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From the category archives: Social Security

GOP Tax Cuts Could Cost Seniors in the Long Run

The GOP had scarcely emerged from the defeat of their latest Obamacare repeal legislation when they pivoted lightning-quick from healthcare to taxes.  The tax reform plan the party unveiled last week may ultimately endanger the well-being of older Americans more than the vanquished healthcare bill.  Here’s why:  The nonprofit Tax Policy Center estimates that the GOP tax plan will reduce federal revenues by a net $2.4 trillion in the next 10 years.  As the deficit grows, Congress will look to cut spending.  Republicans have already called for deep cuts to Social Security and Medicare, and would no doubt come after those programs looking for massive savings. Seniors’ earned benefits could be used as piggy banks to pay for reckless tax cuts that largely benefit the wealthy.

Americans for Tax Fairness put it his way:

"[The tax plan’s] eye-popping cost will lead to deep cuts in Social Security, Medicaid, Medicare, and public education that will leave working families in the cold."- Americans for Tax Fairness

… while House Democratic leader Nancy Pelosi predicted:

“Make no mistake: after Republicans’ tax plan blows a multi-trillion dollar hole in the deficit, they will sharpen their knives for Social Security, Medicare, Medicaid.” – House Minority Leader Nancy Pelosi 

Budget hawks (including President Trump’s budget director Mick Mulvaney and House Speaker Paul Ryan) have long dreamed of cutting Social Security and Medicare.  Once their tax plan balloons the deficit, they will have the perfect excuse for gutting those programs – even though Social Security and Medicare Part A are completely self-funded by workers’ payroll contributions; they contribute not a penny to the deficit.

In fact, the budget cutters’ knives are already sharpened. The 2018 House Budget resolution calls for nearly $500 billion in cuts to Medicaid over the next decade.  That would be devastating for the 1.4 million seniors who rely on Medicaid for long-term care, and millions of others who are dually eligible for Medicaid and Medicare.  The House budget resolution also includes nearly $500 billion in cuts to Medicare over the next ten years.  Under the House budget plan, Medicare would be privatized and the eligibility age raised from 65 to 67 (an effective benefit cut). If these changes are enacted, seniors will be left to fend for themselves in the private insurance market with vouchers that may not keep up with rising costs. 

Despite President Trump’s protestations that the GOP tax plan won’t benefit the rich, that’s precisely who would reap the biggest gains.  (Trump himself could save an estimated $1 billion in taxes!)  According to the Tax Policy Center’s analysis:

"Taxpayers in the top 1 percent would receive about 50 percent of the total tax benefit from the tax overhaul, with their after-tax income forecast to increase an average of 8.5 percent." – Tax Policy Center 

On the other hand, some in the middle class would see their taxes go up.  One in seven households earning between $48,000 and $86,000 per year would pay more in taxes next year; the proportion would double during the next decade.  For households earning $150,000-217,000 a year, one third would immediately pay more in taxes. 

Republicans claim that the tax cuts will pay for themselves through intense economic growth.  They have tried this before (Most recently, with the Bush tax cuts in the early 2000s), and it didn’t work out.  Instead, deficits swelled, reinforcing budget hawks’ instincts to cut programs for the most vulnerable members of our society, including and especially seniors.  One of the (repentant) architects of the failed trickle-down economics of the 1980s, Bruce Bartlett, put it best in a recent column for USA Today: 

"Tax cuts and tax rate reductions will not pay for themselves; they never have. Republicans don’t even believe they will, they are just excuses to slash spending for the poor when revenues collapse and deficits rise." – Bruce Bartlett, former Congressional economist

 

 

Remembering a Crusader for Equal Access to Federal Benefits

The woman President Obama called one of America’s “quiet heroes” passed away September 12th in New York City.  Edith Windsor, 88, was a champion of LGBT rights, whose victory in the landmark United States v. Windsor Supreme Court case allowed married same-sex couples to collect the same federal benefits as heterosexual couples in states that had legalized gay marriage. 

Edith Windsor’s 2013 victory inspired Kathy Murphy, a Texas widow who was denied Social Security survivor’s benefits after the death of her wife, Sara. With the help of the Lambda Legal Defense Fund, Murphy, a member of the National Committee to Preserve Social Security and Medicare, sued the Social Security Administration (SSA) in 2014 for the right to collect survivor’s benefits.  Murphy’s case was later folded into the Obergefell v. Hodges Supreme Court case that legalized same sex marriage and access to spousal benefits for same-sex couples nationwide in 2015.  

Thanks to Edith Windsor, Kathy Murphy, and millions of supporters across the country, same-sex couples became eligible for the full range of Social Security spousal benefits, including retirement, survivor, death and disability protections. This led to the development of a National Committee sponsored community outreach and education initiative called Know Your Rights which helped thousands of LGBT couples and families understand their Social Security benefits.  

Edith Windsor lived with her partner, Thea Spyer, for 40 years, finally getting married in Toronto in 2007. (Their home state of New York didn’t legalize same-sex marriage until 2011).  Windsor was denied an estate tax exemption for married couples after Spyer died, and sued the federal government for a tax refund, leading to the landmark Windsor decision.  

The diminutive Windsor, a retired computer programmer for IBM, never sought the spotlight but embraced her role as a well-known LGBT activist. 

The National Committee celebrates Windsor’s life and her landmark achievements.  She was that ‘ordinary person’ caught up in extraordinary circumstances who bravely stepped forward for the cause of equality, the “quiet hero” who gave voice to couples asking only the same benefits as everyone else.

Rep. Brat at His Worst: Spreading Myths about Social Security and Medicare

In a contentious interview with CNN’s Kate Bolduan this week, Rep. Dave Brat (R-VA) perpetuated some dangerous myths about Social Security and Medicare.  Brat, a Tea Partier and fiscal bomb thrower, has been campaigning to cut seniors’ earned benefits since first running for Congress in 2014.

The CNN interview heated up when Bolduan pressed Brat about the recently-passed deal to suspend the debt ceiling and keep the government open, which he opposed.  It’s worth quoting Brat’s answer at length here, because it is only borderline comprehensible and riddled with inaccuracies:

“I was just at my convocations back home with the kids. The kindergarteners are in the class of 2030, they just told me. They will graduate college in 2034. So if you do know the context, the context is that is the year Medicare and Social Security are insolvent. I don’t think people do know the context.  Otherwise there’d be more urgency and they wouldn’t put up with the nonsense we’re doing up here on the fiscal front. Right? If the press would weigh in on what the damage -- it’s a guaranteed fiscal crisis in 2034. Guaranteed.  In law, I’m on the budget committee, we can’t touch it.  Right--You got to pass in law.  So that’s – that’s the context and so with that; if you ask the average voter how you should vote on a clean debt ceiling increase with no fiscal discipline whatsoever, it’s the whole country 90%.”

Where to begin dissecting this statement?  The relevance of kindergarteners graduating college in 2034 notwithstanding, Social Security and Medicare will not be insolvent that year.  If Congress takes no corrective action whatsoever, the Medicare Part A Trust Fund and the Social Security Trust Funds will be depleted in 2029 and 2034, respectively.  But that does not mean the programs will be insolvent.  Revenue from workers’ payroll taxes still will be flowing in, allowing Medicare to pay 88% of full benefits and Social Security 77% --- with no further action from Washington.  In fact, the 2017 Social Security Trustees Report says there is now $2.847 trillion in the Social Security Trust Fund, which is $35.2 billion more than last year --- and that it will continue to grow with payroll contributions and interest on the Trust Fund's assets.)  

Does this mean we sit by and do nothing?  Of course not.  But Rep. Brat’s prescriptions are as draconian as his statements are inaccurate.  The Congressman has championed cutting Social Security and Medicare and raising eligibility ages as the only solution.  When running for office in 2014, he told a Tea Party crowd:

“It’s not just little marginal changes, right?  In order to avoid those insolvency issues with Medicare and Social Security, you’re going to have to do some major cuts."

According to PolitiFact, Brat went on to say that people will ‘have to work longer before receiving benefits’ – meaning raising the retirement age.  This favorite proposal of fiscal hardliners is actually a benefit cut.  And it is based on the misconception that just because average life expectancy is rising, everyone can work well past 65 – even though working class Americans (especially those doing physical labor on the job) may not be physically able to continue working into their late 60s like their wealthier counterparts.

Hardliners don’t like to talk about this, but there are other ways to keep our earned benefits fiscally sound without punishing the people who depend on them. The National Committee supports legislation by Senator Bernie Sanders (I-VT), Rep. John Larson (D-CT), and others in Congress to keep Social Security solvent without cutting benefits or raising the retirement age – mainly by lifting the payroll tax income cap so that the wealthy pay their fair share.  In fact, the Sanders and Larson bills actually boost benefits and cost-of-living increases while ensuring the fiscal health of Social Security well past those kindergartners’ 2034 graduation date. That way, those kids can count on their benefits when they retire around 2077.

But some members of Congress – and Rep. Brat in particular - ignore or dismiss these modest and manageable solutions, proposing instead that seniors shoulder the burden through benefit cuts and a higher retirement age.

Now we come to the second myth that Brat likes to propagate:  that Social Security and Medicare are major drivers of the federal budget deficit.  At that same 2014 Tea Party campaign event, Brat justified Social Security and Medicare cuts by saying:

“We’re going to have to take some bad medicine… to just balance the budget. If you don’t solve it, then in 11 years nearly all federal revenue will go only to [Social Security and Medicare].”

The fact is that Social Security has no net effect on the federal budget and contributes not one penny to the deficit. It is self-financed through workers’ payroll taxes.  Ditto for Medicare Part A.  Suggesting that these programs must be cut to balance the budget is disingenuous at best, but that doesn’t stop fiscal hardliners and the mainstream media from spreading the myth.  

Notice how Brat conflates the debt crisis with Social Security and Medicare at the end of his CNN rant.  Unfortunately, this claim is made far too often, but is hardly ever challenged by on-air journalists, this time being no exception (though, in truth, Bolduan was struggling just to control the interview).

Why do the on-air rantings of Congressman Brat matter? His arch-conservative philosophy wouldn’t be so dangerous if he were truly on the margins of political debate. But for the first time in more than a decade, fiscal hawks have the power to impose their hardline views on America’s most vulnerable citizens. Brat is a member of the House Budget Committee, which has already voted to privatize Medicare and raise the eligibility age.  That’s a powerful perch for spreading myths about Social Security and Medicare in order to justify cuts that are just plain cruel. 

FDR's Grandson on Social Security... Which Turns 82 Today

President Franklin D. Roosevelt signed Social Security into law on this day in 1935 to provide seniors with basic income security after retirement, mitigating against the “vicissitudes and hazards of life.” Eighty-two years later, the program he created has kept several generations of seniors – and their families – out of poverty.  In turn, the nation is very fortunate to have had several generations of Roosevelts dedicated to preserving Social Security. 

Franklin Roosevelt’s son, Congressman James Roosevelt, Sr., founded the National Committee to Preserve Social Security and Medicare in 1982 to protect the financial security, health, and well-being of current and future generations of Americans.  FDR’s grandson, James (“Jim”) Roosevelt, Jr., carries on his family’s legacy as a leading healthcare advocate and vice-chair of the National Committee’s Advisory Board. 

Last March, Jim Roosevelt sat down with National Committee President Max Richtman for a wide-ranging Facebook Live interview.  We have included some highlights of that interview below as we look at the legacy of Social Security on its 82nd anniversary.

Jim’s grandfather, President Franklin Roosevelt, became inspired to create a national retirement insurance program after seeing older Americans relegated to the poor houses because they had no means of supporting themselves. “It tears my heart to see those old men and women there,” said then-Governor Roosevelt after visiting the poor houses of New York state.  As Jim Roosevelt explained, FDR felt that seniors deserved an assurance of fundamental financial security.

He believed (and we still believe) that Social Security is basic to the lives of the American people. And he was very clear that it was a family program.  It was created not only so that people, when they reach retirement age, have enough money for the basics of a decent life. It’s also so that their children don’t have to spend down their money to take care of them. – Jim Roosevelt

Working with Secretary of Labor Frances Perkins, FDR pushed the Social Security Act of 1935 through Congress at the height of the Great Depression.  To some, it was counterintuitive that  President Roosevelt put such a high priority on retirement insurance at a time when so many millions of Americans couldn’t find work.  But Jim Roosevelt told us that FDR viewed retirement security and employment as inextricably linked.

People said to my grandfather, “Why are you worrying about people’s retirement when people need jobs?”  And he said these are tied together. If people have jobs, they can pay into Social Security knowing that they’ll have benefits later on.  Life is then worth living, work is worth doing.  And I think that’s what has remained the vision for me, for my father, and for the National Committee over these past 30 years. – Jim Roosevelt

It was very important to President Roosevelt that Social Security be funded directly through workers’ payroll contributions.  FDR said that payroll contributions would give retirees “the legal, moral, and political right” to collect their Social Security benefits. He knew that a perpetually self-funded program would guarantee Social Security’s endurance for generations to come, and protect the program from the whims of politicians who might seek to undermine it

The reason that Social Security is structured the way it is is so that nobody, just for political reasons, can cut Social Security out of the budget or out of the law.  Because Social Security has its own dedicated income stream from the payroll tax, we don’t just trade if off against education or defense or other important things.  My grandfather famously said, “With those taxes in there, no damn politician can ever scrap my Social Security program.”  That’s as true today as it was in 1935. – Jim Roosevelt

President Roosevelt’s vision has most certainly endured. Today, Social Security provides some 61 million Americans and their families with basic financial security upon retirement or disability.  For older Americans, Social Security can mean the difference between financial well-being and poverty.  Two out of three seniors rely on Social Security for most of their income, and one-third of seniors depend on it for at least 90% of their income. Public polling consistently shows that Social Security enjoys overwhelming support from majorities of Americans across party lines.

Over the years, Social Security has been modified (with bipartisan support) to expand benefits and keep the system financially sound. This year, Social Security has come under new threat from budget hawks in the Trump administration and on Capitol Hill.  But as generations of Roosevelts have shown us, Social Security is worth fighting for.  On this, Social Security’s 82nd anniversary, we at the National Committee recommit ourselves to preserving this landmark program for current and future generations of Americans.

Watch our full interview with Jim Roosevelt on Facebook Live

House GOP Recklessly Pursues Privatization of Medicare in Budget Process

Congress is targeting the health and financial well-being of America’s seniors by making yet another attempt to privatize Medicare.   Yesterday the House Budget Committee passed the GOP’s FY 2018 budget resolution, which includes Speaker Paul Ryan’s “Medicare premium support” scheme – an innocuous name for turning time-tested senior health care coverage into “Coupon-Care.”  

The House budget blueprint slashes nearly $500 billion from Medicare over ten years and raises the eligibility age from 65 to 67 – along with gutting Medicaid and other social safety net programs for needy seniors.  

The Associated Press had a pithy summary of the painful cuts that the GOP proposes in its new budget:

“The plan, in theory at least, promises to balance the budget through unprecedented and unworkable cuts across the budget. It calls for turning this year's projected $700 billion or so deficit into a tiny $9 billion surplus by 2027. It would do so by slashing $5.4 trillion over the coming decade, including almost $500 billion from Medicare, $1.5 trillion from Medicaid and the Obama health law, along with enormous cuts to benefits such as federal employee pensions, food stamps, and tax credits for the working poor.” – Associated Press, 7/18/17

 National Committee President Max Richtman says that converting Medicare into a voucher program is an existential threat to the program itself. 

 “Over time, giving seniors vouchers to purchase health insurance would dramatically increase their out of pocket costs since the fixed amount of the voucher is unlikely to keep up with the rising costs of health care. And, as healthier seniors choose less costly private plans, the sicker and poorer seniors would remain in traditional Medicare, leading to untenable costs, diminished coverage, and an eventual demise of traditional Medicare, plain and simple.” – Max Richtman, NCPSSM President

Of course, raising the Medicare eligibility age from 65 to 67 as the House spending plan also proposes, is in itself a drastic benefit cut.

Undermining Medicare has been a long-held dream of fiscal conservatives. Their “premium support” proposal is a thinly veiled scheme to allow traditional Medicare to “wither on the vine,” as former House Speaker Newt Gingrich once put it.

Privatization is being sold as “improving customer choice,” but based on the way current Medicare Advantage plans work, private insurance will continue to offer fewer choices of doctors than traditional Medicare does.  If traditional Medicare is allowed to shrink and collapse, choice will disappear, too.

“Weakening Medicare is a politically perilous path for Republicans.  Recent polling indicates that large majorities of Americans across party lines prefer that Medicare be kept the way it is, not to mention that President Trump repeatedly promised to protect the program during the 2016 campaign.” – Max Richtman, NCPSSM President

Meanwhile, the National Committee strongly condemns other priorities of the House Republican budget resolution, as well.  The GOP budget resolution will mean: 

*Hundreds of billions in painful cuts to Medicaid, which seniors depend on for long-term care services and supports.

*Reaffirmation of a House rule that puts 11 million Social Security Disability Insurance (SSDI) beneficiaries at risk of a 7% benefit cut in 2028.

*Reductions to SSI (Supplemental Security Insurance), which provides cash assistance to low-income seniors and people with disabilities.

 *Caps on non-defense spending that will likely lead to devastating cuts to Older Americans Act programs and the Social Security Administration (SSA) operating budget.

 *Slashing of programs that benefit our nation’s veterans and deep cuts to spending on medical research (including cancer, diabetes, heart disease, and other conditions afflicting the elderly).

The savings from these devastating cuts will likely go to tax breaks for the wealthy.  Last year’s House Republican tax plan gave 99.6% of its benefits to the top one-percent of earners, with virtually nothing for middle and low income Americans.

 

 

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