cuts

Republican Budget For Billionaires: The Impact

Dave Johnson — Tue, 27 Mar 2012 15:03:26 -0400

The new Republican budget (called the "Ryan Budget" by DC insiders) reflects current electoral reality: billionaires and corporations now finance candidates, and we get government of, by and for billionaires and corporations. The rest of us no longer matter, except as "the help" and, at least to the extent we haven't been entirely fleeced, a flock to harvest. This budget starts with $10 trillion in tax cuts -- mostly for the rich. After adding $10 trillion to the deficits Republicans then claim that severe cuts are necessary to "fight deficits." Right. Details below.

Keep in mind where we are starting from: The way our economy and tax system is already structured, the top 1% received 93% of income gains from recovery. As Mitt Romney's tax returns demonstrated, those at the very top -- whose income comes as checks generated by the money they already have -- already pay much lower tax rates than those of us who work for a living.

Shock Doctrine

"Nothing is more important in the face of a war than cutting taxes. -- Republican Majority Leader Tom Delay, 2003"

After passing tax cut after tax cut, and military spending increase after military spending increase, and starting war after war, Republican borrowing has added up. So now Republicans terrify the public, telling them that budget deficits will lead to the destruction of the country -- and soon. After a decade of screaming "9/11," "9/11," noun verb "9/11," they now scream "deficit, deficit, deficit." Then with the public suitably stirred up and terrified they offer "solutions" they say are necessary to cut the scary deficit (that they caused, for this purpose).

Behind a blizzard of fog and mirrors, the new Republican budget completes the ongoing shift of our government and our economy away from "we are in this together" democracy to a "you are on your own" system that is entirely for the benefit of a few at the top.

Cuts Taxes For The 1%

The smoke and mirrors: they claim this budget is necessary to reduce deficits, but it doesn't even pretend to. Instead it starts by cutting taxes on the rich and their corporations by another $4.6 trillion while making permanent the Bush tax cuts, costing another $5.6 trillion. It gives a $187,000 tax cut To every millionaire!

Cuts Jobs

Ethan Pollack at the Economic Policy Institute describes how Ryan’s budget cuts would cost jobs -- 4.1 million of them:

Paul Ryan’s latest budget doesn’t just fail to address job creation, itaggressively slows job growth. Against a current policy baseline, the budget cuts discretionary programs by about $120 billion over the next two years and mandatory programs by $284 billion, sucking demand out of the economy when it most needs it and leading to job loss. Using astandard macroeconomic model that is consistent with that used byprivate- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.*

Cuts Everything Government Does For Regular People

This budget starts with $10 trillion in tax cuts for the wealthy! After handing billionaires and their corporations trillions, increasing deficits by an additional $10 trillion, the Republican budget then cuts the things government does for the rest of us: Medicare, Medicaid, food assistance and public investments (mostly infrastructure and education), and pretends it is necessary because of deficits. (It increases funding for military contractors.)

What is cut? The following is from an analysis by the Office of Democratic Whip Steny H. Hoyer:

A Choice of Two Futures: A Look at How the Republican Budget Ends Medicare, Destroys Jobs, Benefits the Wealthy

Ending the Medicare guarantee and raising health care costs for seniors:

Ends the guarantee of health security and shifts higher costs onto seniors and the disabled over time.
Increases seniors’ health care costs just like last year’s budget – which drove up costs by over $6,000 per year, according to CBO.
Reopens the prescription drug donut hole, increasing seniors’ drug costs by up to $44 billion through 2020, including $2.2 billion in 2012 alone, according to HHS.
Increases seniors’ out-of-pocket costs for preventative care and annual checkups by over $110 million in 2012 alone, according to HHS.
54-year-olds would have to save more money just to cover health care costs – an analysis of last year’s budget showed they would have to save an additional $182,000, according to the Center for Economic and Policy Research.

Cutting taxes for the wealthiest Americans at the expense of working families:

Provides millionaires an average tax cut of $150,000.
Reduces revenue by $4.6 trillion on top of the $5.4 trillion cost of permanently extending all of the Bush tax cuts and other expiring provisions, according to the Tax Policy Center.
May force working families to pay higher effective tax rates to cover some of the cost of this $4.6 trillion tax cut for the wealthy by eliminating deductions.

Turning Medicaid into a block grant that jeopardizes access to affordable health and nursing home care for seniors and the disabled:

Cuts a total of $1.7 trillion from Medicaid over the next decade, and according to CBO, is on track to cut the program by 75% by 2050. According to the Urban Institute, block granting the Medicaid program could result in between 14 million and 27 million people losing coverage. An additional 17 million people, who gained Medicaid and CHIP coverage through health care reform according to the CBO, would also lose that coverage as a result of repealing the Affordable Care Act.

Making it harder for Americans to receive Social Security benefits:

Increases backlogs that delay people from getting benefits that they are due and could leave up to 90,000 people with disabilities waiting for a decision in 2013 and leave 300,000 more people with disabilities waiting for a decision each year over the next decade.

Weakening our ability to out-educate competitors and build a competitive workforce:

Reduces Pell Grants by more than $1,000 for 9.6 million students in 2014 and could eliminate Pell Grants for over one million students over the next decade.
Kicks 60,000 low-income children out of the Head Start program in 2013 and 200,000 low-income children out of the program each year over the next decade.
Cuts Title I funding, which could result in nearly 11,000 teachers and aides losing their jobs in 2013 and nearly 38,000 teachers and aides losing their jobs each year over the next decade.
Cuts funding for Individuals with Disabilities Education Act, which could result in 7,800 special education teachers, aides, and other staff serving children with disabilities losing their jobs in 2013, and 27,000 teachers, aides, and staff losing their jobs each year over the next decade.
Reduces work-study funding, meaning almost 37,000 students could lose access to college work-study opportunities in 2013, and more than 166,000 students could be affected each year over the next decade.

Slashing assistance to low-income families:

Cuts the WIC program (Special Supplemental Nutrition Assistance Program for Women, Infants, and Children), kicking 700,000 pregnant or postpartum women, infants, and children off the WIC program and leaving another 100,000 without access to critical foods necessary for healthy child development in 2013. Each year over the next decade, the cuts would kick 1.8 million women, infants, and children off the WIC program and leave another 100,000 without access to critical foods.
Converts SNAP into a block grant beginning in 2016, which could jeopardize access to food assistance for millions of Americans.
Cuts HUD’s rental assistance programs, resulting in over 116,000 fewer low-income families housed through the Housing Choice Voucher program in 2013 and 400,000 fewer low-income families housed through the program each year over the next decade.
Risks permanent loss of affordable units that serve 1.1 million Americans.

Repealing patient protections and putting insurance companies – not American families – in control of health care:

Allows insurers to once again be allowed to discriminate against up to 17 million children with pre-existing conditions.
Subjects 105 million Americans once more to arbitrary lifetime caps on their health insurance.
Increases 54 million Americans’ out-of-pocket costs for preventative care.
Puts up to 15 million Americans who are sick or injured at risk of being dropped from their private insurance because of a simple mistake on an application.
Eliminates tax credits for up to four million small businesses, which are already providing more affordable care to two million workers. [Figures provided by HHS and the Treasury Department]

Weakening national security:

Cuts COPS hiring grants, which could result in 75 fewer local police hires and 6,200 fewer bullet proof vests for state and local law enforcement personnel in 2013, and 285 fewer local police hires and 23,000 fewer vests each year over the next decade.
Cuts Department of Justice (DOJ) funding, resulting in 1,311 fewer federal agents to combat violent crime, pursue financial crimes, secure the border, and ensure national security in 2013, and 4,587 fewer agents each year over the next decade.
Cuts DOJ funding resulting in 948 fewer prison guards to maintain safe and secure federal prisons in 2013, and 3,319 fewer prison guards each year over the next decade.
Reduces Department of Homeland Security funding for preparedness efforts of state and local governments, which could mean 100 firefighters and 80 emergency managers not being hired or laid off in 2013, and 400 firefighters and 300 emergency managers not being hired or laid off each year over the next decade.

Undermining American competitiveness by cutting investments in science, medical research, space and technology:

Cuts funding for biomedical research by NIH, meaning 500 fewer grants NIH could award in a cutting-edge field in 2013 and 1,600 fewer grants each year for the next decade, limiting research that could lead to new cures for diseases.
Cuts funding for NSF, which could result in NSF making up to 1,100 fewer competitive research and education grants supporting over 13,000 researchers, students, and teachers in 2013 and 4,000 fewer grants supporting almost 48,000 researchers, students, and teachers each year over the next decade.
Cuts NASA funding and puts jobs at risk by forcing the agency to terminate major programs and potentially close major facilities.

Threatening our clean energy future:

Cuts investments in the Department of Energy Office of Energy Efficiency and Renewable Energy and its applied research program, known as ARPA-E, that was established specifically to conduct energy research that industry by itself cannot support but where success would provide dramatic benefits for the nation.
Eliminates jobs by setting back efforts to put a million electric vehicles on the road, retrofit residential homes, and make commercial buildings more efficient.
Fails to boost all energy sources by eliminating tax support for renewable energy generation and the domestic jobs created by those energy projects.
Unless otherwise noted, all figures from OMB.

Republican Hostage-Taking Threat Again! Guess Who Benefits?

Dave Johnson — Wed, 14 Dec 2011 13:23:37 -0500

Once again, Republicans are holding government hostage, trying to force through unpopular cuts to the things We, the People -- "the 99%" -- do for each other and our economy, while giving handouts to the 1% who pay for their campaign ads and smears. Once again they are threatening to just shut down the whole government if they don't get their way This time the hostage is unemployment benefits for 2 million people and the payroll tax cut that is the only stimulus left to keep the economy going. Here's the thing, they say they want "cuts" but what they are really doing is shifting costs from the 1% on to the rest of us.

The current 112th Congress is the first Congress elected under the Citizens United Supreme Court decision that opened the floodgates of corporate money in elections. Remember the flood of ads accusing Democrats of "half a trillion in cuts from Medicare" that got them elected -- paid for with corporate money? Those ads swung the electorate toward Republican candidates, and now we are seeing the results -- including cuts in Medicare and even plans to privatize it entirely.

How Many Times?

To get their way Republicans have already nearly shut down our government or just shut down parts of it several times. Shutdown. Hostage. Shutdown. Shutdown. Shutdown and hostage. Shutdown. Shutdown. Shutdown. Hostage. Shutdown. Shutdown. Hostage. Hostage. And on and on...

This Time

Here are just some of the Republican demands this time if we want the hostage released:

Approve the Keystone XL oil pipeline project.
Block rules reducing air pollution from industrial burners.
Drug tests for people receiving unemployment benefits.
Reduce the duration of jobless aid from 99 to 59 weeks.
Allow states to cut benefits even more.

Even Worse Than That

The National Women's Law Center writes, in, House Bill Cuts Unemployment and Health Benefits, Domestic Programs, Child Tax Credit and More that there are many other reasons to be concerned:

Slashes federal emergency unemployment benefits for long-term jobless workers by more than half—and hits the states with the highest unemployment rates the hardest.
Makes permanent, mean-spirited changes to the basic unemployment program, such as requiring claimants to have a high school diploma or GED and making unemployed workers pay for re-employment services offered by the government.
Reduces health benefits by reducing financial protections for low- and moderate-income families purchasing health insurance, cutting funds to providers serving low-income populations, and slashing prevention and public health funds.
Denies the refundable Child Tax Credit to low-income immigrant families by requiring a Social Security number to claim the credit.
Cuts funding for non-security discretionary programs by over $26 billion—on top of the cuts already imposed by the Budget Control Act.

The European Lesson

Republicans claim that cutting back government is good for the economy and creates jobs. (Note -- they always claim that anything for the 1% is good for the economy and creates jobs, whether or not it really is good for the economy and creates jobs or not.)

But is it really good for the economy to cut back on the things government does for the people and the economy? Let's look to Europe, where they have been cutting back on government in a grand experiment to see if that helps the economy. (Hint: it has really, really, really hurt the economy.) Reuters: Analysis: Europe's austerity zeal risks killing the patient,

Europe's "no pain no gain" attitude to solving its sovereign crisis risks exacerbating the bloc's problems, choking off the very growth needed to raise the money to pay down the debt.

... The austerity zeal risks tipping the continent back into recession and a downward spiral of austerity as pitiful growth prospects undermine budgetary targets and ramp up debt burdens, meaning further austerity is required.

"The expansionary fiscal contraction story says that you cut, you show you are serious about cutting and then the confidence fairy will come along and she will start pulling in private investment," said Stephen Kinsella, professor of economics at the University of Limerick.

"The expansionary fiscal contraction story is a lie. You don't cut your way to growth."

Shifting Not Cutting

Do cuts in government spending actually cut spending? Consider what happens when you cut health care spending. The need for the health care certainly doesn't go away, but the cost of it is shifted away from government and on to individuals. Since iIndividuals do not have the economy-of-scale bargaining power and ability to protect themselves from scams and schemes that government does, their own individual cost is often much higher. So when these costs are shifted from government the cost to the larger economy is actually increased dramatically.

The things government does are done because they need to be done. So if government doesn’t pay for them, does the need go away? No, when you cut government the need is still there. The costs are still there. But the power to bargain and to protect is gone. By cutting the 99%'s ability to protect themselves from scams and schemes, the 1% are better able to prey on them.

So, no, cutting government does not cut the costs of the things government does, it just shifts those costs from government onto the larger economy -- the 99% -- and even increases them, to the benefit of the 1%.

Who They Are Protecting And Who They Are Hurting

Why else do the 1% push so hard for government budget cuts, even though they really just shift the same costs onto the larger economy? Because this cost-shifting takes the tax pressure off of the 1%. Government collects taxes to cover the things regular people need, the cost of maintaining and modernizing infrastructure, etc. Of course, these are all good for the economy, the country, and the people. But since the 1% make most of the money and hold almost all of the wealth these prime beneficiaries of the economy are the obvious people to collect taxes from. So by cutting back on government they cut back on government's need for taxes -- from them.

And they get the added benefit of cutting back on government interference in their schemes and control.

In the long game of cuts and consequences, a society cannot win. In the 1980s we cut taxes and started cutting government. As a result we now have crumbling infrastructure, bad schools, unaffordable universities, etc. This is because government cuts do not cut the need out of the larger economy, they shift the costs of needed things away from causing tax pressure on the wealthy.

They don't care if the larger economy suffers as a result, they're already the 1%.

What To Do

Tell Republican leaders to stop sabotaging the economy. Renew the payroll tax cut and long-term aid for the jobless.
Sign the petition.

Republicans Cut Jobs, Keep Oil Company Tax Breaks, Don't Cut Military!

Dave Johnson — Wed, 16 Feb 2011 01:29:08 -0500

As you read this, remember what Republicans did just a few weeks ago to force huge tax cuts for the wealthy, adding as much as $900 to budget deficits. Also, keep in mind that we spend more on military than every other country combined.

People Want Job Creation Not Cuts

Finally, keep in mind that polls show the public wants job creation, and does not want cuts in the things government does for We, the People. On the Campaign for America's Future website front page under "THE PULSE" you can see the results of a poll, showing significant majorities reject cuts in various programs. (Other polls show broad public support for increasing taxes on the wealthy.)

What the public wants, the public doesn't get. This isn't about what the public wants. It certainly isn't about jobs. And, right after increasing the deficits with huge tax cuts for the wealthy, this is not about cutting deficits, either. It certainly isn't about governing or the public interest. This is about one thing only: gutting the hated government.

They Campaigned Against Cuts

In the midterm elections campaign ad after campaign ad asked voters to reject Democrats because they had cut Medicare! They campaigned against Democrats for "cutting $500 billion from Medicare" and not increasing Social Security cost-of-living. As a result, for the first time the senior vote went to Republicans.

Job-Killing Cuts -- "So Be It"

Instead, now in office, Republicans are cutting jobs programs, cutting government jobs, cutting aid to states to keep jobs, and cutting government infrastructure programs that create jobs.

No Cuts In Military?

TPM: Boehner's Spending Cuts Would Kill 1 Million Jobs,

According to federal budget expert Scott Lilly at the Center for American Progress, Boehner's proposed spending cuts could kill almost 1 million jobs.

WSJ: GOP Presses Biggest-Ever Budget Cut,

In early action on the bill, which would cut domestic programs by $61 billion this year, Republicans showed little appetite for making cuts in the Pentagon. The House rejected four amendments to cut defense programs, including one small cut to get rid of some Pentagon advisory commissions.

. . . The Republican bill would cut spending in domestic non-entitlement programs such as high-speed high-speed rail construction, water projects and job training far more deeply and quickly than President Barack Obama and most Democrats favor. The White House issued a veto threat immediately after the bill came to the House floor.

Shutdown?

NY Times: House G.O.P. Pushes $61 Billion in Cutbacks

The current stopgap measure financing the government expires March 4. If the House and Senate are unable to come to an agreement before then or if the financing is not extended temporarily, federal agencies could be shut down. ...

Even as Democrats attacked proposed cuts to programs that help economically struggling Americans and to initiatives involving education, the environment, housing and employment, Republicans lined up to make deeper reductions. The first amendment offered was a proposal to eliminate more than $18 million from the Pentagon budget. ...

But the proposal was defeated on a vote of 223 to 207 and other initial efforts to make deeper reductions failed as well.

Running Through A Hospital With A Machete

Instead of considering how to govern, they are just gutting. No consideration is being given to the value of programs, or the long-term cost of cuts, it is just a frenzy of cutting for the sake of cutting.

LA Times: Criticism mounts as GOP presses ahead with budget cuts

. . . Criticism mounted at the start of a House debate as Democrats took aim at GOP plans to maintain tax breaks for oil companies and the wealthy while cutting medical research, community policing and funding for "Sesame Street"...

. . . Still, GOP leaders said the rollback was necessary, even at the expense of thousands of jobs funded by government programs on the chopping block.

"If some of those jobs are lost in this, so be it," said House Speaker John A. Boehner (R-Ohio). "We're broke."

. . . The liberal-leaning Economic Policy Institute has estimated as many as 800,000 jobs could be lost under the Republican proposal.

. . . The GOP reluctance to cut Pentagon spending became apparent as voting began, when an amendment to cut $18 million in Defense Department operations and maintenance was rejected. [emphasis added]

We Need A Movement For Jobs

We have a jobs emergency. People need jobs. The public is demanding that our government address jobs. But this is not what is happening in Washington. We, the People have got to get heavily involved now and apply the necessary pressure to force Washington to act for jobs.

March 10 Summit on Jobs and America's Future

On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.

Free. $15 with lunch. Register here.

Huge Cuts: Coming Soon, to Social Security Benefits Near You

Daniel Marans — Mon, 06 Dec 2010 11:45:32 -0500

Are you 55 now? What about 45? Or 25? Do you have any children who are toddlers? Because the younger you are, the more drastically your benefits would be cut under the Fiscal Commission's recommendations. Middle-class workers retiring at age 65 would see cuts of up to 41.5% from what they are entitled to under current law.

At the Strengthen Social Security campaign we made two graphs demonstrating how the Fiscal Commission's final proposal would affect typical earners at all ends of the spectrum. The results are devastating. If you are not shocked, you are not looking closely enough. Check it out below, or click here for the graphs, explanatory note and underlying data all in one file.

Below is a breakdown of the most egregious cuts and how they would damage the fundamental character of the program.

The December 3, 2010 Bowles-Simpson proposal would inflict major cuts on the middle-class:

A 25 year-old medium-income worker who retires in 2050 at age 65 and earns a career-average wage of $43,084 would see her benefits cut by $1,993 a year ($14,988 - $12,995). A medium earner’s benefits at age 65 in 2080 would be cut by $2,878 ($14,988 - $12,110) – a 19.2 percent cut.
A 25 year-old high-income worker who retires in 2050 at age 65 and earns a career-average wage of $68,934 would see her benefits cut by $5,445 a year ($19,872 - $14,427). A high-income earner’s benefits at age 65 in 2080 would be cut by $6,915, ($19,872 - $12,957) – a 34.8 percent cut.
A 25 year-old, maximum-income worker who retires in 2050 at age 65 and earns a career-average wage of $106,800 would see her benefits cut by $8,242 a year ($24,240 - $15,598). A maximum-earner’s benefits at age 65 in 2080 would be cut by $10,055 ($24,228 - $14,173) – a 41.5 percent cut.

The December 3, 2010 Bowles-Simpson proposal would radically restructure the program:

For the last 75 years, Social Security has always provided a fair return on the contributions made by workers and their families. Under the guise of deficit reduction, this package dramatically changes the structure of Social Security and weakens the economic security it provides.
The plan uses a hard-to-understand change to Social Security’s benefit formula that eradicates fundamental features present since Social Security’s creation, including the following:
- The more workers contribute, the higher their benefits.
- All workers are guaranteed a fair return on their contributions.
The two “Illustrative Earners” graphs demonstrate the extent to which benefits for earners at opposite ends of the spectrum converge and flatten under the Bowles-Simpson proposal. In so doing, the Bowles-Simpson proposal would steadily erode the link between a worker’s wages and benefits, transforming Social Security from a wage insurance program to one that resembles a welfare program.
A low-income worker earning a career-average wage of $19,388 a year would receive about the same monthly benefit as a very low-income worker earning $10,771, despite having paid higher payroll taxes over his career.

Two Graphs that Every American Worker Should See

Daniel Marans — Tue, 23 Nov 2010 20:26:55 -0500

Apparently the Fiscal Commission believes that only the very poorest (those with career earnings in the range of $10,771) depend upon Social Security's benefits for security in old age--because they are the only ones the Commission spares from cuts. The middle and working class, it seems, could part with a huge slice of their benefits. The Commission's proposed cuts would hit the middle class, and hit them hard.

Of course, you would not know that if you only paid attention to the media's coverage of the various Commission reports. They make it seem like the proposals are just a spoonful of tough medicine for a nation gone wild.

To help shed some light on the matter, I made a chart and graph comparing annual benefits under current law and recent reform proposals for what the Social Security Administration calls a "medium" earner (career earnings of $43,084) and a "high" earner (career earnings of $68,934).

Annual Social Security Benefits for a Medium Earner ($43,084) Under Current Law and Recent Reform Proposals

I think it's safe to say that a 65-year-old with average career earnings of $43,084 a-year relies on Social Security considerably in retirement. As this chart shows, their current annual benefit of $16,674, which is just 55% above the poverty line, would be cut by more than $2,300 under the Rivlin-Domenici plan, $4,000 under Bowles-Simpson and more than $7,000 under Ryan's plan.

Those with average career earnings of $68,934--a solid middle class salary, but still not what we would call "rich" by any means--currently receive $22,212 if they retire at 65. Under the Rivlin-Domenici plan they'd lose $2,500, and under Bowles-Simpson they'd lose close to $7,000--a whopping 36% cut. (Data on the cuts under the Ryan plan were not available.)

Bowles, Simpson and Rivlin have claimed time and again that we can "strengthen" Social Security--ie shore up its finances for the next 75 years--without hurting those who need it. In fact, they have made avoiding the sudden cuts that would occur in 2037 if Congress were not to act, their raison d'etre. Even incoming GOP Budget Committee chairman, Rep. Paul "Privatization" Ryan, has chimed in with his own violin playing about the cruelty we would be inflicting on seniors if we were not able to pay full benefits in 2037 when the Trust Fund is exhausted. Here is a precious quote from his Roadmap's website:

Left on its present course, beneficiaries will face a 22% across-the-board benefit cut when the Social Security Trust Funds are exhausted. According to the 2010 Social Security Trustees Report, median income-earners now approaching retirement will receive benefit cuts in excess of $4,000. Even those who are currently on Social Security – those now 62 and older – may experience indiscriminate cuts in benefits at a time when they are increasingly reliant on the program. Lost in the heated rhetoric against reform efforts is the real pain that will be inflicted on seniors if we continue to cling to this unsustainable status quo.

(Click here for the full Ryan quote, as well as similar remarks in the Bowles-Simpson proposal and the Rivlin-Domenici report.)

But the same Bowles & Simpson, who claim to be trying to save beneficiaries from the immediate 22% cut they will suffer if Congress takes no action to shore up the Trust Fund (which would be both an historical anomaly and a political impossibility), would end up only providing "medium" earners ($43,084) $200 more than if nothing was done. For the so-called "high" earners ($68,934), their proposed benefit cuts are even worse than if the Trust Fund were exhausted. $2,100 worse. So much for "strengthening" Social Security!

The fact is, two-thirds of our seniors rely on Social Security for a majority of their retirement income. No matter how poorly our 401(k)s are performing or how much home equity we've lost in the recession, Social Security is there for us.

That's why if the media won't speak up about these cuts, we must. We cannot let elite budget wonks living in the Beltway bubble conceal what they are trying to do to us. They are doing nothing less than pulling the rug out from under the middle class in this country. And they are getting away with it.

On November 30th, the Strengthen Social Security campaign's National Call Congress Day, call your representatives and tell them how you feel. Tell them that the only people whose benefits should be cut are the lying bureaucrats on the President's Fiscal Commission.

Postscript for wonks: As you may have noticed on the graph, even under current law, benefits for people aged 65 are going down because the normal retirement age is now at 66 and will reach 67 in 2022. This is noteworthy. Before we begin raising the retirement age even further, should we not allow time to consider how the current changes affect retirement security and the labor market? The majority of beneficiaries claim benefits before the normal retirement age, choosing instead to take a 7% cut for every year below the NRA that they retire. For someone currently retiring at 62, that is a whopping 28% cut--for the rest of their lives! I'm betting that a whole lot of those people work in physically demanding jobs or have lost their job in late middle age. Otherwise, why would they take such a big cut?

Another thing. If anyone was wondering what makes Rep. Deutch's plan more generous, it is because he would index benefits to a special consumer price index (the CPI-E) created by the Bureau of Labor Statistics that is meant to be a more realistic estimate of the elderly's cost-of-living. The regular CPI-W does not weight medical costs in proportion to the chunk they take out of seniors' paychecks. This is really an important reform. All of the current reform proposals suggest adopting the chained CPI, which assumes the elderly can replace their current services with cheaper ones as prices go up. Again, this does not take into account medical services that cannot be easily replaced at a lower price. The SSA estimates it would result in a 0.3% cut in the COLA every year--beginning now, for current beneficiaries! That's 6% over 20 years. And we haven't even explored the full potential of the BLS's CPI-E! How come we have heard so little about Deutch's plan?

If you would like to know about my methodology in making the graphs, take a look at this explanation by Nancy J. Altman, a nationally renowned scholar on Social Security and the Co-Director of Social Security Works & the Strengthen Social Security campaign.

Shifting from Defense to Green Jobs is Easy

Armand Biroonak — Thu, 20 Aug 2009 12:01:51 -0400

As progressives call for cuts to defense spending, a big challenge in doing so is addressing job losses that come with eliminating weapons programs. The number of jobs at stake can often be a powerful argument for defense supporters that cannot be ignored. The recent fight over the F-22 and its production in over 40 states is a clear example. But there is a remedy. By shifting defense jobs to the green energy sector, we can both save jobs and address climate change –and it is easier than we think.

To be sure, a sizeable number of jobs are at stake with a cut to defense programs. Case in point is the F-22. Although the numbers may be disputed, the jet’s production involves anywhere between 35,000 and 90,000 total jobs.

However, the majority of jobs in defense production are not actually defense specific. According to the U.S. Department of Labor, “Of all aerospace workers, 40 percent are employed in production; installation, maintenance, and repair; and transportation and material-moving occupations. Many of these jobs are not specific to aerospace and can be found in other manufacturing industries.” Also, other related production occupations include: rigging, systems assemblers, machinists, tool and die makers, inspectors, and sorters.

Compare defense manufacturing jobs to employment at a typical wind turbine company – they match up closely:

Source: Management Information Services, Inc., 2009.

Thus, the value of defense workers is not what they produce, but their skills in production.

Evidence of defense companies making the switch to green technology is occurring. For example, defense powerhouse Lockheed Martin has been moving forward with the research and production of solar and wave energy. In fact, by 2013 Lockheed will open the world’s largest solar energy plant in Arizona. And giant BAE Systems announced this year they will begin development of offshore deepwater wind technology.

So how can this transition occur?

Firstly, the federal government has the ability to redirect and prioritize investments. In 2008 alone, the top 100 defense contractors were paid over $315 billion for their products. With a shift in some of that funding to greater subsidies for green energy companies, boosting public investment and purchasing of green technology, we can speed up the transition to renewable energy.

Secondly, cooperation between government and the private sector can ensure that workers are not left out in the shift. From worker retraining programs both in-house and the Department of Labor’s Employment and Training Administration, reorientation of skills can be smooth. Moreover, federal programs to assist affected companies in the switch –similar to those after World War II –should be in place as well.

Overall, this is a win-win strategy. No longer investing in failed, unnecessary weaponry, retaining jobs and making critical investments in green energy, the U.S. again can be on the right track. And considering how military experts agree that climate change is the biggest national security threat, this shift can become a key component to a new 21st century defense policy.