The Republicans are masters of the "Long Con".
"A "long con" is an extended setup in an attempt to rob or cheat someone else. it usually involved an elaborate story that is executed over many weeks to months, aimed at convincing the target that the con artist (or thief) is legitimately a friend and trustworthy resource. at the end of the long con, the con artist gets the victim to voluntarily put themselves in precisely the position the con artist wants them in.
GOP fiscal and foreign policies are all con games, designed to move money from the pockets of the poor and the middle class, into the offshore bank accounts of the wealthiest plutocrats to ever inhabit the globe. Every single one of their great legislative actions is a "con." But since these are played out over a long period of decades, Americans don't even recognize what's occurring.
One of the longest Cons, and perhaps the most monstrous, has been the GOP "bait and switch" with Social Security. If you've been employed during the past thirty years, you're one of the marks. Rick Perry is just the wind-up accomplice that finally reels in the "pigeons" - the American taxpayers.
And this crime is even greater than you might know - because its origins are all but forgotten today. Some of us were even been born when this con started, back in the 1980 Presidential election.
The Social Security Long Con began with a typical Republican Big Scare (the traditional way that Republicans rush through their con-artist legislation.) In 1980, Ronald Reagan had used the terrifying prospect of "Impending Social Security Insolvency" as a major part of his campaign platform. One of his first actions as President was to send the May 1981 letter to Congressional leaders, demanding action. Reagan put the crisis this way:
As you know, the Social Security System is teetering on the edge of bankruptcy. Over the next five years, the Social Security trust fund could encounter deficits of up to $111 billion, and in the decades ahead its unfunded obligations could run well into the trillions. Unless we in government are willing to act, a sword of Damocles will soon hang over the welfare of millions of our citizens.
As Mr Bill would have put it at the time, "OOOOH NOOO! Social Security will be bankrupt for our future retirees!" A bi-partisan Congressional group, the National Commission on Social Security Reform (NCSSR), was formed, and headed by Alan Greenspan. After a year's worth of deliberations, their solution to fix Social Security was to double the amount of FICA tax on all incomes under $100,000, from 3.1% to 6.2%. After socking it to the American worker with this sudden increase in payroll taxes, there was a "sweetener" attached to the plan which was supposed to encourage working people to work a bit harder - Social Security taxes wouldn't be taken from any salary you received above $106,000. (Medicare taxes have no such income cap.) This cap has remained in place, even as incomes have been subject to inflation over the past three decades. Now Social Security, a "flat tax," is one of the most regressive taxes in our system.
Up until this point, Social Security had always been a "pay as you go" system up til that point. Current workers paid into the fund; retirees, widows and orphan received that money in their payments. Greenspan 's plan went like this: Double the amount retained from wages that the Boomers paid into the system. These overpayments would create a huge surplus. When the Boomers aged to the point of collecting Social Security, the surplus (savings) would be eaten into. After the Boomers died, the surplus would have been depleted. At that point (around 2035) the system would revert back to "pay as you go."
The NCSSR's report was enacted, and the 1983 Amendments to the SSA were the result. When Reagan signed the law, he made this statement:
This bill demonstrates for all time our Nation’s ironclad commitment to Social Security. It assures the elderly that America will always keep the promises made in troubled times a half a century ago. It assures those who are still working that they, too, have a pact with the future. From this day forward, they have our pledge that they will get their fair share of benefits when they retire . . . . Our elderly need no longer fear that the checks they depend on will be stopped or reduced. These amendments protect them. Americans of middle age need no longer worry whether their career-long investment
will pay off. These amendments guarantee it. And younger people can feel confident that Social Security will still be around when they need it to cushion their retirement.[emphasis mine]
Since 1983, the extra money that has been collected from every paycheck of every low-wage earner is invested in special series, non-marketable U.S. Treasury securities - the Social Security Trust Fund (SSTF). This is why Americans who state that they have been "investing" in the Social Security System are absolutely correct. They have been both paying for current retirees and saving for payments to future retirees (themselves, theoretically.)
The SSTF right now is actually $2.5 Trillion of government debt - three times what the Chinese and the Federal Reserve now own.. We know that the money in SSTF was supposed to remain "off budget." (Remember Al Gore's "lockbox"?)
Congress has been borrowing these funds to balance the budget. When you hear the Republicans screaming about the huge long-term debt this country has, remember that the great bulk of it is a debt that we owe ourselves. It is the money that the American workers has been paying into this system for the past thirty years, and then loaning to Congress so that things like unfunded wars and tax cuts for the wealthiest are affordable.
Now the day is coming when the American people as a whole have to actually pay back the Americans who have been putting money into the SSTF for 30 years. In order to do this, we would have to cut our Defense Budget AND end the tax cuts to the wealthiest. But the GOP doesn't want to do this! It would cut into their own private income streams. Their solution is to simply end the Social Security program instead. They plan to keep all the FICA money we've been paying in - for themselves.
So Rick Perry and the GOP are talking about Social Security as a "Ponzi scheme," as bankrupt. This is only the wind-up of a theft that they have been planning for at least 20 years, ever since they began to make the argument that "Social Security won't be there for younger workers." Bush's proposal to privatize Social Security was predicated on that fallacious supposition (another "Social Security solvency scare" begun in 2001). But now, the GOP and the Plutocrats are under tremendous pressure to get the money out of the SSTF before it is depleted by Baby Boomer payouts. They want to end Social Security and its payouts- just as the very generation the tail end of the Boomers, which has been paying double into this system for 30 years, is entering retirement.
Essentially the Republican Party is intending to steal all that money from us. This is downright theft. Why no one is screaming to high heaven about it in beyond me. Perhaps they do not remember 1983. I certainly do - and any of you over the age of 50 probably remember it, as well. As someone who lived through it, I can attest that it truly was a class-warfare attack on lower-wage earners. I had been working for five years when the FICA withholding changed. I was employed in University administration at a fairly low salary of about $17K a year. Although costs were much lower then, that FICA increase made a very big dent in my take-home. That regressive doubling of payroll withholding - which has been going on "temporarily" since 1983 - has financially harmed every lower-wage worker.
Looking back now, I realize that Reagan and Tip O'Neill may have been sincere in their belief that the SSA Act of 1983 ensured "our Nation’s ironclad commitment to Social Security." But the Act has turned out to be part of the long-term plan to steal the wages, and eventually the retirement, of lower- and middle-class workers. Rick Perry's completely false characterization of Social Security as a bankrupt Ponzi Scheme is the clue that the GOP intends to wind up this thirty-year con, closing it down now that it might actually have to pay out to its subscribers. They, who revere Reagan as the Great Patriot of the 20th Century, are making his very words into a mockery. You want to destroy the Republicans? There is no better way than to hoist them on their own petard, using the very words and achievements of Ronald Reagan. Get a recording of Reagan's pronouncement and play it in a incessant campaign to beat back the monstrous attempt at robbing our hard-working people.
The great thing is that Democrats have a magnificent alternative to the current system - and to Perry's proposals. It's a plan that would put Social Security on a solid financial footing throughout the next century. It would put money into the pockets of the lower- and middle-class workers. It would even give a tremendous boost to true small businesses and employment. This alternative plan would jump start the economy AND keep Ronald Reagan's promise.
Get rid of the "Greenspan Doubling" of 1983 on workers earning under $106,000. Remove the income cap on Social Security instead. Institute a system that cuts FICA taxes for those earning under $106,000 to the pre-1983 levels: 3.1%. Make up that loss by placing the current Social Security tax withholding (6.2%) and Medicare tax withholding (1.45%) to all incomes between $500,000 and $5 million. Removing the income cap puts the Social Security system into a long-term surplus indefinitely. It even allows for the raising of benefits. Lowering the payroll tax for the lower-wage earners puts an average of $1,000 annually in the pocket of every lower- and middle-class American.
President Obama has requested that the Payroll Tax cut (from 6.2% to 4.2%) be extended as a stimulus to put more money into the hands of consumers.A rare combination of conservative Republicans and liberal Democrats are united in opposition to this idea - the Democrats mainly because they feel it will undermine the funding mechanism of Social Security. Obama is correct - cutting the payroll tax is stimulative. Worse than that - the return of a 6.2% payroll tax will drive consumer demand down even further. The return of a 6.2% payroll tax will hit the poorest working Americans hardest, taking hundreds and hundreds of dollars out of their pockets. A wage-earner making $24,000 a year will have approximately $750 more per year when their FICA withholding is only 3.1%. That's dental care, meat on the table, or a tank of home heating oil.
Reducing FICA withholding to 3.1% for incomes under $106,000 will also provide a real boost to small business hiring. One of the main reasons that small businesses hold back on hiring needed workers is due to the fact that they must currently withhold 15% of that employee's salary - the employee's contribution, and the employer's matching contribution. That amount is a real disincentive to hiring a new employee, especially when a small business doesn't clear much to begin with. Reducing the necessary employer contributions in half will make it much easier for true small businesses to begin to add additional staff.
The solution to "saving" Social Security isn't to maintain the vastly unjust funding mechanism that it employs now. It's not to concede the Republicans' spurious arguments that it it is "in peril," The solution is to lift the income cap on contributions for the wealthiest. It is to give the lowest wage-earners a break, to make up for the heavy burden they've been carrying for 30 years. It is to remind the American public of the history of Social Security, and how we got to this place. It is to state the truth: Social Security has a surplus of $2.5 Trillion dollars. The people who borrowed that money - the wealthiest in our nation - want to weasel out of paying back what they owe us.
It is to call out the Republican swindlers on this con, and every other scheme of the past thirty years that they have been enacting to impoverish the American public.