Last night I fell asleep as I waited for President Biden’s 2023 State of the Union message. Not entirely surprising since I rise at 5:00am. Apparently, I missed some fireworks. I take it as a sign of the declining collegiality and decorum of the House. Prediction: the same action by a House member now that got a House member censured ten years ago will have no repercussions today.
Here is my questions. Did President Biden accomplish what the White House said was his objective in this SOTU message, to present a unity agenda that would move the country forward?
So far the retorts I’m seeing to the Republican response amount to “I know you are but what am I?”, fine as a playground taunt. I would expect more, however, from serious analysis.
Everyone who participated showed everyone watching the state of the union — much more informative then the laundry list of presidential priorities that never get enacted.
The answer to your question is no.
The only thing missing from the SOTU was the bearded lady.
Serious analysis? Surely you jest.
It was only happenstance that my husband and I watched the State of the Union address last night – we accidentally landed on the channel while going to another program. What held us there was our curiosity in how Biden would articulate his message, given the many incoherent ramblings during his presidency. IMO, he handled himself well in that department.
However, the message itself was stunningly dishonest, crafty, and saturated with lies. From his analysis of inflation’s economical effect – starting at 1.4% in 1/2021 and peaking at 9.1 in 6/2022 – to his myopic critique on oil, deficits, job creation, border safety, and his deliberate misdirection regarding the republican’s stances on SS and Medicare. Then there were the obvious omissions of Ukraine, gender and cultural issues forced in school curriculum, massive illegal migration over the border, rising crime, increased human and drug trafficking. Instead, Biden offered nothing but bromides and freebies creating a thunderous clapping by the human seals on the left side of the aisle.
Finally, while Biden’s words mouthed bipartisanship, his speech was purposed to provoke the opposition and divide the already divisive Congress. Some succinct outtakes of Biden’s SOTU were:
“…an old man yelling at America with America yelling back.â€
“Rather than the state of the union, it was the state of delusion.â€
Didn’t watch, not paying much attention to the media reaction.
The NY Post essentially had the same take on Biden’s performance last night as I had – basically a big zero!
https://nypost.com/2023/02/07/bidens-state-of-the-union-set-new-records-for-dishonesty-and-emptiness/
Senator Mike Lee (R-UT): “It will be my objective, to phase out Social Security, to pull it up by the roots and get rid of it.”
Rick Scott (R-FL): “All federal legislation sunsets in five years. If a law is worth keeping, Congress can pass it again.” {subject to Senate filibuster by recalcitrant Republicans}
President Biden (D-US): “Republicans say if we don’t cut Social Security and Medicare, they’ll let America default on its debt for the first time in our history. Instead of making the wealthy pay their fair share, some Republicans want Medicare and Social Security to sunset every five years.”
Jan: his deliberate misdirection regarding the republican’s stances on SS and Medicare.
Well, he got Republicans to publicly commit to not cutting Social Security benefits.
Zachriel,
Lee said that in 2010 and has since changed his tune. Rick Scott was criticized by Republicans for floating the idea of sunsets for everything.
Point being, there may be a couple of Republicans who genuince committed to wanting to cut Social Security, but there are a lot fewer today than there were 10 years ago. It’s not the party of Paul Ryan anymore.
Trump ended that and even Speaker McCarthy has categorically stated there won’t be any cuts considered. It’s just not a popular position anymore in the GoP.
In a previous post today I’ve said that SS needs to be reformed. The numbers tell us that and in all likelihood that will be even clearer after the next trustees’ report.
What the numbers (again) tell us is that eliminating FICA max altogether just kicks the can down the road. And we can’t fix SS by importing large numbers of entry level workers who will remain entry level for one reason or another. Again the most that would do is kick the can down the road. The farther that can is kicked, the more difficult the solution.
I think the fix will include raising FICA max, raising the SSRA, and changing the benefit formula. That will be so painful that there’s a risk it won’t be done at all until after the trust fund is exhausted. And, bob, by law the trust fund is full of IOUs. When I say “the trust fund is exhausted” I mean that every IOU has been cashed in.
I should add that Social Security reform is long overdue. It has been updated on a regular basis since inception.
Scott is not a back bencher (Chair of the RNC senate committee) and as I recall Tuberville and Braun praised his program. The Senate actually put out a plan in June which suggests raising ages for both SS and Medicare. Its also true that Trump proposed doing away with the payroll tax since the economic growth provided by his economy would more than pay for SS. Instead it just increased our debt.
So while it is true that the GOP is now claiming they wont touch the programs they have a history of talking about it to appease the part of the party that wants to make government so small you cold kill it and have actually submitted plans.
https://banks.house.gov/uploadedfiles/budget_fy22_final.pdf
Steve
Steve, SS is not sustainable in its current form. Somewhere around 2035 it dries up, unless it’s reformed. Making SS a wedge issue that no party wants to touch is not a solution. Much like immigration, abortion the too-hot-to-handle topics drag on until a crisis forces people to act – many times in ways that are knee-jerk rather than sensible and fair-minded. Consequently, I thought Biden, throwing out bait to create a howling, angry response from the opposition party, was juvenile and did nothing to mend Congressional fences.
SS is not sustainable in its current form.
Increasing the payroll tax by 1.5%, and doing away with the income cap brings the system into line.
https://www.crfb.org/socialsecurityreformer/
Increasing the payroll tax will make our tax system even more regressive than is already the case. I don’t believe that “doing away with the income cap” will have the impact you appear to. FICA is a payroll tax. It only applies to wage income. Many of those in the top 1% have the ability to change their income from wages.
Applying the tax to all income would come with a raft of unforeseen problems. For example, without an adjustment in the benefit formula we’d be paying Bill Gates billions a year in SSRI. It could also have the effect of driving income and investments from the United States.
Shorter: I oppose increasing the payroll tax and I think applying the tax to all income would be imprudent.
steve,
“Scott is not a back bencher (Chair of the RNC senate committee) and as I recall Tuberville and Braun praised his program. The Senate actually put out a plan in June which suggests raising ages for both SS and Medicare.”
Raising the age is a common view and is definitely on the table, even among some Democrats.
As Zachriel points out, keeping the age and the benefits the same will require increasing taxes across the board, something even Democrats oppose. There’s a reason why few in power are willing to promote a specific plan, because any plan is going to have tradeoffs. It’s easier to demagogue and prep the battlespace for when Congress can no longer ignore the problem.
Dave Schuler: FICA is a payroll tax. It only applies to wage income. Many of those in the top 1% have the ability to change their income from wages.
Which is an argument for why investment income should be treated like wage income for tax purposes. If they take the money home, it should be taxed at the same rate. At the very least, rich people should actually pay what they owe.
Dave Schuler: For example, without an adjustment in the benefit formula we’d be paying Bill Gates billions a year in SSRI.
That could be addressed along with the increase in the income cap.
Dave Schuler: It could also have the effect of driving income and investments from the United States.
Reducing deficits would also tend to increase investment as investors would see that the United States is serious about paying its bills.
Dave Schuler: Shorter: I oppose increasing the payroll tax and I think applying the tax to all income would be imprudent.
So cutting benefits? The simplest way is to do nothing and let everyone’s benefits be reduced by 25% or so.
As I said I support increasing FICA max to include wage income at least up to $400,000 (indexed), increasing the Social Security retirement age, and changing the benefit formula. I oppose increasing the payroll tax or applying FICA to non-wage income.
In the past I have also mentioned the possibility of creating two tiers of disability benefits to even the playing field between people who work physically and those who don’t but that’s expanding the discussion too far.
Sadly, I think that’s a fantasy. A pleasant fantasy but a fantasy nonetheless.
Disclosure: any foreseeable increase in the Social Security retirement age will still be younger than me. Since I continue to work and am paid wages, I continue to pay FICA.
Dave Schuler: As I said I support . . .
How much will that save?
Dave Schuler: Sadly, I think that’s a fantasy.
That’s what actually happened when Clinton raised marginal tax rates. By reducing pressure from government borrowing, there was more money available for private investment, and more confidence in the United States financial position. Afterwards, there was the debate about the “lock box”. Through some peculiarity in the electoral system, America chose tax cuts over fiscal conservatism.
According to Andy’s site it does the job:
If FICA max is just raised to cover the bottom 90% of wage income, it delays the insolvency date to 2043. The advantage of that approach is that it can actually be realized.
Dave Schuler: Tax All Wages Above $400,000
Wouldn’t that have the effect of “driving income and investments from the United States”?
I think it actually would. They’re saying it in a clumsy way. What I believe they mean is “tax all wage income including for wages above $400,000”. I think it would which is why I actually prefer the other scenario I mentioned—raising FICA max to cover 90% of all wages. As noted above, that pushes the insolvency date back to 2043.
I honestly don’t think taxing all wage income would raise as much revenue as they do. There’s a nasty little phrase used by economists: “all else equal”. For the top .1% of income earners all else is never equal. They have leeway to alter their circumstances in ways the rest of us don’t.
There are a few things you should keep in mind. The Clinton Administration was 30 years ago. Circumstances were different then in innumerable ways including we were reaping the benefits of an unprecedented spate of investment by corporations. It was called the “Dot com boom”. That ended 20 years ago. Companies just don’t invest the way they did from 1985 to 1995 any more.
Tool tip for Tax All Wages Above $400,000: The payroll tax currently applies to roughly the first $127,200 of wages, and this maximum increases annually with average wage growth. This option would immediately apply the payroll tax to all wages above $400,000. It would also pay out benefits equal to 2% of the newly-taxed income, much lower than the 15% rate that applies to earnings just below the taxable maximum.
I don’t think that clears anything up. Are they suggesting a “doughnut hole” between $127K and $400K? I doubt it. If so, why?
To me it’s self-evident that tax revenue on incomes from $127K to $400K is the most likely to be realized and over $400K (particularly over $1M) the least likely to be realized. If they’re proposing the “doughnut hole” I’d oppose that and change to my second scenario. That preserves solvency until 2043.
Dave Schuler: That preserves solvency until 2043.
Social Security is currently projected to be solvent until 2037. You’ve bought five years. Better than nothing, but then what?
ETA: The demographic situation is stable beginning in 2035.