From the category archives: Max Richtman
While some in Washington claim America can’t afford programs like Social Security and Medicare, the truth is states simply can’t afford to lose the economic benefits these programs provide to every community in our nation. We've released state-by-state snapshots of how much revenue Social Security contributes to the economy of every Congressional District in each state and US territory.
Families spend $775 billion in Social Security benefits nationwide each year. When 57 million Americans use the purchasing power of those benefits, they are supporting local businesses and state economies with billions of dollars they simply wouldn’t have without Social Security. Unfortunately, this economic reality has been ignored by Washington’s well financed anti-Social Security lobby as it continues to try and convince Congress to cut middle-class benefits.
“You don’t have to be an economist to understand that cutting Social Security benefits, whether through the Chained CPI or other proposals, means less income for families -- less money they can spend in their communities and less revenue for businesses coast-to-coast. Targeting families who rely on vital programs like Social Security ignores our real economic problems in favor of a political strategy to cut safety net programs. Members of Congress need to take a look at these state-by-state breakdowns and ask themselves, ‘Can my community afford to lose millions of dollars from our economy? Can my neighbors and families afford to lose the retirement and economic stability Social Security provides?’ Step outside Capitol Hill and the answer is a resounding ‘No.’ ”....Max Richtman, NCPSSM President/CEO
Check out your state's stats here and the next time someone tell you we can't afford Social Security, ask them -- Can our economy really afford to lose it?
Medicare’s 48th anniversary is next week on July 30th. NCPSSM activists will mark the event by visiting Congressional offices in 50+ cities and towns across the country. Advocates will also be delivering Medicare anniversary signs to every House and Senate office on Capitol Hill.
Members will be asked to display the sign on their office door on July 30th to show their support for Medicare. Included in the delivery will be special cards listing the National Committee’s Top 10 reasons why Americans love Medicare.
“In spite of Medicare’s success in keeping America’s seniors healthy and out of poverty, Medicare’s guaranteed coverage is under nearly constant attack in Washington. The budget plan passed in the House would end traditional Medicare, privatize it and leave seniors on their own to negotiate with private insurance companies. It would require seniors to pay $6,000 more each year for fewer benefits, making it harder to choose their own doctors while also giving the wealthiest Americans a massive tax break. Too many Members of Congress who’ve advocated the dismantling of Medicare camouflage their plans with promises to “save” the program. However, the American people know you don’t have to destroy Medicare to strengthen it. That’s the message our activists are delivering directly to Congress on this 48th anniversary.”...Max Richtman, NCPSSM President/CEO
Let’s see how many join our celebration and proudly display their pledge to support Medicare not cut it.
Draft legislative language
released by the House Social Security Subcommittee
last night would cut benefits for millions of middle-class and poor Americans still struggling in this economy by adopting a new formula to calculate cost of living adjustments. NCPSSM President, Max Richtman, reacted this way:
“Contrary to claims by some in Washington, the chained CPI is not a 'technical tweak,' and no amount of rationalization can make it so. In reality, the chained CPI is a benefit cut for the oldest and most vulnerable Americans who would be least able to afford it.
Cutting benefits by adopting the chained CPI would cut the COLA by 3% for workers retired for ten years and 6% for workers retired for twenty years. This cut targets both current and future retirees. Three years after enactment, this translates to a benefit cut of $130 per year in Social Security benefits for a typical 65 year-old. The cumulative cut for that individual would be $4,631 or more than three months of benefits by age 75. While supporters claim the chained CPI is more accurate; you have to ask yourself, if this chained CPI really is more accurate, then why the need to offer an incremental benefit “bump” to some beneficiaries? The answer is simple. The chained CPI does not accurately measure these groups’ expenses; in fact, it makes most of the same errors as the current formula and adds a few. Adoption of this new formula is really about cutting benefits and raising taxes on average Americans to reduce the deficit.
While supporters, including the White House, have attempted to wrap this benefit cut in promises to ‘preserve or protect’ Social Security, the stark truth is it’s actually a direct assault on the safety net millions of middle-class and poor seniors and their families depend on.”
Seniors won’t be fooled by Orwellian language which attempts to portray austerity as “accuracy”.
“The current formula, the CPI-W, reflects the expenditures of about 31 percent of households nationally; specifically, wage and clerical households in urban areas. By definition, this population is employed, unlike most retired Social Security beneficiaries. Research has shown that spending patterns differ between the elderly and the general population, especially on health care. Seniors 65 and older spend more than twice as much on health care, and those 75 and older spend nearly three times more than younger consumers. Not only do health care expenditures steadily increase with age but health care costs consistently rise much faster than general inflation. The current price index (CPI-W) does not take these critical differences in the elderly population into consideration. The chained CPI doubles-down on that flaw. Even worse, the proposed chained CPI will cut COLAs immediately for current and future retirees, veterans, the poor and people with disabilities.
For millions of seniors living on fixed incomes and the average $14,000-per-year Social Security benefit, it's frankly unimaginable that some in Washington believe those benefits are too generous. Our nation faces an impending retirement crisis yet rather than address that issue head-on, Washington is instead proposing cuts to the only guaranteed source of income for many retirees, Social Security. It simply makes no sense -- unless your true goal is austerity not accuracy.” Max Richtman, Huffington Post
This chained CPI proposal is just the first of many benefit cutting proposals the House Social Security subcommittee is expected to release in coming weeks. Incredibly, Chairman, Rep. Dave Camp (R-MI) says he wants your feedback. So we say, let’s give it to him. Email Chairman Camp at:
Tell him how losing thousands of dollars in Social Security benefits will hurt you and your family. Tell the House GOP leadership “NO” to the chained CPI.
Max Richtman, NCPSSM President/CEO
Austerity or Accuracy? Why Seniors Need a CPI-E
In 1987, while the Staff Director of the Senate Special Committee on Aging, I helped develop legislation to create a Consumer Price Index for the Elderly (CPI-E). The goal was to more accurately measure the prices and inflation seniors face, ultimately leading to more representative cost of living adjustments (COLAs) for America’s retirees. Never in my wildest dreams could I have predicted that, 26 years later, our nation would still be without an accurate CPI formula for millions of seniors, and that the CPI-E would still be considered “experimental.” Even in Washington, a quarter of a century should be enough for any experiment. It’s long past time for Congress to provide the resources needed for the Bureau of Labor Statistics (BLS) to finish it’s work on the CPI-E.
This is especially important now as many politicians in Washington hope to adopt a new formula called the chained CPI (C-CPI-U). Proponents of the C-CPI-U in the White House and Congress claim COLA accuracy is the goal, yet, they have also offered to “protect” millions of older beneficiaries, veterans, people with disabilities and low-income Americans from this change. You have to ask yourself, if this chained CPI really is more accurate, then why the need to offer an exemption to millions of people? The answer is simple. The chained CPI does not accurately measure these groups’ expenses; in fact, it makes most of the same errors as the current formula and adds a few. Adoption of this new formula is really about cutting benefits and raising taxes on average Americans to reduce the deficit.
The current formula, the CPI-W, reflects the expenditures of about 31 percent of households nationally; specifically, wage and clerical households in urban areas. By definition, this population is employed, unlike most retired Social Security beneficiaries. Research has shown that spending patterns differ between the elderly and the general population, especially on health care. Seniors 65 and older spend more than twice as much on health care, and those 75 and older spend nearly three times more than younger consumers. Not only do health care expenditures steadily increase with age but health care costs consistently rise much faster than general inflation. The current price index (CPI-W) does not take these critical differences in the elderly population into consideration. The chained CPI doubles-down on that flaw. Even worse, the proposed chained CPI will cut COLAs immediately for current and future retirees, veterans, the poor and people with disabilities.
For millions of seniors living on fixed incomes and the average $14,000 per year Social Security benefit, it’s frankly unimaginable that some in Washington believe those benefits are too generous. Our nation faces an impending retirement crisis yet rather than address that issue head-on; Washington is instead proposing cuts to the only guaranteed source of income for many retirees, Social Security. It simply makes no sense -- unless your true goal is austerity not accuracy.
Contrary to claims the current COLA is too generous, the Social Security COLA has averaged just over 2% over the past five years with 0% for two of those years, far below the largest spending increase seniors face, which is spending on health care. It’s hard to imagine any one arguing with a straight face that a 0% COLA increase is too generous. But if the CPI-E determined the Social Security COLA, the expected average COLA would increase about 0.2 percentage points per year. In contrast, using the chained CPI would reduce expected average COLAs by 0.3 percentage points per year. That means a typical 65 year-old would see a decrease of about $130 in Social Security benefits using the chained CPI, three years after the C-CPI-U kicks in. At age 95, the same senior would face a 9.2 percent reduction—almost $1,400 per year. The BLS acknowledges the current CPI-W does not “produce official estimates for the rate of inflation experienced by subgroups of the population, such as the elderly or the poor. This is why we need a true elderly index like the CPI-E and not a formula change that will cut benefits and drive more seniors into poverty. A provision in Senator Bernie Sanders's bill to reauthorize the Older Americans Act (S. 1028) would require the BLS improve the CPI-E and should be adopted by this Congress without any further delay.
According to the BLS, it needs to conduct additional research on where elderly households are located, where the elderly actually shop, and what mix of products the elderly purchase. That research will cost money but the cost to develop the CPI-E is miniscule compared to how much seniors and their families will lose without adequate inflation protection. After nearly three decades, it’s past time for Congress to provide the resources BLS needs to finish its work.
This blog post originally appeared on Huffington Post.
The 2013 Trustees report shows, once again, Social Security is not facing a crisis.
Trustees project Social Security will be able to pay full benefits until the year 2033. After that, Social Security will have sufficient revenue to pay 77% of benefits.
- Social Security is still well funded. In 2013, as the economy regains its footing, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020.
- Trustees project a Cost of Living Adjustment increase of 1.5% to 2.5% in 2014.
With so little bad news to report in this 2013 Trustees report, critics have now shifted their attention to Social Security Disability, which faces a more immediate fiscal challenge
- Trustees project the Disability Trust fund will be depleted in 2016, the same year projected in last year’s report. This projected shortfall is not a surprise and Congress should reallocate income across the Social Security Trust funds, as it has done 11 times before, to cover the anticipated shortfall. Disability expenditures have increased primarily due to demographic trends. The increase in full retirement age from 65 to 66 has also contributed to the increase in disability expenditures, as people remain on the disability rolls longer before shifting to retirement. However, when Congress took action in 1994 to address a then-reported shortfall in DI, it knew that it would have to take action again in 2015 or 2016.
The 2013 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund.
- Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2026, two years later than the 2012 report. Health care spending has also grown much more slowly. Since late 2010, CBO has reduced its projection of cumulative Medicare and Medicaid spending over the 2011-2020 period by $900 billion - or nearly 10 percent.
- Medicare Part B premiums are not projected to increase in 2014.
Here's reaction from NCPSSM's President/CEO, Max Richtman:
“As we emerge from the worst economic downturn since the Great Depression, it’s clear our nation’s retirement security programs, Social Security and Medicare, continue to do their jobs admirably by protecting millions of Americans during these troubled times. Unfortunately, for too many in Washington, this annual Trustees report is little more than an opportunity to re-issue the same doom-and-gloom news releases and renewed calls to cut these programs in order to ‘save’ them, regardless of the fiscal facts. The truth is the Trustees 2013 report shows Social Security has a $2.7 trillion surplus which continues to grow. Social Security isn’t bankrupt; it hasn’t contributed a dime to our fiscal woes and, in fact, has performed its mission without fail.
On the Medicare front, the good news is health care reform has extended the solvency of the Medicare Trust Fund and health care cost growth is slowing. The Affordable Care Act is making a difference not just in Medicare, but is also slowing the rising cost of health care for all Americans.”
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