Martha Raddatz Repeats the “Big Lie” About Social Security and Medicare
By Katherine M Acosta
16 October, 2012
Countercurrents.org
During last Thursday's vice-presidential debate, moderator Martha Raddatz said:
Let's talk about Medicare and entitlements. Both Medicare and Social Security are going broke and taking a larger share of the budget in the process (emphasis added).
Will benefits for Americans under these programs have to change for the programs to survive?
Vice presidential candidate Paul Ryan responded by doubling down on the “big lie”:
Absolutely. Medicare and Social Security are going bankrupt. These are indisputable facts (emphasis added).
It was one of the few lies that did not cause Vice President Joe Biden to roll his eyes or otherwise mock his opponent and correct him. Instead, he merely promised that the Democrats would not privatize the program. That's because no matter which party wins the presidency, Social Security will be under attack. The only difference is that one party proposes to “save” it through death of a thousand cuts, while the other wants to privatize it.
The “big lie,” of course, refers to the propaganda technique of repeating a lie over and over until it becomes accepted truth. Bush II explained the technique in his own inimitable way when he attempted in 2005 to convince citizens at a town hall meeting in Greece , New York that privatizing Social Security was a good idea:
See, in my line of work, you got to keep repeating things over and over and over again for the truth to sink in, to kind of catapult the propaganda.
At least he was being honest about what he was doing.
But now it is past time to “catapult” the anti-propaganda. As linguistics professor George Lakoff has pointed out in his books and articles, well-established “frames” are not changed by one exposure to the facts. Therefore, in preparation for the coming battle to save Social Security, we need to commit to memory and repeat the following over and over to friends, co-workers, relatives, and neighbors; to tweet and comment online; and to write letters to the editor and politicians countering anyone who reiterates the “big lie.” (Note: This is preparation for organizing and fighting attacks on Social Security, not the battle itself.)
1) Social Security is not broke and does not contribute to the deficit. By law, Social Security cannot, and has never, paid out more than it takes in. Even with no changes to the program, it is fully funded for next quarter century, after which it can pay out 75% of benefits. The Social Security Trust Fund currently has a surplus of $2.5 trillion.
2) The “problem” with Social Security is that the federal government has borrowed our funds and now doesn't want to pay us back. Paul Craig Roberts, assistant secretary to the treasury during the Reagan administration, explains the heist :
Two Wall Street henchmen, Alan Greenspan and David Stockman, set up the Social Security raid in this way: The Carter administration had put Social Security in the black for the foreseeable future by establishing a schedule for future Social Security payroll tax increases. Greenspan and Stockman conspired to phase in the payroll tax increases earlier than was needed in order to gain surplus Social Security revenues that could be used to finance other government spending, thus reducing the budget deficit. They sold it to President Reagan as “putting Social Security on a sound basis.”
Along the way Americans were told that the surplus revenues were going into a special Social Security trust fund at the U.S. Treasury. But what is in the fund is Treasury IOUs for the spent revenues. When the “trust funds” are needed to pay Social Security benefits, the Treasury will have to sell more debt in order to redeem the IOUs.
Social Security was mugged again during the Clinton administration when the Boskin Commission jimmied the Consumer Price Index in order to reduce the inflation adjustments that Social Security recipients receive, thus diverting money from Social Security retirees to other uses.
Now, instead of cutting military spending or requiring the Social Security tax to be paid on earnings over $100,000 in order recover our funds and pay benefits due, they instead want to cut benefits, raise the retirement age, and in the case of Republicans, privatize the program (translation: turn the money over to Wall Street).
3) Own the word “entitlement.” As in HELL YES, we are ENTITLED to those funds. It is money we have paid in all our working lives and we are therefore entitled to receive it in our old age.
Currently, Social Security keeps an estimated 20 million people out of poverty, including about a million children. The program will be even more crucial for that task in the coming years. Our other sources of income in old age have already been raided or are under attack by financial elites.
First, they came after our retirement income via the 401(k). As authors William Wolman and Anne Colamosca explain in their 2003 book The Great 401(k) Hoax , for most of the 20 th century, worker pensions were administered through defined pension plans, with employers managing the funds and responsible for paying out promised benefits. The 401(k) offered an opportunity for employers to get out from under pension obligations through defined contribution plans, where employees and employers contribute to the funds, and employees are responsible for making their own investments. Wolman and Colamosca write:
In effect, 401(k)s ask American workers to ape the investment behavior of the rich, even though they obviously do not have the resources to ride out bad markets of the kind that we believe will prevail for next decade. By law, working Americans own the money in their 401(k) plans and are free to invest it as they will. But in reality, most companies do not include an adequate range of investment choices to safeguard savings in volatile markets. At their core, the choices available in most 401(k)s represent a sometimes subtle, and sometimes not so subtle, implication that the employee would do best by investing in stocks (p11).
Brooks Hamilton, who designs 401(k) plans for large corporations, concurred with this view in a 2009 60 Minutes interview:
Hamilton says 401(k)s turned out to be so much cheaper than funding pensions, that many companies decided to freeze their pension plans and replace them with 401(k)s. The decision created millions of new employee investors for Wall Street and the financial community. And they pounced on the opportunity…
(snip)
“The fact is that the typical 401(k) investor is a financial novice. They don't know a stock from a bond. And we give ‘em a list of 20 or 30 mutual funds with really, really powerful names, you know, they sound like, ‘Gee, that's where I want to have my money,'” Hamilton said.
The 60 Minutes story focused on the trillions of dollars lost in 401(k) funds after the 2008 financial crisis and quoted Representative George Miller (D-CA):
There clearly has been a raid on these funds by the people of Wall Street. And it's cost the savers and the future retirees a lot of money that would otherwise be in their account, independent of the financial collapse.
Many of the workers who remained in defined benefit plans and out of 401(k)s found their pensions raided in other ways, as Wall Street Journal investigative reporter Ellen Schultz explains in her book Retirement Heist . In a 2011 interview with Thomas Rogers at Salon.com , Schultz discusses how major corporations such as IBM, General Motors, and GE used contractual loopholes, ambiguous regulations, and litigation to raid employees' pensions without workers understanding how they were being fleeced:
There were billions in promises to retirees for pensions and healthcare and death benefits and life insurance, and the companies figured out that if they cut or eliminated them altogether then they could get those billions in profit — and even use them for executive compensation.
(snip)
A striking example was Lucent, which inherited about 100,000 retirees when it was spun off from AT&T. From the beginning, Lucent kept saying, “We are crippled by these retirees,” but the truth is, they also received more than enough actual money from AT&T to pay every dime of benefits for all the current and future retirees. Bit by bit, they cannibalized these benefits. They eliminated a death benefit, which is a very simple thing that says, if you work for us for 25 or 30 years, and you die, your widow will get $50,000 dollars or whatever per year. Lucent said they couldn't afford that. So they took it away and saved $400 million that had been set aside physically in the pension plan for these folks. At the same time, they awarded more than $400 million in bonuses to executives…
(snip)
The retirees didn't understand this was being done to them. They just assumed, “Oh well, this company is affected like everyone else by the economy.” They didn't see the role the companies played [in deceiving their employees]. The federal courts found Cigna documents that made it clear that the HR executives were discussing how, if the cutting of employees' benefits was handled right, there wouldn't be an employee backlash because the people wouldn't understand what was happening. And it's a pattern that has existed at a number of other companies…
Next up, after the 401(k) hoax and the defined benefit plan heist, will be the raid on public sector pensions. We know that's coming; we've heard the drumbeats.
We let them hoodwink us into handing our retirement savings over to the Wall Street casino (where the house always wins) through 401(k)s, we didn't pay attention when they found myriad ways to chip away at defined benefit plans, and now they're telling us Social Security is broke. This is our last scrap of retirement funds, and we need to wake up, educate ourselves and others, and refuse to let them steal this, too.
Katherine M Acosta is freelance writer currently based in Madison, Wisconsin. She hold a PhD in Sociology and previously worked as a university lecturer and researcher. Contact her at kacosta at undisciplinedphd dot com. She blogs at UndisciplinedPhD.com
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