Labor Advocate Online
Week In Review, May
by Bill Onasch, webmaster, kclabor.org
Once again we are a bit tardy in our review of the week. Last weekend we were immersed in the Future Of American Labor conference. It proved to be a successful gathering, bringing together nearly fifty labor activists from a wide range of unions, locations, and viewpoints. A couple of reports are posted on the conference web page and both text and digital formats of most of the conference talks will be on the web soon as well.
A Mean Test For Social Security
First the good news: if you currently live in abject poverty you won’t lose a thing from Bush’s "progressive indexing" scam. Those earning 16,000 dollars a year or less will keep their full benefits. Call him "Sport."
But let’s say you’re currently 35 and earning an average wage of about 36,000 a year. When you retire under the latest Bush plan you will lose twelve percent of your current entitlement. Your kids will be down 28 percent when it comes their turn.
If you are in a skilled trade or profession and earn 58,000 you’ll be shorted 17 percent and your kids, if they’re lucky enough to stay in the same income bracket, will have lost 42 percent to "progress."
To be fair we should note that the Waltons, Tysons, and Trumps will suffer an even bigger bite out of their Social Security benefits. The billionaires will have to learn to make do along with the rest of us.
Since Bush’s privatization plan has been a non-starter so far he has been floundering around, trying to undermine public confidence in Social Security in outrageous–and sometimes contradictory–ways. In early April he rashly declared:
"I have just come from the Bureau of Public Debt. You see, a lot of people in America think there's a trust, in this sense -- that we take your money through payroll taxes and then we hold it for you, and then when you retire, we give it back to you. But that's not the way it works.
There is no 'trust fund,' just IOUs."
Some commentators observed that such remarks not only may scare workers concerned about their retirement future; it could also frighten many investors–especially the Chinese government–holding just such "IOUs." Bush’s denigration of the trust fund could be seen as a threat to renege on the government’s debt obligation. Without investment in government bonds and T-bills the federal budget would collapse under the weight of the deficit created by massive tax cuts for the rich.
A few days ago Bush changed his tune somewhat:
"I know some Americans have reservations about investing in the stock market. So I propose that one investment option consist entirely of Treasury bonds, which are backed by the full faith and credit of the United States government."
This sounds reasonable. It should because that’s exactly what people are doing already. Social Security is now invested entirely in Treasury bonds backed by the full faith and credit of the U.S. government.
Not only Bush but nearly all of the politicians want us to believe there is a crisis in Social Security. They want young workers to believe there will be nothing left for them. They have various schemes for "fixing" Social Security. Some want to privatize, some favor cutting benefits, many want to make us work longer before drawing any benefits–Bush likes all of the above, as much as he can get. All of these dodges involve redistributing wealth from working class entitlements to the ruling rich.
There is no immediate crisis requiring rash action. Everyone agrees present benefit levels can be supported with no changes for another 25-30 years.
The post-World War II "baby boom" will eventually create a spike in retirees that will eat up current surpluses and require additional income to maintain benefits. This can be accomplished easily by eliminating the cap on income subject to Social Security tax and small increases in the employer contributions to the fund.
We, of course, should expose and oppose Bush’s ever evolving attacks on Social Security. But we also have to be on guard against our spurious Democrat "friends" who say they want to "fix’ Social Security.
Not long ago congress was lecturing us about our irresponsible running up of personal debts and they passed a new bankruptcy law to make sure we don’t short the credit card companies of their due. (By the way, one of the votes for this credit card collection law was the liberal "friend of labor," Rep-Rev Cleaver from the 5th CD in Kansas City.)
Some of these paragons of thrift and financial wisdom came together recently to reconcile differences between the house and senate budget bills. The Budget Resolution Conference Agreement made further deep cuts in programs such as Medicaid and Food Stamps. Nevertheless, by the time they were done they managed to increase the budget deficit.
The short fall results from over 100 billion dollars in tax cuts on things such as dividends and capital gains. 53 percent of this lost revenue goes to households with annual incomes over a million dollars–approximately 0.2 percent of the population.
Our New Green Line
You may have noticed we recently started setting apart stories about environmental issues in our Daily Labor News Digest. This is in recognition of the importance as well as the increasing number of such issues. These deserve greater attention and a place on our action agendas.
That’s all for this week.