Even though it's painful to watch, Robert Kuttner's faceoff with former US Comptroller General David Walker and former CEO of the Peter G. Peterson Foundation is instructive as far as seeing how the attack on Social Security is being
November 12, 2010

Even though it's painful to watch, Robert Kuttner's faceoff with former US Comptroller General David Walker and former CEO of the Peter G. Peterson Foundation is instructive as far as seeing how the attack on Social Security is being framed.

Republicans will tell everyone Social Security is completely deficient, that it's running a 'deficit'. In fact, that isn't the case. What is happening right now has been expected for decades and was planned for in the 1980, when Social Security reforms were passed under Ronald Reagan. Social Security has the largest surplus of any government program and is projected to fully fund 100% of all benefits due now and in the future until 2037. But Republicans are seizing on a known fact to demonize it.

Here's a snippet from the transcript:

KUTTNER: Let's separate out social security. Social security is going to be in surplus for the next 27 years. Social security has nothing to do with the budget deficit.

WALKER: That is just false. That is false. Social security is running a cash flow deficit. It is adding to the deficit. It will be in a permanent cash flow deficit starting in 2015. That is just false.

KUTTNER: I'm sorry. It is not false.

WALKER: I'm a trustee. I know what the numbers are.



KUTTNER: This commission was charged with -- the report says social security has nothing to do with the current deficit and the cuts are not going to take effect for decades. I don't know why social security is part of this at all except ideological opposition to the whole idea.

If Social Security were a private pension plan, it would be funded to a surplus in the early years with the goal of leveling out costs in later years. This gives a funding curve that's fairly level, much like a loan amortization schedule. In the case of pensions, part of the payment goes to the present, and part to the future. It's not a private pension plan, and is funded a bit differently, but the underlying principle is the same.

Kuttner is right. Social Security is not part of the problem. Medicare is, but the Patient Protection and Affordable Care Act begins to deal with the Medicare problem. The only reason to attack Social Security is ideological -- to kill it altogether.

In fact, a look at page 43 of the Deficit Cat Food Commission's draft report released yesterday affirms that Social Security isn't part of the problem. Under the Goals section:

Reform Social Security for its own sake, not for deficit reduction.

In other words, Social Security is not a part of the deficit problem at all. Could someone please give David Walker a small clue on that? It's not like Kuttner didn't try, but Walker is evidently the designated megaphone for the right wing talking points on Social Security and Medicare.

In an effort to blitz the airwaves, Walker also appeared on the Charlie Rose show, where he admonished the President to lead, right-wing code for "our way or the highway". In this segment, he goes on about how the mandate is for President Obama to 'work with the Republicans' (choke, cough) in order to implement these 'tough, but principled recommendations'. Expanding further on that idea, he brings up the idea of personal health savings accounts, copayments, and this idea that government cannot continue to shoulder the health care burden for the elderly and disabled.

There's a solution for that, of course. Unfortunately it's not in this insane report, but it's a really obvious one. Right now, Medicare is under water because of adverse selection; that is, it takes care of the segment of the population insurers don't want. The way to make it solvent is to open it to everyone and have everyone pay -- what many argued for during the health care reform debate. Funny how these very serious men with very serious credentials can't figure out something that obvious. Oh, wait.

Evidently Walker is the appointed "non-partisan" spokesman for the Meow Mix brigade. He will be everywhere, convincing us all we're doomed, doomed, doomed to a future of dystopian poverty if we don't follow the One True Guide back to prosperity.


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