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Tuesday, February 01, 2011

Harry Reid's chooses demagoguery over seriousness

Senate Majority Leader Harry Reid has put forward his marker on what he is willing to do about our nation's entitlement crisis - absolutely nothing.
Cuts to Social Security are “off the table,” Majority Leader Harry Reid said in a video being circulated by a liberal activist group, making Mr. Reid one of the most high profile Democrats to take a stand on the issue.

Of course, his remarks imply that a major revamping of Social Security was actually on the table.

“As long as I’m the majority leader, I’m going to do everything within my legislative powers to prevent privatizing or eliminating Social Security,” Mr. Reid said in the video for the Progressive Change Campaign Committee. “Simply say, ‘It’s off the table.’ We’re not going to balance the budget on the backs of senior citizens.”
Reid simply denied that there is any problem.
Mr. Reid described the fund as the “most successful social program in the history of the world.”

“They’re using scare tactics saying the program is in crisis and on the verge of bankruptcy,” he said. “That is simply not true.”

The Congressional Budget Office predicted last week that Social Security will post $600 billion in deficits during the next decade. If nothing changes, the fund will be bankrupt by 2037, according to the CBO.
This is what the CBO said just last week about the state of Social Security.
Social Security will post nearly $600 billion in deficits over the next decade as the economy struggles to recover and millions of baby boomers stand at the brink of retirement, according to new congressional projections.

This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.

Last year, Social Security posted its first deficit since the program was last overhauled in the 1980s. The CBO said at the time that Social Security would post surpluses for a few more years before permanently slipping into deficits in 2016.

But the new projections show nothing but red ink until the Social Security trust funds are exhausted in 2037.
Analysts often say that fixing Social Security is easy compared to the problems in Medicare. But not if Harry Reid has anything to say about it.


Rick Caird said...

I really believe harry Reid is mentally defective. We can all thank Nevada for giving him back to us, although Little Chuckie (three branches of government) Schumer is no better.

We have been writing about this for years. There is no Social Security Trust fund. I expect Mark and TV will show up and tell us there is, but they will be wrong. Every time Social Security needs money, they take on of their IOU's to the US Treasury. The US Treasury says "Wait, we need to borrow that amount first before we can pay you". So, the US Treasury goes out to the real bond market (or the Fed, but that is a different story) and borrows the money. If the deficit was $1.5 trillion and Socila Security need $100 billion, the deficit just went to $1.6 trillion.

It would all be different if special Treasury bonds fo Social Security only (the IOU's) could be sold on the open market. But, by law, they cannot be. Hence, any one of these bonds that are "cashed in" required Treasury to issue new bonds to pay Social Security. If any private company had done this, the officers would all be serving long terms at club Fed.

Now, we can wait for TV and Mark to show us how "Harry Reid" like they are.

lady di said...

I am soon to retire (God Willing).
I would gladly,(well,not gladly) vote to raise the retirement age now and work for a few more years, in conjunction with closing other government programs and agencies. Everyone needs to take a bit of the sandwich if we are to survive and not look like Egypt looks today.

pumping-irony said...

Rick Caird is exactly right. SS situation is analogous to that of someone who lent his life savings to his crooked no-account brother-in-law who has already gambled it away. The lender can pretend the money is still there but when he calls bro and asks for some cash, bro will have to borrow it from his friendly neighborhook loanshark. This game will be of short duration and will not end well.

SS is no longer cash flow positive (the taxes collected from the current workers are no longer enough to cover its payments to recipients) thanks to the great recession. Thus, the time of reckoning is upon it earlier than expected (they didn't expect this reversal of flows to start until 2017.) But this kind of stuff doesn't deter people like dingy Harry, who maybe plans to double-count revenues or something just like he did to make ObamaCare "work out."

Denial ain't a river in Egypt - it runs right thru WashedUp, DC.

lady di said...

Can I take back my previous post. Give me the money now!

Pat Patterson said...

Sen Reid also engages in a few weasel words in that he claims he will allow no elimination or privatization of SS. As if that was a serious idea in congresss. But he does not, even in this edited version of his remarks state that he would block any cuts or changes to eligibility. He's merely promised that he'll fight to make sure that the sun comes up tomorrow.

bobdog said...

If only we had seen this coming, we could have done something to prevent this tragedy...

Who could have guessed that baby boomers would ever retire?