Mano Singham's Web Journal

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July 20, 2010

The phony social security crisis-5: Raising the social security retirement age

(Continuing a series from March 2008.)

If you want to implement policies that really stick it to poor people, you have to do it when the Democratic Party is in power. The reason that Democratic administrations are the most useful vehicle for harming the poor is that those who call themselves 'liberals' are far more vigilant when Republicans are in power, rightly seeing them as out to serve the interests of the wealthy. But the Democratic party, while serving the interests of the same oligarchy, has fooled people into thinking that they are in favor of economic justice, so when they attack the poor, liberals are caught wrong-footed and do not mount a vigorous counter-attack.

That is something that the oligarchy that runs America realized some time ago but hasn't quite sunk in with liberals because of their fixation on shoring up the Democratic Party's electoral fortunes. This interesting comparison between those who call themselves liberals and those who say they are progressives is worth pondering. One key difference is that "Progressives pursue issues; liberals support candidates". Liberals who think they must support Obama at all costs because otherwise his opponents will benefit at the polls are falling into the same trap as with Bill Clinton, and will end up enabling policies they should oppose.

Despite Ronald Reagan railing against so-called welfare queens, he met vigorous opposition when he tried to pursue policies that harmed the poor. It was only after Bill Clinton's election that we had so-called 'welfare reform' that resulted in a lot of poor people, including single mothers with young children, having their meager benefits cut off. (It was also Bill Clinton who signed the anti-gay Defense of Marriage Act.) Barack Obama and his Secretary of Education Arne Duncan are pursing education policies that would have aroused strong opposition from liberals if Republicans had proposed them.

But the biggest prize that the oligarchy seeks is to destroy social security as a government program and safety net for the poor. George W. Bush wanted to privatize social security and got such a fierce response that it forced him to abandon the attempt. But now during the Obama administration and with Democrats controlling both houses of Congress, we hear a lot of talk about reducing Social Security benefits, primarily by raising the retirement age for full benefits from the current 65 to 70. Although Republicans like John Boehner have initiated discussions on this, key Democrats are also going along with it.

Like he did with health care reform where he sabotaged the public option, Obama is handing off to others the unpleasant task of cutting the social security benefits of poor old people so that he can avoid responsibility. In this case he has appointed a commission (called the National Commission on Fiscal Responsibility and Reform but is derisively referred to as the 'Catfood Commission' because its likely recommendations will force old people to eat cat food to make ends meet) comprised entirely of elites (with one exception). As one blogger says:

[T]he Obama Administration appears to have chugged the austerity/jack rates/cut the deficit Kool-Aid insanity by forming the National Commission on Fiscal Responsibility and Reform. They stuffed it with offensive idiots like Alan Simpson whose sole purpose is to screw the little people out of their social security savings. Hence the sickening nickname, the Catfood Commission.

This blogger is, however, still trapped in the 'liberal' mindset, saying, "I still find this hard to comprehend happened under a Democratic Party administration." He does not realize that this is not an anomaly but precisely the role that the Democratic Party plays in the system.

The arguments in favor of raising the retirement age are presented in economic and demographic terms and in terms of fiscal responsibility. We are told that the social security trust fund will be unable to keep pace with the demands of retirees because we are living longer than we were when the program was started. That is true but the state of the trust fund is nowhere near as dire as it is often painted.

Also, while it is true that life expectancy has increased by 12 years (from 65 to 77) since 1935 when the program was established, that is not the whole story. Life expectancy has gone up because we have had success in reducing infant and childhood mortality with the development of vaccines and other medicines. The relevant figure for the social security discussion is the amount by which life expectancy has increased for people who reach the age of 65. Susan Gardner quotes from Nancy Altman's book The Battle for Social Security: From FDR's Vision To Bush's Gamble:

For Social Security purposes, the correct question is not how many live to age 65, but rather how long those reaching age 65 live thereafter. Here the numbers are not as dramatic. In 1940, men who survived to age 65 had a remaining life expectancy of 12.7 years. Today, a 65 year old man can expect to live not quite three years longer than he might have in 1940, or 15.3 years beyond reaching age 65. For women, the comparable numbers are 14.7 years beyond age 65 in 1940; 19.6 years in 1990. [Emphasis added.]

The second major issue that is being ignored is that the people who are blithely suggesting raising the retirement age are well-to-do people who work in jobs that are interesting, pay really well, and are not physically demanding. It should be no surprise that Members of Congress, media personalities, corporate executives, Larry King and Andy Rooney, etc. are able to, and want to, work well past 65. They work indoors in air-conditioned buildings with legions of assistants to take care of the drudge work. They have plenty of vacation time and the money to relax how and when they feel like it. For such people, retirement would likely mean a less enjoyable life. Why would you want to give those things up? Furthermore, the rich are the very ones for whom the social security benefits form a negligible part of their retirement income. What they lose in social security benefits is negligible compared to what they gain on tax cuts.

Furthermore, life expectancy is much greater for those who are well off (and thus working at easy jobs) than for those who are worse off and thus likely to be working at difficult jobs, and the gap is increasing. For males age 60 in the bottom half of the earnings distribution, life expectancy only increased from 77.7 in 1972 to 79.6 in 2001. In contrast, the corresponding increase for the top half of earnings distribution went from 78.9 to 85.4.

So the people who work the hardest are the ones who already have the least time to enjoy retirement.

Furthermore, nowadays it is very hard for older people who get laid off to get another job and raising the retirement age would consign them to an even longer period of poverty. I also do not see the point of keeping older people working longer because that would mean fewer jobs for younger people, exacerbating the unemployment problem.

POST SCRIPT: Retirement is for losers

Cartoonist Tom Tomorrow on raising the retirement age.