Yes People, Indeed, They Are Coming for You

 

Yes People, Indeed, They Are Coming for You

The Rich are Tired of Funding Your “Entitlements”

After swearing off cutting Medicare and Social Security benefits in the debt ceiling debacle, the GOP just cannot help itself. Their latest proposed federal budget cuts, announced by House conservatives on June 14th and directed at these programs, are very much back on the table. Instead of trying to understand why these programs are no longer completely self-sustaining, the MAGA GOP relabels these programs, which recipients have been funding themselves throughout their entire working lives, as “entitlements” that need to be phased them out over time.

Even as we have failed as a nation to tax wealth – one of the biggest realities behind our rising deficit – and instead embarked on cutting taxes for the richest in the land, the GOP has failed to understand the very nature of our demographic reality. Dropping the corporate tax rate from 35% to 21% during the Trump administration has added trillions to the federal deficit. And done absolutely nothing to benefit most Americans.

The US population has stopped growing, and in fact is contracting as with most developed countries. Our birthrates continue to fall, well below the 2.1 live births per couple required to keep our population steady. We have dropped to 1.9 live births and seem headed for 1.6 as our next steady state. By definition, this means fewer younger workers and more elder and retired (or closer to retirement) workers. When these programs were established in the 1930s, there was a plethora of younger workers as compared to retirees. In recent years, that pattern has reversed. Add to this a massive pressure to stop immigration and to legitimize immigrants here who could add so much to our tax base. So, since the old funding assumptions are no longer valid, we need a ground-up reassessment. MAGA wants to cut benefits; Dems want to bring funding requirements into the 21st century.

Since the underlying assumptions that supported these social benefits – “social benefits” and not the government ownership of all things of value (“socialism”) – have changed, if we prioritize the needs and priorities of over 90% of the nation, we must find alternative funding support instead of subsidizing the mega-wealthy. Government relies on taxation to support its programs, so in a country where 1% of the population owns over 50% of the wealth, the answer is as plain as the nose on your face. Why do we let people get so rich as most of the rest of us are required to pick up the burden? Why do we provide the wealthy with favorable tax laws that other nations, which do not carry the level of deficits that we do, do not? Ah, yes, political campaigns are funded by the rich, often without caps or limitations under the 2010 Supreme Court decision in Citizens United vs FEC. What would be unlawful campaign practices in most other democracies are completely lawful here. So, whatever the rich want, in a world where special interests trump everyone else, they tend to get.

According to the June 16th GoBankingRates.com, “The 176-member House Republican Study Committee (RSC) approved a fiscal blueprint that would gradually increase the FRA [full retirement age] to 69-years-old for seniors who turn 62 in 2033. The current full retirement age is 66 or 67, depending on your birth year. For all Americans born in 1960 or later, the FRA is 67… As Bloomberg noted, workers expecting an earlier retirement benefit will see lifetime payouts reduced if the full retirement age is raised. Those payouts could be drastically reduced for seniors who claim benefits at age 62 , when you are first eligible.

“Lawmakers on both sides of the political aisle have been working to come up with a fix for Social Security before the program’s Old Age and Survivors Insurance (OASI) Trust Fund runs out of money . That could happen within the next decade or so. When it does, Social Security will be solely reliant on payroll taxes for funding — and those taxes only cover about 77% of current benefits.

“While most Democrats want to boost Social Security through higher payroll taxes or reductions to benefits for wealthy Americans, the GOP has largely focused on paring down or privatizing the program… As previously reported by GOBankingRates, House Speaker Kevin McCarthy (R-Calif.) recently told Fox News that this month’s debt limit bill was only “the first step” in a broader Republican agenda that includes further cuts .

“‘This isn’t the end,’ McCarthy said. ‘This doesn’t solve all the problems. We only got to look at 11% of the budget to find these cuts. We have to look at the entire budget. … The majority driver of the budget is mandatory spending. It’s Medicare, Social Security, interest on the debt.’…

“As Bloomberg noted, Republicans argue that failing to change Social Security could lead to a 23% benefit cut once the trust fund is depleted. Raising the retirement age is a way to soften the immediate impact. The RSC said its proposal would balance the federal budget in seven years by cutting some $16 trillion in spending and $5 trillion in taxes.

“‘The RSC budget would implement common-sense policies to prevent the impending debt disaster, tame inflation, grow the economy, protect our national security, and defund [President Joe] Biden’s woke priorities,’ U.S. Rep. Ben Cline (R-Va.), chairman of the group’s Budget and Spending Task Force, told Roll Call.” Yup, common sense if you are a billionaire! Not virtually everyone else.

I’m Peter Dekom, and how do you like living in a nation where well over 90% of Americans truly subsize the lifestyles of the rich and famous over some of our most basic needs?