No, Ezra Klein, the "Coalition of the Ascendant" Doesn't Want Social Security Cuts

The other day, Wonkblog's wunderkind Ezra Klein embraced the 'generational warfare' narrative, perhaps after spending too much time with WaPo's editorial board.  In his article, Klein highlights the fact that the federal government spends about $7 on the elderly for every $1 on children, and then he tries to sell his readers National Journal writer Ron Brownstein's argument that Obama's budget is actually an embrace of the "coalition of the ascendant" (youth, African Americans, Latinos) instead of the seniors who tend to vote Republican.  "See!" Ezra Klein is saying, "Obama's budget is clever!  He's actually benefiting his base."  That's a different defense than the worn-out 11th dimensional chess argument that one hears all too often; however, it's just as bad, if not much, much worse.

First of all, the Brownstein-Klein argument misses the fact that the members of the "coalition of the ascendant" (in which I, as a twenty-something, would include myself) will eventually retire.  It won't be for another forty years, but it will happen.  Social Security has often been spoken of as one leg in a "three-legged stool" of retirement security--along with pensions and savings.  Private sector pensions have been rapidly disappearing.  In the private sector, the percentage of Americans with pensions fell from 38 percent in 1979 to 15 percent in 2010.  I expect this trend to continue as businesses shift away from defined-benefit pensions to plans like 401(k)s.  Such retirement schemes have been justly criticized as a "failed experiment" because they do not offer the same security as a pension and they entail a number of hidden fees.  And there has been a bipartisan war against public pensions at the same time. So there goes one leg of the stool.

How about savings?  The Wall Street crash depleted some people's savings--or at least cost them dearly.  Currently, because of a mix of bankster greed and Federal Reserve policy, interest rates for savings accounts are near zero.  Before I switched banks, my interest rate was 0.00%.  (I could have gotten the same interest if I put my money in a hole in the ground.  And at least the hole wouldn't falsely foreclose on people.) There goes the second leg of the stool.  Why kick the third?

However, there is also a short-term reason why young people should be interested in preserving and strengthening Social Security and Medicare benefits:  the current employment situation.  Demos, reporting on BLS data from 2012, highlighted the rather bleak climate for today's young people at the start of their careers:

--Over 5.6 million 18 to 34 year olds are actively seeking employment, and an additional 4.7 million were underemployed, working part time or marginalized from the labor market altogether. --The unemployment rate for 18 to 24 year olds with a Bachelor’s degree was 7.7% compared to 19.7% for those with a high school diploma.
--The unemployment rate for 18 to 24 year old African Americans is 25.4%, and 14.8% for 25 to 34 year olds, almost double the rates of unemployment for whites in the same age group, 13.1% and 7.3% respectively.  Young Hispanic workers have an unemployment rate that is 25% higher than white workers.
--Women are much more likely to work in part-time, low-wage jobs than men -- 21% of women aged 18 to 24, compared to 10% for men.
--In 2012, the labor force participation rate of 18 to 24 year olds declined to its lowest point in more than four decades. At the same time, 25 to 34 year olds stopped leaving the job market for the first time since the recession began, but the gains were negligible.

As you can see, the bad economic climate is disproportionately affecting youth, women, and people of color---the "coalition of the ascendant."

Now what does that have to do with Social Security, you ask?  There are two main ways for job opportunities to open up.  Either new jobs have to be created (either through public or private investment), or people have to retire.  When people retire--assuming their employer doesn't eliminate the position or double someone else's work, there will be a new job.  That can produce both opportunities for upward mobility within the organization and external hires.  If seniors feel that they will have sufficient economic security in their retirement, then they will be more likely to retire.  However, if we cut Social Security benefits, means test Medicare, and raise eligibility ages, then we are encouraging seniors to work LONGER, thus preventing these jobs from opening up.

Does the millennial generation even want to cut Social Security?  No.  A poll from this past December found that NO age group thought that reducing the deficit was more important than preserving Social Security and Medicare.  That study showed that young people are unsure if Social Security and Medicare will continue at their current levels and think that such programs may prove a financial burden in the upcoming years.  Despite all that, they STILL did not want to cut the program.  And I'm pretty sure that Alan Simpson dancing Gangnam Style and Alice Rivlin making a Harlem Shake video are not going to change that fact.

The aforementioned poll also noted that young people thought that the government should be spending more on youth than on the elderly.  However, Obama's budget isn't an intergenerational shift.  He pays for universal pre-K with a very flawed funding mechanism.  He is not transferring spending from seniors to the young.  He is transferring money from seniors to the Pentagon.

There is no reason for  increased funding for youth to entail a decrease in funding for seniors.  Government funding is not a zero-sum game, no matter what the Wall Street Journal and the Washington Post editorial board want to believe, because you can always raise the total revenue or (with fiat money) print more money.  Moreover, as Dean Baker at the Center for Economic and Policy Research pointed out, when we talk about government spending on seniors versus children, we're not even asking the right question.  How much is the government spending on the wealthy instead of the children?  Hint:  A LOT MORE.

We could also consider how much the government spends in corporate welfare--from subsidies to tax breaks to no-bid contracts and all the rest.  To start, we know that 26 major corporations paid NO corporate income tax in the past four years.  In honor of tax day, Americans for Tax Fairness released a set of Corporate Tax Dodger playing cards, and the CEOs of companies like Bank of America and Microsoft are calling for cuts to social insurance while not paying their fair share of taxes.  Maybe if they want to "fix the debt," they'll begin by helping to pay it down themselves.

Why don't we ask Bank of America, Microsoft, Verizon, Boeing, GE, and all the rest why they are taking away money from our children and denying them a better future?  Last year, Exxon Mobil ran ads about how much it cared about teachers.  The best way for Exxon to show such support would simply be to pay its taxes.

If cutting Social Security and Medicare aren't part of the agenda of the "coalition of the ascendant," what is?

Well, how about some meaningful action on climate change, such as the legislation that Senators Boxer and Sanders proposed two months ago?  Young people, Latinos, and African Americans all favor bold action on climate change more than the public at large.

Also, reflecting on the bleak economic climate I noted above, some direct spending on job creation---through hiring, not boosting corporate profits through an array of tax cuts--would certainly help the "coalition of the ascendant" as they begin and advance in their careers.

Also, how about a fair path to citizenship that doesn't take 13 years (or more!) and involve over $2,000 in fees?

Those three will certainly win you more political capital with the "coalition of the ascendant" than a Grand Bargain that takes pennies from the rich and dollars from the poor--and forces us deeper in the road to austerity.