Prometheus 6

Last Friday I called out Alan Greenspan as a sellout. Today, The American Progress Fund's Action Report got all that and more. Here it go, with their original formatting and everything.

Last Friday, Federal Reserve Chairman Alan Greenspan repeated his call to slash Social Security benefits and raise the retirement age on America's seniors. He also proposed reigning in Medicare benefits. Greenspan claims such action must be taken immediately to avoid unmanageable budget deficits. But he presented a false choice between raising payroll taxes on workers and reducing benefits. What Greenspan didn't mention is his support for extending President Bush's tax cuts for the wealthy indefinitely – at a cost of $1.5 trillion over 10 years. This, despite evidence in the president's own budget analysis that his tax cuts are largely responsible for projected federal budget deficits. According to the Center for Budget and Policy Priorities, the impact of the president's tax cuts on the deficits is three times the impact of the projected Social Security shortfall.

THE GREENSPAN TAX CUT FLIP-FLOP: Greenspan said in February that we shouldn't roll back tax cuts because doing so would "pose significant risks to...the revenue base" by slowing economic growth. But Greenspan advocated those tax cuts in January 2001 because he believed they were necessary to reduce federal revenues. The Washington Post reported on 1/27/01 that Greenspan "justified his support of tax cuts by focusing on a problem that may not even emerge until the end of a possible second Bush term – the government being forced to buy private assets because it had paid off all the national debt and still had buckets of cash in return."[P6 I remembered this, but couldn't remember when the Post said that. I been one-upped!]

THE GREENSPAN BAIT-AND-SWITCH: In 1983, as chairman of the bipartisan Social Security commission, Greenspan said that the way to ensure that Social Security remains on sound financial footing in the future is to make baby boomers pay their benefits in advance. That is why, to this day, people pay more in Social Security taxes than is paid to beneficiaries – 50 percent more in 2004. But, in large part to make up the shortfall caused by the Bush tax cuts for the wealthy, this money (more than $1.8 trillion) has been used to finance other aspects of government. In other words, Social Security has been transformed from a retirement program to a regressive income redistribution program. Lower- and middle-class workers are not paying for their retirement benefits in advance, they are paying for tax cuts for those making more than $300,000. For more, read this American Progress column by Harry J. Holzer.

SOCIAL SECURITY IS NOT IN CRISIS: According to a recent report by the Congressional Budget Office, over the next 75 years, the Social Security shortfall is projected to be 1 percent of all taxable income. Even at current levels, Social Security will be able to pay full benefits until 2052.

A MODEST PROMISE: Greenspan said on Friday that "we have promised more than our economy has the ability to deliver." On Salon.com, James K. Galbraith points out that our promises are quite modest: "Social Security offers a life of modest comfort to most – not all – elderly Americans, as well as a system of support for survivors and the disabled. Medicare offers the elderly access to decent medical care. That is all." Galbraith notes, "We are a rich country, and we can certainly find the food, the modest housing, the clothing and the doctors, nurses, and health aides required to keep our elderly out of poverty in the years ahead."

As an aside, I must say I'm doing nicely in recognizing the significant stuff.