There are legends. There is H. L. Hunt – the legendary Texas oilman who parlayed the winnings from a poker game in New Orleans into an oil empire. When he died in Dallas in 1974, at the age of eight-five, he may have had the highest net worth of any individual in the world, depending on how you count. He had a whole lot of children by three wives, and for the television series Dallas he was turned into J. R. Ewing – ruthless and nasty and brilliantly successful because of it – and there are stories:
Madeleine Duncan Brown, an advertising executive who previously claimed to have had an extended love affair and a son with President Lyndon B. Johnson, said that she was present at a party in Clint Murchison’s Dallas home on the evening prior to the assassination of John F. Kennedy that was attended by Johnson as well as other famous, wealthy, and powerful individuals including J. Edgar Hoover, Richard Nixon, and H. L. Hunt. According to Brown, Johnson had a meeting with several of the men after which he told her: “After tomorrow, those goddamn Kennedys will never embarrass me again. That’s no threat. That’s a promise.”
No one ever confirmed that, or Hunt may have been in the bathroom and not heard any of it, but in Oliver Stone’s movie Nixon there’s a parallel to that meeting, with Larry Hagman as Hunt of course. Anthony Hopkins, as Nixon, looks pretty damned uncomfortable with these Texas billionaires talking about bumping off Bobby Kennedy, just like they bumped off his brother Jack, so that Nixon would win in 1968 – and he’d owe them. He’s frightened – he’d been at that first meeting.
Stone omits any reference to Johnson. Stone is more interested in these Texas billionaires who think that they can do anything they want, to get what they want. That’s the legend. Hunt’s son Nelson Bunker Hunt tried to corner the world market in silver in 1979 and was convicted of conspiring to manipulate it all. He went to jail – but he’s the exception. These Texas guys get what they want.
That’s the legend, but not everyone is as cynical as Oliver Stone. There’s that now-famous letter President Eisenhower wrote to his brother, Edgar Newton Eisenhower, on November 8, 1954:
Now it is true that I believe this country is following a dangerous trend when it permits too great a degree of centralization of governmental functions. I oppose this – in some instances the fight is a rather desperate one. But to attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything – even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon “moderation” in government. Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid.
Eisenhower didn’t live long enough to see Larry Hagman turn H. L. Hunt into the villain America loved to hate, but loved anyway. He just found Hunt stupid, but now, as Social Security turns eighty – FDR signed it into law on August 14, 1935 – people are still being stupid. We’ve heard it again and again. Social Security is going to run out of money. We can’t afford this – even if it is self-funded – just look at the numbers:
In 1940, benefits paid totaled $35 million. These rose to $961 million in 1950, $11.2 billion in 1960, $31.9 billion in 1970, $120.5 billion in 1980, and $247.8 billion in 1990 (all figures in nominal dollars, not adjusted for inflation). In 2004, $492 billion of benefits were paid to 47.5 million beneficiaries. In 2009, nearly 51 million Americans received $650 billion in Social Security benefits.
Where is that money going to come from?
It’s there. Mark Henricks explains the current situation:
The rattle in Social Security’s piggy bank will be silenced one year later than previously forecast, according to the latest report from the retirement fund’s trustees. The 2015 edition of the annual summary said Social Security’s trust fund will run out of money in 2034, instead of 2033 as was forecast last year.
If you’re like many Americans, you think that means you’re not going to get anything from Social Security when you retire. A 2015 Pew Research Center survey found 41% of people who had not yet retired believed that by the time they were ready to retire, there would be no money for benefits.
But, while the latest summary bluntly states that the trust fund will be empty in 19 years, that doesn’t mean future retirees will get nothing. Even after 2034 and if nothing is done, Social Security will be able to pay about 77% of the current level of benefits. While that’s not great, it’s not nothing…
So, despite the somber tone of the report, it’s not as bad as it may sound. Nancy Altman, chair of the Washington-based Strengthen Social Security Coalition of about 300 business, labor and other groups, says it’s likely that solutions will be found and future benefits will be preserved. “Today’s younger person especially should have a sense of confidence,” Altman says.
But this is tricky:
The program’s size, the number of people affected and the size of the problems – Social Security will pay $76 billion more than it brings in for the next few years, and it gets worse rapidly after that – make fixing it politically difficult. Potential remedies are limited: raise taxes, reduce benefits or do some combination. Agreeing on details, however, has been elusive.
One suggestion is removing the upper income cap on Social Security taxes. Right now contributors pay 6.2% on every dollar of wages up to $118,500. Employers pay another 6.2%. Raising the cap to $250,000 or so would, by itself, bring in enough additional funds to solve much or most of the shortfall. Many people think this is one of the most likely fixes to be implemented, because it would affect a relatively small number of upper-income earners.
That’s the kind of thing that would outrage H. L. Hunt – it’s better to jack up the retirement age. Make these folks keep working. That’ll do it, and Richard Eskow sees the friends of the billionaires at work now:
At least 14 of the 17 Republican candidates for the presidential nomination have come out for Social Security cuts in some form. Only Mike Huckabee and Donald Trump have indicated they oppose cuts, while Dr. Ben Carson has remained silent on the subject. Republicans also oppose expanding Social Security’s benefits, although polls show overwhelming support for the idea among voters across the political spectrum. But the idea has gained ground among Democrats. Of the three major Democratic candidates for president, only Hillary Clinton has yet to indicate support for a benefit increase. (This week she appeared to move closer to Sen. Bernie Sanders’ plan to increase taxes for very high earners, however, an idea she opposed in 2008.)
That’s a major shift from recent decades, during which “centrist” Democrats from Bill Clinton to Barack Obama indicated their support for benefit cuts – a gesture that was too often taken as a sign of “maturity” or “realism” in the money-fueled Beltway culture.
The shift in Democratic rhetoric seems to reflect a growing awareness of the electorate’s deep satisfaction with Social Security, and its deep commitment to the program’s survival and expansion.
Yeah, Eisenhower did mention that, and elsewhere Eskow adds this:
Few political advisors would suggest running on a platform of open hostility toward the elderly. Most families include an older person, after all, and everyone who lives long enough will become older themselves someday. Seniors vote in greater numbers, too.
That may be why the GOP isn’t openly presenting itself as the “anti-elderly party.” But how else are we to interpret its deeds and actions? Its leading presidential candidates are pushing cuts to Social Security, while its congressional budgets would end Medicare as we know it.
Most older Americans would lose out under these proposals. But billionaires would make out very well indeed.
Wisconsin Governor Scott Walker became the latest Republican to jump on the anti-Social Security bandwagon this week, and he did so in a somewhat tactless way – by suggesting that benefits cuts should be applied to anybody born later than… Scott Walker.
“We’ll talk about reform,” Walker said, “but only for those – I was born on November 2, 1967 – for anybody older than me, we’re not touching social security.”
(“Reform,” in case you haven’t noticed, is a euphemism some people are fond of using when discussing Social Security or Medicare. It means “cuts.”)
And there are pesky details:
A new report from the U.S. General Accounting Office (GAO), conducted at the request of Sen. Bernie Sanders, found that “about half of households age 55 and older have no retirement savings,” and that “many older households without retirement savings have few other resources, such as a defined benefit (DB) plan or non-retirement savings, to draw on in retirement.”
This retirement crisis comes after decades of wealth shifting from the middle class to the wealthy. Wage stagnation has left many Americans living from paycheck to paycheck and unable to save. At the same time, large employers have cut back on traditional pension plans. As a result, the GAO finds that “Social Security provides most of the income for about half of households age 65 and older.”
This is life and death for half the households in question, and that calls for a bit of Paul Krugman:
The retirement program is, of course, both extremely popular and a long-term target of conservatives, who want to kill it precisely because its popularity helps legitimize government action in general. As the right-wing activist Stephen Moore (now chief economist of the Heritage Foundation) once declared, Social Security is “the soft underbelly of the welfare state” – “jab your spear through that” and you can undermine the whole thing.
But that was a decade ago, during former President George W. Bush’s attempt to privatize the program – and what Mr. Bush learned was that the underbelly wasn’t that soft after all. Despite the political momentum coming from the GOP’s victory in the 2004 election, despite support from much of the media establishment, the assault on Social Security quickly crashed and burned. Voters, it turns out, like Social Security as it is, and don’t want it cut.
It’s remarkable, then, that most of the Republicans who would be president seem to be lining up for another round of punishment.
It’s remarkable, but they are lining up:
In particular, they’ve been declaring that the retirement age – which has already been pushed up from 65 to 66, and is scheduled to rise to 67 – should go up even further.
Thus, Jeb Bush says that the retirement age should be pushed back to “68 or 70”. Scott Walker has echoed that position. Marco Rubio wants both to raise the retirement age and to cut benefits for higher-income seniors. Rand Paul wants to raise the retirement age to 70 and means-test benefits. Ted Cruz wants to revive the Bush privatization plan.
For the record, these proposals would be really bad public policy – a harsh blow to Americans in the bottom half of the income distribution, who depend on Social Security, often have jobs that involve manual labor, and have not, in fact, seen a big rise in life expectancy. Meanwhile, the decline of private pensions has left working Americans more reliant on Social Security than ever.
And no, Social Security does not face a financial crisis; its long-term funding shortfall could easily be closed with modest increases in revenue. Still, nobody should be surprised at the spectacle of politicians enthusiastically endorsing destructive policies.
That’s not the problem:
What’s puzzling about the renewed Republican assault on Social Security is that it looks like bad politics as well as bad policy. Americans love Social Security, so why aren’t the candidates at least pretending to share that sentiment?
There is an easy answer. Big money:
Wealthy individuals have long played a disproportionate role in politics, but we’ve never seen anything like what’s happening now: domination of campaign finance, especially on the Republican side, by a tiny group of immensely wealthy donors. Indeed, more than half the funds raised by Republican candidates through June came from just 130 families.
And while most Americans love Social Security, the wealthy don’t. Two years ago a pioneering study of the policy preferences of the very wealthy found many contrasts with the views of the general public; as you might expect, the rich are politically different from you and me. But nowhere are they as different as they are on the matter of Social Security. By a very wide margin, ordinary Americans want to see Social Security expanded. But by an even wider margin, Americans in the top 1 percent want to see it cut. And guess whose preferences are prevailing among Republican candidates.
There’s now a new reason for that:
You often see political analyses pointing out, rightly, that voting in actual primaries is preceded by an “invisible primary” in which candidates compete for the support of crucial elites. But who are these elites? In the past, it might have been members of the political establishment and other opinion leaders. But what the new attack on Social Security tells us is that the rules have changed. Nowadays, at least on the Republican side, the invisible primary has been reduced to a stark competition for the affections and, of course, the money of a few dozen plutocrats.
Their number is negligible and they are stupid, but they’ve got the money:
What this means, in turn, is that the eventual Republican nominee – assuming that it’s not Mr. Trump – will be committed not just to a renewed attack on Social Security but to a broader plutocratic agenda. Whatever the rhetoric, the GOP is on track to nominate someone who has won over the big money by promising government by the 1 percent, for the 1 percent.
And they met in a dark room in Texas. No, wait. Sheldon Adelson is in Las Vegas. The Koch brothers run their empire out of Kansas City and one of them lives on the Upper East Side. Texas isn’t where it’s at now, as if it matters. An assessment from back in April at Salon.com:
Rand Paul: The junior senator from Kentucky says raising the retirement age is the “only way” to manage possible funding shortfalls in the future. Paul bluntly told an Iowa audience that life expectancy is now 80 years old, but this simply isn’t true for many Americans. Black men, for example, have a life expectancy of closer to 71 years.
Lindsey Graham: Sen. Lindsey Graham (R-SC) has yet to declare, but he is strongly considering a White House bid, saying only the amount of money it takes to win is an obstacle. At the end of 2012, Graham threatened to refuse to raise the debt ceiling unless the age of retirement for Social Security was hiked, saying that the “debt problems” of the country must be dealt with first. Yet Social Security doesn’t add a dime to the deficit, as even GOP President Ronald Reagan admitted. [He did.]
Chris Christie: Christie put out the most detailed plan for Social Security and Medicare of any of the nominees, calling for a new retirement age of 69 (it is currently 65 and on its way to being hiked to 67). He also has the wrinkle of means-testing the program, paring back benefits for those earning $80,000 of additional income and eliminating them at $200,000, a move that is likely to put the upper echelons of the middle class and everyone above that against everyone below.
Jeb Bush: Bush announced his support for raising the retirement age last week. His brother George W. Bush was the president who overreached in trying to privatize Social Security, dealing his party huge losses.
From Paul Campos:
Nothing calls for a quasi-Maoist intervention more than when a bloviating politician opines that it’s no big deal to raise the retirement age to 70, because after all people are living so much longer these days, and work has all sorts of social and even spiritual benefits. Anyone who says things like that should be forced immediately to shingle a roof in San Antonio, preferably in August.
But let’s go back to 1935:
“Never in the history of the world has any measure been brought here so insidiously designed as to prevent business recovery, to enslave workers and to prevent any possibility of the employers providing work for the people,” said Rep. John Taber (R-NY).
“The lash of the dictator will be felt,” said Rep. Daniel Reed (R-NY), “and 25 million free American citizens will for the first time submit themselves to a fingerprint test.”
Rep. James W. Wadsworth (R-NY) cautioned that passage of Social Security would open the door to a government power “so vast, so powerful as to threaten the integrity of our institutions and to pull the pillars of the temple down upon the heads of our descendants.”
And this happened:
Payroll taxes were first collected in 1937, also the year in which the first benefits were paid, namely the lump-sum death benefit paid to 53,236 beneficiaries.
The first reported Social Security payment was to Ernest Ackerman, a Cleveland motorman who retired only one day after Social Security began. Five cents were withheld from his pay during that period, and he received a lump-sum payout of seventeen cents from Social Security.
The first monthly payment was issued on January 31, 1940 to Ida May Fuller of Ludlow, Vermont. In 1937, 1938, and 1939, she paid a total of $24.75 into the Social Security System. Her first check was for $22.54. After her second check, Fuller already had received more than she contributed over the three-year period. She lived to be 100, and she collected a total of $22,888.92.
These two were obviously Takers, not Makers, and thus America was ruined forever. Or it was saved. H. L. Hunt doesn’t always get his way. On the March 21, 1980, episode of the “Dallas” show someone shot J. R. – and everyone knew he had it coming.