Hiltzik: GOP hasn’t learned its lesson on Social Security

You may have thought that Republican beatings in the last election caused party leaders to think more carefully about promoting policies that antagonize the electorate.

You would be wrong. We know this from an op-ed published in the Wall Street Journal under the name of Sen. Mitt Romney (R-Utah). The article appeared on Nov. 10, two days after the vote, when congressional leadership was still up in the air.

However, smart money was already betting that Democrats would at least retain their Senate majority and that while the GOP could win a majority in the House of Representatives, it wouldn’t be nearly as large as expected.

Republican and Democratic governments have run budget deficits for most of the postwar period, [which] requires a periodic increase in the debt ceiling.

— Secretary of the Treasury Janet L. Yellen, September 2021

Nonetheless, Romney revived the traditional and discrediting Republican shibboleth of attacking Social Security, Medicare, and Medicaid as “entitlements” that caused inflation. The truth is they’re nothing like that, but when did that matter to the GOP?

As Democrats have retained their Senate majority, the chances of blanket hacking the benefits of these programs have diminished for now.

But with Republicans regaining their majority in the House of Representatives, there’s still a chance they’ll try to hold the US economy hostage in order to force some sort of compromise on programs, no matter how detrimental to the general public could.

More on that in a moment. But if Romney’s attitude, often portrayed as a “moderate” or “reasonable” or at least “not insane” Republican, reflects that of the party’s more centered bloc, it’s something we need to address now.

Oddly enough, despite the GOP’s stunning performance on Nov. 8, Romney took an even harder line on Social Security programs and an even more ignorant explanation for inflation than his party colleagues offered.

Romney is focused on federal spending, which he says Republicans have been trying to rein in for years.

“More than two-thirds of federal spending isn’t even voted on by Congress,” he says. “Rather, it’s automatic, non-elective spending on entitlements like Medicare, Social Security, and Medicaid, and debt service. … Excessive spending not only contributes to national debt, it is also highly stimulating and inflationary. The Fed is slamming on the brakes while the administration and Congress are stepping on the gas.”

Is that so? Consider the contradiction in those very words: Romney says the spending he’s complaining about isn’t even going to be voted on by Congress, but he blames the administration and Congress for “putting the pedal to the metal.”

He explicitly links the rise in inflation to what he calls “the entitlement crisis”.

Let’s stop right there. Spending on Social Security, Medicare, and Medicaid isn’t a “crisis” for someone who doesn’t have more than $85 million in net worth or — as Romney had at least once — six houses.

In fact, government statistics show that Medicare is a lifeline for 64.5 million older Americans, and Medicaid covers 83.5 million low-income Americans (including 7.1 million children).

Social Security provides retirement and disability benefits to 65 million people, including 50 million retirees and their dependents, 6 million survivors of deceased workers, and 9 million disabled workers and their dependents.

Social Security is the most effective anti-poverty program in US history. It accounts for at least 50% of the income of about half of all recipients, and more than 90% of the income of about a quarter of all seniors.

Romney says spending on these programs is “very stimulating and inflationary,” but that’s utter nonsense. The benefits lag behind inflation year after year. It’s true that Social Security checks will rise 8.7% next year thanks to the annual cost-of-living adjustment, but that’s barely enough to cover an inflation rate that’s been above 8% annualized for most of this year.

In any case, economists know that many factors other than federal spending drove inflation this year and last. These included halting import shipments at US ports, a result of the reopening of the US economy as the pandemic ebbed; and excessive corporate profits. In any case, the inflation rate has been falling in recent months, a turn in the trend line that is expected to continue.

Romney uses his falsification to argue that “some mix of revenue, benefit and eligibility changes are necessary.”

Let’s unpack this verbal wolf in sheep’s clothing: He’s talking about power cuts. Romney’s mention of revenue changes is just a wave of his hand – he knows the GOP congressional group would not advocate revenue increases because that always means tax increases.

This allows for changes in benefits and eligibility. Does anyone really believe he endorses increasingly Advantages? Of course not; For years, the GOP has campaigned against any proposal to improve Social Security benefits.

The latest Republican Social Security proposal, introduced in 2016 by former Rep. Sam Johnson (R-Texas), almost cut pension benefits across the board, reduced annual cost-of-living adjustments, and reduced spousal and child benefits.

Johnson would also have raised the retirement age, which is part of Romney’s formula. Make no mistake: raising the Social Security retirement age (which is currently 67 for people born in 1960 or later) or the Medicare eligibility age (currently 65) is a benefit cut.

Romney promises that “current and near-retirees will not be affected by any changes,” but that’s a well-known hoax.

It’s meant to placate older workers, who tend to be more reliable about voting, while it clings to younger workers who are years or decades away from worrying about how they’ll be cared for in retirement, and so hopefully won’t care on how their post-career years are impoverished by Republican benefit cuts.

That brings us to what the GOP hopes will be their lever in any debate about Social Security benefits: the federal debt limit, which must be raised early next year to stave off a possible shutdown of government functions or even an unprecedented Treasury default.

We’ve covered this type of brinkmanship before – almost too many times to count, actually. This time, the GOP has spelled out what it expects to achieve by holding the economy hostage: benefit cuts.

As we have already mentioned, the debt ceiling is the most infantile feature of US policy. It is also one of the most misunderstood. Republicans contend that the ceiling, which limits the Treasury Department’s spending on federal debt but can be raised by a vote in Congress, represents a hard limit on federal spending and that an increase leads to more waste.

That’s totally wrong. The debt ceiling was originally intended not as a limit on the Treasury Department’s powers to issue debt, but as a way to grant it more to borrow leeway. It was passed in 1917 when Congress was tired of having to vote on every proposed bond issue, which it found irksome. So instead it chose to give the Treasury blanket powers to issue bonds, subject to a makeshift restriction.

There is not a serious economist in Washington who believes that a debt ceiling showdown is an effective way to rein in spending or reduce the federal deficit, or that it is anything but a threat to US financial stability.

Treasury Secretary Janet L. Yellen has advocated simply scrapping it. In a testimony before Congress in September 2021 (weeks before the final deadline for an increase), she noted that “Republican and Democratic governments have run budget deficits for most of the postwar period,” which “requires periodic increases in the debt ceiling.” ”

Otherwise, she told lawmakers, it would be “disastrous” for the economy: interest rates on mortgage loans, credit card debt and other household borrowing would skyrocket, benefit tests would be delayed and government services suspended. Faced with these consequences, she said, “the debt ceiling has been raised or suspended 78 times since 1960, almost always on a bipartisan basis.”

The prospect that a Republican caucus with their backs to the wall could attempt to use the only weapon at their disposal to force changes in Social Security programs that would harm millions of Americans points to the need to resolve the matter in the short term to shake hands — particularly during the lame duck’s congressional session called after Thanksgiving, with Democrats controlling both houses.

This could be the last chance for at least two years to lift the debt brake once and for all. Congress should remove this weapon from the Republican arsenal before it’s too late.

https://www.latimes.com/business/story/2022-11-16/column-moderates-like-mitt-romney-are-threatening-social-security-democrats-dont-have-to-let-them Hiltzik: GOP hasn’t learned its lesson on Social Security

Alley Einstein

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