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From the category archives: Social Security

What Are the Social Security & Medicare Questions You'd Ask Candidates in Monday’s Debate?

Presidential Candidates Hillary Clinton and Donald Trump meet in their widely-anticipated and already heavily-analyzed first debate on Monday. NBC’s Lester Holt will moderate. We’ve already thrown in our two cents on why we believe Social Security and Medicare should be included in this debate (and it’s not because, as the U.S. Chamber of Commerce claims, benefits need to be cut to reduce the deficit).

Past experience has shown that not all debate questions are created equal. In fact, when a moderator addresses Social Security and Medicare in a question that’s actually about deficit reduction that should be a huge red flag for the millions of American families which depend on these programs. As we told Mr. Holt earlier this week:

“We urge you to avoid buying into the premise that “saving” Social Security and Medicare has anything to do with cutting the deficit. It doesn’t.”

What Americans really want to know is what these candidates plan to do to strengthen these programs not slash them – and please, give us details!

What do you want to hear from the candidates on Monday? We’ve created this Presidential Question survey to get your thoughts. Take just a couple of minutes and rank these 5 questions about Social Security and Medicare from 1-5 stars on importance to you. If you love a question it’s a 5, your next best option would be 4 and so on...all the way down to 1 star which is the question that doesn’t really thrill you.

We’ll take all of your answers and share them Monday before the debate.

The Sneak Attack on Social Security

Since before Social Security was created 81 years ago, the actuaries at the Social Security Administration have been tasked with making real-time analysis and long-term projections of the program’s health. Their record has been impressive. For example: in 1934, actuaries projected that the percentage of the U.S. population aged 65 and over would be 12.65 percent in 1990. It turned out to be 12.49 percent.

Given that 60 million Americans depend on Social Security, it’s obvious why accurate and consistent information on the program’s finances is vital to the economic health of so many families and our nation.  That’s why it’s also disturbing to see the possibility that politics might be interjected into Social Security’s financial analysis and projections by the creation of dueling reports.  Some background...

During the Bush administration, the Congressional Budget Office was tasked for the first time in its history to do its own analysis of Social Security.  Now, CBO is staffed with economists who examine many federal programs but they’re not actuaries or Social Security experts.  In fact, they’ve chosen different assumptions on mortality, interest rates, income inequality and disability rates for their Social Security calculations than the experts at SSA.  Not surprisingly that means their predictions are also different. 

“When CBO first got into the act, it projected somewhat smaller shortfalls than the actuaries. Then, in 2013 - soon after Senator Elizabeth Warren and other prominent members of Congress began publicly advocating for expansion - CBO’s projected shortfall increased by 73 percent in just one year. It jumped again in 2014, and yet again in 2015. According to CBO’s non-actuaries, Social Security’s projected long-range shortfall more than doubled, increasing by a whopping 125 percent in just three years. 

The smooth operation of Social Security oversight and policymaking depends on projections that are reliable and trustworthy. The actuaries spend all year long, every year, studying trends, perfecting techniques, and refining their projections. Their projections are steady and consistent, wavering only slightly from year to year. 

Not so, CBO. Estimates that more than double the projected shortfall in the span of just three years should raise red flags in and of themselves. Not surprisingly, CBO’s underlying assumptions are highly questionable.”...Nancy Altman, Social Security Works

  • CBO assumes 75 years of very low interest rates, far lower than we’ve seen over four decades. 
  • CBO predicts income inequality will grow substantially despite efforts in Congress to reverse that trend. 
  • While disability rates are slightly lower, CBO predicts they’ll increase.
  • CBO assumes longevity rates will improve, even for the oldest Americans. Meaning a 95 year old will see the same longevity increase at a 55 year old?

With hundreds of assumptions to consider, it would be logical that some changes might balance the analysis; however, in CBO’s case, each of the assumptions they changed led to a significantly larger shortfall. Coincidence? These graphs, introduced in the House Ways and Means subcommittee hearing on this issue today illustrates that dramatic shift, which more than doubled the shortfall prediction in just three years. 


Members of Congress asked the SSA and CBO today which prediction should they believe --  the nation’s actuaries whose sole job is manage the Social Security program or economists at the CBO, who’ve taken a new and different path to come up with very different answers.

Unfortunately, this case of dueling reporting isn’t happening in a vacuum.  Political pressure to exclude data on the size of Social Security’s benefit replacement rates in the annual Trustees Report (by those who’ve long claimed that benefits are much larger than can be proved) has been successful.  This important data (which has been reported for decades) is no longer provided, meaning the public can no longer see the replacement rates which Social Security benefits provide its beneficiaries.  This clears the way for those who hope to persuade Congress that benefits are more generous than the actual numbers would show.

Earlier this year, CBO also had to issue a correction for errors it made in a widely-reported brief on the exactly the same replacement rate issue.  Once again, these errors played into the same political argument that seniors are getting more from Social Security than actuaries believe, that the retirement crisis is phony and that Social Security costs more and is more generous than the actuarial evidence demonstrates.  As reported by economist Dean Baker at the Center for Economic and Policy Research, this is far from the first time CBO has made errors in its long-term analysis:

“While this was a serious error, unfortunately it was not the first time that CBO had made a major error in an authoritative publication. In 2010, in its annual long-term budget projections it grossly overstated the negative effect on the economy of budget deficits. The 2010 long-term projections showed a modest increase in future deficits relative to the 2009 projections, yet the impact on the economy was far worse. 

The 2010 projections showed a drop in GDP of almost 18 percent by 2025, compared to a balanced budget scenario. This was more than twice as large as the impact shown in the prior year’s projections. The sharp projected drop in GDP could have been used to emphasize the urgency of deficit reduction. As was the case with the recent Social Security projections, CBO corrected its numbers after the error was exposed.”

The Social Security actuaries are universally respected for their straight-shooting and consistent approach to reporting and projecting on the program’s finances.  These days, that type of bi-partisan respect is hard to come by.  That’s why we say it’s time for outside influence-peddlers to quit creating confusion over a system which has served our nation well for more than three-quarters of a century. 

An Open Memo to Lester Holt: Actually, Social Security and Medicare Are More Than Just Deficit Reduction Tools



To: Lester Holt, NBC Nightly News anchor and moderator of the first 2016 Presidential Debate

Subject: The most important – but overlooked – issue in the presidential election isn't finding a way to cut benefits to millions of middle-class Americans

Mr. Holt,

In a campaign that’s been far more about personalities and proclivities than policy and practical solutions, we agree with the U.S. Chamber of Commerce that issues need to take center stage as you moderate next week’s Presidential debate.  We also agree that, for millions of average Americans and their families still struggling to see the full benefits of our economic recovery, understanding (in detail) what the Presidential candidates plan for future Social Security and Medicare benefits is important.  But we urge you to avoid buying into the premise that “saving” Social Security and Medicare has anything to do with cutting the deficit.  It doesn’t.

The push for benefit cuts to Social Security, Medicare and Medicaid in the name of deficit reduction has always been the goal of the billion dollar corporate and Wall Street backed crisis campaign driving Washington's deficit hysteria. “Never let a good crisis go to waste” was a strategic political move capitalizing on deficits as a way to force middle-class benefit cuts on Americans already shell-shocked in the Great Recession.  Once deficits reduced (without the drastic cuts to benefits that corporate lobbyists assured us must happen), the anti-“entitlement” lobby lost its inside-the-Beltway political momentum.  No doubt, they hope you’ll help them get their benefit-cutting mojo back.

Not surprisingly, the Chamber’s recitation of deficit woes failed to mention the billions of dollars in federal revenue lost to the Treasury each year thanks to tax cuts for corporations and the wealthy over decades.  There was zero mention of corporate inversions which have literally robbed our nation of legally-owed taxes. If you want to ask the candidates a question about bringing down deficits, how about:

“What will you do to prevent the loss of hundreds of billions of federal revenue from American corporations who dodge paying their taxes through corporate inversions and loopholes?

There is an important Social Security and Medicare conversation to be had.  We must find long-term solvency solutions that also address our nation’s retirement and health security crisis.  Obamacare went a long way toward improving the health care picture but more work remains to be done.  Retirement USA reports the gap between what Americans need to retire and what they actually have is $7.7 trillion. In fact, about half of households age 55 and older have no retirement savings and a third of current workers aged 55 to 64 are likely to be poor or near-poor in retirement. Unfortunately, the median retirement account balance is a puny $3,000 for all working-age households and $12,000 for near-retirement households. Vanguard reports that 401K balances, for those who do have them, fell a median of 11% last year.  Social Security remains the only stable retirement income for many Americans.

While the Chamber sees Social Security as solely a source of “investment-draining and economy-staling uncertainty,” the truth is, Social Security is a hugely stabilizing force for the economy.  A new report from the National Committee to Preserve Social Security and Medicare Foundation shows that, in 2014 alone, Social Security delivered a $1.6 trillion fiscal boost nationwide as benefits were spent and cycled through the economy.  Seniors spend their Social Security for the basics of everyday living which fuels businesses large and small. Unfortunately, Social Security’s economic contributions to communities, counties, and states continue to be misunderstood and ignored in Washington’s fiscal debates.

The American people understand how important programs like Social Security and Medicare are to re-building and strengthening the fiscal health of millions of families and our nation.  They know we cannot ignore program adequacy in favor of a benefit-cuts only approach when addressing long-term solvency. Thankfully, the economic recovery and time have provided many Members of Congress the space to craft meaningful legislation that not only extends Social Security’s solvency by decades but also boosts benefits, which is exactly what the American people have said in poll after poll they support. In fact, 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.  Not just for today’s seniors but also for future generations which will likely depend on these programs as much, if not more, than current retirees.

With this in mind, we strongly urge you to ask the candidates: 

“What is your specific plan to ensure Social Security and Medicare’s long-term solvency?”

Regards,

The National Committee to Preserve Social Security & Medicare

Social Security Administration Cuts Hurt Americans in Every State

Congress has cut the Social Security Administration’s core operating budget by 10 percent since 2010, after adjusting for inflation. Incredibly, this is happening at the same time a record number of Americans retire each year.  It’s not like the baby boom generation is a surprise.  Our nation built extra schools when they were young and housing as they reached adulthood; however, today’s Congress has chosen to ignore the fiscal realities of their retirement. 

A new report by the Center on Budget and Policy Priorities details the dramatic impact Congress’ SSA budget cuts have on service nationwide:

  • SSA’s staff has shrunk 6 percent nationwide since 2010. Five states — Alaska, Iowa, Kansas, Nebraska, and West Virginia — have lost more than 15 percent of their staff since 2010.
  • Disability Determination Service (DDS) staff, who decide whether applicants’ disabilities are severe enough to qualify for Disability Insurance (DI) or Supplemental Security Income (SSI) has shrunk 14 percent nationwide since 2010.  Seven states — Indiana, Kansas, Louisiana, Mississippi, South Dakota, Tennessee, and Texas — have lost over 20 percent of their DDS staff.
  • Staff shortages have contributed to a record-high disability hearing backlog of over 1 million applicants.
  • SSA has been forced to close 64 field offices since 2010, at least one in nearly every state.

Added to this list, according to a recent audit of the SSA, are reduced hours of service at the remaining offices, the limited mailing of the annual earnings statement, increased wait times, crowded lobbies and limited appointment availability.  

As we reported last month:

Unfortunately, this budget slashing effort is nothing new. “Starve the beast” and shrinking government “down to the size where we can drown it in the bathtub" are long-held goals for Congressional conservatives.  Today’s budget cutters are continuing that 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.

“Cutting staff when SSA is processing historically high claims is irresponsible and a sign that the Republicans who voted for this cut are not interested in providing tax payers with good service regarding SSA,” said Witold Skwierczynski, president of the American Federation of Government Employees SSA Council. “Instead they appear to be creating a scenario that insures the collapse of the program and will enhance the push to privatize it.  If the public loses trust and faith that the federal government can administer SSA, they will look to privatization proposals as an alternative.”...Washington Post, August 9, 2016 

We recommend you read the full CBPP report here to see what’s happening in your state and nationwide. 

Another Trump Whopper – This One on Social Security

Since immigration is a key issue for Donald Trump’s Presidential campaign, we knew it was only a matter of time before one of the biggest Social Security myths would work its way into campaign rhetoric – and so it has, in a new Trump for President campaign ad:

In Hillary Clinton’s America, “illegal immigrants … [are] collecting Social Security benefits, skipping the line.” –voice-over in a Donald Trump campaign ad, Aug. 19, 2016

As we’ve reported many, many times, undocumented workers do not receive Social Security benefits.  In fact, because they don’t have legal Social Security numbers what frequently happens is they end up contributing but not collecting:

“Stephen C. Goss, the chief actuary of the Social Security Administration, has reported that unauthorized immigrants contributed about $12 billion a year to Social Security, adding an estimated $300 billion over the years to the Social Security trust fund. During the most recent attempt to reform our immigration system in 2007, the Congressional Budget Office (CBO)estimated granting permanent status would generate $57 billion in additional revenue over a decade.”

Fact checkers took a look at the new Trump campaign ad and came to the same conclusion, earning Trump his 42nd “Whopper” ranking:

“The Republican presidential nominee makes a bizarre claim that undocumented immigrants will collect Social Security under a Clinton presidency. In general, people in the United States illegally are not eligible to collect Social Security benefits. They must be granted some type of lawful status — either by obtaining legal status or being granted deferred action. Even then, it’s not accurate to say they are “skipping the line.” People who obtain lawful status under DACA need to work for at least 10 years, pay taxes and reach retirement age before they are eligible to receive Social Security benefits.

Trump has already earned 41 Four-Pinocchio ratings. We would have liked to see the nominee finally stick closer to the facts in his first general-election ad. Unfortunately, this ad is — to borrow a line from its script — “more of the same.” The broad assertion in this ad is just not supported by facts, and thus earns Four Pinocchios.”

You can read more about what Immigration reform means for Social Security in our Issue Brief.  Here are some basics:

  • As legal status is granted to current undocumented immigrants, allowing workers to step out of the shadows, contributions to the Social Security program will increase. The CBO estimated that reform would increase the growth of the economy by as much as 1.3 percent.
  • Social Security trustees project that an increase in immigration of 100,000 persons a year would improve the long-term actuarial balance of the Social Security’s trust fund by about 3.5% of the projected 75-year deficit.
  • The immigrant population, in particular undocumented workers, is very young. In fact 59% arebetween 25 and 44 years of age. History has shown that their children, as legal second- generation Americans, would make measureable contributions to our nation and economy. A Pew research study of the 20 million adult U.S.-born children of immigrants shows that these adult children have median incomes and homeownership rates similar to the general U.S. population. In fact, second generation adult children of immigrants have a lower poverty rate and higher college graduation rates. All of these demographic factors are potentially good - not bad - news for Social Security.


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