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    Like Nixon - Obama Manipulates Social Security to Buy Votes


    Democracy and Power 107:  Counting votes

    Successful … politicians are insecure and intimidated men. They advance politically only as they placate, appease, bribe, seduce, bamboozle or otherwise manage to manipulate the demanding and threatening elements in their constituencies.
    – Walter Lippmann (1889-1974), American Journalist and Author

    Like Nixon - Obama Manipulates Social Security to Buy Votes

     President Nixon increased Social Security benefits prior to the 1972 election by an enormous 20%.  Infamously, just prior to the election Nixon attached a note to each beneficiaries’ check lauding their big gift.  Because of the political deceit and political incompetence, Social Security was broke in six years. 

    In the early 80’s the Greenspan Commission raised the tax rates, increased people and incomes taxed and extended the age of eligibility.  These government manipulations altered the contract with working Americans and raised the amount of money confiscated by the government.

    Last year, Obama and Congress lowered the Social Security tax rate for all workers.  Recently, Obama demanded a two month extension of the cuts.  Similar to Nixon, Obama extolled the benefit he provided to workers:

    “Because of this agreement, every working American will keep their tax cut,” … “When Congress returns, I urge them to keep working without drama, without delay, to reach an agreement that extends this tax cut as well as unemployment insurance through all of 2012.” 

    Obama’s statement was directed to 160 million workers – all potential voters.  Coordinated with Obama’s pandering to workers, his campaign manager Jim Messina emailed this devious attack claiming the Republicans want to: 

    … gut Social Security to pay for more tax cuts for millionaires and corporations.

    Obviously, gut Social Security to pay for more tax cuts for millionaires and corporations has been tested by the political spin masters and is proved to scare seniors and outrage the Democratic base.  This mantra will be stated repeatedly until the November election. This is crass politicking at it's finest.  Similar to Nixon, if not worse, Obama's tax cut will cause Social Security to go broke earlier and every American workers; taxes will increase.  

    The tax cuts Obama has requested will reduce revenue flowing to Social Security by roughly $220 billion.  Ultimately (and soon), every American worker will be taxed more.  Most likely, it will not be in the form of an increased payroll tax, which is too blatant. 

    However,  there will be an attempt to raise the tax-ceiling on the rich, which will not raise enough revenue.  Then, politicians will look to income tax and everything else the federal government taxes.

    For example, to partially pay for the two month extension, Congressed levied “fees” collected by Fannie Mae and Freddie Mac on home mortgages.  Dangerously, there is no limit to government's thirst to tax.  Plus, at some point of time, Congress will attempt to introduce an additional tax - the value added tax (VAT).  And again, every American will be taxed to some degree.

    Nixon and Obama are not the only politicians to misuse Social Security system.  Bush II created the prescription drug benefit just before the 2004 election, which, once more, was buying senior votes and exacerbating America’s debt crisis.

    There is only one sure way to stop this despicable and dangerous political gamesmanship and subterfuge – workers invest their Social Security taxes in a tax-free IRA.  Only when a person owns their retirement accounts will politicians stop this deceit.

    Never trust a politician with your money.  They will manipulate and use your money for their political advantage.  Ownership is the only sure method to stop these political hucksters.   Saving and investing will propel America forward economically, socially and morally, which benefits everyone in the long-run.


    Additional reading:

    For an in depth review of Congress and Social Security read The Congressional Response to Social Security Surpluses, 1935-1994  by John Cogan of the Hoover Institute.



    Fix Social Security Now

    I really like the article. I am questioning one statement :

    "The tax cuts Obama has requested will reduce revenue flowing to Social Security by roughly $220 billion. Ultimately (and soon), every American worker will be taxed more. Most likely, it will not be in the form of an increased payroll tax, which is too blatant. "

    As I understand it, the general taxpayer is paying for the revenue shortfall. My source is Charles Blauhous, and I can send you a citation, who said that the general taxpayer paid 105 billion to Social Security in 2011. If I am wrong, I hope you will email me directly as soon as possible.

    This change isn't left pocket and right pocket. This change expands the revenue reach of Social Security from capped-wages of covered workers to all income of all Americans. So the people in Galveston County who thought that they were leaving the system are simply going to pay for it without getting even a 'credit' for their contribution.

    Social Security has run out of people to rope into the game so it is now roping in people who have nothing to do with the system.

    I appreciate your feedback on this question - thanks,

    Fix Social Security Now

    Here is the link, It is a summary which provides a link to the fuller piece. I have seen politicians loosely talk about 'backfilling' which has to be one of the great euphemisms of all time for subsidizing. I double check with people because it is my #1 blogging subject. I want to know that my understanding of the facts is right.

    What I have said is that Blauhous is being polite. This policy expands the revenue reach of the system from capped-wages of covered workers to all wages of all Americans. We can't expand it by bringing in new participants. We have to expand it to complete strangers to the system, like the people who work for Galveston County and the millions of other Americans who do not participate.

    Obama wants to expand subsidy - at which point it will cost over 2 trillion dollars over 10 years. But no one is talking about it. Beyond the holiday (which I think we agree is not a holiday but rather a shift to deeper pockets) there is the EITC - which is a direct payment to low-wage workers - just so that they can afford payroll taxes. It is as though the system was working.

    forgive typos my computer is acting up and I have to post material faster than I can proof.

    teda's picture
    Ted Abram

    Blauhous is the expert. I assumed there was some transfer from the treasury to pay Socail Security benefits. I was unaware of the amount - $105 billion. My "soon" should have been " already every American worker is taxed more."
    Also, Blauhous cautions the increased money from the general treasury could potentially change Social Security into a welfare program, breaking the relationship between the money paid by a worker and the benefits received.
    Again, only personal accounts will prevent a politician from manipulating the fruits of a worker's labor.