Bush is stealing your FICA payments

by Gary Boatwright, Fri Jan 28, 2005 at 08:18:43 PM EST

I think Democrats have to start explaining to working Americans that Bush is stealing their FICA payments to extend his tax cuts for the wealthy. I don't think this message is getting through all of the balderdash about whether or not the trust fund really exists and generational transfers of wealth. I don't think most Americans are aware how large the Social Security surplus is every year and that Bush is using it to fund current government operating expenses and hide the real size of his budget deficit.

more in extended diary

I'm not completely sure that all liberals realize that if you add the $164 billion dollar Social Security surplus for 2004 to the $413 billion dollar budget deficit, Bush's actual 2004 budget deficit was $577 billion. I think this Trust Fund Assets Chart might actually clarify the amount of Social Security surpluses that will be used to finance the extension of Bush's tax cuts.

This is a massive transfer of wealth from the middle class to the wealthy elite. If you calculate the difference between the amount in the trust fund in 2014 and 2004, you find that Social Security will run a $1.6 trillion dollar surplus over the next ten years. In other words, $1.6 trillion dollars of our FICA payments are going to be used to extend Bush's tax cuts. Over the next 15 years over $2 trillion dollars in FICA payments are going to be used to extend Bush's tax cuts.

This also goes to the core of the problem with Bush's budget deficit and extending his tax cuts. When Clinton was running budget surpluses, he proposed investing 15% of the Social Security Surplus into a dedicated market account separate from the trust fund. The rest was going to be used to pay down the deficit, thereby easing the burden of redeeming Social Security trust fund assets in the future.

You can also argue that the surplus will be used to fund the Iraq war and whatever corporate welfare Republicans add on to the budget next year. I think it is more accurate to describe this as a radical transfer of $1.6 trillion dollars from working Americans into tax cuts for the wealthiest ten percent.

Over the next ten years President Bush is taking over one and a half trillion dollars in surplus FICA payments and using them to fund his tax cut for billionaires. That seems like a pretty simple frame to me. We need to also emphasize that Bush's real deficit last year was nearly $600 billion dollars. I think Americans would wake up in a hurry if they realize the size of the surplus they are paying in to Social Security every year and make the connection to extending Bush's tax cuts.

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Keeping THIS promise is against their religion...

Nomatter what Americans want, I just know in my heart that the Bush plan is to figure out a way to steal our Social Security in order to enrich their friends and themselves.

Look at it this way, have you ever known somebody who was a compulsive liar, who was very personable and seemed normal in public, but in private was a abusive "Avenging Angel" type.. never keeping a promise and always making you know that he/she remembered and repaid even unintended slights..

Maybe you know a workplace bully, or an abusive husband..

Well, the Bush crew own America. They are narcissists, who do not have a conscience. They don't know how to love. They only know a grey, unemotional world of tit-for-tat.

Since 'nobody can force them' to keep their promises, I think that the chance of their doing so, if not forced to, is very slim.

In my experience, such people CAN be relied on to do one thing consistantly..

Cause tears.. and dissapoint.

If people die, if they get sick, if they cannot cope with not having an adequate income in their golden years.. Mr. Bush would like us all to remember that we voted for him. he has a mandate, he says..

He doesn't care.. He doesn't know how to, and he doesn't have to.

Dishonesty, dealing in bad faith, and making bad decisions, even ones that end up killing people, even if you are President, is not a crime...

Sorry...

by ultraworld 2005-01-28 09:19PM | 0 recs

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FICA

Thanks for the kind comments on my diaries. Good to know that someone is reading and thinking. But I can just sense peoples' eyes glazing over when I resort to those numbers that tell the story to you and Ultraworld, but pass by a lot of people like a fart in a blizzard. FICA is just an acronym on a paycheck for most folk, and if my experience posting on this topic tells me anything, simpler is better.

Not that we are not having an impact, I have seen the discourse moving on this topic a lot more in the last two months than it has in the last two decades. But to assume that people automatically know the meaning of 'FICA' is to assume that they understand the implications of the various tables and figures that I regularly reference. Which is to say assuming more than the evidence reveals.

by Bruce Webb 2005-01-28 10:33PM | 0 recs

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Re: FICA

But to assume that people automatically know the meaning of 'FICA' is to assume that they understand the implications of the various tables and figures that I regularly reference. Which is to say assuming more than the evidence reveals.

That's exactly the problem I noticed Bruce. Not everybody is going to be as interested in the wonkish details as you are. I thought I was leaning too much towards the wonkish side until I saw your diaries. The kind of factual and detailed hard facts you have analyzed is critical counter the myths being propagated by CATO and the Heritage Foundation. I appreciate your hard work.

Now we have to make those details personal and understandable. If anybody has any ideas for refining my suggestions I certainly welcome them.

by Gary Boatwright 2005-01-29 06:24AM | 0 recs

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My introduction to this

was when I saw the numbers move. How did 2023 suddenly become 2026 and then 2029? Something was causing the exhaustion date to move out and a little investigation showed the explanation: if we beat the numbers the date moves out. Well we soundly thrashed the numbers for 2004 and the date will move out yet again, how much to be determined by how brazen they are in suppressing the numbers for future growth. Anyone who deploys "2018" or "2042" is relying on a counterfactual economc model. The economy did not grow 2.7% in 2004, it just didn't, and pretending that you can simply use dates that derive from that initial input and ignore the real world of 4.0%+ reveals either ignorance or dishonesty. My bet is on dishonesty.

D-Day is March 31, 2005. By law they are supposed to release the Annual Report of the Trustees before April 1. They have already pulled every numeric dodge possible out of their bag of tricks. For example the Intermediate Cost model in the 2003 Report set 2003 growth at 1.9%, 2004 at 2.3%, and 2005 at 2.1% 2003 Report The real world reported 3.4% for 2003. And the response of the Trustees is instructive. In the 2004 Report they revised the number for 2004 up somewhat from 2.4% to 2.7%. Given the stronger than expected growth in 2003 they had little choice, but they still returned the smallest number they dared. And then they pulled the switcheroo they assumed nobody would notice: they were forced to revise 2004 up and they responded by revising 2005 down, from 2.1% to 1.8%. Now there was exactly no economic justification for that downward revision for 2005 in the face of an economy that was outperforming your "optimistic" projection. At worst they should have let 2005 alone, in any realistic projection they would have had it uptick. But they were stuck between a rock and a hard place.

Per the 2004 Report 2.8% in 2004 and 2.1% in 2005 is all it takes to meet the Low Cost alternative that shows SS fully funded. Already there was dangerously little room between Intermediate and Low Cost for 2004 (2.7% and 2.8%), after all we are supposed to be talking about a range of outcomes, positing 2.1% growth for 2005 in both models just would not pass the bullshit test. So they ratcheted down 2005 to 1.8% to maintain some daylight between the alternatives.

Well every pressure cooker has a bursting point and the 2005 Report is it. Real world growth beat both the 2.7% of Intermediate and the 2.8% of Low Cost and that alone will move the numbers out. But the kicker is the number for 2005. They can't suppress it down from 1.8% and the instant they bring it above 2.1% bells and lights go off: we officially beat Low Cost, the amount of the beating being determined by the effects of injecting 4.0% into a model that predicted 2.7%.

People who have not studied a model where the difference of .1 percentage points in growth in 2004 produces a trillion dollar swing in 2040 may look at 4.0% and 2.7% and go "so?" Meanwhile I am jumping around the room.

They can't produce an honest report that doesn't show a fully funded Trust Fund. I don't have a spreadsheet but my suspicion is that 4.0% for 2004 does the whole job on its own. Either way anything above 2.1% for 2005 is proof positive.

I just don't see any way they can delay the report and still get legislation through. And the numbers are dangerously straining the pressure cooker, at some point it is going to blow.

Got Numbers?

by Bruce Webb 2005-01-29 09:16AM | 0 recs

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Or to answer your question

We just play defense until March 30th and then start loudly demanding the release of the Report.

Bush is attempting to push this through based on emotion alone. But his window is just too narrow . Election day is to far for Representatives to be rushed on this by constituent phone calls, and yet too near for them to be placing their whole political futures at risk to achieve some wet dream of Rove, Norquist, and the Club for Growth.

Bush may push support for privatization above 50% nationally, but I doubt he can bring any real pressure to bear on Democrats state by state. And nothing would please me more that having this pushed through the House on a party line vote based on bogus numbers. Pfff, the dream of a permanent majority up in smoke off the Third Rail.

Because they just don't have the numbers.

by Bruce Webb 2005-01-29 09:31AM | 0 recs

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Lying, Thieving Scoundrels

I agree that Bush & Co. are lying, thieving scoundrels -- figured that out a couple years ago. I am pretty much past being pissed off about it. The lies seem so transparent, yet I know intelligent people that think Dubya is doing a great job. Facts seem to be irrelevant -- probably because they do not want to wake from the delusion. It is going to take time for these people to accept the evidence. We must continue to keep the facts in the forefront -- to counter the false claims. Eventually, the truth will win out. I hope that will be soon.

by Herb La Tortue 2005-01-29 01:03AM | 0 recs

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Transparent lies

Well they aren't as transparent as we might think. You can read through the 15 page summary that heads each Report and come away with a decent set of dates and numbers that support "crisis". It is not until you engage the numbers in the meat of the Reports, and more importantly see how they changed over time that the reality of "Man, they are just making shit up" strikes you.

But God made href=" " /a for a reason, and I am willing to do His Work for as long as it takes.

by Bruce Webb 2005-01-29 02:55AM | 0 recs

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some additional numbers to add support..

first of all, kudos for all in keeping these financial issues going. You see the effects across various web sites, and even though the word isn't widely spread yet, the start is good to see. We eventually have to tackle the problems of 1) why the democratic leadership seems to be indifferent of the stealing, and 2) how to use mass media to reach more people (it's amazing how quickly the republicans can mass market lies in instantaneous media, whereas democrats have no such medium to have their voices heard). I agree completely with JB's change-the-wind sentiment that to get (at least the current democratic leadership) to do anything, we need a group movement first.

Look at the finances of the top 1%. They pay on average $158,000 per person per year in federal income taxes. There's about 1.2 million of them, paying as a group $190B of individual income taxes per year. 190B/1.2M = $158,000.

The general fund's debt as increased from a surplus under Clinton to $633B/yr under W ($577+other trust funds). Yet the general fund's revenues from taxes (not SS) have decreased from ($1200B in 2000) to $998/yr now ($809B from individual income taxes, $189B from corporate income taxes). If the budget was balanced, taxes would be raised across the board by 633/998 = 63%. That's an additional 0.63*158,000 = $100,000/yr that the average person in the top 1% would be paying in order to have balanced the budget in 2004 (and yearly going forward with the current projections). This includes the tax cuts along with the additional spending that they want.

The "hope" of the top 1% (read as "W's agenda"), of course, is that if the 1%, as a group, is never accountable for this debt. Either that 1) it is delayed as long as possible so that they personally will no longer be earning this much and the burden will fall on whoever is later in the top 1%, 2) that when the day of reckoning comes, it will be at a lower tax rate (flat tax)? so that the burden is placed on all Americans as a whole, and/or 3) devaluation of the dollar will lessen the effects of the debt from this group since many of them are diversified across the dollar & euro.

FICA/SS no doubt works into this plan since it is revenue brought in at a regressive rate to pay for taxes that should be at the progressive rate.

FICA/SS is also being used as part of the political tool in W's "cutting the deficit in half". As JB noted from the LA Times, W appears to be indifferent to cutting any meaningful spending. But note that SS surplus goes from $150B/yr currently to $250B/yr around 2008/2009. That additional $100B/yr can be used to say that the deficit is being cut by $100B/yr even if no spending is cut at all. If the mass-media uses the fake $400B/yr figure for the debt, it gives the false appearance that (by not cutting anything at all), that the deficit has already been cut by 100/400=25%. I'm assuming that this was the plan from the start, with excuses planned to be given later that a "50% cut" was overly optimistic. In the end we know that there was no deficit reduction, but unless there's a voice of opposition, the average person is going to believe whatever the mass-media will be feeding them.

by zigzig 2005-01-29 04:06AM | 0 recs

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Re: some additional numbers to add support..

Thanks zigzag. I'm partial to the Forbes 400 list myself. The billionaires of the world picked up a cool half trillion dollars last year. In America, the top 400 picked up a cool $45 billion increase in their wealth.

This poor fella is the 400 richest person in America, tied at 389th with Boone Pickens at $750 million. If we extend Bush's tax cuts, hundred millionaires will soon be pushed out of the elite entirely. A lousy hundred million dollars just doesn't go as far as it used to.

by Gary Boatwright 2005-01-29 06:35AM | 0 recs

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Someone should make it a point to make SURE

That those who have received the vast and substantial benefits of the Reagan/Bush largesse over the last 20 years should be the ones who pay to eliminate the big mess that they are and will cause..

Often, they pass a bill by making promises associated with it. But they NEVER seem to keep those promises. It's like a big shell game.

What we need is a new system of evaluation and punishment that evaluates goals by performance and not by the 'efforts' of those who have much to gain by making them cursorily if at all...

Also, dealing in bad faith, in other words, passive aggressive dealings, should be a crime..

Also, we need to start IGNORING the things Bush says.. and telling others so, and hold up as the criteria for success, successful, accomplishment of those goals - and that ONLY.

NARCISSISTS ARE ALL TALK, NO ACTION

Lets realize that we are dealing with compulsive liars here..

These people lie like others breathe.. with every breath, and they are VERY good at it.. its second (or perhaps first) nature to them...

But catch them red handed and its not a pretty sight..

BTW, I grew up in a family of narcissists and have the scars to prove it. I am not a novice here..

AND I KNOW THEM WHEN I SEE THEM...

Beware.. These people would rather have the US reduced to a smoking ruin than have their bullshit tactics exposed.. They will bring us to ruin if we don't FORCE them to be the leaders that we need, and NOT the IDIOTS they say 'their mandate' (HA) has given them permission to steal..

But don't expect them to go softly.. Narcissists like to go out with a bang, literally..

(and take you with them, if they can, when they go..)

Look up (google) "narcissistic personality disorder" AND divorce

(together) for some interesting stories from SURVIVORS

Here's a good place I found with that search:

http://groups.msn.com/NARCISSISTICPERSONALITYDISORDER

TAKE THEIR ADVICE... RUN, DON'T WALK - AWAY FROM THESE PEOPLE...

They are very highly represented among politicians and 'religious' people.

Narcissists gravitate to these professions because of their need for respect - to cover up the yawning gulf of emptiness within them... and also, usually, to help obscure the BRUTAL AND AMORAL WAY THEY ABUSE OTHERS, USUALLY THEIR OWN FAMILIES...

by ultraworld 2005-01-29 05:40AM | 0 recs

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thank you!

thanks to jollybuddah and everyone who commented. i admit i'm largely ignorant of how our tax system works, so this information is very helpful. i've been following the financial discussions as of late, and i rarely comment because what i'm really doing is trying to absorb all the data.

i'm hoping that soon, someone will volunteer to totally break it down into simple simple terminology and math, ie layman's terms.

anyway, thanks for this diary - it's very helpful!

by annatopia 2005-01-29 08:31AM | 0 recs

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You too can be an expert!

Here are some links to diaries I posted earlier that provide a pretty clear picture of some of the specifics in the debate:

The Social Security lock box

The Social Security Trust Fund

The Diamond-Orsazag Alternative

Social Security Plus (Social Security plus a Thrift Savings Plan type retirement plan)

A Brand New Lock Box

I also have quite a few links to what I think are reliable sources. One of my favorites is the special series on Social Security at the Center on Budget and Policy Priorities

Enjoy! You should be able to be quite the authority in a few hours.

by Gary Boatwright 2005-01-29 09:13AM | 0 recs

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you rock, thank you!

now i've got some reading to do...

by annatopia 2005-01-30 09:32AM | 0 recs

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Social Security is not broke

I tried to strike a balance between wonkery and simple explanation at my website Social Security is not broke: by the numbers and can say with near certainty that you are not going to find the numbers in more accessible form anywhere than you can there.

But perhaps the best explanations can be found at Economics Policy Institute: Social Security Issue Guide or in this essay from Mark Weisbrot and Dean Baker (economists who have been all over this for a decade) Social Security "Reform": A Solution in Search of a Problem

by Bruce Webb 2005-01-29 09:43AM | 0 recs

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Re: Social Security is not broke

Great links! I'm just starting Dean Baker's book, The Phony Crisis. He nailed this "crisis" malarky years ago. A man ahead of his time.

by Gary Boatwright 2005-01-29 10:19AM | 0 recs

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Killer quote from Baker and Weisbrot

"The myth of Social Security's impending crisis, like the myth of Saddam Hussein's involvement in the September 11 attacks or his non-existent nuclear weapons program, has real consequences. Just as it would have been difficult, if not impossible, to get public support for an invasion of Iraq without these myths, the Bush administration's proposal to slash benefits and partially privatize Social Security wouldn't have a prayer if people were aware of the actual state of Social Security's finances."

Speaking Truth to Power.

by Bruce Webb 2005-01-29 09:27PM | 0 recs

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Re: Social Security is not broke

thank you bruce! between you & jollyB, i think i'll be able to put this all together. thanks for helping to educate me.

by annatopia 2005-01-30 09:32AM | 0 recs

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The Looted Lockbox

I like your frame:

Over the next ten years President Bush is taking over one and a half trillion dollars in surplus FICA payments and using them to fund his tax cut for billionaires. That seems like a pretty simple frame to me.

Here's a more strident variation:

President Bush is looting the contributions of average Americans to their Social Security lockbox with one of his hands while with the other he shovels the vast bulk of the ill-gotten money to his wealthy supporters.

Yes, the Dems will be accused of bringing out the same old class warfare but if Republicans would stop waging class warfare we wouldn't need to rail against it.

Yes, I know there is no true lockbox. But the legislative intent was clear enough that the contributions towards Social Security belonged to Social Security and would be paid back to all who contributed in full.

by Curt Matlock 2005-01-29 09:40AM | 0 recs

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Re: The Looted Lockbox

Warren Buffet of all people, has admitted that "If class warfare is being waged in America, my class is clearly winning." I don't know how much clearer or louder a clarion call the Dems need.

by Gary Boatwright 2005-01-29 10:22AM | 0 recs