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Ronald Reagan’s Message for the GOP, ‘Social Security has nothing to do with the deficit.’
Republicans keep nattering on about how we can fix the deficit by attacking so called “entitlements” of Social Security and Medicare.
Yet, right wing God Ronald Reagan very simply explained the lack of relationship between Social Security and the deficit way back in 1984. He said plain as day, “Social security has nothing to do with the deficit.”
What about this is so hard to get?
At the first Reagan-Mondale debate in 1984, Reagan set the record straight about Social Security. Watch here via Bill Scher and the Campaign for America’s Future‘s Youtube account:
Reagan said, “Social Security, let’s lay it to rest once and for all… Social security has nothing to do with the deficit. Social Security is totally funded by the payroll tax levied on employer and employee. If you reduce the outgo of Social Security, that money would not go into the general fund or reduce the deficit. It would go into the Social Security Trust Fund. So Social Security has nothing to do with balancing a budget or raising or lowering the deficit.”
Why are we still discussing Social Security as relevant to the deficit, and why are the very people who advocate against Social Security the same people who claim to revere Ronald Reagan? We know y’all hate the social safety net, but can we at least agree to deal in real math?
For a real taste of irony for the math impaired, Dan Gross explained that it is the “Republican-designed Medicare Part D prescription drug benefit that threatens to explode entitlement costs, by as much as $1 trillion in 10 years.” You see, Republicans left Medicare Part D unfunded and also left it up to the private sector insurance companies to charge what they wished for the drugs rather than force competition to do its thing.
At least Social Security is funded, which is more than we can say for Republican “entitlements” like wars, corporate subsidies, and tax cuts to the rich. Which party is the fiscally responsible party again?
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11 Responses to Ronald Reagan’s Message for the GOP, ‘Social Security has nothing to do with the deficit.’
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Anne
Dec. 8th, 2012 at 9:00 am
The GOP of the 21st century loves to cherry-pick when it comes to what Ronald Reagan did during his presidency. While a lot of what he did met with their approval, other things he did such as raising taxes 11 times would be a disqualifying act as far as being a Republican in 2012 is concerned. This issue of social security is just one of many in which they are choosing to overlook Reagan’s actual words in order to rationalize going after it. This is just one more thing that proves they are about protecting the wealthy at the expense of everyone else.
joe the economist
Dec. 8th, 2012 at 6:15 pm
Reagan is talking about “deficit” which is a point in time measurement. In 1984, we had raised payroll taxes to a point where it didn’t add to the deficit, provided that you ignore the EITC. So he isn’t being completely honest with the audience. They think he means overtime, and he let them reach the wrong conclusions.
In 2012, Social Security adds significantly to the deficit by dollar for dollar deficit spending subsidies. That is about to get a lot worse.
The people who would like to increase the payroll cap lay the lie clear : The fact is that every said penny could have been collected by the IRS for debt reduction. Social Security does not operate in a vacuum. When you pull in more resources it come from resources that aren’t available elsewhere. In this case you are simply diverting the tax base away from debt reduction to Social Security.
How can you say diverting taxes away from debt reduction to support Social Security doesn’t add to the deficit?
joe the economist
Dec. 9th, 2012 at 8:16 pm
10 Thumbs down but no one contests the fact that pushing new taxes to Social Security away from deficit control … does in fact affect the deficit.
Joe dibenedetto
Dec. 8th, 2012 at 9:58 am
I wish the rest of the Republican Party would listen to him.
Mr Ronald Reagan please teach your party this. They don’t understand
Shiva (Moderator)
Dec. 8th, 2012 at 10:02 am
Unfortunately, SS is something the GOP wants to get rid of. What its related to or not is not relevant to the argument. Reagan is a figurehead now, not someone to be followed.
This is a wholly different and destructive GOP now.
RMuse
Dec. 8th, 2012 at 12:29 pm
This simple fact needs to be driven home so GOP, teabaggers, and libertarians get it. It is our money, our retirement, our retirement healthcare. It is also part of New Deal the GOP has worked to destroy for 75 years, and extremely popular and probably the only fiscally responsible programs in U.S. history, which is why they want it gone. It’s hard to say government is evil when a government program is successful and doesn’t affect the debt.
Ken Hughes
Dec. 8th, 2012 at 12:41 pm
There’s little differance between the GOP and Democrats. Neither party represents “We the People”. As for the GOP representing the rich more
rich people are Democrats than Republicans.
It’s amazing how easly some people can be brain-washed and accept it as fact.
Democrats by nature are the nastiest people in the country and can’t see it.
Aline Kaplan
Dec. 8th, 2012 at 3:24 pm
It’s really very simple. The Republicans are using the deficit boogeyman to go after the social safety net programs that they despise. The facts around Social Security have nothing to do with their crusade. After all, if they really wanted to cut the deficit, they would include the Department of Defense in their attack on government spending. Instead they are aiming directly at programs that help Americans in need. Anyone who thinks that they’re going after Social Security to fix the deficit hasn’t been paying attention.
joe the economist
Dec. 8th, 2012 at 6:04 pm
am sorry to break the news to you. Politicians lie. If Reagan said it, he lied : Social Security was in a state of insolvency at that time because payroll taxes didn’t cover the outflow of the system and the Trust Fund had been liquidated. If you wish, I can tell you how poli-speak makes a lie so confusing that you don’t care.
” If you reduce the outgo of Social Security, that money would not go into the general fund to reduce the deficit. It would go into the Social Security trust fund. ”
That statement is true, but it does not mean that … “So Social Security has nothing to do with balancing the budget or erasing or lowering the deficit.”
In 1984, the general fund subsidized Socail Security in the form of the EITC. That is a dollar for dollar increase in the deficit. We have since expanded the subsidies to include the payroll tax-holiday. The subsidies are in the hundreds of billions of dollars.
If you subscribe to the idea that taxes kill the taxed, a wage tax will kill jobs and depress wages. The consequence of that is felt in income tax collection.
Dan Overmitten
Dec. 9th, 2012 at 8:17 pm
Not that anyone is asking…….Social Security was just fine until Congress decided to raid the fund. Can’t remember the exact date but I believe it was in the 70s. My stanch Republican father pointed that out to me.
joe the economist
Dec. 10th, 2012 at 1:25 am
Dan,
There is virtually no evidence that the funds flowing through Social Security have been misused. According to SSA, 85-90% of all revenue ever collected has been distributed to beneficiaries. SSA in fact classifies the ‘raid’ as an internet myth.
I have seen the accusation thrown at every President since Kennedy. According to SSA, the financial operations of Social Security haven’t change materially since inception.
Some people miscontrude the term on-budget or off-budget to imply greater access to the systems funds. The phrase refers to a reporting of income and expense. Companies like GE for example maintain many different income reports. They have one set for the IRS. They have another for their investors. I imagine that they have a third set for the SEC. How you report income or expense does not change the assets in the system.