Subject: HRC and Social Security
From: Brent Budowsky <[email-masked]>
To: John Podesta <[email-masked]>
Date: Sat, 5 Sep 2015 07:06:12 -0400

For a variety of economic, social and political reasons I would suggest that HRC
support an increase in social security benefits for recipients below a certain net
worth threshold, and finance it by a combination of a small tax on Wall Street trades,
and if necessary a graduated increase in the social security tax for those earning
above a certain income.  Sometime soon I will write a column suggesting this and
wanted to give you a heads-up and suggest HRC advocate this. 

In brief:

1.  Economic and social reasons:  Seniors living on fixed incomes are among the
most hard-pressed groups in America today.  Their interest bearing yields on bank
accounts, etc. lag far behind the real cost of living increases and their Social Security
COLA's have been lagging behind the real inflation rate for many years, leaving them
falling further and further behind.

I would emphasize that a majority of seniors who would benefit from a social security
increase are women, because they live longer, and because in most cases for their
entire working careers they were receiving unequal pay compared to men while
they were paying into the system.

HRC and most politicians do not appreciate the severity of this from the point of
view of poor and middle income seniors.  They do not have a real-life or intuitive
understanding of what it is like to pay ever-rising costs of groceries, and medicine that is not covered by insurance, and other necessities whose prices rise while fixed incomes decline in relative terms, because they are either wealthy and/or live in worlds
inhabited without much daily interaction with fixed income seniors struggling with this in their daily lives.

An increase in social security benefits financed as I suggest would have a net
stimulative effect to the economy and increasing economic equality and social equity.

2.  Financing: I like the idea of a small tax on Wall Street transactions which would
raise substantial revenue without imposing material hardship on traders.  Bernie
has proposed this, to use the money for his free public college proposal.  The problem
with the free public college proposal, which I like in principle,  is that it is virtually
impossible to adequately restrain tuition costs, which needs to be done, but without
doing this the transaction-tax-for-tuition trade would largely subsidize higher
tuition and detracting from the benefit to students.

By contrast, a transaction tax whose revenues went into the social security fund to
fund an increase in social security benefits would be a straight trade that would
support higher benefits.  To address a legitimate issue, a combination of some
means testing plus the transaction tax could enable this formula to strengthen
long term social security financing while simultaneously financing some increase
in benefits.  We could simply take the revenue gain from the transaction tax plus
the social security financing gain from the means test and divide the financing
gains between one part increase benefits and the other part enhancing the stability
of the system.

3.  Democratic politics.  Right now Bernie Sanders, Elizabeth Warren and some
other progressives support increasing benefits.  I agree with them on principle and
policy and would advise HRC to join and potentially lead this.  This would rally
the Democratic base, divert some attention from you-know-what, and be the kind
of initiatives Democrats should pursue for Democratic principles behind a highly
popular Democratic government program that we should aggressively champion,
and not defensively back away from.

When I write this column, if HRC opposes this, I would simply agree with Bernie
and Elizabeth supporting it and would not mention HRC either way.  If HRC supports
this I would banner and give high praise to her leadership.

4.  Democratic-Republican politics:  I do not believe it is enough to merely repeat
that we oppose Republicans who want to cut social security.  That is fine as far
as it goes, but is timid and stale and tends to ring like demagoguery and does not
ring man bells with seniors because they have heard it before and we are merely
arguing against a negative event that they know is unlikely in fact to happen.

By contrast, a call for an increase in social benefits would resonate with voters
because it would involve a specific amount for the proposed increase that all 
seniors would immediately understand, view as directly improving their lives
in measurable ways, and serve as one motivating issue for a potential mandate
election that would have an outstanding chance of being enacted if HRC is elected,
especially with more Democrats elected to the House and Senate with her.

Additionally, if an increase in benefits were financed in whole or part by a Wall
Street transaction tax, we would draw a stark contrast with Republicans on both
ends of the trade where Democrats have the high ground and Republicans are
vulnerable.  We support social security in ways they do not; we will finance this in
a way that ask Wall Street to do their fair share in an age where there is great
wealth on Wall Street and a need for economic fairness.

This can but need not be accompanied with populist anti-Wall Street rhetoric,
that is a political call.  Res ipsa loquitur, the thing will speak for itself, they want
to privatize social security and turn it into a new Wall Street profit center; we want
to protect Social Security and increase benefits for poor and middle class recipients. 

5.  Senior voters.  Democrats have developed a growing weakness with senior
voters that this would directly address.  And again I would emphasize that a majority
of these beneficiaries are women, who simply live longer than men, and begin with
a baseline of having worked for wages that were unequal in most cases for their
entire careers while they were working.

Politics and policies are both about choices.  These are the choices I would
recommend for HRC.

Brent

Sent from my iPad