How Obama is threatening social security.

Writing in the NATION William Greider points out that Obama’s tax compromise not only gives a 700 billion dollar tax break to billionaires but has an even more dangerous aspect. To guote Greider:It is the Trojan horse provision that threatens to destroy Social Security by undermining the longterm solvency of the social insurance system.

Obama is proposing to knock 2 per cent off deductions that every worker regularly contributes to the Social Security Trust Fund. This is money that is then set aside for future retirement benefits. No doubt this is an easy political sell. Workers get less off their paychecks and Obama can also tout the measure as a stimulus to the economy. No doubt the same story as for the continuation of tax cats to the very rich.

But this reduction in income for the Social Security Trust Fund could have disastrous effects on the Social Security System. Greider gives Obama the benefit of the doubt noting that the consequences of the move were no doubt not intended by Obama who has always promoted Social Security. But surely he has enough economic advisers who should know very well what the results will be.

Many conservative Republicans would love to do away with Social Security and regularly point out that the present system will in time go bankrupt and suggest privatization etc. Now Obama is helping them out. The reduction in payments will be 120 billion annually. Of course the Republicans will greet this with glee because it will give their arguments questioning the sustainability of the system more weight.

With all the other financial pressures on the system, Congress will not be likely to re-impose the deductions in a year or so. The Republicans and no doubt many Democrats can pose as defenders of the workers as they are creating the conditions for sabotaging their retirement benefits.

No doubt Obama will not find the strength to fight against the billionaire tax cuts when it might interfere with his re-election campaign. That old economy will still need stimulating. He may also need to stimulate donations to his campaign coffers. It may not do any good since big donors may already have decided they have been betting on the wrong horse.

Nancy Altman, a policy expert and co-chair of Social Security Works, believes this perverse policy turn “will lead inexorably to killing Social Security.” She notes that Obama’s move will bolster right wing arguments that claim that the funding of Social Security is not sound. Altman continues: “Today’s Democrats fail to understand the program, “and so are not only blind to subtle assaults against it, but seem to conspire in those assaults. With the Republicans and the Democratic president, perhaps unwittingly, conspiring to destroy Social Security, the American people don’t stand a chance.” The connection between what is being done and the possible demise of Social Security is quite clear. Conservative Republicans see it. I guess this means that Liberal Democrats are much stupider than conservative Republicans if this defense is correct. Actually the excuse seems to be simple apologetics of the type that the left continues to invent to make Obama look less reactionary. Surely he must know quite well what will happen but he nevertheless deliberately follows a reactionary policy while selling it as a benefit to his Democratic base. There is nothing very subtle about the manner in which the Obama policy goes against the survival of Social Security. The apologetic nonsense spouted by Altman and others is not very subtle either.

NOTE: Greider himself does not question the apologetics of Altman. He also claims that Democrats do not seem to understand the repercussions of what they are doing. Greider also notes that Obama has defended Social Security many times. The critique of this view is mine not Greider’s. Whatever Obama may say his actions could lead to the demise of Social Security and to pretend he does not know it defies common economic sense.

Source : Agency

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