This report by the Kaiser Family Foundation about elder poverty is shocking. I don’t think people realize just how many millions of people are barely subsisting in their old age, but it’s many more than the government likes to admit to. Just as with the Chained-CPI, we’re dealing with how they are accounted for rather than the actual numbers these people are forced to live on.

Dylan Matthews explains why elder poverty is so much worse than we realize:

While the SPM takes transfer payments into account, it does the same with out-of-pocket medical costs. If you’re an unmarried senior with no dependents, make $15,000 a year, and spend $10,000 of it on medical care, under the official poverty measure you’d most likely not count as poor, as $15,000 is above the 2012 poverty threshold for a single senior ($11,011).

But under the SPM, you’d count as poor as $15,000 – $10,000 = $5,000, which is below the relevant SPM threshold. And despite having Medicare, many seniors struggle with out-of-pocket medical bills. As my colleague Michelle Singletary pointed out over the weekend, the Employee Benefit Research Institute has found Medicare only pays for about 60 percent of seniors’ total health costs. Sarah has written about how out-of-pocket costs tend to pile up particularly at the end of seniors’ lives.

Can you believe that we’re actually talking about whether or not $15,000 counts as poverty in America in the first place? And then it turns out they aren’t counting what these old people have to lay in medicare costs! That’s just mind-boggling.

In any case, the article is very interesting and shows that some of the places with the highest elderly poverty are in places like California where 20% of SS recipients are in poverty.

And yet, the president and members of both parties have been talking about cutting benefits. Unbelievable.

As always when I read about the necessity of a guaranteed old age pension that keeps people living in dignified circumstances after they are too old to work, I’m reminded of this great article by Arthur Delaney and Ryan Grim from a few years ago:

An employee of Associated Charities, a private organization dedicated to alleviating poverty in the District of Columbia, met an old black woman carrying a basket of cinders near the dump in Southeast D.C. on a bitterly cold day in December 1896.

The woman “could not give street and number, but could ‘fotch’ the agent to her place,” according to a case study labeled “Aunt Winnie” in one of the organization’s annual reports from near the turn of the century. “Old age, with a heavy load on top and a strong wind blowing, made the walk a trying one. At last the 8×10 cabin was reached. In it was a stove in many pieces held together with wire, a bedstead with rags for mattress and rags for covering. From the leaky roof the floor was wet through and through.”

Aunt Winnie, the report said, had no income save the 50 cents she made every two weeks for taking in wash. In summertime she raised herbs and greens, but in winter she “suffered for food and fuel.” Her children had all been sold away to slavery, and a nearby niece was too poor to offer any support. Her neighbors helped, providing money for the stove and cot, and a “colored friendly visitor was found to carry broth and other comforts to her.” The neighborly charity wasn’t enough to persuade the agent, who was essentially a private sector version of a social worker, that the old woman should be on her own.

“In the fall of ’98 agent asked her to go into the almshouse, but she would not consent. During the storm in February ’99, she was kept from perishing with a great effort. Every visit, and they were many, had to be made through snow up to the waist. It was during these visits that the promise was made that before another winter she would take refuge in an almshouse.”

When the weather warmed, Aunt Winnie backed off her promise to go to the almshouse. The social worker started to play hardball.

“It would be hard to say which, the agent or the applicant, suffered the more, because through all this distress had sprung up a loving confidence and perfect trust that seemed cruel to deceive. Attention and assistance were withdrawn gradually.”

It worked: In July, Aunt Winnie relented and said she’d go to the almshouse as soon she could sell her cabin. Nobody would buy it, so the social worker told her to tear it down and sell it for kindling. At 2 p.m. on Aug. 23, 1899, the social worker showed up in a wagon.

“[S]he was sitting on her trunk, without a stick of the cabin to be seen. Without a murmur she dropped a courtsey to the bare spot where once stood the cabin and turned away. After an affectionate separation in the almshouse the agent came away feeling that for such a balmy day in August it was a trying task to perform, but for winter’s blizzards, a blessed relief. In case of her death a promise has been made to her that the general secretary of the Associated Charities will keep her body from potter’s field.”

Aunt Winnie, whose story is preserved in the archives of the Historical Society of Washington, had been sent to an American institution that was by then some 300 years old and went by a variety of names: the county farm, the poor farm, the almshouse or, most often, simply the poorhouse. She would probably have been surprised to learn that more than a hundred years later, after the virtual eradication of elderly poverty, a powerful political movement would materialize with the mission of returning to the hands-off social policies that made the poorhouse the nation’s only refuge for the jobless, the aged, the infirm and the disabled.

According to a Pew Charitable Trusts study released Thursday, baby boomers and Generation Xers are increasingly unlikely to be able to afford the costs of retirement, making critical the need for a strong Social Security program to bridge this income gap. Instead of weakening the social safety net by using the “chained CPI” to reduce Social Security cost-of-living increases, this study proves that we need to increase the protections for the elderly to make sure they can maintain their standard of living.

In order to do this, Iowa Sen. Tom Harkin has put forth a bill that would strengthen Social Security, not weaken it, as President Obama’s budget have proposed. The Strengthening Social Security Act of 2013 (S. 567) would help place a bridge over the gap where America’s seniors are falling short. You can support this effort by signing this MoveOn petition, which is currently 12,000 signatures away from its goal of 100,000.

The Pew study’s findings are troubling. The study found that while early baby boomers may be in a better position to have a secure retirement as beneficiaries of the housing bubble and dot-com boom of the 1990s and early 2000s, those born after 1955 would have a much tougher time trying to secure their retirement. While most financial planners suggest being able to replace 70 percent of your earned income during retirement, the Pew study found that many late baby boomers will only be able to replace 60 percent of their current income, and Gen-Xers will only be able to replace half of their pre-retirement income.

The Pew study found that early baby boomers might well be the last generation to be able to afford a secure retirement, with late baby boomers and Gen-Xers accumulating too much debt from credit cards, mortgages and student loans to retire securely. Gen-Xers, who did not have the most solid financial foundation to start, took the hardest hit from the Great Recession, losing nearly half of their wealth in the crash.

With these findings, and the fact that an increasing number of seniors rely on their Social Security checks for between 50 percent and 90 percent of their income, it is easy to see that the chained CPI is going to hurt millions of seniors. The chained CPI uses the substitutions for cheaper items consumers make in response to inflation to come up with a cost-of-living increase that is a bit lower than the standard consumer price index. But the chained CPI does not take into account the items that comprise a higher share of spending for seniors, such as health care and housing, that tend to have a higher inflation rate thanconsumer goods generally. Researchers estimate that chained CPI would mean an average benefit cut of over $1,000 a year for someone who retires at age 65 and lives to be 95. Clearly, with so many people having a decreased ability to enough for retirement, now is the exact wrong time to be cutting Social Security benefits.

While the chained CPI would cut Social Security benefits to seniors, the Strengthen Social Security Act of 2013 would provide a form of relief. According to Senator Harkin’s office, the bill would:

• Strengthen Benefits by Reforming the Social Security Benefit Formula: To improve benefits for current and future Social Security beneficiaries, the Act changes the method by which the Social Security Administration calculates Social Security benefits. This change will boost benefits for all Social Security beneficiaries by approximately $70 per month, but is targeted to help those in the low and middle of the income distribution, for whom Social Security has become an ever greater share of their retirement income.
• Ensure that Cost of Living Adjustments Adequately Reflect the Living Expenses of Retirees: The Act changes the way the Social Security Administration calculates the Cost of Living Adjustments (COLA). To ensure that benefits better reflect cost increases facing seniors, future COLAs will be based on the Consumer Price Index for the Elderly (CPI-E). Making this change to Social Security is expected to result in higher COLAs, ensuring that seniors are able to better keep up with the rising costs of essential items, like health care.

These changes would soften the blow that many Americans’ savings took during the Great Recession, and provide a stronger program of relief when we need it the most.

President Franklin Delano Roosevelt, after signing the Social Security Act of 1935, said, “We can never insure one-hundred percent of the population against one-hundred percent of the hazards and vicissitudes of life. But we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

Roosevelt had the foresight to see that America needed a safety net to protect its people from the excesses of the banks and Wall Street. From the Great Depression was born Social Security. Now, instead of recognizing that the wound from the Great Recession has not healed, there has been an attempt to short the American people by cutting a program that is increasingly important to seniors. Now that we know that many Americans will be unable to support themselves in retirement, we must not cut the program designed to insure the population against the hazards and vicissitudes of life, but strengthen it.

African Americans in retirement or on disability would be hit particularly hard by a proposal to use the “chained CPI” to limit cost-of-living adjustments to Social Security benefits, according to a new study released by the Center for Global Policy Solutions.

Changing the inflation adjustment from the commonly used Consumer Price Index to the chained CPI, which incorporates how consumers respond to inflation by switching to lower-priced alternatives, would cut benefits to all seniors by more than $4,600 over the first 10 years, and $28,000 over 30 years. That would hit African-American retirees, who rely more heavily on Social Security benefits than white households, especially hard. Forty-seven percent of African-American seniors rely on Social Security for more than 90 percent of their income; for 40 percent of seniors, Social Security is their only source of income.

Those in the African-American community who receive Social Security benefits due to disability or death would also feel a disproportionate impact. The report pointed out that:

• While 10 percent of the U.S. workforce are African Americans, they make up 19 percent of disabled workers receiving benefits.
• African-American children are twice as likely to receive survivor benefits from Social Security as white children.
• Though 15 percent of the nation’s children are African American, they are 21 percent of the children receiving disability benefits.

The median wealth of African-American households amounts to only a nickel for every dollar of the median wealth of white households, according to the report. With a wealth gap so large, many more white households will be able to offset the cuts in Social Security than African Americans.

“As a result of racial wealth disparities, African Americans will be negatively affected by implementation of the chained CPI regardless of the non-means tested federal program from which they receive their benefits,” said Maya Rockeymoore, president and CEO of the Center for Global Policy Solutions. “With precious few other assets to help meet expenses, African Americans will experience deeper economic pain as a result of the chained CPI.”

It is troubling enough to think that those who need the protection of Social Security the most, the elderly, are going to be hurt by the switch, but knowing that many of the youth who also receive the benefits of Social Security are going to be hit should make the case against using the chained CPI as a panacea to our deficit problems. It is unfair to place the saddle of debt burden on the backs of those who need it the most.

There are other solutions that will allow America to save money as well as protect the achievements of Franklin Roosevelt and Lyndon Johnson, Rockeymoore points out: “The President and Congress should identify reforms—like lifting Social Security’s cap on taxable wages—that strengthen the program’s solvency while providing a basis for ensuring that benefits work for those who need them most.”

So, they’ve crunched some real numbers and determined exactly how much money the average Social Security recipient can expect to lose if the Chained-CPI is implemented. I’m going to assume that if someone told you that the government was going to seize $15,000.00 from your 401k you’d think it was a cut:

Cognizant of the harm this benefit cut would do to seniors and people with disabilities over time, the Administration has proposed cushioning the effect by providing a partially compensatory bump in benefits from age 76-85 for retirees (or in the 15th-24th year of benefit receipt for people with disabilities). Yet for the average worker, this “benefit enhancement” never restores one’s annual benefit to what it would have been without the switch to the stingier COLA. And what is more, the bump does not return to the elderly the income they will lose between retirement and their 76th birthday — represented by all the space between the black and red lines above (for more detailed analysis, consult our fact sheet). Benefits decline steadily again from age 86 onward, when the vast majority of seniors have exhausted their savings and ability to work, and may have lost their partner as well.

To rich people, 15 grand amounts to tip money so they cannot see why average Americans shouldn’t be willing to give up such a paltry sum especially if it will “save” Social Security for their grandchildren.

Funny thing about that — it won’t. Save Social Security, that is. The green line is the present course of the trust fund. The dotted blue line is with the Chained-CPI:

As you can see, it adds about two years to the trust fund. If this so-called “shortfall” is the problem they seek to solve by switching to the Chained-CPI, I think we can agree that it’s a pretty pathetic solution. (And certainly, if we continue on the bipartisan path that says the only option is to cut the program, I’m going to guess all you young people will see an age 75 retirement age and a tiny, withered welfare program instead of this universal one when you get old.)

The only rational way to shore up the Social Security trust fund is to raise the cap on how much income is subject to the SS tax. In fact, there’s no good rationale not to at least go back to the Reagan standard in which 90 percent of wages were subject to SS taxes. Today only 83% of wages are subject to it because the the 1% hogs so much more of the nation’s wages.  And the rest of their bounty from investments isn’t subject to the payroll tax at all.That would mean that $200,000 of its wages would be subject to the tax this year instead of $110,100. Honestly, I’m hard pressed to see why this is off the table ( especially considering that the Chained-CPI also raises taxes!)

And look at it this way, once the deadbeat baby boomers have finally shuffled off their mortal coils, the whole system will stabilize again and you can even talk about lowering the retirement age and the level of taxation back to where it was before all of us losers agreed to pay for the mistake of being born between 1947 and 1964 by retiring later and paying more all of our adult lives. It’s win-win.

Personally, I’m for Bernie Sanders’ plan to raise the cap on income above 250k. I happen to think that President Obama’s apparent desire to create a Grand Bargain to fix all fiscal and funding problems for all time is tilting at windmills at best (and hubristic nonsense at worst.)  But if he really wants to do this, Sanders’ plan solves SS funding for at least 75 years, which would make a hell of a run at it. Barring that, we can at least go back to the Reagan era funding levels before we start chopping away again at benefits.

If you want to really educate yourself on the history of the Trust Fund  and how it works, this document from the Social Security Administration is invaluable. I think this is particularly important:

The sustainability of the current structure of benefits and financing of the OASDI program is not an issue directly addressed in the trustees report. This consideration is more political in nature, in that it depends on the wants and desires of the American people, as reflected by the actions of their elected representatives in the Congress. It is clear that modifications of the program benefit and tax levels can be made within the current program structure to restore sound financial status. But it is up to each generation to come to a consensus on the tax levels it is willing to pay and the benefit levels it wants to receive. Even the form of benefits and mode of financing, historically defined as monthly benefits financed generally on a PAYGO basis, are open to consideration by the American people and future Congresses.

The trustees report does, however, provide insight into the sustainability of currently scheduled benefits by providing a comparison of program cost and scheduled tax revenues, expressed as percentages of the total output of goods and services in the United States—our gross domestic product (GDP).
Projected OASDI cost is expected to rise from about 4.5 percent of GDP since 1990, to about 6 percent of GDP over the next 20 years, and to roughly stabilize at that level thereafter (see Chart 5). Although an increase in the cost of the program from 4.5 to 6 percent of GDP is substantial, the fact that the increase is not projected to continue after this “level shift” is important. Chart 5 focuses on the question of whether the level of benefits scheduled in current law should be maintained for future generations, at the price of higher taxes, or whether scheduled benefits should be reduced to levels affordable with the current taxes in the law.

This is a political choice. It’s not some law of God or nature that demands human sacrifice over which we have no power. We can choose to fund this program if we want to. This is a very wealthy country — a military superpower. We have all the resources and capital we need to take care of our elderly and sick population. If we choose to.

The “rebranding” of the Republican party crashed headlong into reality again yesterday. The setting was Upper Senate Park on Capitol Hill.  The occasion was a FreedomWorks’ rally for the purpose of introducing what FreedomWorks is calling its “New Fair Deal.”

I was assigned to cover the rally, and what I there illustrated why the odds are against the GOP pulling off a desperately needed makeover. But I saw enough to show me that Democrats can’t afford to get comfortable, because there’s a chance Republicans could just about pull it off.

The turnout was far less than the  1,000 activists FreedWorks said would descend on Capitol Hill. By my estimate there were maybe a couple hundred people there by the time I arrived at the rally (just as the final  strains of “The Star Spangled Banner” were fading.)  I guess the offer of free bus rides wasn’t enough. (Or maybe tea partiers objected in principle to any “free ride”? I know, I know,.But it was worth a shot.)

I was intrigued that  FreedomWorks was sufficiently recovered from its recent troubles to attempt an event like this. I had the tiniest hope that I would hear something new from the conservative movement this time.

But what I got was “old wine in new skins.” The “New Fair Deal” that I guess is supposed to be the conservatives answer to the New Deal, is really the same old stale deal that the GOP has repeatedly failed to sell to voters.

The “New Fair Deal” has four very basic components.

• “Ending corporate handouts”
• “Simplifying” the tax code by closing loopholes
• “Balancing” the budget
• “Empowering” Americans by making Social Security and Medicare optional

Some of this stuff might have sounded good, if I hadn’t listened to the speakers flesh out the points above.

• “Ending corporate welfare” turned out to be about ending investment in green jobs, and alternative energy, and actually protecting or even increasing “corporate handouts” to the coal and oil industries (with enough references to Al Gore and Solyandra to keep the crowd interested.
• “Simplifying the tax code” turned out to be another version of an old favorite on the right: the flat tax. In this case, that means simplifying thing to the point where we have just two rates: 12 percent and 24 percent. Not much was said about corporation paying no taxes at all, but there was plenty about the number of Americans who don’t earn enough to pay federal income taxes. Guess which will be paying up under the “New Fair Deal.”
• “Balancing the budget” comes down to the usual cuts to everything that conservative hate. And that leads to the next and final point.
• “Empowering” Americans by making Social Security and Medicare optional, means making the kind of cuts to both programs that conservatives have longed to make for years. For Social Security, this probably means “private accounts” that are about as safe and reliable as your 401(k). For Medicare, it probably means vouchers.

The whole thing is packaged in about 10 bills.

What’s to get the party faithful fired up? The New Fair Deal consists of 10 bills, which will include:

Cuts to a wide array of subsidies, with alternative energy companies, sugar growers, and high-speed rail all to get the ax. A conservative alternative to Obamacare. A “flat tax” system. A private savings option for Social Security. Tax reform to broaden the tax base.

(There’s a rich irony in the name. President Truman offered the original Fair Deal in the late 1940s, a program that not only looks like a mid-20th century version of President Obama’s current agenda but is widely credited with launching the long-running liberal drive to universal health care, opposition to which inspired FreedomWorks and the tea party movement to begin with in the summer of 2009.)

Largely, the policies are mostly echoes of longstanding conservative rallying cries, although there are some new wrinkles such as a minimum 1 percent income tax (a nod to the 47 percent of Americans, made famous by Mitt Romney, who don’t pay federal income taxes) alongside two tax brackets around 10 percent and 25 percent.

What’s different is the language these tea party activists are using to describe it.

Republicans have the same problem that they’ve always had. The GOP is selling what nobody wants, except the party’s base.

It’s not just marriage equality, and it’s not just “generation X and Y” voters either. Republicans are out of step with the majority of Americans and the emerging American electorate on a wide range of issues.

• A majority of Americans want a path to citizenship in any immigration reform, but Republicans can’t quite embrace the idea.
• A majority of voters across all age brackets believe abortion should be legal in all or most cases, but the Republican party platform calls for the banning of all abortion.
• An overwhelming majority of Americans, 77 percent, want America to use more renewable energy; only one third agree with the Republican party’s denialist position on climate change.
• In poll after poll after poll, a majority of Americans support raising taxes on the wealthy to reduce deficits. Even a majority of the wealthy support raising taxes on themselves. Try getting Republicans to even consider closing a few tax loopholes.
• Likewise, a majority of Americans oppose cutting Social Security and Medicare — even among Republicans — but the GOP won’t even consider a deal that doesn’t cut both.
• Surveys show that the real mandate of the 2012 election was job creation, but Republicans have never met a jobs bill they didn’t kill. Meanwhile, the Republicans cheer the job-killing austerity of sequestration.

Lacking a truly new message, Republicans are savvy enough to find new messengers. I was surprised to see that the first two speakers at the rally were not only women, but an African American woman and a Latina — both of whom spoke with a diverse tableau of young people standing silently behind them.

That was the extent of the change, however. Not only was the diversity on stage the not reflected in the audience, but the decidedly economic focus of the messages from the stage were offset by the signs, t-shirts, and audience responses that were equally concerned with social issues.

From what I saw, the GOP is walking the same old walk,  and talking only slightly updated talk.

The voters in the diverse coalition that rewarded president Obama with reelection, and Democrats with gains in the the Senate and the House, did not vote as they did because of “bribes” or “gifts.” They made judgements based on how government had helped them, and thus would help others, because they believed that’s what government should be about “addressing the needs and desires of people.”

If Republicans think that these groups were merely put off by your “tone,” you guys are fooling yourselves even more than you want to fool voters. Your “tone” in this election only confirmed what women, youth, and minority voters suspected all along. Without a record of even attempting to address their concerns through policies that jibe with your principles, these voters will see right through you.

Your walk won’t match your talk, and it will show. Voters will know that you’re still not that into them, and they won’t be remotely into you.

The “New Fair Deal” is the same old, stale deal from the same old GOP. Can’t say I’m surprised.

I can’t say I’m comforted either. If Democrats keep trashing their own brand, and their “New Deal” legacy as well, they could give the GOP just enough room to pull this off.

In our post-mortem of the 2012 elections, the Campaign for America’s Future was one of the few organizations willing to say that “class war” was not only the common theme of many of the Democratic Party’s electoral successes but it is a strategy that the party should proudly embrace as it moves toward the 2014 and 2016 elections.

It’s taken six months after our “wage class war” report was posted for a major mainstream media outlet to probe our claim with any depth, but today Politico reporters Jonathan Martin and John F. Harris echoed our conclusion that “class warfare works.”

“That fundamental reality of the Obama years — that the president won a second term in large part because he gave new life to an old brand of class-based politics — continues to echo six months later as the dominant factor shaping American politics this spring, as the parties slog through the latest fiscal fight,” Martin and Harris write.

In his analysis of the 2012 elections, Robert Borosage said that the weak economy rendered President Obama and swing-district Democrats politically vulnerable, and wealthy Republican benefactors put up big money to go in for the kill. But with the Republican standard-bearer, Mitt Romney, being “inescapably the candidate of, by and for the 1 percent,” the Obama campaign was able to use populist themes to hold together the coalition of young people, women and people of color that helped get him into the White House in the first place.

But, as Borosage also noted in his analysis, Obama is not by nature a populist class warrior, and nothing reveals that more than his current willingness to champion a cut in Social Security benefits in order to win a “grand bargain” with Republicans on tax reform.

That is what brings us to what Politico accurately calls “both a political challenge and a definitional moment.” Having won significant electoral victories over the tribunes of the 1 percent in 2012, will President Obama and the Democratic Party soil that victory by doing the 1 percent’s dirty work for them on such issues as Social Security?

The most distressing answer to that question is in the comments to Politico by Obama political strategist David Axelrod, who goes so far as to echo the rhetoric by Republicans like Rep. Paul Ryan in justifying cuts to Medicare and Social Security.

“The most persuasive case for reforming Medicare is saving Medicare,” Axelrod is quoted by Politico as saying. “You don’t want to see the Big Bad Wolf making those decisions.”

Unsaid by Axelrod, of course, is that the American public does not want to see anyone making a decision to reduce Social Security benefits – neither bad wolves nor pliant sheep – when what we desperately need is a strategy for strengthening benefits and making seniors more financially secure.

Particularly insulting is Axelrod’s assertion that those of us who have been opposing President Obama’s proposal to limit Social Security cost-of-living adjustments through what is called the “chained CPI” are more interested in using retirement security “as a club with which to pound the opposition” and don’t want to “address long-term problems with the programs.”

But class war as viewed by progressives is not war for war’s sake. The economic future of low- and middle-income people – and thus the country at large – is at stake, as a result of a sustained, decades-long attack fueled by conservative economic policies on workers and the pillars of shared prosperity.

Solutions based on a different vision of an economy that works for everyone are at the very core of this fight. On Social Security, for example, we have shown how Social Security’s solvency can be assured for at least the next 75 years through a combination of more equitable taxation – asking wealthier individuals to pay more into the system – and bolder policies to grow the economy and get unemployed people working again, so that they are once again paying Social Security taxes.

What the White House and Congress should remember is that class war is in fact today’s central political reality, and any politician who wants to win either a future election or a positive political legacy should be on the side of working people, not the plutocrats and ideologues bankrolling the policies of austerity and income inequality.

All the smartest people in the executive suites just knew that the taste of Coca-Cola needed “reform.” Rival Pepsi was advertising to the “New Generation” and Coke’s executives came to believe their product wasn’t what the “cool” people wanted to drink. Everyone they talked to at the executive-level strategery seminars, and all the other executive-level geniuses they spoke with daily agreed. They were the elites, and they all knew better than their old-fashioned, uncool customers what the company needed. So they all drank the Kool-Aid and came up with “New Coke.” We all know what happened next. (Hint: it was bad.)

It couldn’t have gone better for Pepsi if Pepsi had placed those executives there themselves.

Your Brand

In business there’s this concept called “branding.” A company or product is “known for” something, and the public expects that is what the company or product will do for them. If a company or product continues to deliver on what they are “known for” the customers remain loyal. If the company or product violates the expectations of the brand, the customers go somewhere else — fast.

Democrats are “known for” fighting for working people, and fighting on We the People’s side against corporate power. They are “known for” taxing the wealthiest and giant corporations so We the People can do things to make our lives better. (By the way, doing things to make our lives better is also called “government spending.”)

Cutting Social Security?

If there is one thing that the Democratic Party is “known for” — their “brand” — it is starting, expanding and protecting Social Security. It was the New Deal and its government jobs programs for the unemployed, investment in infrastructure, heavily taxing the wealthy and corporations, but mostly Social Security that created “brand loyalty” for Democrats for generations.

Now this brand is at risk.

President Obama and some Democrats are now advocating cutting Social Security, to show they are “reasonable” and “reaching out” to Republicans, because Republicans want cuts to Social Security and other things We the People do to make our lives better. These “centrist” Democrats want to show the opinion elite and other strategerizers that they can be “bipartisan.” After decades of cuts in taxes on the wealthy and corporations and cuts in the things We the People do to make our lives better they want to “meet halfway” and show they have “the courage” to cut Social Security.

Democrats who want to protect the “brand” of the Democratic Party, and keep the loyalty of We the People need to step up right now and avoid a “New Coke” rebranding of their party.

The Congressional Progressive Caucus (CPC) circulated a letter that was signed by a majority of Democrats. That letter said, “we remain deeply opposed to proposals to reduce Social Security benefits through use of chained CPI” but it doesn’t include explicit language pledging members to vote against a bill that includes chained CPI.

Another letter by Reps. Alan Grayson and Mark Takano is making the rounds and is more explicit. The Grayson-Takano letter says, “we will vote against any and every cut to Medicare, Medicaid and Social Security,” including “cutting the cost-of-living adjustments.” Currently there are only 36 signatures on the Grayson-Takano Letter.

Tell Your Representatives And Senators To Pledge No Cuts To Social Security

Tell your representatives to pledge to protect Social Security. People utterly depend on the meager benefits they get from Social Security — wealthy people do not utterly depend on a few pennies per dollar taxed from the highest incomes. (A 5% tax increase on people making $250,000 means that someone who makes $250,001 after all deductions pays an extra five cents in taxes.)

Click here and Tell Congress: Say No to Obama’s Social Security Cuts,

The President’s budget includes devastating Social Security cuts. But they will not become law if Congress rejects them. It’s up to us to speak out and let Congress know the public will punish any legislator that supports undermining Social Security. Use the form below to tell your senators and representative: Say no to Obama’s Social Security Cuts.

At our blog: Chained CPI: Wrong for Social Security

PCCC: Support The Grayson-Takano Letter

Elected Democrats, This Could Be You

Are you going to keep listening to all the “right people” who say “everyone knows entitlements have to be cut and corporate taxes have to be lowered” etc.? Or are you going to listen to We the People because democracy?

Just for fun:

February business headline: JCPenney Has Hired The ‘New Coke’ Mastermind To Help Turn Things Around

JCPenney CEO Ron Johnson announced on the company’s Q4 earnings call that he has brought on former Coke marketing exec Sergio Zyman as an advisor as he tries to turn around the ailing department store.

… Johnson said on the company’s Q4 earnings call … Sergio has a unique ability to understand customers and as well as strategies that will succeed based on rapid fire test and response.”

April business headlines:

J.C. Penney CEO Ron Johnson is out

JCPenney fighting for survival

Three More Top JC Penney Executives Have Left

Elected Democrats, this could be you. Are you in or out — literally in this case?

—–

Follow me and CAF on Twitter:

The Congressional Progressive Caucus and AFL-CIO president Richard Trumka pressed their opposition to President Obama’s proposed chained-CPI change to Social Security benefits at a Thursday afternoon news conference, denouncing it as a cut in benefits for those who need the social safety net the most.

Fifteen members of Congress, as well as around 45 supporters and members of the press, gathered on the southeast Capitol lawn. ““We are here to represent is the tens of millions of Americans who are saying that at a time we have more wealth and income inequality in this country than in any time since the 1920s, do not balance the budget on the backs of the elderly, the children, the sick and the poor,” said Sen. Bernie Sanders, I-Vt.

“Social Security did not cause nor did it add to the deficit in any way. Chained CPI is some economist’s fancy way of weakening Social Security’s most important protections. This protects the purchasing power of seniors, it prevents seniors from losing economic ground each and every year,” said Trumka.

Among those who joined Sanders and Trumka were Congressional Progressive Caucus co-chairs Reps. Raúl Grijalva, D-Ariz., and Keith Ellison, D-Minn.; Sen. Tom Harkin, D-Iowa; and the Leadership Conference on Civil Right’s Nancy Zirkin.

As I wrote on Tuesday, the chained CPI is a change in the cost-of-living allowance that would change how much Social Security recipients receive drastically. It would cut nearly $700 for a 75-year-old retiree and more than $1,600 for a 95-year-old retiree per year. While supporters of the chained CPI measure say that it is a more accurate way to determine costs of living, in actuality it is not representative of many of the items that the elderly purchase. It is also tantamount to a middle-class tax hike, with 70 percent of the increased taxes that come with the bill hitting those in the middle class.

“Working Americans and retirees shouldn’t be treated like bargaining chips or told to pick up the tab for corporate tax loopholes,” Grijalva said.

“When we are losing a hundred billion every year in taxes because corporations are stashing profits overseas, there are ways to deal with deficit reduction that are fair,” Sanders said. “I don’t know what kind of country we live in when we think we are going to balance the budget on the backs of the men and women who have lost their arms and legs and their eyesight defending this country. We are not going to balance the budget on the backs of the disabled.”

“They talk about cutting entitlement. Social Security is not an entitlement, it is an earned benefit; people pay into it their whole lives,” Harkin said. “How about cutting the tax break entitlements on corporations? That’s how we can save some real money. The people that this hurts the most are the last that ought to be hit by changes.”

“In an effort to compromise with Republicans, the President’s budget contains a wrongheaded provision that extracts revenues from middle class pocketbooks instead of wealthy corporate interests,” Zirkin said.

“Instead of supporting policies that harm seniors, let’s get back to the real problems facing this country—creating 21st century jobs in America, confronting climate change and growing income inequality, and making sure seniors have an adequate retirement on which to live,” said Ellison. “Let’s oppose the chained CPI.”

Some details are emerging about the so-called “softening” of the Chained-CPI for the most vulnerable. Here’s one analysis of what we know so far from Shawn Fremsted at CEPR:

And a just-released White House fact sheet claims that the proposal is coupled with “measures to protect the vulnerable and avoid increasing poverty and hardship.”

Does this mean people who rely on means-tested benefits and low-income income people generally should breathe a sigh of relief? Hardly. Here are some reasons why (setting aside for the moment the impact of the chained CPI on Social Security for low-income retirees, which I’m sure my colleague Dean Baker will have more to say about):

1) Although Disability Insurance is not a means-tested benefit, the benefits it provides and the typical incomes of the workers receiving benefits are already quite modest. On average, female workers receiving Disability Insurance receive a benefit of only $993 a month and male workers receive a benefit of $1,256 a month. As a result, a woman with a disability living on her own and relying solely on an average Disability Insurance benefit has an income that is barely equal to the extremely austere poverty line (HHS’s monthly poverty guideline for 2013 is $958). Thus, for typical disabled workers receiving Disability Insurance, even seemingly modest benefits cuts over the short run can be a big deal. The White House fact sheet says that their plan includes a “benefit enhancement” for people who receive Disability Insurance benefits for more than 15 years, one that is phased in over a subsequent 10-year period. But that means 15 years of cuts first. And many disabled workers will not live long enough to see any of the subsequent phased-in “enhancement.”

2) The exemption of means-tested programs (including Medicaid, ObamaCare premium assistance, Supplemental Security Income, Pell Grants, and certain nutrition assistance programs) and the poverty guidelines detailed in the White House fact sheet will almost certainly be only a very temporary exemption. Once the chained CPI is adopted for the tax code and Social Security—an immensely popular program, in large part because it is tied to workers’ contributions—it will only be a matter of time until it is applied to the less-popular, non-contributory means-tested ones. And, until the chained CPI is applied to means-tested programs, conservative opponents of those programs will have a field day decrying what I imagine they’ll label along the lines of “liberals’ special treatment for welfare recipients” and perverse preference for “welfare over work.” It’s worth remembering here that some means-tested programs have no automatic inflation adjustments. Funding for Temporary Assistance, for example, has been frozen in nominal dollars for nearly two decades. So, advocates for low-income people shouldn’t be optimistic about holding the line against the chained CPI in the means-tested programs that lucky enough to have COLAs.

Once applied to means-tested programs, the chained CPI would produce substantial cuts over time as Alison Shelton of the AARP Public Policy Institute shows in an excellent brief detailing the impact of the chained CPI on benefit programs.

3) Applying the chained CPI to the tax code will reduce the value of refundable tax credits, particularly the Earned Income Tax Credit, and increase tax rates on low-income, working class people. CBO had previously estimated that the cuts to refundable tax credits would add up to $17.9 billion over the next ten years. The Urban-Brookings Tax Policy Center has estimated that 45 percent of tax units in the lowest income quintile (below $26,000) and 84 percent of tax units in the second quintile (roughly $26,000 to $47,000) will pay about $175 more on average in taxes in 2020. Now, this may not seem like a lot, but if you’re a poorly compensated worker trying to raise two children on $10 an hour, every dollar counts.

And again, if the Chained-CPI is just a “re-calculation” that more accurately reflects the cost of living, why should this be necessary? It should be no harm, no foul, right?

Unless the truth is that these programs are already inadequate and this will make things worse, there should be no need to mitigate its effects in the first place. And if this is any indication, even that mitigation isn’t going to help much.

Suppose you’re in a bar and you overhear a couple of guys in the next booth talking about a plan to steal from people’s houses. As you eavesdrop the plan unfolds: one will come to the front door pretending to be from the gas company warning the homeowner about a gas leak down the street. While he distracts the homeowner at the front door, the other one will sneak in the back door and take stuff.

So the next day the doorbell rings, and there’s a guy saying he is from the gas company. He says he wants to talk a while to warn you about a gas leak down the street…

This is what is happening with this constant drumbeat of attacks on Social Security. The attack on Social Security never goes away, it only escalates. As we go into this next round of attacks — this time it is even coming from the President* — it is more than useful to understand the background of this campaign against the program.

Make your voice heard. Tell your elected representatives that you oppose these cuts.

The 1983 “Leninist Strategy” Plan To Privatize Social Security

In 1983 a couple of conservative “think tanks” developed a step-by-step plan to privatize Social Security, for the benefit of “the banking industry and other business groups.” The plan describes a strategy to convince people that Social Security is going broke and that it is a “Ponzi scheme,” to undermine confidence in the program and lead people to accept that it needs “reform.” The plan outlines methods to “neutralize” opposition. The plan involves a smokescreen strategy of saying things to distract people from seeing what they are doing.

This strategy for attacking Social Security was spelled out in a 1983 document from the Cato Institute (previously named the Koch Foundation), with Heritage Foundation input. You can read the original document for yourself, it is titled Achieving A Leninist Strategy. Please, if you have time, read the entire document (in particular the section “Weakening the Opposition”) to understand the strategy that has been unfolding in the years since, but the following quotes give you an idea:

“Lenin recognized that fundamental change is contingent upon … its success in isolating and weakening its opponents. … we would do well to draw a few lessons from the Leninist strategy.”

“…construct … a coalition that will … reap benefits from the IRA-based private system … but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public.”

“The first element consists of a campaign to achieve small legislative changes that embellish the present IRA system, making it in practice a small-scale private Social Security system.

“The second main element … involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it.”

“The banking industry and other business groups that can benefit from expanded IRAs …” “… the strategy must be to propose moving to a private Social Security system in such a way as to … neutralize … the coalition that supports the existing system.”

“The next Social Security crisis may be further away than many people believe. … it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform.”

Michael Hiltzik wrote about this strategy last year in the LA Times,Attacks on Social Security, Medicare borrow a strategy from Lenin,

Let’s go back to the original strategy brief by Stuart Butler and Peter Germanis. Their piece, “Achieving a ‘Leninist’ Strategy,” appeared in the Cato Institute’s Cato Journal for fall 1983. Anguished over President Reagan’s failure to exploit Social Security’s 1982 fiscal crisis to privatize the program, they concluded that the reason was the program’s strong support among the powerful voting bloc of seniors.

The answer, they concluded, was to “neutralize” elderly voters while continuing to undermine confidence in Social Security among the young. Their model was the Leninist movement’s “success in isolating and weakening its opponents.”

Any plan to change Social Security, they wrote, “must therefore be neutral or (better still) clearly advantageous to senior citizens … the most powerful element of the coalition that opposes structural reform.”

The young, by contrast, were not organized to support privatization, and uninformed about its virtues. The task of filling the knowledge gap, they argued, could best be performed by “the business community and financial institutions in particular … both through their commercial advertising and through public relations.”

So Now You Know

If you know there is a plan do something that harms you, and you know the plan describes a smokescreen strategy where things are said to distract people from seeing what is happening to them, and then you see the plan unfold step by step … you can stop reacting to the cover story outlined in the plan meant to distract you. You can start fighting back.

Read the plan, and then the next time they say “Social Security is going broke” or “Social Security is making the debt worse” you’ll see what is going on in a whole different way. Social Security is not “going broke” and Social Security does not add to the debt.

After reading this, these constant attacks take on a whole new light. You see it unfolding and say to yourself, “Oh, they’re doing that,” and “wow, it’s right out of the original strategy document!”

Sort of like “Wow, those guys in the bar were talking about MY house!”

So now, when they come to the door, you know what they are up to.

Past Posts

Understand The Rights Attack On Social Security,

Here is what to take away from this: Every time you hear that “Social Security is going broke” you are hearing a manufactured propaganda point that is part of a decades-old strategy. Every time you hear that “Social Security is a Ponzi scheme” you are hearing that strategy in operation. Every time you hear that “Social Security won’t be there for me anyway” ” you are witnessing that strategy unfold.

Washington Post Joins Wall Street Sneak Attack On Social Security,

Don’t fall for it. If they can gut Social Security they stand to make a lot of money but you stand to lose your retirement.

Fairy-Tale Social Security Policy,

A popular Boogeyman is “Social Security is going broke.” This fable originated from a 1983 Cato Institute Journal document, “Achieving a Leninist Strategy” by Stuart Butler of Cato and Peter Germanis of the Heritage Foundation. The document laid out a long-term strategic plan to dismantle Social Security. Part of the idea was to manufacture public beliefs like those we hear repeated (and repeated and repeated) today, “Social Security is going broke” and “Social Security is a Ponzi scheme.”

*Note – I am not saying the President is part of the plan, I am saying that his offer of benefit cuts falls for the plan’s lie that “Social Security is going broke.”
–

Follow me and CAF on Twitter: