02-19-2017  10:34 pm      •     
McMenamins

Even though feuding Democrats and Republicans reached a last-minute deal on New Year's Day to avoid the fiscal cliff, a lively debate will continue in coming months over the role the federal government should play in the lives of its citizens.

In one corner are Republicans who contend that federal spending has run amuck – and it should be slashed. In the other corner are Democrats, including President Obama, who make the right oral arguments, but the wrong moves to defend such worthy American staples as Social Security and Medicare. In most political crises, Republicans will fight and Democrats will take flight.

Let's begin with a president who doesn't seem comfortable in the rough-and-tumble world of politics.  He has a tendency to give away the store even before the store opens up its doors for business.

As Paul Krugman wrote July 31, 2011 the New York Times, "Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to the raw extortion over the debt ceiling. Maybe it's just me, but I see a pattern here."

Unfortunately, that pattern remains unbroken.

A Center for Policy and Budget Priorities blog noted, "Boehner complains that, in what the White House describes as an offer of $1.2 trillion in spending cuts and the same in tax increases, Obama counts interest savings that accrue as spending cuts, thus making the one-to-one ratio illegitimate.

"More importantly, however, is that, when viewed correctly and in their entirety, the non-interest spending cuts under the President's latest offer would actually exceed his proposed tax increases and would roughly equal the spending cuts that Boehner himself proposed in his deficit-related negotiations with the President last year."

And that's on top of cuts already made.

The CBPP also pointed out, "When those negotiations broke down, the President and Congress enacted the 2011 Budget Control Act (BCA), which established annual caps on discretionary spending for each of the next ten years.  These caps, which will cut spending by what the White House estimates to be $1 trillion over the next decade, reflected a tentative agreement by the President and Speaker over discretionary spending in those negotiations."

President Obama has already signaled a willingness to make additional concessions on Social Security and Medicare.

Let's take a closer look at Social Security.

A story by FAIR noted, "Social Security is not bloated or poorly run. Its shortfall is primarily the result of people living longer, and therefore drawing benefits longer."

As a CBPP fact sheet observes, "In June 2012, 56 million people, or about one in every six U.S. residents, collected Social Security benefits. While three-quarters of them received benefits as retirees or elderly widow(er)s, another 11 million (19 percent) received disability insurance benefits, and 2 million (4 percent) received benefits as young survivors of deceased workers."

It also noted, "Social Security benefits are much more modest than many people realize. In June 2012, the average Social Security retirement benefit was $1,234 a month, or about $14,800 a year. (The average disabled worker and aged widow received slightly less.) For someone who worked all of his or her adult life at average earnings and retires at 65 in 2012, Social Security benefits replace about 41 percent of past earnings. This replacement rate will slip to about 36 percent for a medium earner retiring at 65 in the future, chiefly because the full retirement age, which has already risen to 66, will climb to 67 over the 2017-2022 period.

"Moreover, most retirees enroll in Medicare's Supplementary Medical Insurance (also known as Medicare Part B) and have Part B premiums deducted from their Social Security checks.  As health-care costs continue to outpace general inflation, those premiums will take a bigger bite out of their checks.

"Social Security benefits are modest by international standards, too. The United States ranks 30th among 34 developed countries in the percentage of a median worker's earnings that the public-pension system replaces."

Social Security plays an outsized role in the lives retired African-Americans.

"Social Security is a particularly important source of income for groups with low earnings and with less opportunity to save and earn pensions, including African Americans and Hispanics," CBPP said. "Among beneficiaries aged 65 and older, Social Security represents 90 percent or more of income for 35 percent of elderly white beneficiaries, 42 percent of Asian Americans, 49 percent of blacks, and 55 percent of Hispanics."

Yes, money spent on Social Security and Medicare is well spent. And that's why Obama should summon the courage to stand his ground.

 

George E. Curry, former editor-in-chief of Emerge magazine, is editor-in-chief of the National Newspaper Publishers Association News Service (NNPA.) He is a keynote speaker, moderator, and media coach. You can follow him at www.twitter.com/currygeorge.





 

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