The president is following through on his intention to abandon the welfare of elderly and disabled Americans in a budget deal that would cut $130 billion from programs like Social Security over the next 10 years, and that could starve the system in the long run.
The 10-year plan, which would go into effect Oct. 1, runs to an amount of $3.7 trillion and features cuts totaling $1 trillion. The proposal devotes $250 billion to new spending on infrastructure, education and other job creation measures, and would raise $800 billion from new tax revenue. Of that amount, $563 billion would come from levies on the wealthiest Americans and $78 billion from a hike in the cost of cigarettes.
Given the opposition from Republicans in Washington, many critics believe the budget has little chance of being passed by Congress.
In his statement in the Rose Garden at the White House on Wednesday, Obama cast his willingness to dwindle social welfare programs as proof that he’s serious about saving the economy. He said that he is not willing to “finish the job of deficit reduction on the backs of middle-class families,” even though Social Security indirectly supports middle-class families by giving financial support to their elderly members. Roughly 50 million seniors and disabled Americans rely on the program. The rich would suffer no comparable loss in their ability to support themselves.
The budget could destroy Social Security in the long run through a change in the formula used to determine inflation’s effect on the purchasing power of pension payments. Generally speaking, inflation would play a lesser role in those calculations. The rising value of the checks would fail to keep pace with the rising costs of goods and services, significantly reducing the program’s ability to provide for its recipients. Many economists and political critics believe that Obama, the Republicans and Wall Street intend to weaken Social Security via this strategy, preparing the way for its eventual privatization and the capture of its $2.7 trillion by banks.
Furthermore, Social Security is not responsible for any part of the deficit. It is funded entirely by those who receive it through a payroll tax levied during their working lifetime, not the U.S. Treasury.
Additionally, many economists think shrinking the deficit is the wrong objective. America’s outlays should be increased, they say, in order to fuel industry, education and employment advances that will eventually create enough taxable high-income jobs to pay off whatever debt was incurred to fund those programs.
Read more from The Guardian about the damage Obama’s budget would do to Social Security here.
—Posted by Alexander Reed Kelly.
AP/J. Scott Applewhite