Alan Simpson (left) and Erskine Bowles are proposing cut backs to Social Security and Medicare in a preliminary report by Obama’s deficit reduction committee.
The October issue of the Dispatcher reported that the ILWU Pacific Pensioners Association was sounding the alarm about a potential attack on Social Security by President Obama’s bipartisan Peterson-Pew Commission on Budget Reform which was created to propose ways to bring down the federal budget deficit. The pensioners’ rallying cry was well founded. On November 10, the commission released a preliminary report that should be of concern to every worker in the country. The commission proposes cuts to both Social Security and Medicare along with other proposals that would negatively impact working families and leave banks, which caused our current financial crisis and the very rich, who benefited from massive tax cuts under the Bush Administration, unscathed. Here are some of the ways in which the Pew-Peterson commission’s proposal would impact working class families:
- Raises the retirement age for Social Security and Medicare to 69.
- Cuts Social Security benefits.
- Ends the mortgage tax 4. Ends the tax deduction for workers’ health benefits.
- Freezes salaries for federal workers for 3 years.
- Slashes the federal workforce by 10% by 2020
- Establishes co-pays for veterans at VA health services.
Proposal also cuts corporate taxes
Co-chairs Alan Simpson and Erskine Bowles, who authored the preliminary proposal, make a claim to progressive reform by raising the Capital Gains Tax, but their proposal also cuts corporate taxes and flattens the tax rates which make it more regressive—that is the wealthy pay a smaller percentage of their income in taxes than everyone else. The commission does not propose a return to the Clinton-era tax rates on the wealthy which actually led to a balanced budget.
Economist warn austerity measure could reduce government revenue
Economists Josh Bivens and Andrew Fieldhouse of the Economic Policy Institute (EPI) said that the austerity measures proposed don’t take into account the current economic crisis.
“The Co-Chairs’ proposal threatens to increase the already unacceptably high level of unemployment and increases the possibility of the economy falling back into outright recession by prematurely enacting sizeable austerity measures,” they wrote in a recent article on the EPI’s website, www.epi.org.
They argued that the resulting loss of jobs from the austerity measure could significantly reduce government revenue, offsetting the budgetary gains from the cuts. “This hasty embrace of austerity does not just harm the overall economy; it also means that their plan would produce far less budgetary savings than they assume, as the cyclical effects of depressed economic activity on the budget will largely defray the savings from spending cuts and tax increases,” they wrote.
Mike Lux, a political consultant who worked for in the Clinton administration lambasted the Pew-Peterson report in an article for the Huffington- tonpost.com, “What is most bizarre, all this pain for the economically stressed working and middle class, and they still don’t actually balance the budget until 2037. This is one of the worst policy documents I have ever seen – [Bill Clinton dug us out] of the big budget deficits of the Reagan/GHW Bush era and created a balanced budget and long term surpluses by doing modest budget cuts, taxes on the wealthy, and strong economic growth. Clinton did it without gouging the middle class,” Lux wrote.
Public widely opposes cuts
In a new poll, more than eight in ten likely voters across the political spectrum say they oppose cut- ting Social Security to reduce the national deficit. The poll released by the Strengthen Social Security campaign showed the cuts are opposed by 83% of Democratic respondents, 82% of Republicans, 78% of Independents and 74% of tea party members.
ILWU to lobby in defense of Social Security
The ILWU will be sending a delegation to Washington DC in March to lobby in defense of Social Security. Members are encouraged to contact their Senators and Representatives to let them know your opinion.