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Do Not Believe The Myths Surrounding The ‘Grand Bargain’

Let’s get serious about our future.

Over the last nine months every politician on both sides was saying we need to do something about the deficit, the budget, to preserve Social Security and Medicare for all.  “This is about our grandkids”.  Some even liked to say that our “children would be inheriting our debt”.  Those are great talking points because they created a message based on fear and propaganda not facts.

The AFL-CIO has been working with many allied organizations to help people understand the facts around some of the issues facing America and Congress in the coming month.

Everyone is talking about taxes! ‘We need to tax the rich.’ ‘We need to extend the middle class tax cuts.’ ‘We need to extend the tax cuts for all, especially to the job creators.’  What is the truth behind these statements?

The truth is America has a budget problem.  We spend more that we take in. This creates deficit.  While many politicians are still trying to lay blame to how we got here, I have already moved on.  We need a balanced approach to solving this budget problem.  We need to make strategic cuts and revenue increases.  That’s right — I am asking for an increase in taxes, that is if you are one of the people who make $250,000 a year or more. If you are, then paying a few extra dollars in taxes is not really going to hurt you, is it?  Making those ends meet every month is a lot easier when you have $20,000 a month coming in.

[mantra-pullquote align=”right” textalign=”right” width=”40%”] Ending the ‘Bush Era Tax Rates’ would also reduce our budgetary shortfalls by “1 Trillion dollars over ten years”.[/mantra-pullquote]

The first way to help fix our deficit and budget problem is to END THE BUSH TAX CUTS!  That is right, we let the “temporary” tax cuts expire.  These tax cuts were supposed to increase job creation. What actually happened was they created a huge hole in our deficit and led to the worst financial depression in 60 years.  I know what you’re saying, ‘those tax cuts are going to hurt small businesses and the job creators’.   You would be wrong.  The truth is that only “only 2.5% of small business owners make more than $250,000 per year, and these include 237 of the 400 wealthiest people in the country.”  Ending the ‘Bush Era Tax Rates’ would also reduce our budgetary shortfalls by “1 Trillion dollars over ten years”.  Wasn’t the entire “super committee” created to find one trillion in debt reduction?

The real question is, how do we convince the ‘Norquist’ tax dodgers that in order to save our economy and Social Security/Medicare programs, we have to raise taxes on the top 2%?  This is being referred to as the ‘Grand Bargain’.   Republicans want to make cuts to Social Security and replace Medicare with a voucher in order to preserve the tax rates for those above $250,000.   That is right: the GOP is going to bargain away the benefits promised to 62 million Americans to preserve a tax rate for 6.2 million Americans! This does not make any sense at all.

[mantra-pullquote align=”left” textalign=”left” width=”33%”] According to the Trustees, Social Security can pay 100% of promised benefits until 2033. [/mantra-pullquote]

People say that ‘Social Security is going bankrupt’.  This is another myth that many on the right keep using. The fact is “Social Security is not going broke. It will always be able to collect payroll tax revenue to fund benefits. According to the Trustees, Social Security can pay 100% of promised benefits until 2033. Without any changes at all, Social Security can pay three-fourths of promised benefits indefinitely after that.”  If you are still not convinced, there is one simple change to Social Security that will solve the issue forever: just eliminate the cap.

Right now, people who make over $110,000 hit the Social Security cap, and don’t have to make any further contributions.  Eliminating the cap is an idea that was supported by President Obama and proposed by Sen Bernie Sanders (I-VT).

[mantra-pullquote align=”left” textalign=”left” width=”33%”]Fact: Increasing the retirement age from 67 to 69 amounts to a 13% cut in benefits.[/mantra-pullquote]

One more myth that needs to be mentioned is the outright lie that ‘if we increase the eligibility age of Social Security there will be no loss in benefits’. The fact is “Increasing the retirement age from 67 to 69 amounts to a 13% cut in benefits.”

One of the other ‘bargains’ that Congress is bartering with is cuts to Medicare.  Medicare provides millions with affordable healthcare options and benefits for those who have none.  Congressional Republicans are proposing cuts and “adjustments” to “make Medicare last longer.”  This is another myth.  They are using the same model that corporations are using to shift the cost burden to the worker. Making the workers pay more for the same benefit reduces the bottom line.

[mantra-pullquote align=”right” textalign=”right” width=”33%”] “Turning Medicare into a voucher … (beneficiaries) will have to pay an average of $6,500 a year more”
-Robert Riech[/mantra-pullquote]

Many of the right wing media like to say that ‘Medicare (like all government programs in their opinion) is wasteful and inefficient’. The AFL-CIO would beg to differ: “Medicare has lower costs than private insurance and has done a better job of controlling health care cost growth for the last 40 years.”  Even famed author and public policy expert Robert Reich agrees that what the Republicans are trying to do to Medicare is wrong. “Turning Medicare into a voucher whose value doesn’t keep up with expected increases in healthcare costs — thereby shifting the burden onto Medicare beneficiaries, who will have to pay an average of $6,500 a year more for their Medicare insurance.”

Anything that Congress does to the Medicare plan has (or will) have a direct effect on you.  If they increase the premium, that is more you must pay in the program up front. If the increase the co-pays, that is more that you have to pay out of pocket before the insurance kicks in. If they place a cap on benefits, then if you exceed that cap – well, you’re pretty much screwed.

This ‘Grand Bargain’ and ‘Fiscal Cliff’ discussion is a disaster waiting to happen.  The country re-elected President Obama because we believed that the wealthy need to pay a little more to help reduce our deficit.  America rejected the idea that we need to continue to reduce taxes on the ultra-wealthy and corporations. We need our President to hold strong to his statements made during the campaign.  Do not let Congress change Social Security or Medicare in any way, and do not let them walk out without ending the ‘Bush Era Tax Cuts’ to top two per-cent.

Do not be fooled by the myths and propaganda.  The truth will set you free.




About Matt Murray

Matt Murray is the creator and an author on the NH Labor News. He is a union member and advocate for labor and progressive politics. He also works with other unions and members to help spread our message. Follow him on Twitter @NHLabor_News
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