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From the category archives: Retirement

New Online Resource Details Social Security’s Economic Impact in States and Counties Nationwide

Social Security’s economic contributions to communities, counties, and states continue to be misunderstood and often ignored in Washington’s fiscal debates. A new online report unveiled by the National Committee to Preserve Social Security and Medicare Foundation provides a detailed look at the significant economic impact generated by Social Security benefits. Social Security Spotlight delivers data on beneficiaries by state, county, Congressional district, race/ethnicity, age and gender. Also available are the Economic Stimulus Impact for each state, and the Regional Support Index (RSI) which illustrates the level of support that Social Security provides to all residents of a given state or county. This comprehensive data details what America’s retirees, people with disabilities, survivors and their families know first-hand -- Social Security plays a vital economic role for families, communities and businesses throughout America. 

In 2014 alone, Social Security delivered a $1.6 trillion fiscal boost nationwide as benefits were spent and cycled through the economy. The report’s impact estimates are adjusted for taxes and the composition of state economies, which affect how benefits are multiplied and generate additional economic activity. For example in 2014, California residents received $80.4 billion in benefits, which added $165.9 billion to the state economy. At the other extreme, District of Columbia residents received $1.1 billion in benefits, which generated $1.6 billion in economic activity. The Regional Support Index (RSI), shows that between 2008 and 2013, Social Security also played a growing economic role in the vast majority (nearly 94%) of counties’ throughout the nation. In fact, 34 states showed a high/medium RSI ranking, demonstrating how important Social Security’s stimulus and stabilization effects are to states large or small, and rural and urban residents. 

Social Security Spotlight can be especially helpful during the 2016 election cycle for voters, journalists, policy makers and campaign staff as the future of Social Security is debated. There have been numerous policy proposals that could diminish the earned benefits in Social Security triggering financial losses not only for American workers, retirees, the disabled, and their families but also their communities, counties and states. Every Congressional and Presidential candidate will be encouraged to take a hard look at the economic impact numbers.  Voters should also ask candidates and incumbents, “Can our community afford the economic hit which would come by cutting benefits?”

Here’s a look at some of the information available for each state.  This example highlights Florida:

Total # Social Security beneficiaries:   4.2 million residents receive $62 billion in benefits. Sumter County receives the highest per capita Social Security income, Lafayette with the lowest.
Economic Impact Dollars:   $122.5 billion
Regional Support Index:   In 26 Florida Counties, 25% or more of the population receives Social Security.

In 32 Florida Counties, Social Security is 10% or more of their citizens’ income. 

Since 2008, Social Security’s economic impact has increased in every Florida County.

Demographics:     4.2 million Florida beneficiaries 75.5% White, 13.2% Hispanic, 1.4% Asian, 8.9% African American, 6.1% children           

The Social Security Spotlight project was funded by a grant from the Retirement Research Foundation. The project has been guided by the Task Force on the Future of America’s Health and Retirement Security.  Research was conducted by: Peter S. Arno, PhD, Senior Fellow and Director of Health Policy Research at the Political Economy Research Institute at the University of Massachusetts-Amherst National Committee to Preserve Social Security & Medicare Foundation board member, and Andrew R. Maroko, PhD, Assistant Professor, City University of New York Graduate School of Public Health and Health Policy.

Two Party Platforms –Two Starkly Different Views on Social Security

The Democratic Platform released today clearly shows that the differences between how the Democratic and Republican parties will approach the future of Social Security couldn’t be starker. The GOP platform promises to consider all benefit cut options, refuses to lift the payroll tax cap and suggests sending Americans’ earned benefits to Wall Street through privatization. The Democratic Party platform, on the other hand, offers the strongest statement on strengthening Social Security seen in decades.  By pledging to fight efforts to “cut, privatize or weaken” Social Security, supporting expansion of the program, lifting the payroll tax and exploring a new COLA formula for seniors, the Democrats have tackled head-on the critical challenges facing millions of average Americans. 

“For too long, many in Washington have ignored the retirement crisis facing Americans nationwide.  The Democratic Party’s platform acknowledges what average Americans and their families understand first-hand – Social Security is an economic lifeline to millions which should be improved. Boosting Social Security’s benefits to provide economic security while also extending the program’s solvency can be done at the same time.  The Democrats get that.

The National Committee proudly worked closely with the Democratic Platform Committee and DNC Chair Rep. Debbie Wasserman Schultz to ensure efforts to improve the current cost of living allowance (COLA) formula are investigated.  The current formula isn’t measuring seniors’ expenses properly and they’ve seen no increase for too many years, while their expenses (especially health costs) continue to grow.  We need a COLA for the elderly and are happy to see Democrats address that reality in this 2016 platform.”...Max Richtman, NCPSSM President/CEO and Democratic Platform Committee Member

It’s also very telling that while the GOP buried their cuts and privatization plans for Social Security under the Platform’s Government Reform heading, the Democrats addressed Social Security, as they should, as part of their plan to restore economic security for average Americans. That’s been Social Security’s fundamental role for more than 80 years -- providing an economic lifeline impacting the lives of virtually every American family.

A new National Committee to Preserve Social Security and Medicare Foundation report also released today, called Social Security Spotlight, illustrates very clearly the huge economic impact Social Security benefits have in every state and county throughout the nation.  This research can be especially helpful during the 2016 election cycle for voters, journalists, policy makers and campaign staff as the future of Social Security is debated.


If They Can't Cut Benefits--Cutting Social Security Administrative Funding is the GOP Fall Back Strategy

 

It’s often been said budgets are the best indicator of a nation’s priorities because talk is cheap but where Congress actually spends taxpayers’ money is what really matters.  If you believe that premise, then American seniors have a lot to worry about.  On the Medicare side of the ledger, we’ve already reported about efforts by GOP Senate appropriators to kill the vitally important State Health Insurance Assistance Program (SHIP) program: 

“The SHIP network provides critical information upon which people with Medicare rely to make informed decisions about their coverage options and enrollment decisions,” says Judith A. Stein, Executive Director, Center for Medicare Advocacy, Inc. “The SHIPs are critical to providing assistance with these increasingly complicated choices. People with Medicare and their families from all over the country depend on SHIPs as the key source of unbiased guidance.

‘Senate appropriators have turned their backs on a growing number of people who will need SHIP services to navigate the complexities of Medicare coverage by proposing to eliminate program funding. This kind of penny-wise, pound-foolish lawmaking will threaten the economic security of millions of Medicare beneficiaries and their families.”…Max Richtman, NCPSSM President/CEO”

The news is just as bad on the Social Security side as the Senate Appropriations Committee cut the agency’s administrative budget request by nearly 5.5% at a time when 10,000 Americans a day turn 65.  As Los Angeles Times columnist, Michael Hiltzik, reports this cut is especially telling:

“In fiscal terms, there’s no earthly reason for Congress to be stingy with Social Security’s administrative budget. The money comes out of workers’ payroll taxes and the system’s other revenue, not from the general treasury. And it’s spent with painstaking care: The Social Security Administration is one of the government’s most efficient agencies, with a core administrative budget of 0.7% of benefits, devoted to upholding a decades-old reputation for superb customer service.” 

Politically, this effort is a continuation of a decades-long campaign to diminish successful government programs which, since the vast majority of the American public of both parties supports them, can’t be killed outright.  Whether it’s right-winger Grover Norquist’s goal "to get it {government} down to the size where we can drown it in the bathtub" or former Speaker Newt Gingrich’s plan to “starve the beast” by slashing taxes on the wealthy and underfunding government programs conservatives don’t like, Republican efforts to weaken programs like Social Security and Medicare continue in full force.   

In the case of the Social Security Administration, the Senate Special Committee on Aging reports that years of Congressional under funding is clearly taking its toll.

“At a time when Baby Boomers are retiring and filing disability and retirement claims at record numbers, SSA has shed 11,000 workers agency-wide over three years. Hiring freezes resulted in disproportionate staffing across the nation’s 1,245 field offices, with some offices losing a quarter of their staff. These past five years have also served witness to the largest five-year decline in the number of field offices in the agency’s 79-year history as 64 field offices have been shuttered, in addition to the closure of 533 temporary mobile offices known as contact stations. SSA has also reduced or eliminated a variety of in-person services as it attempts to keep up with rising workloads and shift seniors and others online to conduct their business.”…Reduction in Face-to-Face Services at The Social Security Administration

The Center on Budget and Policy Priorities detailed the real-life effects this has on millions of American seniors:

“Before the budget cuts, more than 90 percent of applicants could schedule an appointment within three weeks; by 2015, fewer than half could.”

“Starting in 2011, budget cuts forced SSA to freeze hiring, and the teleservice centers lost many agents through attrition.  In just three years, SSA lost more than 15 percent of its 800 number staff. Wait times and busy rates spiked.  In 2014, wait times peaked at over 22 minutes and busy rates at 13 percent.”

Again, let’s not forget that American workers have contributed a lifetime to support Social Security.  This isn’t even general revenue at issue.  While the numbers are important, they only offer a glimpse into what these cuts actually mean to average Americans, many who find themselves at the Social Security office during some of the hardest times of the lives:

“For me, this was just one bill. But there’s much more at stake for many people who need the benefits offered by the Social Security Administration, who are not in a position to put this kind of time or legwork in. Many who visit are poor, old, widowed, homeless, or disabled, and if they aren’t one of those things themselves, they are likely caring for someone who is. They are at the end of their rope, perhaps experiencing the worst scenario of their lives: They need a wheelchair. They’ve gone blind. Their spouse died. Or, like me, they have a baby in the NICU.”…Laura Kwerkel, The Atlantic

The battle to fully fund the Social Security administration and the Medicare SHIP program continues.  Chances are good your Member of Congress will tell you protecting these programs is a “top priority” but their actual vote on these particular programs could likely tell you a very different story.

Why the Social Security COLA matters

There’s no more closely watched Washington announcement for seniors than word of what the next year’s Cost of Living Adjustment will be for Social Security beneficiaries.  While the final decision isn’t announced until October of each year, the annual Social Security Trustees Report usually provides a sneak peak a few months early, as it did last week.

News that seniors should prepare for no increase (or a very small increase) for the second year in a row and the fourth time since 2010 has many understandably worried.  Contrary to conservative /fiscal hawk mythology, which dominates so much of the political discourse in Washington these days, American Social Security beneficiaries aren’t living high on the hog.  In fact, Americans know first-hand that the average $1,300 monthly Social Security retirement benefit isn’t too generous.  They know that this year’s zero cost of living allowance isn’t too generous.  They see a growing amount of their Social Security check going to pay for rising healthcare costs and skyrocketing drug prices.  It’s no wonder the annual COLA announcement adds to their frustration. 

But here’s the thing…Congress didn’t vote or even “decide” to give you a tiny or zero COLA next year.  That number is cooked into the law.  The only way to change the COLA is to convince your Members of Congress to support a new formula that actually measures the cost of living American seniors face.  

This is how current law works: 

“If there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was made to the third quarter of the current year. “ …NCPSSM, “Call for COLA Recalculation,” June 2015 

That means the Social Security COLA is based on the costs of goods and services purchased by wage earners, not retirees.  That’s a real problem since the purchases made by retirees are vastly different than younger Americans still in the workforce. 

“The primary source of the difference in spending patterns is medical expenses, which for most years have increased at a higher rate of inflation.  Seniors spend three times more than younger consumers on health care, including prescription drugs, medical co-pays and deductibles and non-covered expenses.  In fact, older Americans spend 23 percent of their average Social Security check for Parts B and D cost-sharing in addition to paying for health services not covered by Medicare. The following chart illustrates a sample of the increases in health care expenses compared to the increases in Social Security benefits:”

 

 

This is why we have long advocated for the adoption of a cost of living formula for the elderly that measures the expenses retirees actually face.

As early as the 1980’s, Congress recognized the problems with using the CPI-W as the basis for preserving the spending power of Social Security benefits, and in 1987 directed the Bureau of Labor Statistics (BLS) to begin work on an index focused on the elderly.  As a result, the BLS created the Experimental CPI for Americans 62 Years of Age and Older (CPI-E) and calculated estimates of the index dating back to December 1982.  The CPI-E continues to be classified as experimental because its sample size is smaller than the CPI-W, and is therefore subject to a greater sampling error.

The National Committee believes a fully developed CPI-E represents the best hope for correcting problems with the CPI-W for America’s seniors.  But Congress must provide the BLS with the funding needed to finish work on the CPI-E and make it the standard for calculating COLA adjustments for Social Security, Veterans, and Federal Civilian and Military retirement benefits. 

America’s seniors worked hard for their earned benefits and they deserve to have their standard of living and purchasing power preserved through an accurate COLA calculation.

 

GOP Appropriators Want to Eliminate Funding for Medicare SHIP Programs

 

Each day 10 thousand Americans become eligible for Medicare.  The aging of the baby boom generation certainly isn’t a surprise to anyone and yet, instead of boosting programs to serve this increased need, Republican Congressional leaders continue to slash and now eliminate programs designed to help millions of aging Americans and their families. 

The latest target is one of the nation’s most effective consumer resources for seniors, the Medicare State Health Insurance Assistance Program (SHIP)

“The SHIP network provides critical information upon which people with Medicare rely to make informed decisions about their coverage options and enrollment decisions,” says Judith A. Stein, Executive Director, Center for Medicare Advocacy, Inc. “The SHIPs are critical to providing assistance with these increasingly complicated choices. People with Medicare and their families from all over the country depend on SHIPs as the key source of unbiased guidance.” 

Incredibly, the Senate Appropriations Committee approved a Fiscal Year 2017 budget appropriations bill that completely eliminates the $52.1 million in funding for SHIP. 

“Senate appropriators have turned their backs on a growing number of people who will need SHIP services to navigate the complexities of Medicare coverage by proposing to eliminate program funding. This kind of penny-wise, pound-foolish lawmaking will threaten the economic security of millions of Medicare beneficiaries and their families.”…Max Richtman, NCPSSM President/CEO

“Understanding the complexities and decisions required for Medicare is an overwhelming, isolating experience for seniors, people with disabilities, and caregivers who don’t know where to get help. For millions of Americans, their only option for that help is their SHIP. If SHIPs disappear, there is no replacement for the critical services they provide. The loss of SHIPs threatens the economic security and the health of all current Medicare beneficiaries and the thousands who become eligible every day.”…James Firman, President and CEO of the NCOA 

"Eliminating SHIPs would leave millions of older Americans, people with disabilities, and families who need help comparing coverage options, appealing denials, applying for financial assistance, and navigating an evolving and increasingly complex program stranded—with nowhere to turn. With 10,000 Baby Boomers aging into Medicare each day, it is imperative that the U.S. House of Representatives reject this unprecedented, nonsensical cut."…Joe Baker, President of the Medicare Rights Center

In case you have any doubt about the need for SHIP services consider this:  today’s Medicare beneficiary must choose among more than 20 prescription drug plans, an average of 19 Medicare Advantage plans, as well as various Medigap supplemental insurance policies—all with different premiums, cost sharing, provider networks, and coverage rules. SHIPs also help beneficiaries resolve fraud and abuse issues, billing problems, appeals, and enrollment in low-income health assistance programs. In 2015, SHIPs provided one-on-one assistance to more than seven million individuals and in the past decade, the number of beneficiaries receiving personalized counseling from SHIPs has tripled.

Not a day goes by that we don’t hear horror stories of seniors and their families who face severe economic hardship and even bankruptcy because of a bad choice made in their healthcare options.  That’s exactly why SHIP is so vitally important.    

We’re proud to join a coalition of aging organizations including; The Center for Medicare Advocacy, Medicare Rights Center, and National Council on Aging (NCOA) to fight for a reversal of this outrageous Senate move to eliminate seniors’ access to desperately needed SHIP services.

We urge you to call your Senators and Representative and tell them:  Americans Need SHIP.

 

1-800-998-0180

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