Sen. Bernie Sanders, was recently horrified to learn that Dear Leader, President Obama, might be putting Social Security benefits up for potential cuts in order to tackle deficit reduction:
President Meets Senators President Obama made a rare visit to Capitol Hill on Tuesday and told Senate Democrats behind closed doors that he was open to cutting Social Security benefits as part of a deficit-reduction deal with congressional Republicans. “He is more inclined to cut benefits, which I strongly disagree with,” Sen. Bernie Sanders told The Wall Street Journal and United Press International after leaving the meeting with the president. “I’m going to fight as hard as I can to make the point that Social Security has not contributed on nickel to the deficit,” Sanders said Wednesday morning on National Public Radio’s “Morning Edition. (No word as to whether or not Obama talked about cutting NPR’s budget – ed.)
It’s hardly shocking that Bernie has a problem with anyone cutting the checks that help keep him in office. After all, it’s been decades since he never had a real job. I quote Venkman: “I’ve worked in the private sector – they expect results“. But I suppose that Bernie had some of his highly-groomed locks standing on end to hear this sort of talk issue from the mouths of, well, the President who has broken all prior deficit records for 4 years running.
“I’m going to fight as hard as I can to make the point that Social Security has not contributed on nickel to the deficit,” Sanders said.
I’d like to see that “fight”. ================>
But instead (sigh), let’s talk about the budget. In the FY2012 budget, Social Security was 22% of all federal outlays. Yet Bernie says that Social Security doesn’t contribute one nickel to the deficit? He’s right there – it’s billions of nickels that Social Security outlays have contributed to the deficit.
Why? Because current Social Security payments are made through two vehicles, since Social Security has no “lock box” and has, in fact, a stack of IOU’s instead of money in its coffers. Current Social Security outlays come from current tax receipts, meaning people working, right now, are having their Social Security dollars transferred to current recipients, and all the dollars retired workers contributed to Social Security have already been spent.
If the USG is borrowing roughly 43 cents out of every dollar it spends, some of that borrowing is going out the door in the form of transfer payments, including Social Security, Medicare, Medicaid, Defense, Education – all are part of the total budget pie.
As Andrew Biggs (AEI) outlines below, Social Security does contribute to the annual deficit – to the tune of $165 billion per year:
And on a unified budget basis, when Social Security’s financial position worsens the budget deficit grows. Social Security today contributes about $53 billion to the budget deficit—$165 billion if we include the temporary payroll tax cut designed to stimulate the economy—rising to $100 billion by 2020 and never looking back. It’s as simple as that. Is Social Security the main driver of today’s $1.3 trillion unified budget deficit? Of course not, and no one said it is. But it’s not pennies or dimes either, as the left would have you believe.
Sanders simply wants to wave away any suggestion that Social Security is insolvent, or that there are unfunded liabilities in the tens of trillions of dollars, not just for Social Security, but for Medicare and Medicaid, too.
Unsurprisingly, for the Senator who sees every additional dollar of government spending as a good thing, and also seems to see the pockets of people who work for a living as bottomless pits of revenue, no tax stone shall remained unturned:
In an interview afterward with Reuters, Sanders said it would be better to bring more revenue into the system. “There are ways to address these problems without cutting benefits,” he said. “Some of us suggested doing what he [Obama] proposed in 2008, which is to lift the cap on taxable income,” Sanders said. Harkin told
Politico that Obama’s response to his and Sanders’ concerns was “basically things are open for negotiation.”
Yes, in Sanders’ world, everything is open for negotiation – as long as it means continuing to increase public spending, public dependency, and public fealty to our charismatic overlords, and that “the rich” pay for it, even if it has been empirically demonstrated that there’s not enough tax revenue in the world to cover our debts and liabilities.
No wonder Bernie feels betrayed. The president who just won his 2nd term based on the notion that we don’t have a
spending problem is now saying well, we might have a spending problem. The reality is that we have decades of politicians who quite knowingly have pushed a growing problem off and under the table, which is the pinnacle of irresponsibility, yet Sanders still lectures us that there’s no problem that can’t be solved by higher taxes and even more spending.
Let’s ask Europe how well that’s working out for them. If their phones are still working.