings" as distinct fromt he publicly held debt.
SS has been running in the red since 2010. It has been paying out more in benefits than it collects in revenue. To make up the shortfall, it cashs in the IOUs in the SSTF thru the General Fund, which just happens to borrow 42 cents on every federal dollar spent.
Source: CBO "Combined OASDI Trust Funds; January 2011 Baseline" 26 Jan 2011. Note: See "Primary Surplus" line (which is negative, indicating a deficit)
Matters are even worse than this chart shows. In December, Congress passed a Social Security tax reduction. Workers are temporarily paying 2 percentage points less, from 6.2 percent to 4.2 percent, in Social Security payroll taxes this calendar year. Since the government is making up the shortfall out of general revenues, CBOs deficit projections for the trust funds do not include that. But CBOs figures predict that the "payroll tax holiday" will cost the governments general fund $85 billion in this fiscal year and $29 billion in fiscal year 2012 (which starts Oct.1, 2011.) Since every dollar of that will have to be borrowed, the combined effect of the " tax holiday" and the annual deficits will amount to a $130 billion addition to the federal deficit in the current fiscal year, and $59 billion in fiscal 2012.
Social Security has passed a tipping point. For years it generated more revenue than it consumed, holding down the overall federal deficit and allowing Congress to spend more freely for other things. But those days are gone. Rather than lessening the federal deficit, Social Security has at last as long predicted become a drag on the governments overall finances.
As recently as October, CBO was projecting that it would be 2016 before outlays regularly exceed revenues. But Social Securitys fiscal troubles are more severe than was thought, and the latest projections show the permanent deficits started several years ahead of earlier predictions.
Even if the T-bills in the SSTF represented real money, it would not be enough actuarily to pay the future benefits. In the next 20 years we will double the population over 65. By 2030 one out of every five people in this country will be 65 or older. And by 2030 there will be just two workers for every retiree. SS is a Ponzi scheme. The people at the top of the pyramid will receive muc more in benefits than they put in. That won't be the case for future retirees.
The Obama administration is flat clueless about everything they only work to change it to socialism.
Doesn’t Ax-Rod think it will come up in the debates?
Now is not the time to have a head full of mush named Axlerod discussing important policy issues. He and his boss are the problem with America!
1965 .. Lyndon Johnson took SS out of a(n) (untouchable) fund and made it General Fund so the politicians can more openly steal.
Bad news does not get better with age.
A stitch in time saves nine. (We need several million stitches now, but better to sew before it’s billions.)
Now is not the time - the time has long since passed. Now is just the best time that is still available to us.
A myth. The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."
Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget."
This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself.