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Trumplandian Feudalism: Employ the Unemployed While Still Starving Them

Something odd is going on in the White House. Donald Trump just did a massive flip-flip. Ok, it’s not that odd. But it’s still somewhat odd because it’s unclear if he actually did the flip-flop or is attempting to hold two mutually exclusive views simultaneously. You see, Donald Trump used to say the US unemployment rate was a complete fraud and actually much, much worse than the headline sub-5 percent unemployment rate makes it out to be. Like closer to 42 percent. That’s what Trump said over and over on the campaign trail and since getting elected while lamenting that 94 million American adults are “out of the labor force” (which includes all retirees and students). But all of sudden that changed and now Donald Trump is super excited about the official unemployment rate. Why? Because the jobs report for the first full month of his presidency just came in and it wasn’t too shabby [1].

So did Trump suddenly drop his oft-repeated criticism of tradition unemployment reporting? Well, as we’re going to see, probably not because his administration is still planning on redefining the “official” unemployment rate to be much “looser” [2] and his claims that 42 percent if American adults are out of work are necessary to achieve a long-held GOP goal championed by House Speaker Paul Ryan: converting the US safety-net – including Medicare, Medicaid, and Social Security – into a “work for a pittance to get a pittance of government support”-net that traps the poor in system where if you have to find full time work to get any help at all [3]. Maybe [4] even [5] for the elderly. And the help you get in return for that work-requirement will keep shrinking year after year. It’s a plan that can’t happen unless almost all non-working adults are defined as “unemployed”. So, no, Trump didn’t change his mind. He just still thinks we’re all stupid [6] (maybe [7]).

***

The jobs report for the first full month of the Trump presidency came in at a robust 235,000 new jobs and the unemployment rate dropped to 4.7 percent. Not too shabby for the first month and as one might imagine Donald Trump was quite pleased. And tweet-happy. But as one might also imagine, the fact that Donald Trump was so pleased has less to do with anything Trump actually did (235,000 new jobs a month is roughly inline with the last four years [8]), and more to do with his fanciful imagination. In this case, it’s Trump’s imaginative hallucination that we wouldn’t all notice that he called the unemployment rate completely fake – and possibly 42 percent – right up to the moment that this jobs report came out [1]:

Fortune

The White House Is Celebrating Jobs Numbers President Trump Used to Call ‘Phony

Tessa Berenson
3/10/2017 4:32 PM Central

The Trump Administration is celebrating the Department of Labor’s latest jobs report [9]. But in the past President Trump has called the same monthly report “phony” and a “hoax.”

Friday morning the president retweeted [10] a Drudge Report link to the numbers that said “GREAT AGAIN: +235,000.” (Employers added 235,000 new jobs in February, bringing the unemployment rate down to 4.7%, the report found.)

White House spokesman Sean Spicer tweeted that the report is “Great news for American workers” and “Not a bad way to start day 50 of this Administration.”

Other Administration officials touted the numbers as well, including Chief of Staff Reince Priebus [13] and Vice President Mike Pence [14].

‘Phony’ and a ‘joke’

During a press conference in 2015, Trump said the unemployment rate, then at 5.1%, was too low to accurately capture the real economic situation in the country. He called it “such a phony number” and said, “the number isn’t reflective … 5.3 percent unemployment, that is the biggest joke there is in this country … The unemployment rate is probably 20 percent, but I will tell you, you have some great economists that will tell you it’s a 30, 32. And the highest I’ve heard so far is 42 percent.”

PolitiFact rated [15] Trump’s 42 percent claim “pants on fire” and wrote at the time, “Getting a percentage that high requires believing that being a high school, college or graduate student, a senior citizen, a stay-at-home parent, a job-training participant, or having a disability is no excuse for not holding down a job, or for working less than 40 hours in a week. The highest alternative unemployment-rate measure we could come up with that had any credibility was 16.4 percent, and even that exaggerated figure is only about one-third of the way to Trump’s 42 percent.”

‘One of the biggest hoaxes’

In August 2016, Trump once again claimed that the actual unemployment rate was higher than the jobs report reflected. ” We have the lowest labor force participation rates in four decades,” Trump said in a speech [16] to Detroit Economic Club during the general election campaign. “Fifty-eight percent of African-American youth are either outside the labor force or not employed. One in five American households do not have a single member in the labor force. These are the real unemployment numbers – the five percent figure is one of the biggest hoaxes in modern politics.”

‘Ninety-four million Americans’

During his first address to Congress [17] to Congress, Trump threw out a startling statistic: “94 million Americans are out of the labor force.” But that figure is misleading [18]. Like the other unemployment statistics Trump mentioned as a candidate, it includes retirees, students, stay-at-home parents and people who are disabled—people who are not actively looking for a job. If Trump were being consistent about using that definition, the Administration could not also tout the 4.7 percent unemployment rate from this month’s jobs report.

‘Not a good sign’

In December 2012, the jobs report said employers added 244,000 jobs, about 10,000 more than this week’s report that Trump seems excited about. But at the time, Trump, then a private citizen, was not pleased. “Today’s job report is not a good sign & we could be facing another recession,” he tweeted. “No real job growth. We need over 300K new jobs a month.”

‘Not real’

And here’s a bonus mention for Trump’s new Treasury Secretary Steven Mnuchin. “The unemployment rate is not real,” Mnuchin told the Senate Finance Committee [20] during his confirmation hearing in January. “I’ve traveled for the last year. I’ve seen this.”

PolitiFact rated [15] Trump’s 42 percent claim “pants on fire” and wrote at the time, “Getting a percentage that high requires believing that being a high school, college or graduate student, a senior citizen, a stay-at-home parent, a job-training participant, or having a disability is no excuse for not holding down a job, or for working less than 40 hours in a week. The highest alternative unemployment-rate measure we could come up with that had any credibility was 16.4 percent, and even that exaggerated figure is only about one-third of the way to Trump’s 42 percent.””

Just FYI to all the high school, college or graduate students, senior citizens, stay-at-home parents, job-training participant, and people with a disability. Trump want you to know that there’s no excuse for not holding down a job, or for working less than 40 hours in a week. All 94 million of you.

And in case you’re tempted to assume that Trump’s 42 percent guestimate that he kept mentioning on the campaign trail [21] was merely the high-end of the guestimate range that Trump and threw out there for shock value on the campaign tail but was going to drop once he became president, he wanted you to think otherwise during his first big televised address to Congress:


During his first address to Congress [17] to Congress, Trump threw out a startling statistic: “94 million Americans are out of the labor force.” But that figure is misleading [18]. Like the other unemployment statistics Trump mentioned as a candidate, it includes retirees, students, stay-at-home parents and people who are disabled—people who are not actively looking for a job. If Trump were being consistent about using that definition, the Administration could not also tout the 4.7 percent unemployment rate from this month’s jobs report.

His first address to Congress and he straight up using the 94 million number. This is going to be brutal. And that was during his first address to congress a week and a half ago. Unless he really did drop the 42 percent unemployment meme over the last week and a half and is now relenting on his apparent determination to redefine the unemployment rate as including almost living adult who is not working. Including retirees. And students.

Trump’s Treasury Secretary Agrees. Suddenly. Sort of

And yes, Treasury Secretary Steve Mnuchin echoed Trump during his confirmation hearings by saying he’s changed “unemployment rate isn’t real”:


And here’s a bonus mention for Trump’s new Treasury Secretary Steven Mnuchin. “The unemployment rate is not real,” Mnuchin told the Senate Finance Committee [20] during his confirmation hearing in January. “I’ve traveled for the last year. I’ve seen this.”

Now, it’s important to realize that what Mnuchin said wasn’t an outrageous statement on it’s own, in part because there are many different ways to define an official unemployment rate. It’s a subjective call so there isn’t a “correct” “official” unemployment metric. It just depends on what you want to measure as “unemployed” for the official metric. You can limit it to people actively looking for work (the current “official” rate) or everyone who isn’t working but could work whether they’re actively looking for a job or not. There’s not a “correct” way to do that. There really is a much larger pool of long-term unemployed/under-employed people who would like to work but gave up looking and it’s not unreasonable on it’s own to say “hey we should count those people who gave up looking too”. Although it is unreasonable to suggest that the government isn’t actually looking at that expanded definition of the unemployment rate since those metrics collected and reported.

Also note that when Mnuchin gave his confirmation testimony and echoed Trump’s unemployment rate views it’s pretty unclear what exactly he went when he because, while he didn’t lament that 94 million adults were out of the labor force like Trump did during his congressional address and so many times before, Mnuchin did call for “all potential workers” to be considered in a new unemployment rate. And how you define “all potential workers” is also a subjective call. Is it all the long term unemployed who want and job and those who don’t. Or maybe retirees and students counted in the unemployment rate too. There really are 94 million “potential workers” too, at least potentially if that’s how you want to define all unemployed adults as a “potential worker”. So determining how Mnuchin defines the pool of “potential workers” is pretty urgent as he vaguely describes this plank of the Trump agenda [22]:

The Hill

Mnuchin: Unemployment rate is ‘not real’

By Peter Schroeder – 01/19/17 01:49 PM EST

Steven Mnuchin dismissed the sharp decline in the unemployment rate as “not real,” arguing that the average American still hasn’t felt anything from the economic recovery.

Testifying before the Senate Finance Committee Thursday, Mnuchin said that his travels with President-elect Donald Trump have changed his perspective and argued the nation’s needs a new approach.

In so doing, Trump’s pick to head the Treasury Department dismissed the validity of one of the nation’s central economic guideposts, which currently sits at 4.7 percent.

“I absolutely understand why he got elected,” said Mnuchin. “The average American worker has gone absolutely nowhere. The unemployment rate is not real.”

Republicans have argued in the past there should be more focus on alternate ways to measure the nation’s labor market, noting that potential workers that give up searching for a job after six months are no longer counted as unemployed.

“Republicans have argued in the past there should be more focus on alternate ways to measure the nation’s labor market, noting that potential workers that give up searching for a job after six months are no longer counted as unemployed.”

Who’s not going to be a “potential worker”? That’s a pretty big question. Students who have never worked? Retirees? The disabled? Keep in mind that, there is a kind of value judgement at work for different labels. For instance, if retirees were counted in the “official” unemployment rate that sort of implicitly suggests they should actually be working. Full time. Same with students. And don’t forget that when Donald Trump repeatedly lamented how 94 million Americans were out of the labor force, he was implicitly suggesting retirees, students, and basically all adults capable of working should be working full time. In other words, you retire when you’re either too sick or disabled to work or you die. That’s what’s implied if Trump’s “94 million Americans are out of the labor force” comment is to be taken seriously.

So what percentage of that 94 million pool of adult Americans without full-time work does Treasury Secretary Steve Mnuchin consider “potential workers”? Well, the article below points to a hint Mnuchin gave us back in the beginning of February in his written responses to questions from Senators during his confirmation hearing (the hearing where he referred to “potential workers”. In his written response Mnuchin suggested still using existing Bureau of Labor Statistics (BLS) unemployment statistics as the “official” unemployment rate system, but just using one of the “looser” unemployment rates as the “official” one instead. The BLS system ranges from the “U-1” unemployment rate (narrowest definition of unemployed that isn’t typically seen as very useful) to the “U-6” (all unemployed, underemployed, and people capable of working, but not students and retirees). Currently, the “U-3” rate (unemployed people who have looked for work in the last 12 months) is the “official” unemployment rate.

It’s the U-3 that just came in at 4.7 percent that Trump claims is now suddenly real after claiming for years it was garbage and hiding the real extent of US unemployment because it didn’t count people who want to work but just gave up trying to look. And, again, that’s not an invalid point Trump is making about the inadequacy of the “U-3” rate as an unemployment metric. it’s Trump’s 42 percent/94 million claims that are invalid points because they assume every physically capable adult is working full time. But the points that Trump was also making about the U-3 “official” unemployment rate not capturing what’s really going in the economy isn’t invalid.

There’s no reason we couldn’t follow Trump’s suggestion of using a “looser” definition of being unemployed and, say, call the “U-5” rate (the “U3” plus workers looking for work more than 12 months and workers who are capable and interested in working but haven’t looked for a job for whatever reason in the last four months) the “official rate”. There’s nothing wrong with that as long as we understand how to interpret it. As Paul Krugman pointed out in 2014, there’s a lot of value in looking at “U-3” vs “U-6” rates together just to get a better idea of how much slack there is in the economy (and as Krugman also noted we should apply government stimulus if there’s too much slack) [23].

And as the article below points out, Treasury Secretary Mnuchin suggested in his written response to the Senate that maybe the “U-5” should be the official rate. As the article also notes, the “U-5” was at 5.7 percent in early February (and is presumably lower now). So if shifting to the U-5 rate really is the change to the unemployment rate that the Trump administration is planning on implement, the unemployment rate is going to be permanently higher. And at times perhaps much much higher depending on the slack in the economy. And there’s nothing necessarily wrong with using the U-5. But if the U-5 is what the Trump administration makes the “official” unemployment rate going forward, there’s definitely not going to be an 42 percent unemployment rate any time soon…unless he changes the “U-5” definition to include all 94 million students, the disabled, and retirees out of the labor force, of course [2]:

Bloomberg

Full Employment May Be Redefined as Trump Attacks Benchmark
by Patricia Laya
February 1, 2017, 11:01 PM CST February 2, 2017, 12:15 PM CST

* Treasury nominee says unemployment rate has too much clout
* Main rate is still best indicator, former stats chief says

Just as the U.S. nears full employment based on the principal measure used for almost eight decades, President Donald Trump and his team are looking at new yardsticks.

The jobless rate probably held in January at 4.7 percent, according to the median estimate from economists ahead of Friday’s Labor Department report. Federal Reserve policy makers see such a level — which is down from a post-recession high of 10 percent in 2009 — as being at or near full employment, meaning anything lower would push inflation higher.

While the rate’s use as a chief indicator dates to the Depression era, Trump spent last year’s election campaign calling the measure “phony” and arguing it overstates the strength of the labor market. More recently, his Treasury secretary nominee, Steven Mnuchin, said the number has “excessive influence” over policy and that it fails to account for people who have dropped out of the labor force or aren’t actively looking for work. White House spokesman Sean Spicer said [24] Trump’s economic team will look at a “multitude of statistics” in assessing labor-market strength.

Trump’s officials actually share common ground with Fed Chair Janet Yellen on their support for reviewing a range of labor-market indicators. Yellen has argued in the past that the jobless rate didn’t capture slack evident elsewhere, as the Fed kept interest rates near zero until late 2015. She’s pointed to low levels of labor-force participation and the large number of part-time workers who would prefer full-time employment.

Fed policy makers indicated in their post-meeting statement [25] Wednesday that there’s still room for improvement in the job market. While the unemployment rate “stayed near its recent low” in December, “some further strengthening” is expected in labor conditions.

Comparable Rates

That doesn’t mean central bankers or Labor Department economists are about to abandon the unemployment rate as their main gauge. That figure is the “number that’s most comparable over time and one that’s most comparable internationally,” said former Bureau of Labor Statistics Commissioner Erica Groshen, who left the government last month at the end of her four-year term as President Barack Obama’s appointee to the post.

Mnuchin, in written responses to senators’ questions following his confirmation hearing last month, cited the so-called U-5 rate as an alternative indicator. That rate, which stood at 5.7 percent in December, includes discouraged workers as well as a group called marginally attached workers, who aren’t working or actively looking for work but want a job. Another measure, the U-6 or underemployment rate, was 9.2 percent in December. It also includes part-time employees who want full-time work.

“People change their minds about whether they’re discouraged,” said Groshen, who was previously a Fed economist. “We’ve been measuring the unemployment rate the same way since the 1940s. Most other countries that have an unemployment rate use a definition that’s similar to ours — partly because we created it and because it works.”

While other measures can help give a more nuanced view of the labor market, they don’t go back as far, Groshen said.

Changing the target unemployment rate “would just say to me that you’re confused, that you don’t know what you’re aiming for,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina.

Payrolls, Wages

Friday’s report is projected to show a steadily improving labor market, according to economists’ estimates. Employers probably added 175,000 workers to payrolls in January, an improvement from December, while average hourly wages probably rose 2.8 percent from a year earlier, compared with the 2.5 percent rise in January 2016.

Trump’s skepticism was part of his message that helped him win the 2016 election. The president is “absolutely right in saying that the labor market has much more slack in it than the Fed and other commentators are thinking about,” David Blanchflower, a Dartmouth College economics professor and former Bank of England policy maker, said on Bloomberg Television. “Millions of people voted for Trump saying there are no decent jobs out there and nothing much is changing.”

U.S. efforts to define and measure unemployment stemmed from the Great Depression, when about 13 million people were out of work, amounting to a 25 percent jobless rate. But no one knew these figures at the time or whether they were improving or deteriorating, according to a 2009 paper by BLS economist Steven Haugen.

Researchers devised the methodology, and the monthly employment report began in 1940, based on a regular sample survey of the population. That practice continues today, with about 60,000 U.S. households surveyed each month by the Census Bureau. Payroll figures come from a separate survey of businesses and government agencies.

Since 1940, there have been various reviews of the concept and definition of unemployment, which have resulted only in minor revisions to the official measure, Haugen wrote. A range of alternative metrics, including the U-5 and U-6 rates, were developed in the 1970s.

Such measures now show that the “labor market is tightening,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York.

Political Influence

While the BLS commissioner participates in the drafting of the monthly employment release and approves it, other political appointees aren’t involved, and long-standing guidelines are aimed at avoiding the politicization of the reports, Groshen said. Trump hasn’t named a new BLS chief yet. The position is subject to Senate confirmation.

If the focus is placed on a rate that measures unemployment differently, what would matter is that “you use it consistently over time, both backwards and forward,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh.

Among people out of the workforce, “it’s hard to know how many are legitimately would-be employees,” Hoffman said. Still, “there are people on the sidelines that could come back in, who keep the labor market from being all that tight.”
d
“The spigot keeps twisting a little tighter, but it’s not bone-dry,” he said.

“Mnuchin, in written responses to senators’ questions following his confirmation hearing last month, cited the so-called U-5 rate as an alternative indicator. That rate, which stood at 5.7 percent in December, includes discouraged workers as well as a group called marginally attached workers, who aren’t working or actively looking for work but want a job. Another measure, the U-6 or underemployment rate, was 9.2 percent in December. It also includes part-time employees who want full-time work.”

That’s the line the Treasury is going to walk now that Donald Trump is calling into question the US’s long-standing unemployment rate metric: Use U-5 instead of U-3 as the “official” rate. Which would push it up to a whole 5.7 percent today. And not remotely 42 percent.

So What’s the Official Plan for the “Official” Unemployment Rate? Andy Puzder Gives Us a Clues. An Ominous Clue

So is Mnuchin’s “U-5” proposal reflective of what Trump thinks the “official” unemployment rate should be reset to? Well, don’t forget that Mnuchin delivered his response to the Senate with the “U-5” proposal at the beginning of February and Trump lamented how “94 million Americans are out of the labor force,” at his first speech to Congress at the end of the month.

And at this point who knows which, if any, of Trump’s pre-3/10/2017 (when the February jobs report came out) views on the unemployment rate are still in effect after his bizarre embrace of the jobs report that was in direct contradiction of his bizarre repeated lamentations of the idea that 94 million Americans are out of the labor force. Are there any other clues he’s left for us?

Well, there was one big clue, and it’s an ominous one. The clue came in the form of Trump’s decision to nominate fast-food CEO Andy Puzder as labor secretary. Specially, the clue comes from the choice of Puzder for that labor secretary role and how Puzder’s well known views on replacing all social safety-net and welfare programs with a national work requirement and wage subsidies in the form of the Earned Income Tax Credit (EITC) for low-income worker and how closely those views align with another key figure in this mess: House Speaker Paul Ryan’s desire to do the same. If Trump defines all adults physically and mentally capable of working as “out of the labor force”, that means all recipients of welfare and safety-net programs can be considered eligible for a work-requirement to get their government assistance (with an EITC). And that’s all required if Paul Ryan’s long-held goal of eliminating welfare programs (including Medicaid) can come to fruition.

So first, let’s take a look at the Andy Puzder’s views on replacing all welfare with a check from the government. A check you only get if you’re working in the form of the EITC. If you want food and shelter you’ll need find a job. At minimum wage if that’s all that’s available (perhaps at a fast food restaurant?). And while Puzder isn’t going to be labor secretary because he withdrew his nomination over a variety of personal scandals [26], this was still the well known views of Puzder when Trump selected him. And, again, Puzder’s dream of creating a giant work force of government subsidized minimum wage workers (for the benefit of all employers who might want to employ minimum wage workers) is the same as House Speaker Paul Ryan’s dream. So Puzder’s views on these matters, which he made clear in the following opinion piece he write in 2015, is a big clue as to why Donald Trump keeps talking about 94 million Americans being out of work [27]:

The Hill

More work, less welfare

By Andy Puzder – 06/22/15 06:31 PM EDT

After six years of a recovery that has failed to meaningfully help working-class Americans, our nation is facing a crisis of entrenched poverty and declining opportunity.

Not surprisingly, the number of people dependent on the Supplemental Nutrition Assistance Program (SNAP), federal housing assistance and Medicaid continues to grow. The number of people receiving SNAP benefits (food stamps) alone has doubled since 2008, to 74.7 million; in troubled cities like Baltimore, more than 1 in 3 residents receives them.

These important programs genuinely help people in need, and we are a nation rich enough to assist the economically disadvantaged. But these programs have the unintended consequence of discouraging work rather than encouraging independence, self-reliance and pride.

At quick-service restaurant brands Carl’s Jr. and Hardee’s, we’ve seen these policies’ unintended consequences firsthand.

Consider that some of our crew members are declining promotions to shift leader positions because the increase in income would disqualify them for food, housing, medical or other government benefits.

These promotions are the first step on the ladder to becoming a general manager, potentially making up to $80,000 a year. It’s a shame they’re unable to take a promotion for fear of losing public assistance. Following local minimum wage increases, other employees have refused additional hours or requested fewer hours to keep their incomes below the cutoff for receiving benefits.

Called the “welfare cliff” by policy wonks, this growing trend is little more than people responding to incentives. Simply, people get trapped into working less and keeping valuable benefits over working more and losing them.

For example, eligibility for food stamps ends when annual income exceeds 130 percent of the poverty line, or a little more than $15,000 a year, for an individual. At $8.25 an hour or less, employees can work a full-time schedule of 35 hours a week and still qualify for these benefits. But when the minimum wage increases above this level, as it has recently in many cities and states, employees must reduce their hours to keep their benefits.

Similarly, in most states, Medicaid eligibility ends when annual income exceeds 138 percent of the poverty line. Understandably, some employees choose to work less and keep the thousands of dollars’ worth of benefits instead of working a little more and losing them.

The impact a loss of government benefits has on financial security for people living in poverty can be draconian. It can lock them into poverty by making the chasm between government dependence and independence too broad to cross.

As a result, people forgo opportunity for safety, which prevents them from realizing the independence and self-reliance that come with personal success and a job.

There is a solution that fulfills society’s obligation to help the poor without reducing opportunity: the earned income tax credit (EITC).

The EITC supplements incomes of the working poor through the tax code. Rather than access to myriad and complex government programs, people receive a government check supplementing their paycheck.

As their income from work increases, their government supplement declines. The decline, though, is never so steep that it results in a decline in total income. You make more when you work more, thus rewarding work, without the perverse incentives and massive government bureaucracy that characterize existing social programs.

The IRS recently estimated that nearly 28 million Americans received more than $66 billion in EITC payments in 2013, lifting an estimated 6.5 million people out of poverty, including 3.3 million children. While programs that provide food, housing and medical benefits are certainly important, the EITC is more effective in helping people rise out of poverty. These existing programs should be rolled into an expanded EITC.

The IRS recently estimated that nearly 28 million Americans received more than $66 billion in EITC payments in 2013, lifting an estimated 6.5 million people out of poverty, including 3.3 million children. While programs that provide food, housing and medical benefits are certainly important, the EITC is more effective in helping people rise out of poverty. These existing programs should be rolled into an expanded EITC.

Replace all federal programs that provide food, housing and medical benefits with an expanded EITC (that you only get with a job). That was published view of Trump’s first labor secretary. A view that makes defining a very “loose” definition of the “unemployed” a requirement because you can’t force people getting welfare services (like Medicaid) to work for those benefits if they aren’t considered “unemployed”.

Paul Ryan Gives Us Another Clue: His Long-Held GOP Agenda

So how closely do Puzder’s views on these matters match that of Paul Ryan’s? Well, the last time Ryan issued an poverty-program “reform” agenda it was last year and the agenda was just a vague set of goals that gave little idea of what he actually intended to do (it was a presidential election year) [28]. But we don’t need to guess what Ryan intends, since he’s been very clear when it’s not a presidential election year. Like he made clear in 2014 when he laid out a plan to fold all saftey-net programs in one big program that would be block-granted to states and scheduled to slowly whither away and die as people were pushed onto and expanded EITC (with an implicit work requirement) [3]:

The Nation

Paul Ryan’s Welfare Reform Ideas Are Even Worse Than You Think

Ryan is asking the poor to be more flexible in being oppressed.

By Michelle Chen
August 15, 2014

If you ask congressional conservatives about their plan to revive the economy, you’re not likely to get a very detailed answer, since they tend to doubt that the government is the solution—to a bad economy or anything else. But the neoliberal philosopher king of Capitol Hill, Representative Paul Ryan, has rolled out a plan to reduce government and reduce poverty simultaneously. He calls it “Expanding Opportunity in America”—and he plans to do it by shrinking what’s left of the welfare state.

Under the banner of “flexibility for accountability [29],” Ryan presents an agenda that reflects “deregulation for deprivation,” systematically reducing public assistance in hopes of “incentivizing” people to be somehow less poor. New research shows us that the plan would deepen the damage already inflicted by eighteen years of reforming welfare out of existence.

The centerpiece of Ryan’s latest budget plan is the so-called “opportunity grant,” which consolidates eleven federal programs into a single chunk of funding, including food stamps, subsidized childcare, and housing funds. This ultimately forces welfare admnistrations to parcel out money for, say, rehabilitation programs for people with disabilities, senior centers and subsidized daycare for toddlers, all from the same capped fiscal pot, which in turn dilutes overall funding streams and undercuts resources for directly assisting the poor.

Progressive critics say that this formula has been tried before, with the 1996 welfare reform law [30] that gutted key public assistance programs. Those measures capped benefits and lumped programs into a single pot of funding, with disastrous effects on the poor.

Ryan’s “opportunity grant,” as Bob and Barbara Dreyfuss reported earlier [31], would impose the same austerity two-step of capping and consolidating. Following the “accountability” framework of the current welfare laws, Ryan’s “opportunity” program would impose strict requirements on welfare recipients, which would humiliatingly micromanage their household spending work-related activites.

The program also promotes the Earned Income Tax Credit [32], which subsidizes incomes through income tax refunds, as an alternative to direct cash benefits, suggesting that tax breaks are a form of assistance superior to cash payments.

At the heart of Ryan’s plan is an all-out assault on food stamps. Food stamps are a favorite target for small-government conservatives because (1) they run the way a welfare program should—benefits expand based on people’s need, not the political whims of Capitol Hill; and (2) even though benefits are extremely lean, only a few dollars per day, food subsidies are extremely effective at reducing poverty—so it’s the kind of welfare libertarians hate.

The restructuring proposed in the Ryan Plan, according to an analysis by the CBPP [33], would directly target crucial (and fragile) pillars of the welfare state [34]: because about 80 percent of the Opportunity Grant goes toward food stamps and housing assistance, “the cuts would almost certainly reduce families’ access to these programs, which are effective at reducing poverty—particularly deep poverty.

Although the 1996 welfare reforms were supposed to promote self-sufficiency—and overall poverty has fallen by some measures—CBPP’s longitudinal analyses shows that “deep poverty” [35]—or living on less than roughly $8.50 per day—has actually surged, particularly among children. And according to new research by H. Luke Shaefer and Kathryn Edin, published in Pathways [36], the number of households surviving in extreme poverty, or on less than about $2 per day, has more than doubled since the Clinton-era reforms were enacted.

Although all demographics experienced greater poverty and instability over a fifteen-year period, racial and gender disparities aggravate the effects. Extreme poverty shot up 186 percent among blacks, and 134 percent among whites. While households headed by married couples saw extreme poverty nearly double, single-woman households saw a staggering 230 percent rise.

Today funding for the Temporary Assistance for Needy Families Block Grant [37], the main source for cash assistance, managed jointly by states and Washington, is not only frozen but melting away. TANF has seen much of its value erode through inflation since 1996. According to the CBPP, spending on basic assistance declined in real dollars by 50 percent between 1997 and 2011.

Ryan’s plan, which embraces an elitist concept of flexibility by giving more freedom to employers to pay workers as little as possible and more freedom to officials to cut public spending, encapsulates the free-market logic of empowering capital through the unfreedom of labor. The working poor get to eat all the cake they can get. The hierarchy of employers over workers that the Ryan plan promotes reflects a profound mistrust of, along with social disinvestment from, those who already have the least power over their economic lives.

In contrast to Ryan’s rhetoric, numerous studies show that when entrusted with the flexibility to spend cash assistance [38] however they want, people generally use it to fit their rational needs. These actual studies, of course, defy the stereotypes [39] that the poor would rather splurge on frivolous expenses like cigarettes and beer.

Plus, the dignity of having control over your life—something that chronic poverty tends to rob people of—is priceless. When the economy declines, Schaefer explains, “cash support offers a flexibility to recipients that is absolutely essential if they want to succeed in the labor force. Let’s say someone loses their job and cannot get unemployment insurance (which is pretty common among the working poor). They need some amount of cash to use for the things that will help them find that next job (as long as the government continues to be unwilling to fund jobs of last resort)…. some amount of cash, immediately available when a crisis strikes, is crucial for people to pursue their self interest at the very bottom—and the lack of this is a gap in the current system.”

Ryan is asking the poor to be more flexible in being oppressed—to seize the opportunity to sleep under the bridge of their choice. This rationale presents the poor themselves, not the social system of poverty, as the scourge the government must get rid of. And as long as they’re wiped off the welfare rolls, they really do disappear, in a way. To many in Washington, they were never visible.

“If you ask congressional conservatives about their plan to revive the economy, you’re not likely to get a very detailed answer, since they tend to doubt that the government is the solution—to a bad economy or anything else. But the neoliberal philosopher king of Capitol Hill, Representative Paul Ryan, has rolled out a plan to reduce government and reduce poverty simultaneously. He calls it “Expanding Opportunity in America”—and he plans to do it by shrinking what’s left of the welfare state.

Reducing government programs and reducing poverty simultaneously. That’s the plan. Officially. Unofficially the plan isn’t actually about reducing poverty, but that’s the sales pitch: if we just set bundle all wefare and safety-net programs into one big federal block-grant to states, and then set that block-grant on a schedule for slow (or fast) death, people will be incentivized to find work because their government support will be constantly shrinking and the EITC tax credit for low-wage workers increases:


The centerpiece of Ryan’s latest budget plan is the so-called “opportunity grant,” which consolidates eleven federal programs into a single chunk of funding, including food stamps, subsidized childcare, and housing funds. This ultimately forces welfare admnistrations to parcel out money for, say, rehabilitation programs for people with disabilities, senior centers and subsidized daycare for toddlers, all from the same capped fiscal pot, which in turn dilutes overall funding streams and undercuts resources for directly assisting the poor.

Progressive critics say that this formula has been tried before, with the 1996 welfare reform law [30] that gutted key public assistance programs. Those measures capped benefits and lumped programs into a single pot of funding, with disastrous effects on the poor.

Ryan’s “opportunity grant,” as Bob and Barbara Dreyfuss reported earlier [31], would impose the same austerity two-step of capping and consolidating. Following the “accountability” framework of the current welfare laws, Ryan’s “opportunity” program would impose strict requirements on welfare recipients, which would humiliatingly micromanage their household spending work-related activites.

The program also promotes the Earned Income Tax Credit [32], which subsidizes incomes through income tax refunds, as an alternative to direct cash benefits, suggesting that tax breaks are a form of assistance superior to cash payments.

Are you too poor to afford food, shelter, and medicine? Well, you better find a job at any wage at all and hope the expanded EITC covers the cost of living. Literally living. Have fun bargaining with the boss:


Ryan’s plan, which embraces an elitist concept of flexibility by giving more freedom to employers to pay workers as little as possible and more freedom to officials to cut public spending, encapsulates the free-market logic of empowering capital through the unfreedom of labor. The working poor get to eat all the cake they can get. The hierarchy of employers over workers that the Ryan plan promotes reflects a profound mistrust of, along with social disinvestment from, those who already have the least power over their economic lives.

That’s the plan. And it’s a plan that requires a “loose” a definition of the unemployed as possible. And even if you do have a job and are hoping that EITC government wage subsidy will cover your costs of living, that EITC is going to have to be expanded dramatically if the worker poor of tomorrow aren’t going to be the working deeply-poor [40]:

Center on Budget and Policy Priorities

Commentary: The EITC Works Very Well – But It’s Not a Safety Net by Itself

March 26, 2014
by Sharon Parrott

House Budget Committee Chairman Paul Ryan’s recent report on safety net programs rightly praised the Earned Income Tax Credit (EITC) for reducing poverty and promoting work. But, Ryan’s report criticizes much of the rest of the safety net. And, over the past several years, Chairman Ryan’s budget plans have targeted low-income programs such as SNAP (formerly food stamps) and Medicaid for extremely deep cuts. While it’s heartening to hear Chairman Ryan trumpet the EITC’s success, policymakers need to understand that the EITC alone can’t do what’s needed to ameliorate poverty and hardship.

The EITC serves a specific role in our safety net: easing the taxes and supplementing the wages of low-income working families. It promotes work by providing the most help to families with significant earnings. A single parent with two children, for example, must earn between $13,650 and $17,850 in 2014 to qualify for the maximum credit. Those earnings are modest, to be sure, but most people in this earnings range work most of the year and work at least 30 hours per week when they have a job. In short, they have significant attachment to the labor force.

Here’s what the EITC (and its sibling the Child Tax Credit or CTC, which helps offset the cost of raising children) are not designed to do — and cannot do without other safety net programs:

* Help people who are out of work or can’t work. The EITC and CTC are designed to help families with at least modest earnings. But, some people don’t have jobs, particularly in a weak economy, or have long periods of unemployment during a year. Others can’t work due to illness or disability or the need to care for an ill or disabled child. Still others can’t work because they have young children and can’t earn enough to afford child care.

Without programs such as SNAP, Supplemental Security Income (SSI), and Medicaid, people in these families, including millions of children, couldn’t put food on the table, keep a roof over their head, and get needed health care. Helping them isn’t only the right thing to do — it’s also an investment in children. Research shows that basic assistance to children not only reduces short-term hardship but also improves their academic performance and long-term prospects. And, Medicaid coverage enables children to receive preventive care as well as treatment for everything from ear infections to cancer.

* Keep people out of “deep poverty.” Because the EITC and CTC aren’t targeted to the very poorest families, they don’t do much to keep people out of deep poverty, or above half the poverty line. Overall, the EITC and CTC plus other programs targeted on low-income individuals — such as SNAP, SSI, and Temporary Assistance for Needy Families — kept an estimated 15 to 20 million people above halfthe poverty line (about $11,000 for a family of three) in 2010. (That estimate is based on the federal Supplemental Poverty Measure, which most analysts favor. The upper end of the range reflects estimates based on Urban Institute data that correct for the underreporting of government benefits.) Roughly 70 to 80 percent of these people would have remained in deep poverty if the EITC and CTC were the only forms of income-tested assistance for very poor families (see Figure 1).

* Help families get health care. The average EITC benefit for families with children was $2,254 in 2011 — not enough to buy health insurance for a family or pay health care bills when someone gets sick or needs expensive medications. The programs designed to help low-income people get decent health care are Medicaid, the Children’s Health Insurance Program, and subsidies to buy private coverage through health reform’s new marketplaces, not the EITC.

* Help families on a monthly basis. Recipients get their EITC and CTC for the year in one lump sum when they file their income tax return. That works fine for many working families, helping them save for larger expenses and budget for the coming year, but poorer families and families whose incomes drop sharply due to a mid-year job loss need help during the year. And, for families that need significant help with large monthly expenses — such as putting groceries on the table and paying high rent or child care costs — monthly assistance programs are often a better fit. If a new mother needs help paying for child care to go back to work, for example, a tax credit that she needs earnings to qualify for and doesn’t arrive until she files her tax return the following winter or spring isn’t going to help her get back to work.

* Serve as an automatic stabilizer for the economy in recessions. Programs like unemployment insurance, SNAP, and Medicaid automatically expand during recessions when more people lose their jobs and need help. Since the EITC only goes to people who work, in contrast, it doesn’t help those who are out of work throughout the year. And, for people who still have earnings but whose earnings shrink during a downturn, the EITC rises for some, but falls for others. A recent study found that the EITC is only weakly counter-cyclical — that is, it expands only a small amount overall when unemployment rises.[1] For single-parent families, the largest group of EITC recipients, the study found “no evidence that the EITC stabilizes income” overall as unemployment rises. By contrast, other programs such as unemployment insurance and SNAP are far more responsive to increases in unemployment, according to the study.

The bottom line? The EITC is a critically important and highly effective part of the safety net, but it can’t — and wasn’t meant to — stand alone as our answer to poverty.

“The EITC and CTC are designed to help families with at least modest earnings. But, some people don’t have jobs, particularly in a weak economy, or have long periods of unemployment during a year. Others can’t work due to illness or disability or the need to care for an ill or disabled child. Still others can’t work because they have young children and can’t earn enough to afford child care.”

Can’t afford to eat? Well, you better find a job, any job, if you want to eat in the America Paul Ryan and Donald Trump want to make. And if the economy sucks that’s tough so you better not complain about your working conditions.

And if you think that this agenda is just going to impact low-income workers (and you’re sick enough not to care about their plight), keep in mind that the creating a sea of millions desperate workers who will work at just about any wage under any conditions just to get enough government assistance for basic food and shelter is a recipe for dragging down wages everywhere but the top. Imagine all the people who aren’t currently working and aren’t looking for work for whatever reason – maybe they can’t find any jobs that aren’t paying poverty wages or maybe they have physical or mental health issues that make employment difficult but don’t entirely prevent them from working – and now imagine them being forced to take any job at all at any wage just to get the most basic government assistance. How is that going to do anything other than drive down wages?

And What About the Poor Retirees. They’ll Might Need to Work For Thier Government Pittance Too

Now, so far, all the proposed changes to the “official” unemployment rate and how that ties into the broader agenda to replace the safety-net with a work-requirement and an inadequate government check haven’t involved programs for retirees. But don’t forget that in addition to the block granting of Medicaid – with the idea of steadily shrinking it to death which is already part of Paul Ryan’s Obamacare replacement proposal [41]Paul Ryan and the GOP has also championed a similar idea for retirees: voucherizing Medicare [42]. And ensuring those vouchers shrinking every year while the eligibility age is steadily ratcheted up. And if you’re a poor retiree who can’t afford health insurance with your future Medicare voucher, there’s also the option of bankrupting yourself and going on Medicaid…which just might include a work-requirement to receive after it gets block-granted if you particular state decides to implement a Medicaid work requirement that includes seniors. This is all on the agenda even if Paul Ryan, Trump, and the rest of the GOP don’t want you to know it [4]:

The Huffington Post

Not Just Obamacare: Medicaid, Medicare Also On GOP’s Chopping Block
The health care safety net as we know it could be bound for extinction.

By Jonathan Cohn , Jeffrey Young
11/15/2016 11:50 am ET | Updated Nov 15, 2016

Donald Trump and Republican leaders in Congress have made clear they are serious about repealing Obamacare, and doing so quickly. But don’t assume their dismantling of government health insurance programs will stop there.

For about two decades now, Republicans have been talking about radically changing the government’s two largest health insurance programs, Medicaid and Medicare.

The goal with Medicaid is to turn the program almost entirely over to the states, but with less money to run it. The goal with Medicare is to convert it from a government-run insurance program into a voucher system – while, once again, reducing the money that goes into the program.

House Speaker Paul Ryan (R-Wis.) has championed these ideas for years. Trump has not. In fact, in a 2015 interview [43] his campaign website highlighted, he vowed that “I’m not going to cut Medicare or Medicaid.” But the health care agenda on Trump’s transition website, which went live Thursday, vows [44] to “modernize Medicare” and allow more “flexibility” for Medicaid.

In Washington, those are euphemisms for precisely the kind of Medicare and Medicaid plans Ryan has long envisioned. And while it’s never clear [45] what Trump really thinks or how he’ll act, it sure looks like both he and congressional Republicans are out to undo Lyndon Johnson’s health care legacy, not just Barack Obama’s.

Of course, whenever Trump or Republicans talk about dismantling existing government programs, they insist they will replace them with something better – implying that the people who depend on those programs now won’t be worse off.

But Republicans are not trying to replicate what Medicaid, Medicare and the Affordable Care Act do now. Nor are they trying to maintain the current, historically high [46] level of health coverage nationwide that these programs have produced. Their goal is to slash government spending on health care and to peel back regulations on parts of the health care industry, particularly insurers.

This would mean lower taxes, and an insurance market that operates with less government interference. It would also reduce how many people get help paying for health coverage, and make it so that those who continue to receive government-sponsored health benefits will get less help than they do now.

It’s difficult to be precise about the real-world effects, because the Republican plans for replacing existing government insurance programs remain so undefined. Ryan’s “A Better Way” proposal [47] is a broad, 37-page outline [48] without dollar figures, and Senate Republican leaders have never produced an actual Obamacare “replacement” plan.

But the Republican plans [49] in circulation, along with the vague – and shifting – health care principles Trump endorsed during the campaign, have common themes. And from those it’s possible to glean a big-picture idea of what a fully realized version of the Republican health care agenda would mean.

Medicaid

As of August, 73 million Americans [50] had benefits from Medicaid or the Children’s Health Insurance Program, according to the Centers for Medicare and Medicaid Services, which doesn’t break up the numbers for the two programs. All but around 16 million [50] of them are covered by pre-Obamacare rules, but all Medicaid beneficiaries stand to be affected by the GOP’s plans.

Until the Affordable Care Act, working-age adults without disabilities were ineligible for this benefit [51] in most cases, with some exceptions, including low-income pregnant women and very poor parents [51] of children who qualified for Medicaid or CHIP.

As an entitlement like Medicare and Social Security, Medicaid gets however much money [52] it takes to cover the medical expenses for everyone enrolled.

Over a 10-year time period, the Medicaid plan the House Budget Committee approved [53] this year would reduce federal spending on the program by about one-third, or roughly $1 trillion [54], not even counting the effects of repealing Obamacare’s expansion of the program, according to the Center on Budget and Policy Priorities.

Repealing the Affordable Care Act and its Medicaid expansion fully would eliminate the coverage for the roughly 16 million people [50] the Centers for Medicare and Medicaid Services reports have enrolled under this policy.

The federal government paid for 62 percent [55] of the $532 billion [56] in Medicaid expenditures in fiscal year 2015, the most recent year for which such a breakdown is available. In 25 states [57], the federal share of spending is higher still [55], so even states that may want to maintain today’s Medicaid benefits would find it extremely difficult, if not impossible [58], to replace the federal dollars that would disappear under GOP proposals.

One result could be 25 million fewer [59] Medicaid beneficiaries, according to the RAND Corp.’s analysis of Trump’s plans.

Trump and other Republicans have long promoted “flexibility” that would enable states, which jointly finance and manage Medicaid with the federal government, to alter the program.

While this may seem on its face like simple federalism, the purpose is not to allow states to cover as many people as they do now in different ways, but to significantly reduce federal spending on Medicaid and to permit states to cut back on who can receive Medicaid coverage and what kind of benefits they have.

Ryan’s latest version [47] of this 35-year-old idea [60] would establish either “block grants” to states – that is, a flat amount of money each state would get from the federal government each year to spend on Medicaid as they like – or “per capita allotment” – meaning a flat amount of money for each person enrolled. These approaches would differ [61] in terms of how much money states would receive yearly and how much the funding would increase from year to year.

In any case, the funding wouldn’t be high enough to maintain current coverage, inevitably leading to millions of currently covered individuals losing their benefits. And the financing would grow at a slower rate than health care costs, portending more lost coverage over time. For those who remain on Medicaid, Ryan would permit states to charge them monthly premiums and add other strings [48], such as a work requirement.

Medicare

The Medicare revamp [62] in “A Better Way” would result in wholesale changes [63] to the entitlement – ones that would realize Ryan’s long-term goal of privatizing [64] the program.

Today, most of the 55 million Medicare beneficiaries enroll in the traditional, government-run program and then buy private supplemental insurance to cover remaining out-of-pocket costs. A sizable minority opts to buy private insurance plans, through the Medicare Advantage program. The government regulates these plans tightly, to make sure they provide coverage at least as generous as the traditional Medicare program does.

Ryan would replace [65] this arrangement with a “premium support [66]” system, under which each senior would get an allotment of money – a voucher, in other words – he can use to get insurance. When Ryan introduced the first formal version of his proposal, in 2010 [67], he envisioned ending the traditional government program altogether. Now he says it should continue to exist alongside the private plans, competing with them for business..

What would this mean for beneficiaries? A great deal would depend on details Ryan has yet to provide, particularly when it comes to the value of that voucher – and how quickly it would increase every year – compared to the cost of the insurance. But the whole point of the system is to ratchet down the value of the vouchers over time.

That would reduce spending on Medicare, which Ryan always says is a goal, and some seniors would likely end up saving money, because they could easily switch to cheaper plans. The question would be what happens to everybody else. Without adequate regulation [66] of benefits and other safeguards tailored to the special needs of an older, frequently impaired population of seniors, the consequence of moving to premium support could be higher costs for individual seniors who have serious health problems – with low-income seniors feeling it most intensely.

If at the same time Republicans shrink Medicaid, those seniors will suffer even more, since today the poorest seniors can use the program to pay for whatever medical bills Medicare does not.

Ryan promises that the proposal would not affect seniors who are 55 or older, since the new system wouldn’t begin operating for 10 years. But realistically the entire Medicare program would change once premium support took effect – private plans would almost certainly find ways to pick off the healthiest seniors, for instance – and, at best, the damage would simply take longer to play out.

Ryan’s Medicare scheme includes one other element – a provision to raise the eligibility age [68] gradually, so that seniors would eventually enroll at 67, rather than 65. Particularly in a world in which the Affordable Care Act no longer exists, 65- and 66-year-olds searching for private coverage would find it harder to obtain, more expensive and less generous than what they’d get from Medicare today.

The end result would almost surely be higher out-of-pocket costs for those younger seniors – and a significant number of them, maybe into the millions, with no insurance at all.

“But Republicans are not trying to replicate what Medicaid, Medicare and the Affordable Care Act do now. Nor are they trying to maintain the current, historically high [46] level of health coverage nationwide that these programs have produced. Their goal is to slash government spending on health care and to peel back regulations on parts of the health care industry, particularly insurers.”

Yep, the goal isn’t “repeal and replace” Obamacare as Republicans made their rallying cry. The goal is “repeal all entitlements and replace them with something steadily cheaper”. That’s it. That’s the goal. And that means things like turning Medicare into a steadily shrinking voucher and converting Medicaid into steadily-shrinking block grants that can include things like work-requirements:


Ryan’s latest version [47] of this 35-year-old idea [60] would establish either “block grants” to states – that is, a flat amount of money each state would get from the federal government each year to spend on Medicaid as they like – or “per capita allotment” – meaning a flat amount of money for each person enrolled. These approaches would differ [61] in terms of how much money states would receive yearly and how much the funding would increase from year to year.

In any case, the funding wouldn’t be high enough to maintain current coverage, inevitably leading to millions of currently covered individuals losing their benefits. And the financing would grow at a slower rate than health care costs, portending more lost coverage over time. For those who remain on Medicaid, Ryan would permit states to charge them monthly premiums and add other strings [48], such as a work requirement.

Today, most of the 55 million Medicare beneficiaries enroll in the traditional, government-run program and then buy private supplemental insurance to cover remaining out-of-pocket costs. A sizable minority opts to buy private insurance plans, through the Medicare Advantage program. The government regulates these plans tightly, to make sure they provide coverage at least as generous as the traditional Medicare program does.

>Ryan would replace [65] this arrangement with a “premium support [66]” system, under which each senior would get an allotment of money – a voucher, in other words – he can use to get insurance. When Ryan introduced the first formal version of his proposal, in 2010 [67], he envisioned ending the traditional government program altogether. Now he says it should continue to exist alongside the private plans, competing with them for business..

What would this mean for beneficiaries? A great deal would depend on details Ryan has yet to provide, particularly when it comes to the value of that voucher – and how quickly it would increase every year – compared to the cost of the insurance. But the whole point of the system is to ratchet down the value of the vouchers over time.

If at the same time Republicans shrink Medicaid, those seniors will suffer even more, since today the poorest seniors can use the program to pay for whatever medical bills Medicare does not.

Shrinking Medicare by pushing health care costs onto seniors, which will push more seniors onto Medicaid, whil simultaneously shrinking Medicaid and giving states the option creating things like work-requirements to get it. That’s the plan. And while President Trump hasn’t formally agreed to that plan, don’t forget that his “94 million out of the labor force” comments that he repeatedly made implicitly assumes that all retirees are potential employees.

And then there’s the fact that privatizing (and cutting) Social Security is very much part of the GOP/Ryan agenda too [69].
:

Forbes

Why Social Security Cuts Are Still In GOP Agenda

John Wasik
Mar 10, 2017 @ 09:19 AM

Despite what President-elect Trump says, Social Security cuts are still very much on the table. His Secretary for the Department of Health and Human Services — Rep. Tom Price (R-Georgia) — filed legislation last year to trim the program’s benefits. And I suspect it’s still on his radar screen.

Price’s strategy was to bury Social Security “reform” inside of a a massive budget bill [70], so the issue wouldn’t necessary receive a separate hearing in Congress. Price was chairman of the powerful House Budget Committee in the last Congress.

The conservative Georgia doctor has long been a proponent of major cutbacks to Social Security, Medicare, Medicaid and Obamacare. In a speech before the conservative group Heritage Action for America on January 12, 2015, Price told the group [71] about his plans for Social Security:

“This is a program that right now on its current course will not be able to provide 75 or 80 percent of the benefits that individuals have paid into in a relatively short period of time. That’s not a responsible position to say, ‘You don’t need to do anything to do it.’

So all the kinds of things you know about – whether it’s means testing, whether it’s increasing the age of eligibility. The kind of choices — whether it’s providing much greater choices for individuals to voluntarily select the kind of manner in which they believe they ought to be able to invest their working dollars as they go through their lifetime. All those things ought to be on the table and discussed.”

None of these ideas are new and have been floated by Republicans such as Paul Ryan, speaker of the house, and conservative think tanks for years. But the word Price doesn’t use — privatization — is still very much on the GOP agenda for Social Security and Medicare.

Even worse, Price used false information as a scare tactic to provide political cover to carve up the program. Social Security is not in any danger of not being able to provide “75 or 80 percent of benefits in a short period of time.”

According to the non-partisan Congressional Budget Office [72] (CBO), the Social Security trust fund that serves as a kitty for retirees, will be forced to reduce benefits in 2030. And that’s only if Congress does nothing to boost funding of the system.

That means that only complete inaction by Congress will drive the trust fund balances to zero. Even then, Social Security will still pay benefits.

By 2030, “the Social Security Administration would no longer be permitted to pay full benefits when they were due,” with future benefits by annual income, the CBO report said. At most, benefits would likely be cut by 29%.

President-elect Trump has said on the campaign trail that he wouldn’t touch Social Security or Medicare, but he’s clearly at odds with his party, which has wanted to trim or privatize Social Security and Medicare for more than a decade.

“None of these ideas are new and have been floated by Republicans such as Paul Ryan, speaker of the house, and conservative think tanks for years. But the word Price doesn’t use — privatization — is still very much on the GOP agenda for Social Security and Medicare.”

Privatization, the word that GOPers always think about but dare not speak. But they sure love proposing it:


So all the kinds of things you know about – whether it’s means testing, whether it’s increasing the age of eligibility. The kind of choices — whether it’s providing much greater choices for individuals to voluntarily select the kind of manner in which they believe they ought to be able to invest their working dollars as they go through their lifetime. All those things ought to be on the table and discussed.”

Those were the words of Tom Price, Trump’s choice for Secretary of Health and Human Services and the House GOP’s long-time point man on gutting entitlements. And what those word describe is a Social Security privatization option even if he doesn’t use the word “privatization”. But that’s what it is, even if it’s not the full privatization of Social Security and merely a private option. That’s how privatization is supposed to work under the Paul Ryan agenda: start with the option to have your social security taxes go into a Wall Street-run private fund, and then steadily shrink the defined benefits of the traditional program.

And don’t forget that when you move people away from a defined benefit system – the way social security operates today – and towards a defined contribution option – which is how the private option would work – that is a plan allow people to make really bad investments when they’re young and have almost nothing left in that Social Security private personal account when they hit retirement age. And if ther’s a massive financial crisis, a whole generation of retirees or near-retirees could see their Social Security accounts wiped out. Which means the privation of Social Security is a recipe for pushing seniors onto Medicaid because they will be poor enough to qualify. And, again, Medicaid in the future just might require work requirements. Maybe for people over 65 if that’s allowed. Or 67. Or whatever the retirement age ends up being in the future.

So, once again, when Donald Trumnp repeatedly refers to a 42 percent unemployment rate and 94 million people being out of the labor force it’s not inconceivable that he’s intentionally framing the unemployment definition required for a “Ryan” vision of the future where everyone needs to work for government assistance. Including the elderly.

Yes, Trump Thinks We’re Stupid. Or Has Dementia

Of course, now that Donald Trump embrace the 4.7 percent unemployment rate it unclear what to think about what Trump actually thinks when it comes to the veracity of past and present unemployment rates. Especially after Donald Trump had Sean Spicer deliver to the press a mysterious tragicomic message: “I talked to the president prior to this, and he said to quote him very clearly: ‘They may have been phony in the past, but it’s very real now.’ ” [6]:

The Washington Post

19 times Trump called jobs numbers ‘fake’ before they made him look good

By Christopher Ingraham
March 10, 2017 at 4:49 PM

We may assume President Trump is quite pleased with the strong jobs report [73] from his first full month in office: He retweeted [74] the Drudge Report’s triumphant “GREAT AGAIN” framing of the numbers Friday morning, after touting employment figures [75] released by payroll firm ADP earlier in the week.

Not so long ago, however, Trump’s view of the monthly jobs report, which comes courtesy of the nonpartisan federal Bureau of Labor Statistics, was markedly different. As recently as December [76], he described the report as “totally fiction.”

If there was any argument over whether Trump was flip-flopping on the jobs report at the precise moment it reflected positively on him, White House press secretary Sean Spicer laid it to rest Friday afternoon, telling reporters: “I talked to the president prior to this, and he said to quote him very clearly: ‘They may have been phony in the past, but it’s very real now.’ ”

“If there was any argument over whether Trump was flip-flopping on the jobs report at the precise moment it reflected positively on him, White House press secretary Sean Spicer laid it to rest Friday afternoon, telling reporters: “I talked to the president prior to this, and he said to quote him very clearly: ‘They may have been phony in the past, but it’s very real now.’ ””

“I talked to the president prior to this, and he said to quote him very clearly: ‘They may have been phony in the past, but it’s very real now.’ ” WTF. Is he trolling us? Because Trump is either suggesting that the unemployment rate dropped from 42 percent to 4.7 percent in the first month, which would indeed be pretty impressive, or he thinks that the entire world is stupid. Dementia perhaps? Only Trump knows. Unless it’s dementia in which case maybe not.

But something very weird and very ominous is going on with Trump and the unemployment rate. It’s possible the Trumnp administration is merely going to shift the “official” rate from the “U-3” to “U-5” rate the way Steve Mnuchin recommended expand it to include everyone who would like to find work, even the long-term unemployed who are so discouraged they’ve stopped looking.

But when we look at all the clues available it’s becoming increasingly clear that Donald Trump’s repeated references to a 42 percent unemployment rate with 94 million Americans out of the labor force isn’t dementia. It’s laying the rhetorical groundwork to redefine who is considered “unemployed” in order to lay down the conceptual groundwork required to replace the US safety-net with a “work for a pittance to receive a government pittance” safety-net. And including retirees in that potential workforce. That’s where all the clues are pointing.

Although when you consider that in implementing this agenda Donald Trump is basically setting himself up to be Paul Ryan’s ghoulish and super-villain stand-in who will be loathed for generations to comes. As conservative columnist Reihan Salam recently wrote in Slate, if Donald Trump listens to Paul Ryan he’s committing political suicide [77]. And it’s hard to see why Salam isn’t correct. What Paul Ryan and the GOP want to do – make almost all poor American adults a new serfs-for-welfare class of desperate low-wage employees – is beyond cruel and just bad policy that’s going to end up harming the entire economy and make living in America that much more stressful for almost everyone. The idea of losing your job in America is already scary enough. It’s about to become terrifying. And Donald Trump, when he used that “94 million Americans out of the labor force” line during his first address to Congress, gave a very strong indication that he’s willing to lead America into Paul Ryan’s vision of the future. As his policy agenda unfolds and becomes more and more aligned with the Paul Ryan ‘granny starver’ agenda that really does appear to be Trump’s plan . And Trump increasingly appears willing to take the bulk of the public blame for making it a reality. So while it’s unclear what exactly Trump meant when he had his spokesperson troll the world, you know, maybe it really is dementia [7].