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From the category archives: Max Richtman

Real Retirement Security Solutions or More of the Same?

It’s easy to become cynical if watching Washington work (or not work, as is often the case) is your job.  So forgive us for not popping a cork in celebration of the Bipartisan Policy Center’s new Personal Savings Initiative.  Don’t get us wrong, it’s the right idea for the right time.  We’ve been saying for a long time that our nation is facing a retirement crisis far greater than the fiscal Armageddon promised by conservatives if we refused to take their advice to slash middle-class benefits. As NCPSSM President/CEO, Max Richtman, has written before:

“Three decades of stagnant middle-class incomes, disappearing pensions, limited ability to start and maintain personal savings, and the failure of the 401K experiment lay the foundation for a retirement crisis that could further threaten millions of older Americans and their families.

According to the New School for Social Research, 75 percent of Americans nearing retirement have less than $30,000 in their retirement accounts. Almost half of middle-class workers will be poor or near poor in retirement and living on a $5-per-day food budget. The National Institute for Retirement Security reports four out of five working families have retirement savings less than one times their annual income and 45 percent do not have any retirement assets at all.

While Washington has been obsessed with the federal budget deficit, there's been virtually no Congressional conversation about the $6.8 trillion retirement savings deficit. What will happen to the millions of American families who are ill-prepared for retirement? There's almost no conversation about how to prevent this retirement crisis from impoverishing our families or about how younger generations will handle parents and grandparents who cannot support themselves. In spite of this current and growing retirement crisis, Social Security and Medicare, programs vital to a basic secure retirement, continue to be the favored targets for some in Congress who are determined to use benefit cuts to reduce the federal deficit.”

While the Pete Peterson funded Bipartisan Policy Center’s stated goal is to address personal savings, Social Security benefits received an inordinate amount of attention in today’s kickoff event.  Not so surprising when you consider that this group is chaired by former Democratic Senator and fiscal hawk Kent Conrad and Wall Streeter/former Bush appointee, Jim Lockhart.  The group is dominated by conservatives and center right former politicians and staffers, Republican political appointees, industry reps and think-tankers.  As was the case with the failed Bowles-Simpson Fiscal Commission, there are a few members who break that mold and will no doubt find themselves swimming against the tide once the discussion turns to Social Security.  Which the Chairmen made very clear today, it will, since “everything is on the table.”

Sound familiar?  It should since that’s Washington-speak for get ready for middle-class benefit cuts -- but this time they’ll be wrapped in a package to increase personal savings and strengthen retirement security?  It’s no wonder we’re cynical. 

New Medicare Advantage Rates Preserve Insurance Industry Subsidies...Again

For the second year in a row, America’s massive health insurance industry lobby launched a Washington lobbying and advertising blitz hoping to scare seniors into believing they’ll lose their Medicare and politicians will lose their seats if the industry’s government overpayments aren’t protected.  Mission accomplished. Rather than trimming rates, the Obama administration raised them:

“Private Medicare plans would see a 0.4 percent boost in their payment rates for 2015 under a final rate announcement made by Centers for Medicare and Medicaid Services officials Monday.

Officials with Medicare said the better-than-expected news for insurers came about in part as a result of healthier enrollees signed up for both Medicare Advantage and traditional fee-for-service plans, which means less of a cost burden on the health insurance system for the aged.” Congressional Quarterly

When CMS says “in part” what they aren’t mentioning is the part where the administration basically caved (for the second year in a row) to the insurance industry’s million dollar lobbying blitz to keep its billions of dollars of federal overpayments intact.   

“Today’s announcement by CMS to, once again, preserve government overpayments to private insurers in Medicare Advantage is bad policy and bad economics for the Medicare program. These subsidies were supposed to be gradually trimmed in order to expand benefits and improve the quality of care for all seniors in Medicare. However, each year the insurance lobby threatens to cancel coverage or charge more to seniors in MA plans rather than accept a reduction in their overpayments or reimbursement rates. 

For many years, private insurance companies have claimed they can provide better coverage to seniors at a lower cost.  The reality proves otherwise.  Since 2003, all seniors in Medicare (including those not even enrolled in Medicare Advantage) have paid higher premiums to help fund the billions in government overpayments to private Medicare Advantage insurance companies.  Over the years, as much as 14% more per beneficiary has been paid to MA plans than is paid to cover individuals enrolled in traditional Medicare.  It’s a wasteful federal boondoggle that was rightfully corrected by passage of the Affordable Care Act (ACA) in 2010.  Additionally, thanks to the ACA, growth in health care costs have been decreasing which means that reimbursement rates also go down.   As reimbursement rates have decreased, MA plan enrollment has increased. 

Let’s be clear, contrary to the health insurance industry’s massive lobbying campaign claims, Medicare doesn’t make the decision about cuts to seniors’ MA coverage, including increasing premiums or reducing access to doctors. That decision rests squarely in the board rooms of the nation’s private insurance industry, which is unwilling to give up a penny of their government giveaway in favor of continued threats of diminished coverage and higher premiums for seniors.

This annual drama with private insurers in Medicare proves, once again, that when private MA plans are unwilling to compete on a level playing field with traditional Medicare, seniors will ultimately pay the price. So much for providing better coverage for less.”...Max Richtman, NCPSSM President/CEO 

Boosting Social Security Benefits

By Max Richtman, NCPSSM President/CEO

Momentum continues to build inside and outside the halls of Congress to reverse course on the single-minded quest to cut Social Security benefits which has dominated our political discourse for years.  Not surprisingly, commentators who bought into the billion dollar Wall Street campaign to convince America we can’t afford a strong Social Security system are distressed at this turn of events.  Apocalyptic screeds with headlines like “Increasing Social Security Benefits Would Wreck Retirement Security” portray efforts to boost these earned benefits as partisan pandering. They conveniently ignore the fact that legislation increasing benefits would also extend Social Security’s long-term solvency by decades. The American people have never bought into the false choice that the only way to “save Social Security” is to slash benefits. Congress now has the opportunity to plot a course that addresses our looming retirement crisis while also strengthening Social Security’s long-term finances. 

There’s no doubt that, for years now, the steady drumbeat for cutting Social Security benefits has been so deafening as to drown out any discussion about what those cuts would actually mean for millions of Americans.  According to the 2014 Retirement Confidence Survey by the Employee Benefit Research Institute, a sizable percentage of workers report they have virtually no savings and investments. More than a third (36 percent) of retired civilian workers say they have less than $1,000 (up from 28 percent in 2013). A quarter of workers and 17 percent of retirees indicate that their current level of debt is higher than it was five years ago.  Social Security remains the only stable source of income for many families who are still rebuilding after our nation’s recent brush with economic collapse.  Yet rather than address this retirement crisis head-on, we have wasted years of political energy focused on cutting benefits to pay down the deficit rather than strengthening the Social Security program -- until now.

Legislation sponsored by Sen. Tom Harkin (D-IA) and Rep. Linda Sanchez (D-CA) would change the benefit calculation formula the Social Security Administration uses, so that benefits would gradually increase by approximately $70 per month. The Strengthening Social Security Act would also change the way the Social Security Administration calculates the Cost of Living Adjustment (COLA), ensuring that benefits more accurately reflect the increasing costs facing seniors today. Finally, this legislation would phase out the current payroll tax cap so that all Americans contribute to Social Security taxes fairly.  In 2014, workers who earn less than $117,000 contribute 6.2 percent of their wages in Social Security payroll taxes. Workers who earned above $117,000 pay no Social Security payroll taxes above that level, meaning the effective tax rate for Social Security actually decreases for America’s higher income workers. In fact, workers who earn over a $1 million per year only pay Social Security tax on one-tenth or less of their earnings which creates a gaping loophole for millionaires. The “Strengthen Social Security Act of 2013” gets rid of this loophole, boosts benefits, and would extend the solvency of Social Security by almost two additional decades, until 2049. 

The latest survey by the National Academy of Social Insurance shows large majorities of Americans, both Republicans and Democrats, agree on ways to strengthen Social Security, without cutting benefits. Of those polled, 74 percent of Republicans and 88 percent of Democrats agree that “it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.”  Simply put, the American people are willing to pay more for Social Security.  They understand the growing impact these benefits have on individual lives and on our larger economy.

Families spend $816 billion in Social Security benefits nationwide each year.  When 57 million Americans use the purchasing power of those modest benefits, they are supporting local businesses and jobs, communities and state economies with billions of dollars they simply wouldn’t have without Social Security.  Boosting Social Security now makes sense not only for millions of Americans and their families but also for our economic recovery.  The waning anti-Social Security lobby will try to stop our progress, but the American people understand that boosting benefits is the right thing to do and now is the right time to do it, for millions of middle-class families and our nation’s economic recovery.  

There’s Good News and Bad News for Seniors in the President’s Budget Plan

2015 Budget Reaction from National Committee to Preserve Social Security and Medicare President/CEO, Max Richtman

“While the President’s budget thankfully no longer includes cuts to Social Security, his 2015 plan unfortunately still targets seniors by shifting more costs to Medicare beneficiaries through increased means-testing, premium hikes and co-pays. While some tout increasing means testing in Medicare as a way to insure ‘rich’ seniors pay their share, the truth is, the middle-class will take this hit too.

Medicare has already been means-tested since 2007 and the number of beneficiaries subject to higher premiums has been increasing.  If passed, this means testing proposal targets even middle-class individuals with the equivalent income of just $45,600 – these are not ‘wealthy’ seniors by any measure. Shifting even more costs to seniors ignores the economic challenges many face just getting by day-to-day. It also exacerbates the retirement deficit gap millions of Americans face now and into the future.

Our nation faces a retirement security crisis.  Shifting even more costs to seniors worsens that crisis rather than addressing it head-on. While acknowledging this crisis with proposals such as myRA and automatic IRA’s, this budget focuses attention on the private sector rather than strengthening the number one source of income for many seniors, Social Security. As a nation we should be looking for ways to boost Social Security’s benefits.” Max Richtman, NCPSSM President and CEO

NCPSSM Launches "Boost Social Security Now" Campaign

Education campaign will push for better benefits for workers, retirees and their families

We're building upon the growing public support for expanding Social Security by launching the Boost Social Security Now education campaign to inform and mobilize our membership, grassroots networks and on-line communities to convince Congress that now is the time to boost benefits, not cut them. For more than 30 years NCPSSM has been recognized as one of the nation’s most ardent and effective defenders of America’s social insurance safety net. In 2012, the National Committee expanded its focus on Social Security with the release of a proposal to modernize benefits, which included caregiver credits, shifting the annual cost of living adjustment formula to one designed for elderly consumers and improving the basic benefit of all current and future beneficiaries.  Since that time, the call for expanded benefits has grown louder and includes support from within Congress including Senators Elizabeth Warren, Tom Harkin and Bernie Sanders, and Representatives Linda Sanchez and Gwen Moore.  

For years, Washington’s fiscal debate has been co-opted by the billion dollar austerity lobby and its single-minded quest to cut middle-class benefits in Social Security and Medicare to reduce the deficit.  Their anti-Social Security mission ignores the cold hard economic realities facing millions of retirees, the disabled, widows and children.  That’s why the National Committee, on behalf of its millions of members and supporters nationwide, is saying enough is enough.  Now is the time to boost Social Security benefits, not cut them. It’s the right thing to do for our economy and America’s middle-class families and this is the right time to do it”...Max Richtman, NCPSSM President/CEO

The National Committee has endorsed nine different pieces of legislation that would enhance Social Security, including S. 567 and HR 3118 which, when fully phased in, would boost benefits by approximately $70 per month and adopt the more accurate consumer price index for the elderly (CPI-E). As a fiscally responsible way to increase and strengthen Social Security finances we also support lifting the payroll tax cap.

Today, Social Security’s average monthly benefit of just $1,269 is 90% or more of retirees’ income for 46% of unmarried elderly and 23% of married couples.   Social Security will be even more important to future generations, especially the Recession Generation which faces income loss, diminished net worth, and high unemployment during their vital income earning years, all of which ultimately impacts their retirement. 

Social Security’s positive economic impact shouldn’t be ignored. American families spend $775 billion in Social Security benefits nationwide each year, providing vital economic stimulus to local businesses and state economies they wouldn’t have without Social Security.

The goal of our Boost Social Security Now campaign is straightforward: Congress should increase Social Security benefits now to protect the economic security of millions of American families. 

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