Thursday, December 30, 2010

Neoliberalism at work, Spanish edition (US Social Security edition, too)

The majority Spanish Socialist Party (PSOE) under President (Prime Minister) José Luis Rodríguez Zapatero has just endorsed phasing in a retirement age of 67 by 2027, raising it from the current 65 for their version of Social Security. (Manuel Gómez, La edad de jubilación a los 67 años llegará en 2027 El País 30.12.2010) The Spanish version is also called Social Security.

Spanish Civil War poster from the Republican government, 1938: the PSOE once had tougher enemies to fight than their constituents' retirement system

That's a really bad idea, one that the United States adopted in 1983 and Germany recently adopted, also with the support of its Social Democratic Party (SPD). In the neoliberal scheme of things, it is the role of left parties to lead in cramming measures like this down the throats of their working-class and poor base voters. Gee, I wonder how much their bases appreciate this. (Hint: the SPD took a serious beating in the election following their action.)

This represents a significant cut in benefits. And I don't doubt that good Republican sources who typically regard "Europe" as a cuss word will soon be pointing the examples of Spain and Germany to show how wise statesmen are approaching the problem.

Of course, drastic as raising the retirement age from 65 to 67 is, its not nearly as drastic as the proposals favored by the various anti-Social Security factions here: raising the retirement age to 69; reducing or eliminating the benefits to spouses, dependents and the disabled; erode the value of Social Security payments by reducing or freezing the cost-of-living adjustments; converting the program to "personal savings accounts" (aka, privatization, though its advocates don't use that word any more since it started polling poorly) and, just outright eliminating the program.

And eliminating the program is the real point of all these moves. All of them will mean real blows to the economic status of the elderly. But Democrats shouldn't lose sight of what the Republicans have clearly in their sights: when a Democratic President signs on to any of those proposals, it creates a major breach in the political firewall that has protected the Social Security program since its inception in 1934. And then Republicans and Democratic neoliberals will press harder in the next round of Social Security reductions.

I should add that, certainly in the US context, the raising of the Social Security retirement age to 67 is a major hardship. Age 45 is the formal age to be considered legally an "older worker" in federal employment laws. And, even for the highly qualified, getting a new job if your old one disappears at 55 or older is a very uncertain prospect for most people who find themselves in that situation. If someone loses their job at 62 or 63, they may be able to get by reasonably well (emphasis on "may") if they wait until 65 to draw full benefits, as opposed to the significantly lower benefits if you start drawing at 62. Waiting until 67 is a very different story. Waiting until 69 would be completely infeasible for most people in that situation.

Its a truly grim fact that we're facing a new year in which the biggest domestic political fact may be against a Democratic President's attempt to phase out the Social Security program. Gee, I wonder how much the Democrats' base voters will appreciate this.

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