Obama talks Social Security in Ohio
Barack Obama is on day five of his economic tour of battleground states today, appearing with his wife Michelle in Columbus, Ohio, and highlighting differences with Republican rival John McCain on Social Security.
The event is also part of his mending fences tour because it also features Ohio Governor Ted Strickland, a fierce supporter of Hillary Clinton who helped her to a campaign-prolonging win in Ohio's primary on March 4.
Strickland hails from -- and draws strong support from -- rural southern Ohio, home to the kind of blue-collar white voters who emerged as a key part of Clinton's base and who Obama struggled mightily to attract. Strickland was also thought of as a possible running mate, but this week he unequivocally took himself out of the running before he was even asked.
In his speech, Obama pledged to protect Social Security "today, tomorrow, and forever" -- and hit McCain for being open to private savings accounts to supplement the retirement benefits.
"Privatizing Social Security was a bad idea when George W. Bush proposed it. It's a bad idea today," Obama said, also accusing McCain of incorrectly claiming at a New Hampshire town hall meeting on Thursday that he had always been against it.
Obama also promoted his proposal to help shore up Social Security by levying further taxes on income above $250,000 a year. Now, the first $102,000 in income is taxed. Under his proposal, that wouldn't change, and income between $102,000 and $250,000 also wouldn't be taxed.
"Right now, the Social Security payroll tax is capped," Obama said in prepared remarks. "That means most middle-class families pay this tax on every dime they make, while millionaires and billionaires are only paying it on a very small percentage of their income. That’s why I think the best way forward is to adjust the cap on the payroll tax so that people like me pay a little bit more and people in need are protected. That way we can extend the promise of Social Security without shifting the burden on to seniors. And we should exempt anyone making under $250,000 from this increase so that the change doesn’t burden middle-class Americans. This means that 97% of Americans will see absolutely no change in their taxes under my plan – 97%."
UPDATE: McCain denied again today that he wants to privatize Social Security.
"We have to fix Social Security, and we have to fix Medicare," he said at a town hall meeting in New Jersey. "....My friends, I do not and will not privatize Social Security. It is a government program, and it is necessary, but it's broken. We've got to tell the American people that we got to fix it. And we got to sit down together, the way that Ronald Reagan and Tip O'Neill did back in 1983 and fix Social Security. But my friends, I will not privatize Social Security, and it's not true when I'm accused of that, but I would like for younger workers, younger workers only, to have an opportunity to take a few of their tax dollars, a few of theirs, and maybe put it into an account with their name on it. That's their money. That's their money. So when I say that, so when I say that, please don't -- please don't let them twist that as they have others. It's their money. It's their money. It's your money. And we will make sure that present day retirees, I will commit, have the benefits that they have earned. And nothing any proposal would change that."
Republicans have already issued a pre-buttal to Obama's appearance.
"Barack Obama is coming to Ohio talking about raising capital gains tax, eliminating the cap on Social Security, raising other taxes and fees -- which candidly the citizen of the state of Ohio and the small businesses, the real creators of jobs in the state of Ohio, are least able to afford," Ohio GOP Deputy Chairman Kevin DeWine told reporters on a conference call. "We think what Barack Obama offers to people of Ohio is a risky proposition. And we know the voters in Ohio are sophisticated voters, they have seen their share of hotly contested races, and we believe they will see, just as Governor Strickland did during the primaries, they will see through the fluff as Gov. Strickland called it during the primaries, and not be easily swayed by Barack Obama and his policies that will be harmful to our economy."
The McCain campaign today also questioned the impact of Obama's tax proposals on seniors, including those who rely on Social Security.
While Obama proposes to eliminate income taxes on seniors with less than $50,000 a year in income, McCain's campaign cited an analysis that Obama's plans would increase the tax bills for 10 million senior households, in part because of his proposal to raise capital gains taxes, which would apply to stock dividends that seniors receive.
"Barack Obama likes to think that his tax increases will only hit a few Americans, but in truth, his economic plan will be a disaster for everyone, especially seniors," Tucker Bounds, a McCain spokesman, said in a statement. "Because of Barack Obama's tax increases, one out of every three senior households will end up paying higher taxes. That's not change we can believe in when so many seniors are struggling to cope with higher gas prices and food prices. The last thing we need to do is raise their taxes. Unfortunately, all too often, that is the first thing Barack Obama will do."
The Republican National Committee also sent around a video clip of Hillary Clinton criticizing Obama's Social Security plan. "I do not want to fix the problems of Social Security on the backs of middle-class families and seniors. If you lift the cap completely, that is a $1 trillion tax increase. I don't think we need to do that," she said during a Democratic debate last November.
The social security system needs more money coming in. I believe the first logical step would be to raise the cap, even just a little. Privatization should not be the first resort simply because of the risk involved.
Man. I grew up republican. Thank GD I started to read and actually look at what they are doing. The GOP has made a serious mess of America. They have put corporations before the middle class. Our elders used to be able to live on one salary. Now, the only manufacturing job left in the states is at burger king putting together burgers. They have manipulated the markets to make gas increase. They have the permits to drill but aren't drilling and now they want to chip away at social security bit by bit till it is gone too. Oh yeah, and how do feel about our army being privatized, and the back door draft that has been put in place. It isn't their sons and daughters going to war. It's ours. We have got to pull together and say NO MORE. Mr. Bush find your self another country. You are not welcome here any more.
Obama voted to raise taxes over 90 times when he bothered to show up in the Senate. He and his wife have a $1 million (ONE MILLION.....$$$$) fund of his money that yields TAX FREE INCOME. If he wants to tax, tax, tax, why is he placing his and his wife's money in TAX FREE funds? HYPOCRITE.
Part of a column that I wrote in 2005.
It has been updated and expanded – March 19, 2008
A so-called fact is that the Social Security Trust Fund is a very safe asset with over $4.096 trillion (3/19/2008) to pay retirees. As President Bush has shown, the Trust Fund has no money. We must pay additional tax money to replace the bonds.
The United States bonds in the Social Security Trust Fund are not assets. They are liabilities as the bonds are debts owed to Americans who will be receiving their monthly Social Security checks. The Social Security checks, however, cannot be sent until the bonds are converted to cash. That cash will come from higher taxes paid by Americans or the sale of additional bonds to Americans or foreigners. Not only do most American workers have 12.4% of their lifetime salary taken from them to put into the Social Security Trust Fund, they will have additional moneys taken from them to pay off the Trust Fund bonds.
Politicians continue to verbally promise the Social Security money to Americans although the Supreme Court determined, in two different decisions, that Americans are not guaranteed Social Security payments. Depending on how the amount is calculated, Social Security is missing between $3 and $12 trillion to pay the amounts that have been promised to current workers.
One of the most misleading statements we hear is “We should raise the salary cap to $140,000 (or more) and that will provide all the funds that we need.”
Collecting additional Social Security taxes at this time only gives more money to current politicians to spend because -- by law -- they must spend the extra money. It also increases the bonds in the Social Security Trust Fund, which requires even more money to be collected from Americans to buy back the bonds in future years.
Another inaccuracy is that there is a difference between debt or bonds “Held by the Public” and “Intragovernmental Holdings” bonds or debt. There is no material difference between the two types of bonds. A Government Bond is a Government Bond and both pay interest and both must be converted into cash to pay the bondholder. Both types of bonds must be added together to make up the total United States Government Debt.
The current official Social Security website (www.ssa.gov) says “The Social Security system is progressive in that lower-wage earners receive a higher percentage benefit than higher-wage earners do.”
Using today’s (March 2008) Social Security website calculator, a 25 year old earning $12,000 per year in 2008 and beyond and paying $1,488 in FICA taxes would have an annual retirement benefit of $8,784 or 73% of their wage when the person retires at 67 years of age. A person earning $102,000 in 2008 and beyond and paying $12,648 of FICA taxes per year would have an annual benefit of $28,992 or 28 % of their pre retirement wage. That is the current program and shows that today’s low-income workers benefit almost three times as much as high-income worker.
MORE INFORMATION –
--- If one is imprisoned over 30 days, their Social Security retirement payment stops.
--- If a nonworking wife is married for less than ten years, she receives no benefit from her husband’s Social Security.
---- In 1950 there were 5.5 workers for every social Security beneficiary by June 2006 there were 3.3 workers per beneficiary and by 2033 there will be 2.2 workers per beneficiary. Soon it will require both your working grandchildren to support you.
The simplest maneuver and most practical is to raise the retirement age. The extended lifespans, thanks to the medical health care system that everyone thinks is broken has created a larger retired population that is expected to grow. Change the retirement age to deal with the changes of the times. Perhaps this will become moot as the plan to raise the cap on FICA etc. will likely bankrupt physicians and we can go back to average lifespans of as little as 30-50 years of age. Is that a hidden tax on low income wage earners? a shorter lifespan?
Many small businesses, and in particular physician practices pay income to the physicians of those practices as income after paying expenses. This change in FICA capping would hit those physicians incomes by thirty percent when you take into account the business requirement to match the FICA payments. Medicare (which private insurers base their payments upon) just reduced payments by 15%. These changes will truly create a medical care crisis.
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