Uh-Oh Spaghetti-o's: Word on the Street is Obama is Looking to Privatize Social Security

Yes, I know this title is dramatic but we're now reading multiple reports

William Greider:

Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea--Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

Dean Baker:

Word has it that President Obama intends to appoint a task force the week after next which will be charged with "reforming" Social Security. According to inside gossip, the task force will be led entirely by economists who were not able to see the $8 trillion housing bubble, the collapse of which is giving the country its sharpest downturn since the Great Depression.

This effort is bizarre for several reasons. First, the economy is sinking rapidly. While President Obama's stimulus package is a good first step towards counteracting the decline, there is probably not a single economists in the country who believes that is adequate to the task. President Obama would be advised to focus his attention on getting the economy back in order instead of attacking the country's most important social program.

Back during the primaries, I got a lot of crap for this post on Obama's Economic advisers and how they were recommending privatizing social security...
so now our more Progressive, worker oriented Journalist watch dogs are reporting on some horrific developments.

Even the film I.O.U.S.A, written by and for deficit hawks, acknowledges social security is solvent. I find the documentary reasonably accurate which Greider blasts. That said, he might be blasting it due to the strategy behind the film. Check out this tidbit:

Their report--Taking Back Our Fiscal Future, issued jointly by the Brookings Institution and the Heritage Foundation--recommends that Congress put long-term budget caps on Social Security and other entitlement spending, which would automatically trigger benefits cuts if needed to stay within the prescribed limits. The same antidemocratic mechanisms--a commission of technocrats and limited Congressional discretion--would shield politicians from popular blowback.

The authors of this plan are sixteen economists from Brookings and Heritage, joined by the American Enterprise Institute, the Concord Coalition, the New America Foundation, the Progressive Policy Institute and the Urban Institute. "Our group covers the ideological spectrum," they claim. This too is a falsehood. All these organizations are corporate-friendly and dependent on big-money contributors. No liberal or labor thinkers need apply, though the group includes some formerly liberal economists like Robert Reischauer, Alice Rivlin and Isabel Sawhill.


Is this true? Once again they are trying to destroy any last remainder pillars of social benefits to the American people? My, oh my do we have a war on our hands. Since retirement, pension funds are under attack and the next generations facing retirement pretty much have nothing as a result, if anything social security needs to be expanded.

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Boy if Obama tries that I will lead the...

...the riots myself ;-). That would be totally unacceptable and the death knell of the Democratic Party. One would think a party on the upswing would want to stay in power, but then we ARE talking about Democrats ;-P.



"....under Capitalism, man exploits man. Under Communism it's just the opposite..." ---John Kenneth Galbraith


"....under Capitalism, man exploits man. Under Communism it's just the opposite..."

---John Kenneth Galbraith

oh yeah, uh huh

There are Democrats and then there are Corpocrats running around with the Dem Logo.

Yeah, I wouldn't have posted this except I've seen these indicators over and over from the primaries on...

now we have two major Progressive journalists reporting it at the same time, so well, there ya have it.

I believe them.

It's ridiculous, they should be looking to expand these and then #1, reduce health care costs because the U.S. is getting ripped off by the health private sector (insurance companies, drug manufacturers, for profit hospitals and so on) badly, as in 8x worst than any other industrialized nation.

I keep having images of corporate vampires sucking on the neck of the middle class and they are convinced the dead bodies still have blood in them...if they can only find the next big vein!

It's The Local Economy Stupid: Rebuilding American Tech

When I lived abroad, I always bought local: screw the Multinationals. First. a technology solution for those suffering mightily under the heel of Bush Capitalism: build powerful open source servers. This is not theory. I will distribute this to all interested in my solution: Linux, Apache DB2 Eclipse. Each essential ingredient for server constucion is freely distributed and available. Unlike LAMP(Linux,Apache, MYSQL, PHP), LADE - Linux, Apache, DB2. Eclispe is robust and platform universal).

Ford constructed the 3 rivers plant late in 1930s. The inputs were iron, copper, rubber and sand. The outputs were
cars. This is the level of in-sourcing we need now. The tech equivalent of Three Rivers is a sever building plant like the Hudson Valley Works of IBM, but build on Open

The bigger scope will be constructed upon local based microprocessor and system board solutions such as Intel is proposing. Other nations manufacturing microprocessors and sytems board must start local server solutions. Let's applaud Intel for in-sourcing.

Same multinationals who wrecked our economy and the rest of the planet. So let every other nation and the U.S. do the same to get out out the crisis. From agriculture (so far uneffected due to price support socialism), to the andicapped' to the social security retirees to those living on unemployment, too many see the future and it is socialist.

I want a future not socialist or capitalist but economically democratic. When Michael Camdessus - IMF Chief in 1989 - went to the U.S.S.R. , he did not attack the Politburo, KGB or Soviet Military. He destroyed the local factory and farm 'soviets'. In other words, the same system running United Air and HP would be dismantled. The State owned, but even to a small extent after Stalin. Paulson is our Camdessus.

We need to construct a tech solution that is democratic and uses local resource to rebuild. I am almost alone olitically.

What of the great promise made in the 1980s by the out-sourcers: abandon all hope of the industrial economy and technology will sustain you. This enormous lie by the ruling class in times past, when people could read, remember and act, would be the stuff of revolt.

So it falls to us, the down-trodden to create any future at all. I applaud all my brothers and sisters who did so much and risked all to destroy this most despotic and oppressive system. I applaud those who died opposing the despotism under which we all suffer.

All I have written regarding Enterprise Funds are more relevant now then ever. After they waste enough time and money, they will understand that there is one substitute for management and control. The substitute is waste and fraud.

To those who say this cannot be done, just show me the location of the next Intel Plant.

Burton Leed

No way

If by privatizing they mean putting Social Security funds into some new IRA, nope can't see that happening. Bush & Co. tried it and failed. The political climate isn't there, especially with the S&P falling 40%+ this past 18 months.

Though, I wouldn't put it pass the government from looting Social Security to pay the bills.

They have been looting SSA for 20+ years!

During the first Reagan administration, the payroll tax rate for SS was increased in order to address projected shortfalls when the baby boom generation would retire. Hence, there was a planned surplus for the years leading up to that time. However, the government began, almost immediately, to use these surplus collections to cover deficits in the general budget. Do you remember all that talk in the 90s about the "social security lock box"? It was because of this constant borrowing from the SS surplus. The latest figure I have seen is that the US Gov't. is in hock for about $2.5 Trillion to SSA.

There is no plan to privatize SS. Instead, they are using the staggering budget deficits as cover to misrepresent SS as just another expense item in the annual government budget. This clever slight of hand is being used to include SS in the long term budgeting process. This will allow the gov't to delay, hopefully forever, the need to pay back the $2.5T.

You can read the original report here which forms the basis for the review panel. The really deceitful thing about this though, is that they intend to issue recommendations which will be presented to Congress, not for further debate, but rather for an "up or down" vote to accept the recommendations as law. This gives the members of Congress political cover as to how they individually vote.

We definitely have a budget deficit problem in this country. But we have a whole host of serious social problems as well. It is the dark art of Disaster Capitalism that has led us to accept unregulated finance as part of the real economy at the expense of manufacturing, given huge tax cuts to the wealthy and the corporations, and fought unfunded wars for hegemonic pursuits.

Obama made the promise to set up this commission in December as a quid pro quo to the Blue Dog deficit hawks. He first announced his intentions publicly in a WaPo interview in January, just prior to the inauguration. If this commission were only offering ideas for further consideration and debate I would have reservations about it's veracity simply due to the imbalanced makeup of the participants. However, to use the commission as a Trojan Horse is to purposefully intend to deceive the public. I have already written to the White House and asked for clarification on this commission. I hope the press, economists, and other citizens push back hard on this subject prior to the President making his official announcements.

More on Greider's "Grand Bargain"

Well, it appears William Greider struck a nerve at the Peterson Foundation. Digby has the details here. The whole idea that the Obama administration wants to look at "entitlements" seems counter-intuitive to me. There is much to be worried about here unless the discussion and review happens in the sunlight.

not to me

I find this all so interesting. I think for David Walker to become more credible to the left they need to state very firmly under no circumstances will they privatize social security or reduce benefits for most people (the idea of reducing benefits for the super rich who really do not need it seems ok).

But I do not think the left is being completely fair to the Peterson Institute either but the reason they are not is the "powers behind" what they are saying and their motivations.

I do think both Baker and Greider are right in warning about those "privatize" agenda honing on on the rest of entitlements instead of fixing the system.

I'm not surprised by the story on Obama at all because during the campaign that was something I saw via interests, economic advisers.

Color me suspicious.

I have been called a conspiracy theorist before, and a DFH more often than I care to remember. Still, I have to ask why a self-promoting, billionaire, hedge fund trader is so interested in the long range fiscal stability of the United States? And why is he and his foundation (read movement synchophants) concerned about "entitlement programs" as being the chief threat to that stability? I.O.U.S.A is a slick piece of propaganda, designed to appeal to the household mentality of dealing with federal deficits. Just like Joe the Plumber the other day, asking why we need a stimulus. For Joe, if you have a tight budget you just cut the cable service and the like. This is the simple-minded appeal that resonates with fiscal conservatives in this country. Pete Peterson and his acolytes are way better than Joe the Plumber at creating smoke screens and diversions.

But I absolutely agree with you Robert, the economic team that Obama has assembled is at the very least, worrisome. It is this realization that makes me especially wary of any promises he has made to the Blue Dogs. We can talk about SS, Medicaid and Medicare until the cows come home. In fact, I really think we should. But we better be doing it in the open, with input from everyday people, retirees, the young, union workers, economists from the left and right, actuaries, and any other interested parties you can think of. This is truly the democratic way of reaching consensus.

Others share your opinion that "entitlement reforms" might just mean raising tax brackets and benefits. If that is what it is, I am interested in discussing how we get there. But you have to believe your lying eyes. Look at who makes up the panel and what their basis is for discussion and tell me that it is even likely that is what they might come up with.


we have billions of bits and if the economy is going into the slide I suspect, probably we have a lot more free time than normal to start analyzing truth or fiction or half truth on this.

I've watched the film and also listened to the discussion and I just didn't get the feeling they were going after SS so much or really privatization, what I did get the feeling they were going after was Medicare and Medicaid.

My attitude is if other nations can provide health care to all and not break the bank, clearly something is corrupt and wrong in America and go after those health profiteers but a very ineffectual system.

We agree, my friend.

Medicaid and medicare are definitely underfunded, and therefore need to be addressed forthwith. If your take is right, that they are only looking at Medicaid and Medicare, then I apologize for being a worry wart.

However, as you can surmise from my blogname, I am concerned with every American, rich and poor alike. I don't begrudge wealth, but I think there is a role for every person in the success story of an institution. I feel fortunate to have been involved in founding and nurturing three successful start-up corporations in my career. My management philosophy was always that everyone, from janitor to CEO, has a vital role to play in the organizational success, and would be compensated accordingly. But the end of year achievement (bonus) would be shared equally from top to bottom.

I don't delude myself that this kind of egalitarianism is prevalent in our society, but I do think that it is right. I only hope that this administration at least takes the view point that finding solutions to problems that consider the "common good" as an important, if not an overriding, concern is a change from the past and reflects the will of the electorate. I just want every part of the American society to have a fair hearing in the process.

cost, effectiveness

On the Peterson Institute, that's how I read it but I am very wary of the privatization agenda so I too look for it at every turn.

I am for H.R. 676, or single payer universal health care. I can see from the statistics, this nation is getting royally screwed on costs and think health care is a public service, a public works, a right. Call me Canadian but I also think our health care system makes us as a location for corporations much less cost effective. I have heard this from many CEOs who point to their costs. I also think our system is one of the reasons behind institutionalized age discrimination as well as discrimination against single mothers.

In terms of social justice I'm kind of a mix on what works and what does not but ya know, quality of life, *I thought* was an economic goal.