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From the category archives: Retirement

Celebrating Black History Month

Social Security is One Program – No Matter How Much Conservatives Try to Pit Seniors Against the Disabled

Tomorrow,  Republicans leading the House Ways and Means Social Security subcommittee will continue their campaign to try and convince Americanswhy it’s OK to threaten a 20% benefit cut for people with disabilities unless Congress enacts larger “reforms” (“reforms” actually meaning benefit cuts since conservatives have already ruled out revenue increases) from retirees, widows and survivors who depend on Social Security. 

This divide and conquer strategy ignores the fact that, once you step outside Congressional hearing rooms, average Americans understand that Social Security’s value goes far beyond just retirement.  Demonizing people with disabilities discounts the basic truth that American workers contribute throughout their working lives into one program -- Social Security.  Their contributions provide economic security for a whole host of needs from birth to death – for children who’ve lost a parent, spouses who’ve lost their “significant other” and people with disabilities no longer healthy enough to work.  Worker contributions provide all of these benefits. Cutting Social Security disability is cutting Social Security benefits, no matter how conservatives in Washington want to pretend otherwise. Targeting one group of Social Security beneficiaries is a political first step to attack the whole program.

Web Phillips is the National Committee’s Senior Legislative Representative and will testify before the committee tomorrow:  

“Our members come from all walks of life and every political persuasion.  What unites them is their passion for protecting and strengthening Social Security and Medicare, not just for themselves but for their children and grandchildren.  Our members see Social Security as an inter-generational compact that protects all members of the family.  To them, it is a single integrated system of benefits that provides family protection from birth to death.  It is a system where all of its parts, whether SSDI or retirement and survivors benefits, are equally important.

Most seniors have children and grandchildren and are as concerned for their offspring’s well-being as they are for their own.  Maybe more so.  They may have had sons and daughters who were born with a disabling condition or who became disabled later in life.  They are familiar with the disappointment and financial hardship unanticipated events cause and are grateful that Social Security is available to provide help when it is needed.  Fundamentally, they understand SSDI’s value and they support the program.”

At the heart of this issue is the GOP’s refusal to simply allow a modest and temporary reallocation of part of the 6.2 percent Social Security tax rate to the DI Trust Fund which would put the entire Social Security program on an equal footing, with all benefits payable at least until 2033. Again, Americans pay taxes to one Social Security system with the understanding their money provides disability, retirement and survivor benefits – all of them – so changing that allocation formula temporarily avoids any shortfall. In fact, Democrats and Republicans have authorized this same strategy eleven times without controversy (including four times during the Reagan administration). Extending the DI Trust Fund’s solvency to match the Retirement Trust Fund is a simple common sense step that sets the table for a more constructive long-term conversation about Social Security between now and 2033, rather than this faux crisis mentality promoted by the billion dollar anti-Social Security lobby and it’s allies on Capitol Hill. 

GOP leaders call this common-sense solution “kicking the can down the road” while they ignore the reality of what a 20% benefit cut would mean to millions of people with disabilities.  It’s a “death sentence” according to Social Security Acting Commissioner, Carolyn Colvin.  She’s right.  However, rather than address this immediate need for Social Security disability beneficiaries, as so many other Congresses have, Republican leaders continue their cynical political attack in which all Social Security beneficiaries are the hostages. 

America’s Richest 1% Won’t Contribute Another Dime to Social Security All Year

This week America’s wealthiest will make their last contribution to the Social Security system for 2015. The rest of us...middle class and the working poor...will continue to pay 6.2% of every dollar we earn to keep Social Security strong.  How can this be?

 


So, the payroll tax cap means the wealthy will never have to contribute on all of their income, just the first $118,500 (in 2015).  Because most Americans never earn that much in a year, many don’t even realize this unfair tax cap exists or the devastating effect it’s having on Social Security’s long-term fiscal outlook: 

“... the Social Security trust fund, which currently holds $2.8 trillion, is projected to be drawn down by about 2033 (according to the Social Security trustees). After that point, if no changes are made to the program, retirees will receive only about 75 percent of scheduled benefits. One of the main causes of this projected shortfall is the growth in inequality over the last 30 years. Back in the 1980s, the last time changes were made to Social Security, Congress and President Reagan decided to build up the trust fund with workers' payroll taxes in order to essentially pre-fund the coming retirement of the Baby Boom generation.

As a result, the trust fund has been steadily building up over the decades, but they weren't able to predict how much income gaps would widen over that time. So while the payroll tax cap has been adjusted for inflation every year, the income of the richest workers has increased faster, allowing more and more earnings to escape the tax, and causing the payroll tax to collect less than needed.”  Nicole Woo, Center for Economic and Policy Research

It’s no coincidence that conservatives who constantly clamor for cutting Social Security benefits never list raising or eliminating the payroll tax cap as an alternative solution to strengthening Social Security.   Once again, for America’s 1% and their supporters in Congress, middle-class benefits cuts are always the preferred solution.

“I found an even more glaring example of the vast inequity of the Social Security tax system a couple of years ago when I was reading a report issued by an association of CEO’s here in Washington.  The report made recommendation to “fix” Social Security by cutting benefits, cutting the Social Security cost of living adjustment, raising the retirement age…no mention of the payroll cap.  I was curious about the membership of this group and after a little research I did the math and discovered that one member of their executive committee reached the cap and stopped paying FICA tax after lunch on New Years Day.  Earning $54 million dollars a year allows you to do that…but doesn’t make it right.” Max Richtman, NCPSSM President/CEO

The National Committee proudly moderated a Capitol Hill event today with Senator Bernie Sanders (D-I), Rep. Jan Schakowsky (D-IL) and the Strengthen Social Security Coalition bringing attention to this Social Security payroll tax giveaway provide only to the richest people in America each year.

The Center for American Progress released a new report today analyzing what America’s income inequality has meant for Social Security’s funding. First, some historical background...when the 1983 Greenspan Commission passed its Social Security reforms 90% of American workers paid on all of their annual income.  In other words, only 10% were exempted from the payroll tax cap.  Since then, our nation has seen more and more income shifted to the wealthy meaning there are 6 times the number of millionaires and billionaires today compared to 1983 and more people above the tax cap. That’s means America no longer collects the Social Security payroll taxes from 90% of workers...today it’s only 83%. CAP reports that’s more than a trillion dollars lost.

“Had 90 percent of covered wages been taxed from 1983 to 2013, the OASDI trust funds would have been $1.1 trillion larger by 2013, shrinking the 75-year expected shortfall by 10.1 percent.

The simulation that we have modeled is retrospective; it addresses what would have happened had 90 percent of wages been taxed since 1983. In their annual report, the Social Security trustees answer a similar, but prospective, question: How would raising the cap to cover 90 percent of earnings starting in 2015 affect the trust funds’ shortfall? The trustees find that over the 75-year period, this change would close about 27 percent of the expected shortfall in the trust funds.”

 As Center for Economic and Policy Research Co-Director, Dean Baker, told the crowd today, “Social Security isn’t broke...America’s economy is.”  Contrary to the current GOP divide and conquer messaging, American seniors aren’t stealing money from children’s programs and the disabled aren’t bankrupting the Social Security retirement system.  Conservatives don’t want average Americans to see the truth -- our economic policies have shifted the nation’s wealth to the wealthy and away from everyone else.

It’s (Past) Time to Reauthorize the Older Americans Act

Chances are if you, or anyone in your family, is 65 or older your life has been impacted by an Older Americans Act program.  From Meals on Wheels to senior centers, prevention of physical and financial abuse, computer training to legal assistance, OAA programs touch the lives of millions of seniors and their families.  This myriad of programs provides home and community-based services making it possible for older adults to remain independent, but they’ve continually faced flat or shrinking budgets at a time of growing needs.  Funding programs that allow seniors to age in place is cost-effective; however, Congress has not reauthorized these programs since 2010. 

Tomorrow, legislation to reauthorize OAA will be considered by the Senate Health, Education, Labor & Pensions (HELP) committee . We’ve urged the Senate to pass this reauthorization:

“S. 192 builds on the core programs of the Older Americans Act (OAA) – including congregate and home-delivered meals, help for family caregivers, transportation and senior center services - which enable older adults to remain as independent as possible. We support provisions in S. 192 that protect against elder abuse and strengthen long-term care ombudsman services, as well as programs such as fall prevention and chronic disease self-management that promote healthy living. OAA services help seniors avoid hospitalizations and nursing home care, and, as a result, save federal and state funds that otherwise would be spent on such care. In addition to reauthorizing OAA programs, increasing OAA funding is crucial to meet the growing needs of seniors and to compensate for the lack of adequate funding over past years, a funding shortfall that was aggravated by the sequester.” 

We’ve created a video to introduce Members of Congress to the real-life impact their decisions have on average American seniors. 

 

Will the President’s Commitment to Middle-Class Agenda Protect Social Security too?

There is always plenty of Monday morning quarterbacking after each year’s State of the Union.  However, reading the commentary on last night’s speech was especially interesting since President Obama has clearly decided to take the gloves off in pursuing a popular middle-class economic agenda the American people support but the GOP-controlled Congress has no intention of passing:

“Republicans said that they were caught off guard by a major component of the president’s 2015 agenda, which he announced over the weekend and detailed further in his speech, to raise taxes and fees on the wealthiest taxpayers and the largest financial firms to pay for, among other things, tax breaks for the middle class and free community college. While these programs may prove popular with many Americans, Republicans said that they hoped the American public would see them as a ploy from a president who knows Congress will never pass them.”  The New York Times

What the Republican leadership has supported is more tax cuts for huge corporations and the wealthy plus cuts to Social Security and Medicare. While the President didn’t emphasize Social Security and Medicare in last night’s State of the Union, he did highlight their importance to American families’ economic and health security.  Truth is, you simply can’t improve the financial outlook for average Americans without protecting these programs.  But of course, these days “protect” has very different meanings depending on whom you talk to in Washington.

Remember all those Congressional campaign promises about “protecting” Social Security?  For the newly sworn-in GOP House what that actually meant was voting just hours after taking their oaths of office to put Social Security benefits cuts at the top of the Congressional agenda.  You’ve got to give the House leadership credit for stealth.  No one, outside a small circle of Republican Rules Committee members and GOP leadership, even knew this Social Security attack was coming.  Slipped inside what’s usually a routine administrative start to each Congressional session was an unprecedented change to House rules that would allow a 20% benefit cut for millions of disabled Americans unless there are broader Social Security benefit cuts or tax increases. Of course, House Republicans have no intention of passing tax increases so guess what’s left?  Benefit cuts to millions of Americans who receive Social Security.

This House vote illustrates the increasingly Orwellian nature of our political discourse, where words have little meaning because "save” means "slash" and "protect" means "privatize.” What’s even more noxious about this particular assault on Social Security is the ongoing effort to pit beneficiaries – retirees, the disabled, survivors and their families – against each other.  Proponents of this stealth rule change in the House claim seniors will somehow suffer if the disabled are allowed access to the benefits they too have contributed to throughout their working years. That’s a particularly absurd notion since the majority of disability recipients are also older Americans.  However, the divide and conquer politics of fear all-too-often work.  This latest Social Security attack is built on a foundation of lies intended to demonize America’s disabled community.

No doubt, you’ve already heard the messaging, most recently espoused in an especially candid way by Senator and Presidential hopeful Rand Paul that: Social Security disability fraud is rampant because it’s so easy to receive benefits and people would rather collect a hefty check from the government than work.  It’s the 2015 incarnation of “our nation is full of ‘welfare queens’ and ‘greedy geezers.’” It also suffers from the same basic problem...it’s simply not true.

So let’s break down a few of these Disability Myths.

 

MYTH: “Disability has become a form of permanent welfare for a lot of folks. It's not that hard to prove a mental illness, or mental issues, or pain issues.” 

Not that hard?  So, why are the vast majority of claims denied?

 FACT: “Nearly 80 percent of applicants are denied at the initial level, and fewer than 4 in 10 are approved after all levels of appeal. Underscoring the strictness of the disability standard, thousands of applicants die each year while waiting for benefits. And one in five male and nearly one in six female beneficiaries die within five years of being approved for benefits. Disability Insurance beneficiaries have death rates three to six times higher than other people their age.” Center for American Progress

 

It’s seems pretty ridiculous to claim the system’s being widely-abused when so many die just years after receiving benefits or while they’re still waiting for an answer.

MYTH:  Growth in Social Security disability claims is “astonishing”, an “epidemic” and “startling.” 

Actually, it’s called demographics.  Ever heard of the baby boomers? Former SSA Commissioners from both Republican and Democratic administrations have taken issue with this fact-free, hysteria-laden portrayal of the disability program’s growth.

 FACT:  “It is true that DI has grown significantly in the past 30 years. The growth that we’ve seen was predicted by actuaries as early as 1994 and is mostly the result of two factors: baby boomers entering their high-disability years, and women entering the workforce in large numbers in the 1970s and 1980s so that more are now "insured" for DI based on their own prior contributions.” Open Letter from former SSA Commissioners

 

 “As Baby Boomers retire, the program’s growth has already leveled off and is projected to decline further in the coming years.”  Center for American Progress

 

MYTH:  The entire system is “broken,” rife with “fraud” and “rubber-stamping judges” bankrupting the entire Social Security program.

 

 FACT:  The Government Accountability Office found that improper payments of Social Security benefits that include Disability Insurance had an error rate of just 0.6 percent. Government Accountability Office

 

Social Security touches the lives of virtually every American family and has unparalleled support across all ages, political parties and demographics.  The GOP led House clearly hopes to drive a wedge through that coalition, pitting seniors against people with disabilities, young versus old and workers versus retirees.  So much for a new Congress that “works together.”

President Obama’s economics agenda for the middle-class is not only popular but desperately needed for millions of Americans left behind in this recovery...including Social Security beneficiaries of all ages. Of course, the GOP Congress won’t pass it but there’s always 2016. 

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