From the category archives: Social Security
One of Congress’ strongest champions for strengthening and boosting Social Security, Medicare and Medicaid is Rep. Gwen Moore from Wisconsin. Congresswoman Moore has also been an effective voice in Congress for measures that focus on improving the economic and employment conditions in low-income communities. We’re so glad she’s agreed to share her views with us on the current Congress, Black History month and recent attempts to target Americans with disabilities by the GOP leadership in the House.
Rep. Gwen Moore (D-WI)
Each February, we are reminded of our country’s greatest African American leaders with the celebration of Black History Month. Black History Month provides us an opportunity not only to reflect on those who advocate on behalf of the African American community, but also to examine the critical concerns and issues facing African Americans today. Even with all of the progress made over the past half-century, African Americans still represent a disproportionate share of our nation’s poor. As we work to change the underlying causes for this reality, we must also make sure we’re providing an adequate safety net to prevent further harm of those who are already struggling to get by.
There is no program more vital to protecting those who are battling poverty than Social Security. Not only is Social Security responsible for allowing millions of Americans to enjoy a comfortable retirement after a life of hard work, but also provides insurance for more than 90% of American workers in the event of a debilitating accident or illness through the Disability Insurance program.
On the first day of the 114th Congress, House Republicans pushed through a rule change regarding the Social Security trust funds that would prevent the routine transfer of funds between the retirement and disability accounts. Without the ability to transfer funds, the Disability Trust Fund will be forced to cut all benefits by 20% in 2016. That’s 20% from a paycheck that already is not enough to keep 1.6 million people out of poverty.
A harsh truth we must come to terms with is that one out of every three young workers new to the labor force will either die or need Disability Insurance before they turn 67. Those odds get even worse for African American workers, who make up a disproportionate percentage of Disability Insurance beneficiaries. An unexpected disability or illness can be devastating to an individual or family, but the Disability Insurance program supplies protection to soften the blow of an immediate loss of income. While the benefits are modest, averaging around $1100 a month, they still represent the main or only source of income for over 80% of beneficiaries. Nearly one in five beneficiaries live in poverty, which translates to roughly 1.6 million people, or approximately the population of greater metropolitan Milwaukee, my home city.
Obviously, this critical program needs more funding, but my congressional colleagues across the aisle continue to stand in the way. The rule change proposed by House Republicans was slipped under the wire as a procedural fix. But let’s call it what it is: a brazen attack on our nation’s most vulnerable. These are people who paid their dues to Social Security while they were in the labor force who are now in need of the services they paid into.
Now is not the time to weaken the Disability Insurance program, but rather we should be strengthening it. One of the major lingering effects of the recession is the sharp increase in long-term unemployment. While this number is now on the decline for the overall population, disabled workers continue to struggle to find gainful employment. Cutting what meager benefits they have now would be a death sentence.
This Black History Month, instead of only reflecting on the African Americans of the past, we should also make sure we are taking care of the African Americans of today and tomorrow. Cutting benefits to the Disability Insurance program would disproportionately affect African Americans. I believe in a vision of government where we take care of those who have fallen on hard times due to disability. Black History Month serves as a good means to highlight these issues, but I will keep fighting for this vision all year-round, day-in and day-out, until every American receives the assistance they need to live a prosperous life.
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.
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.
Reaction from National Committee to Preserve Social Security and Medicare President/CEO, Max Richtman on the President's Budget:
“We’re glad to see President Obama respond to the GOP majority’s Social Security hostage-taking by including language in his 2016 budget allowing the routine rebalancing of the Trust Funds. Threatening people with disabilities with a 20% benefit cut unless there are broader Social Security benefit cuts plays politics with the livelihoods of 11 million Americans and their families rather than resolving this imminent funding issue. We applaud the President for taking a stand against this Social Security ploy. The President also included increased funding for the Social Security Administration which is desperately needed by an agency that’s been forced to reduce local office hours, cut back on consumer services, and increase the wait time for disability hearings. We urge Congress to approve this Social Security Administration budget.
While the President’s budget thankfully no longer includes cuts to Social Security, through the Chained-CPI proposal, his 2016 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 as well.
Medicare has been means-tested since 2007 and the number of beneficiaries subject to higher premiums has been increasing. If passed, the President’s means testing proposal will hurt middle-class individuals and flies in the face of his budget theme of ‘middle-class’ economics. The economic realities facing America’s middle-class retirees are ignored by these provisions which shift even more costs onto seniors and exacerbate the retirement deficit gap millions of Americans face now and into the future. These Medicare proposals are especially worrisome given the fact that with the new GOP majority in Congress, passage of these cost-shifting plans can happen with a simple majority vote in the Senate posing a serious threat to millions of American seniors.” ...Max Richtman, NCPSSM President/CEO
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