Ezra Klein, filling in for MSNBC's Lawrence O'Donnell this Tuesday evening, ended this segment responding to Goldman Sachs CEO, Lloyd Blankfein's assertion that the Social Security retirement age should be raised with a question that we all already know the answer to:
KLEIN: [A]ll these folks who like to talk about raising the Social Security retirement age as if it's a complete no-brainer, they need to think harder about why they have settled on the single cut to Social Security that will concentrate its pain on people who are poor, who haven't fully shared in the remarkable increase in life expectancy and who really don't like going to their jobs every day. Why are they the people who should sacrifice the most on Social Security?
Because they haven't bought the politicians, who as Klein noted, too often are more than happy to stay at their jobs until they drop dead, unlike most Americans out there.
I just want to thank Ezra Klein for saying on television what way too few of his fellow pundits are willing to say out loud. Raising the age equals a cut in benefits for the poor and those who work physical jobs that most people just cannot continue working as we get older and our health declines, and for advocating that the cap be lifted. And for pointing out again what he wrote in his article at The Washington Post last month -- There’s nothing ‘courageous’ about raising the Social Security retirement age.
Here's what Blankfein told CBS's Scott Pelley:
BLANKFEIN: You're going to have to undoubtedly do something to lower people's expectations -- the entitlements and what people think that they're going to get, because it's not going to -- they're not going to get it.
PELLEY: Social Security, Medicare, Medicaid?
BLANKFEIN: You can look at history of these things, and Social Security wasn't devised to be a system that supported you for a 30-year retirement after a 25-year career. ... So there will be things that, you know, the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.
PELLEY: Because we can't afford them going forward?
BLANKFEIN: Because we can't afford them.
We wondered whether he thinks the government needs more revenue in the form of higher taxes.
BLANKFEIN: In the long run, there has to be more revenue. And, of course, the burden of that revenue will be disproportionately taken up by wealthier people. That's just logical.
PELLEY: So higher taxes on wealthier people?
BLANKFEIN: More taxes on wealthier people, to the extent that we need to raise more revenue, and we do need to raise some more revenue.
PELLEY: Why is an increase in revenue, in tax money, necessary? Why can't you just cut your way out of the deficit?
BLANKFEIN: For sure certain people in this country wouldn't like the society you would have if you did that, and personally, I don't think I would like it either, if we went as far as to close our entire budget deficit in that way.
PELLEY: What kind of society would it be?
BLANKFEIN: I think it would be one where the safety net would be more porous and lower to the ground.
Rough transcript of Klein's full response below the fold.
That was Lloyd Blankfein, CEO of Goldman Sachs talking to CBS, and he's not saying anything that people, particularly richer people with a desk job, don't say all the time in Washington and in New York. But it's got to stop. If you want to talk about cutting Social Security, just talk about cutting it. It's a reasonable point of view. You're allowed to hold it, to say it aloud and be straight forward. What makes me disgusted, though, is the cavalierness with which people who get paid a lot of money and who love their jobs, people you'll have to take out of the office on a stretcher when they are 90, the cavalier cavalierness they talk about raising the retirement age.
What Blankfein was saying there is that Social Security wasn't designed for all these old people who live a long time. And to some degree, who cares? The country's economy has grown fifteen fold and one of the things we can buy with that money is a decent retirement for people who don't have jobs they love and who don't want to work forever. That's a gift of a rich society. Moreover, this idea we have gained so many years, it's not true, or at least it's not nearly as true for poor folks who heavily rely on Social Security, as for rich folks who don't need it that much.
As you can see on this graph since 1977 the life expectancy of male workers retiring at 65 has risen a full six years if they are in the top half of the income distribution. If they are not, if they're in the bottom half, it's only risen 1.3 years. So yeah, if you're wealthy, you have many, many years to enjoy Social Security. But if you're not, you don't.
And so making it so people who aren't wealthy have to wait longer to use Social Security is a particularly cruel way to cut the program. And it's not just a cut that is particularly tough on people who died younger. It's a cut that is particularly tough on people who spend their lives in jobs they don't enjoy.
Do you know what age people begin taking Social Security? 65 is what most people think, but they're wrong. If you wait until age 70, you get bigger benefits, but almost no one does that, so that's not the right answer either.
Most people begin taking social security at age 62. That is as early as the law allows you to take your benefits. And when you do that, you get smaller benefits over your lifetime. We penalize you for taking your benefits early. But most people do it any way and they do it because they don't want to spend their whole lives at that job.
Unlike many folks in finance or the U.S. Senate, or the nation's op-ed pages, or who blog and do television shows sometimes, they don't want to work until they drop. And that's what galls me about this easy argument. The people who make it, the pundits and the Senators and CEOs they'll never feel it.
They don't want to retire at age65, or age 67 or even usually 70. But you know what they would feel and what they don't tend to advocate for quite as loudly? Social Security taxes don't apply to income over $110,000 a year. In 2011, Lloyd Blankstein's total compensation, not all of his income, but total compensation, was $16.1 million. That means he paid social security taxes on less than 1% of his compensation.
If we lifted that cap, if we made all income all the way up to $16 million subject to payroll taxes and the Congressional Budget Office estimates that it would do three times as much to solve Social Security's shortfall as raising the retirement age to 70. In fact, that one move, lifting the payroll tax cap, would all at once assure the program's solvency for the next 75 years.
I don't mean to pick on Blankfein here. He's one of the CEOs that's pretty straight forward about that fact that his taxes are going to need go up. But he and all these folks who like to talk about raising the Social Security retirement age as if it's a complete no-brainer, they need to think harder about why they have settled on the single cut to Social Security that will concentrate its pain on people who are poor, who haven't fully shared in the remarkable increase in life expectancy and who really don't like going to their jobs every day. Why are they the people who should sacrifice the most on Social Security?
