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Social Security Is Class Warfare in Florida

This whole Social Security privatization scheme is causing some Democrats and Republicans to break ranks with their parties. In fact, Josh Marshall, author of the Talking Points Memo, has been providing daily updates on which members of Congress are straying from the pack. The conventional wisdom would be that Ginny Brown-Waite, who hails from the district with the largest number of Social Security recipients, would be a tad gun-shy. The man with the second-biggest cadre of SSI recipients is Democrat Robert Wexler: good luck trying to convince him. But the districts ranked three through five on SSI recipient populations are represented by 2000 Election villainess Kathleen Harris, Connie Mack’s son, and Mark Foley. The latter had described some of his colleagues as “terrified” to the Associated Press. This implies he is not. Kathleen Harris remains just as ambivalent as Brown-Waite. Mack has done little to make his opinion public.

Down at #21….C.W. Young, a Republican, has vowed he will not support any changes to Social Security that involve personal accounts. Florida Dem Alan Boyd meanwhile, has promised to cosponsor Bush’s legislation in the House. So what gives?

M-O-N-E-Y. Not in terms of campaign contributions or corruption but in terms of rich and poor. The skeptical group of Florida Republicans hails from the state’s poorer coast. Namely, the western one. Income differentials between Brown-Waite’s and Young’s district with that of Foley and Wexler’s are striking. The average per capita income in Palm Beach County is $44,000 a year, double the standard found in Brown-Waite’s district.

But wait, there’s more. Currently there has been a spate of editorials suggesting the Democrats have failed to suggest an alternative to save Social Security. Now, the Clinton task force already has four: eliminate the wage cap on payroll tax, retain the estate tax and have it pay into the Social Security Trust Fund, force some state and county workers to pay Social Security if their retirement plans and non transferable, and re-index the benefit schedule.

The first two don’t play real well in Florida. The state has no income tax, causing many wealthy people to claim it is their state of primary residence. Including but not limited to Ted Turner, Rush Limbaugh, O J Simpson, countless professional athletes, and Dick Vitale. The state also has a wacky rule about homestead exemptions, which is largely a measure to prevent probate. In Florida, the homestead exemption is $15 million dollars. But in other states getting a house that is not your primary residence to qualify for the homestead exemption can be difficult, and Florida’s rules are not exactly clear. But the political reality is: rich retirees in Florida will not want to reinstate the estate tax or raise the FICA cap to pay for poorer Americans. Poor SSI recipients, on the other hand, will be more than happy to see the government “spread the wealth”.

And this smells like…class warfare. The favorite Republican response to Democrats pointing out if a particular policy benefits the wealthy over the poor. Now, the Social Security “crisis” is a bit of misnomer. Social Security is so successful because it loans money to the Federal General Fund by purchasing T-Bills and then redeeming them later. The interest on these T-Bills is the whole reason that Social Security “works”. So it is true that by 2018 the payroll tax will not cover the value of the T-Bills cashed in. But the SSA can’t cash its own T-Bills in; the Treasury Department has to do it (indirectly or directly). And as some have pointed out, the amount of T-Bills sitting in the SSTF is around $1.7 trillion. Sounds big until you realize that foreign governments (like China), domestic and international banks, and private individuals like Bush him all hold another $7 trillion in T Bills collectively. So nothing stops us from having Congress buy more T-Bills and put them in the trust fund. Nothing except a veto, that is.

posted by Thomas at 1:43 AM 0 comments