Breaking News: September 7, 2001 --
WASHINGTON (CNN) -- Despite White
House and congressional vows not to touch the Social Security surplus, budget
projections now show the federal government may have to do just that -- to
the tune of at least $10 billion, CNN has learned.
Commentary & Charts
[See, Capricorn Ingress , "Dubya" and U.S. Economy for additional background: U.S. Economy/Predictions]
Mark Your Calendars
- Social Security's progressed Asc at 29 Scorpio changes to 0 Sagittarius on December 24, 2001. Ten scant days after the Solar Eclipse at 22 Sagittarius. This eclipse falls on Social Security's North Node (24 Sagittarius). It will set off SS's progressed Saturn (24 Pisces, in the degree of the natal Lunar Node). Progessed Saturn is in square to the natal Lunar Nodes. One would hope that Saturn in Pisces would staunch the Neptunian "leak" of funds out Social Security, but the nodal square (and the eclipse) takes on a Jupiterian flavor: tapping/spending it out/taking another gamble. Social Security's natal Venus at 24 Aquarius is also in nodal degree. The semi-sextile from progressed Saturn (and Saturn is the ancient ruler of Aquarius) seems to point to the shrinkage of resources, not the bountiful releasing of plenty.
Prediction: December 14th's eclipse (just ten days shy of Christmas 2001), will find the consumer fearful and unwilling to jump-start the economy via lavish holiday spending. Check retail sales reports on your local news the day after Thanksgiving. That day is the first "official" day of holiday shopping sprees. Retailer reports will deliver crushing news to the Bush administration: his tax rebate will have failed to bail out the economy. By February-March, 2002, it will impossible for the GOP to avoid the "R" word -- Recession.
- Social Security's Progressed Moon conjoins the USA's second house Pluto (27 Capricorn) two years from today: September 7, 2003. The second house is the peoples' money. The 8th house of the USA's chart is Cancer: Security. Bush's natal Sun and Saturn (limitations) are in the USA's 8th house. Hence, Saturn, "shrinkage of government programs and funding" is the Bush administration's goal.
- Social Security's Solar Arc directed Ascendant is 12 Sagittarius. Transiting Pluto is moving through SS's directed first house just as it is moving through the USA's first house. T-Saturn at 14 Gemini (9/7/01) carries the message: "a harsh battle (1/7 chart axis) over shrinking Social Security Surplus by tapping it for $10 Billion to make up for Bush's insane tax rebate and tax cut programs. When Transiting Saturn reaches 21 Gemini ((first hit, June 29, 2002), it will conjoin the USA's natal Mars (house 7). This appears to be the first opportunity for Congress to get the Bush administration locked into a stalemate. At that time, there may be a window of opportunity whereby Congress will seek to mitigate the damage Bush has done.
- October 10, 2003, Transiting Saturn hits the USA's natal Sun and George Bush's natal Sun. Bush's 12th house and the USA's 8th house (both houses of "endings") may signal a "Dubya Downfall," as Saturn in conjunction to the USA's Sun was the harbinger of Republican Richard M. Nixon's resignation of the Presidency (Watergate). When Saturn reaches 26 Cancer (conjoined to Bush's natal 12th house Saturn), on November 1, 2004, what might this spell for Dubya's re-election possibilities? The Presidential Election is November 5, 2004 (the first Tuesday of November). Transiting Saturn will still be hovering atop Bush's natal Saturn (this also marks his Second Saturn return at age 59 1/2). Since Transiting Saturn will oppose the USA's natal Pluto (and Bush's natal 12th house Saturn), this may be the chief indicator in Bush's downfall. He will not be re-elected.
- The progressed Midheaven conjoins progressed Neptune (17 Virgo) on October 2, 2005. Although it is too early to tell, the next president may become the scapegoat for Bush's rape of the United States's "social security." Undoing Bush's damage, if Ronald Reagan (Reaganomics) is any indicator, then the USA faces at least a ten year cycle of bailing itself out of its growing deficit. The Saturn-Pluto conjunction of 1982 (birth of Reaganomics) at 27 Libra becomes the Saturn-Pluto square to that conjunction in 2020, when Saturn and Pluto meet in Capricorn. The USA's first Pluto return (27 Capricorn) on February 3, 2022 (first hit). We will be two years into the next Jupiter-Saturn conjunction (0 Aquarius) cycle by the time Pluto re-meets the USA's natal Pluto. This conjunction, in Aquarius spells what: The New Tyranny.
I'm Taking The Gloves Off
In Mundane or Political astrology, we look to Uranus for indicators as to how much freedom a government allows its people, and to Saturn for how much restriction a government imposes upon the governed. Winston Churchill said it best: "People do not get the government they want. They get the government they are told they want. (A special thanks to my father, Knute F. Dobkins, former Chairman of the Democratic Party, State of Indiana [two successive terms], who discussed the Churchill issue with me at length in August, 2001).
The inauguration chart's T-Square (Saturn opposite Mars/both in square to Uranus) was the culmination of the three Saturn-Uranus squares of 2000: a "shattering" of the status quo vis a vis Florida's Election 2000 debacle.
First, Americans learned or re-learned what is taught in high school civics classes. The USA is not a Democracy. It is a Federalist Republic. The U.S. Constitution states clearly that no American has the "right" to vote for the President of the United States. Injustice Scalia made that point quite clear in his defense of the X-Treme Court's Per Curiam decision of December 13, 2000.
Americans vote for "Electors" (Electoral College members) who, the voters hope, will faithfuly discharge their duty by casting his/her electoral ballot in favor of the candidate who wins the majority of the votes in each of the 50 states. The fact that most Americans had no inkling of how the Electoral College operates is a sad commentary on U.S. education and the willingness of citizens to learn the actual limits of their rights and do something about it.
Second, Bush's suspicious "win" of the U.S. Presidency ushered in what was already a "known" by the time of the Democratic and Republican conventions of August 2000. The USA was teetering on the brink of a dangerous reversion to fundamentalism -- or what I call the psychic eruption into the collective consciousness of the Old Testament God, Yahweh. Yahweh, the epitome of Saturn-Pluto, is the punisher; the Lord of Karma, or "I am become death, destroyer of worlds." [The Bagavadgita -- Lord Shiva]. Yahweh keeps company with Satan (Saturn) and seeks to resolve His own dualistic dilemma (illustrated in the story of Job) by denying his victim redress through the power of intimidation: "Where were YOU when I created Leviathan? Can YOU make one of those?" The Job story reminds me of Bush a la the Wizard of Oz: "Pay no attention to that man behind the curtain!" There is no reason, no logic, and no remedy for disowned 12th house contents. America, as modeled by the current administration, is lethally infected with Yahweh's shadow: Neptune. Enter the "spin machine." Or Bush's Deux ex Machina: Ari Fleischer, et al. Neptune in Virgo in the USA's 9th house is purity of vision; redemption through Public Relations; and a stacked holy judiciary. I cannot find one scintilla of truth emerging from this White House. It makes Clinton's prevarications about Monica Lewinsky look like child's play. The destablizing factor in American politics makes me wish for a couple of hits of Thorazine.
That insanity being said, look carefully at Bush's Faith-Based Initiative. Apart from the Constitution's strictures against merging Church and State, the Bush Administration seeks to dismantle the Federal Government which still holds the key to many of the freedoms and social programs Americans have come to enjoy. Bush doesn't believe Jesus is the answer. He believes Yahweh is the answer. Bush, with his 12th house Sun conjoined to Saturn, projects personal disownership of his own "sins" outward and expects that redemption will result from having others pay the price. In ancient Rome, the Emperor would often appoint a slave to perform the Emperor's penance. This appeasement-by-proxy was one of the perqs of a slave-based society. Bush, who was bailed out of numerous failed enterprises by Daddy's friends, now expects 12th house bail-outs on a global basis. This flunkie Harvard MBA, with hands firmly on the reins of the U.S. Economy, is little more than a greedy-needy child alone with a cookie jar.
Social Security is not only a Federal Program instituted by a larger-than-life/mythical president (FDR), it is also the legacy TO US of a generation that was called to become much greater than its individual self -- a generation destined to watch the destruction of its highest ideals on a global level (Pluto in Cancer -- the enduring nuclear family) -- and suffered the deprivations of the Great Depression; World War II; and the vision of Hitler's holocaust. Is it too fucking much to ask Bush to remember WHO he is really stealing from?
September 7, 2001 -- by Starcats.
Brief History of Social Security
Social security consists of public programs to protect workers and their families from income losses associated with old age, illness, unemployment, or death. The term is sometimes also used to include a broad system of support for all those who, for whatever reason, cannot maintain themselves (see social and welfare services). In the United States the term has a specific connotation, referring to a complex of national programs that began with the passage of the Social Security Act of 1935 and that are now administered by the Social Security Administration and the Health Care Financing Administration. The principal programs are Old-Age, Survivors, and Disability Insurance (OASDI) and Medicare, which includes Hospital Insurance (HI) and Supplemental Medical Insurance (SMI). They provide direct payments to maintain the income of retired or disabled workers, their dependents, or their survivors and to defray some medical expenses of the long-term disabled and of retirees and their spouses aged 65 and older.
U.S. social security programs are financially self-sustaining. OASDI and HI were set up to be funded on a pay-as-you-go basis through payroll taxes collected in equal amounts from employees and employers during the workers' years of active employment in accordance with the Federal Insurance Contributions Act (FICA), while SMI is financed from premiums paid by the insured and federal general revenues.
HISTORY OF SOCIAL INSURANCE
In its modern form the concept of social insurance may be said to have originated during the Industrial Revolution. The transformation of agrarian nations into predominantly urban, industrialized societies where most citizens worked for wages increased the economic insecurity of the individual and added greatly to the problems of the aged and the disabled. These conditions fostered the belief that society as a whole should bear at least some responsibility for the economic protection of its members. Although the degree to which countries have adopted the concepts of the welfare state varies enormously, the idea that a minimum state social responsibility exists is now almost universally accepted.
In 1883-84, Chancellor Otto von Bismarck of Germany established the first social insurance programs, sickness insurance, and workers' compensation plans supported by the compulsory contributions of workers and employers; in 1889 old-age insurance was added on, to which the government also contributed.
Although France introduced a voluntary national unemployment insurance plan in 1905, little more was done until 1928, when a vast range of compulsory programs was adopted. The 1920s also witnessed the development of national social security plans in many other European nations, in some Latin American countries, and in Japan.
Great Britain instituted a national social insurance scheme, establishing a rudimentary unemployment and old-age insurance program, in 1911. This program was greatly expanded and liberalized in 1925 and again after World War II when a program of "cradle-to-grave security," advocated by Sir William Henry Beveridge, was adopted. New Zealand, under the pressure of economic hardship, adopted a sweeping social insurance and welfare plan in 1938, and Australia gradually instituted a similar program in the late 1930s and 1940s.
Canada introduced a national unemployment insurance program funded by equal contributions from employers and employees in the late 1940s. It also developed an old-age pension program that is financed by general tax revenues and instituted a family allowance plan under which families receive a small monthly payment for each child. In addition, the compulsory Canada Pension Plan is a contributory retirement plan that provides retirement and disability benefits to covered workers. The Guaranteed Income Supplement program ensures a minimum income for persons over age 65.
Countries with Communist governments tended to model their social insurance plans after the all-embracing social security program adopted by the USSR in 1922.
SOCIAL SECURITY IN THE UNITED STATES
The creation of a national social security system in the United States did not come about until the 1930s. The Social Security Act of 1935, passed as part of President Franklin D. Roosevelt's New Deal legislative program, was intended to provide pensions for most retired commercial and industrial workers aged 65 years or more. At the same time it established a joint federal-state system of unemployment insurance.
EVOLUTION OF THE U.S. SYSTEM
Unemployment insurance developed as a joint responsibility of the states and federal government, with the U.S. Department of Labor administering it at the national level. The OASDI program has been the main responsibility of the Social Security Administration, which replaced the original Social Security Board in 1946, became part of the U.S. Department of Health, Education, and Welfare in 1953 (reorganized in 1979 as the Department of Health and Human Services), and became an independent agency of the government on Mar. 31, 1995.
The Social Security Act of 1935 provided retirement benefits only to retired workers themselves. In 1939, however, before any benefits had been paid, the first of numerous extensions to the system provided benefits for survivors and dependents. Later extensions included several classes of workers not covered under the original law. For example, during the 1950s state and local government employees, members of the armed forces, and many farmworkers, domestic workers, and the self-employed were taken into the system. In 1956 the age at which women become eligible for some benefits was lowered from 65 to 62, and in 1961 men were given the option of retiring at age 62 with a reduced level of benefits.
The year 1957 saw the introduction of the national Disability Insurance (DI) program, which established a separate fund to provide cash benefits to workers over age 50 who become totally and permanently disabled. In 1960 the age limit for disability was removed. In 1965, Medicare was introduced, providing medical benefits for those over 65 and creating yet another social security fund to finance them. (In 1965, Congress also established the separate Medicaid program to provide medical benefits for certain categories of the needy poor: children and their caretakers, the elderly, and the disabled.) In 1974 the Social Security Administration established the federal Supplemental Security Income (SSI) program, which took over the responsibility from state-administered programs for furnishing assistance to the blind, disabled, and aged indigent.
In 1972 the Congress introduced an automatic indexing provision to OASDI that raised social security benefits each year to reflect increases in the cost of living. This legislation also provided for automatic increases in the earnings base to finance the higher benefits. However, a flaw in the indexing plan caused benefits to rise much faster than earnings. In 1977, Congress corrected the indexing flaw, raised payroll tax rates and the earnings base, and moved to 1990 a tax rate increase that had been scheduled for 2011. These changes were designed to put the system on a sound financial footing. However, as a result of the rapid inflation, slow economic growth, and high unemployment that characterized the late 1970s, the fund experienced an increasing gap between tax receipts and benefits. Congress eliminated some benefits in 1980 to avoid a further drop in the fund. But the gap between receipts and benefits continued, and so in 1982, Congress allowed the old-age and survivors insurance fund to borrow money from the disability and hospital insurance funds.
In 1983, Congress passed legislation designed to assure the financial health of the system for the next 75 years. The law expanded coverage to federal employees hired after 1983 and to roughly 1 million employees of nonprofit organizations. The legislation also made the benefits of some higher-income beneficiaries subject to federal income taxes, with the proceeds reverting to the trust funds. In addition, the law required a gradual rise in the normal retirement age--from 65 to 67--between the years 2003 and 2027.
As a result of the legislative changes in 1977 and 1983, OASDI revenue began to increase significantly. In addition, social security costs as a percentage of revenues began to decline in the 1980s. This decline occurred because low birthrates in the 1920s and 1930s resulted in a relatively small population of retirees. As a result, the labor force is expected to remain about three times as large as the population of beneficiaries until about 2010. The tax rates are structured so that the baby-boom workers will support the small population of current retirees while they contribute toward their own retirement. OASDI fund reserves will grow until about 2025. After 2025, however, large numbers of baby-boom retirees will begin to draw down the OASDI funds. The Social Security Administration predicts that these funds will be depleted around 2036.
In 1988, Congress passed the Medicare Catastrophic Coverage Act. This act expanded Medicare coverage to protect beneficiaries from financial ruin in the event of serious, long-term illness. Catastrophic hospital insurance took effect in January 1989. Later that year, however, Congress repealed the act after many beneficiaries objected to having to pay a surcharge to cover the costs of the expanded coverage.
BENEFITS AND COVERAGE
Old-age, survivors, disability, and hospital insurance cover about 95 percent of the workers in the United States, including nearly all workers in private industry and most public workers. OASI pays retirement benefits to workers, and, under certain conditions, to their dependents. It also pays a small death benefit upon an insured worker's death when certain eligible survivors are present and provides survivors' benefits to dependents who meet certain stipulations.
The Disability Insurance fund pays benefits to workers with a severe physical or mental condition that has lasted, or is expected to last, at least one year or will result in death. Disabled workers must wait six months before they can collect benefits and must have worked in covered employment for a certain length of time. As with OASDI, the families of disabled workers are also eligible for benefits under certain conditions.
Medicare pays the costs of hospital care, certain skilled nursing facility care, and home health services for retirees or the disabled, through the fund. The program is open to all people aged 65 and older or to those under 65 who have received disability benefits for at least two years. It also covers insured workers and their dependents who suffer from chronic kidney disease. Medicare has an additional, voluntary program, Supplemental Medical Insurance (SMI), that helps pay the costs of physicians' services and other expenditures not covered by HI.
OASDI and HI benefits are financed by the FICA payroll tax, which has risen from a rate of 2 percent at the inception of the program to the current rate of 15.3 percent. The taxable earnings base, or the maximum amount of earnings that can be taxed, has grown over time in line with the growth in average wages. Historically, OASDI and HI used the same taxable earnings base, but this changed with passage of the Budget Enforcement Act in 1990 and the deficit-reduction package of 1993. In 1995 the maximum taxable earnings bases were $57,600 for OASDI and unlimited for HI. SMI is financed by premiums paid by participants and general federal revenues.
For most workers retirement benefits are based on average indexed earnings over a maximum of 35 years. Benefits are not related strictly to earnings, however; the benefit formula is weighted heavily in favor of low-income workers, assuring them of a higher percentage of preretirement earnings than high-wage workers. As noted earlier, workers with dependent spouses also receive additional benefits, regardless of the latter's employment history.
Workers may collect full retirement benefits if they are aged 65 to 69 and their annual earnings do not exceed a certain amount--$11,280 in 1995. At and after age 70 workers are eligible for full retirement benefits regardless of their income. People who delay claiming benefits until after the normal retirement age of 65 receive a higher benefit. Benefits of workers who claim them at 62 are permanently reduced by 20 percent.
Certain other categories of beneficiaries also receive reduced benefits. In 1995 beneficiaries aged 62 to 64 lost $1 in benefits for every $2 they earned over $8,160, while those aged 65 to 69 lost $1 for every $3 earned over $11,280. Some higher-income individuals and couples must pay federal income tax on as much as 85 percent of their benefits. In 1993 this rule was made to apply to individuals whose income exceeded $34,000. In sum, the current social security system encompasses nearly all workers and has been able to combine the insurance objective of wage replacement with welfare concerns.
EQUITY VERSUS ADEQUACY
The 1935 Social Security Act attempted to set up a system under which workers would receive at least as much in benefits as they had contributed (excluding the employer contribution). This goal was considered crucial to public acceptance of a compulsory program. In a social insurance plan, however, where universal and compulsory protection is the goal, individual equity may be de-emphasized in favor of social adequacy--a standard of living below which it is felt no one should fall. This principle was upheld through the weighted benefit formula. In cases in which an individual's contributions do not mandate the socially desired level of benefits, individual equity and social adequacy conflict.
The 1939 amendments to the Social Security Act strengthened the commitment to social adequacy, because the needs of millions of the elderly were not being met by the states' old-age assistance programs. At that time the 1935 principle of a fair rate of return was weakened, and benefits were based on average earnings during a shorter period of coverage than the original base of lifetime earnings.
THE PROBLEM OF FUNDING
The conflict between equity and adequacy has given rise to controversy about whether social security benefits should continue to be financed exclusively by the payroll tax or whether some portion of the program should be funded by another source of revenue, such as the personal income tax. Many consider the payroll tax regressive--that is, excessively burdensome to low-income workers--because they contribute a greater share of their income than do highly paid people. Steep increases in the taxable earnings base, however, have mitigated the regressivity of the payroll tax.
The choice of whether to rely exclusively on the payroll tax or to introduce other types of financing also involves questions about the role of social security and the effect that a change in financing might have. Some persons fear that the use of general funds would lead to excessive expansion of social security at the expense of other government programs. Others are even more opposed to the change because they believe that the program should be wholly divested of its welfare function.
Important factors in the debate are the growing burden imposed by the payroll tax itself and the serious financial problems expected to confront the Social Security system after the turn of the century as the baby-boom generation enters retirement. In the mid-1980s there were five people in their prime working years for every one person aged 65 or older. Under a pay-as-you-go system, an increase in the ratio of beneficiaries to workers would imply an inevitable increase in taxes.
This potential burden was mitigated somewhat by the 1983 legislation, which allowed the funds to accumulate surpluses and essentially temporarily prefund the OASDI expenses associated with the retirement of the baby boomers, although this was not the original intent of the changes. The OASDI funds have been running substantial annual surpluses since 1987 and are expected to continue to do so for some time. The problem is that the prefunding is somewhat illusory. The social security surpluses basically have been used to fund operating deficits in the non-social-security portion of the federal budget. This development has spurred some people to call for a return to straight pay-as-you-go financing and for others to urge productive investment of the fund reserves.
The costs of OASDI benefits seem manageable over the 75-year planning horizon. Even assuming pay-as-you-go financing and taking into account the sharp increase in the ratio of retirees to workers, projected benefits are not expected to exceed 7 percent of gross national product.
The story is different for HI. The HI trust fund is projected to begin running a deficit of annual income relative to benefits in 1996 and exhaust its assets in 2002, with its annual deficit continuing to grow for the rest of the 75-year projection period. These cost trends are not unique to the HI trust fund but rather reflect the cost pressures of health care generally. Expenditures on health care in the United States equaled about 14.2 percent of GDP in 1995, up from 5 percent in 1960. The Advisory Council on Social Security estimated that by 2020 expenditures on health care will consume from 25 percent to 30 percent of GNP. The problems facing HI, then, cannot be resolved in isolation; they must be addressed as part of comprehensive health-care reform.
Alicia H. Munnell, Grolier's Encyclopedia, CD ROM Edition
Bibliography: Aaron, Henry J., et al., Can America Afford to Grow Old? (1989); Advisory Council on Social Security, Income Security and Health Care: Economic Implications 1991-2020 (1991); Bernstein, Merton C. and Joan B., Social Security: The System That Works (1989); Dickens, Thomas L., and Crumbley, D. L., Keys to Understanding Social Security Benefits (1992); Gordon, Margaret S., Social Security Policies in Industrial Countries (1989); Marmor, Theodore R., et al., eds., Economic Security and Intergenerational Justice (1995); Munnell, Alicia H., The Future of Social Security (1977); Myers, Robert J., Social Security, 4th ed. (1992).