From the category archives: Budget
It must be campaign season! GOP candidates, under Karl Rove’s tutelage, have doubled-down on their Medicare and Social Security dodge and deflect strategy. The heart of this political strategy is to avoid talking about GOP candidates’ true plans for Social Security and Medicare while simultaneously portraying their opponents as the “enemies of seniors.”
Greg Sargent offers this perspective:
“It is remarkable to watch Rove’s group try to position multiple Democratic Senators as the real threat to social insurance for the elderly, for the third straight cycle — and even more intriguingly, to use Simpson Bowles to do so. After all, Simpson Bowles is still widely treated as a paragon of unimpeachable fiscally responsible centrism, and Dems have long been pilloried by Beltway fiscal scold types for refusing to embrace its sanctified prescriptions for deficit reduction.
Indeed, this sort of Crossroads rhetoric should outrage fiscal conservatives. As Philip Klein put it in a post slamming Crossroads’ ad against Mark Pryor: ‘if Republicans want to be a limited government party, they have to be making the case for reforming entitlements — not running ads attacking Democrats from the left.’ “
As a reminder, Simpson Bowles is the Wall Street backed plan which would raise the retirement age, change the Social Security formula to cut benefits by 5%-30% while also changing the COLA formula to cut benefits for both current and future retirees. Simpson Bowles has been touted by conservatives and centrists as a “balanced plan” even though it imposes 75% in benefit cuts (largely on the middle class) and only 25% in revenue increases. How incredibly cynical for Karl Rove and crew to attempt yet another rewrite of history on behalf of his GOP congressional clients, most of whom would not only support Simpson-Bowles but also the GOP/Ryan budget which would be especially devastating to Social Security and Medicare.
So, as you will inevitably see these ads make their way onto your local channels, here’s what you need to remember about the GOP campaign strategy on Social Security and Medicare from their 2012 playbook and our blog post back then:
A memo and campaign how-to video from the National Republican Congressional Committee provides an incredibly clear and cynical look behind their political curtain, as the NRCC gives Republican candidates tips on how to dodge the discussion they really don’t want to have about the votes they’ve already cast on Medicare:
“Do not say: ‘entitlement reform,’ ‘privatization,’ ‘every option is on the table,’ … Do say: ‘strengthen,’ ‘secure,’ ‘save,’ ‘preserve, ‘protect.’” NRCC Memo
It’s up to voters to ask the right questions. That happened in New York with GOP candidate Elise Stefanik and hilarity ensued:
If you had any doubt about just how stark the differences are between the Republican and Democratic approach to fixing our economy, these dueling letters between Treasury Secretary Jack Lew and GOP Senator Orrin Hatch should clear that up for you quickly. At issue is the idea of “economic patriotism.”
First, some background...
There’s currently a loophole in our tax code that allows American companies to dodge paying taxes by renouncing their corporate citizenship, leaving operations here but claiming an overseas address. This legal tax dodge costs our nation billions of dollars each year.
“The practice has become known as “inversion.” But what it really amounts to is desertion. And it could cost Americans tens of billions of dollars. There are 47 firms in the last decade that have exploited this loophole, according to new data compiled by the nonpartisan Congressional Research Service. But it’s a hot topic again because at least a dozen U.S. firms are currently considering taking advantage of it.”...Center for American Progress
The President’s 2015 budget would make it harder for firms to reap the benefits of being an American company while simultaneously dodging their tax obligations by requiring a minimum 50% foreign ownership to avoid U.S. taxes (it’s currently only 20%). This week, Lew sent a letter to Congress urging quick action (okay, try not to laugh...) to pass inversion legislation.
“Congress should enact legislation immediately...to shut down this abuse of our tax system. What we need as a nation is a new sense of economic patriotism, where we all rise and fall together. We know that the American economy grows best when the middle class participates fully and when the economy grows from the middle out. We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.”
Sounds reasonable, right? Not according to the ranking GOP member of the Senate Finance Committee who penned a testy letter in reply. Not only does Senator Hatch reject the legislative fix offered by Senate Democrats to recoup the billions lost to corporate scofflaws he also redefines the idea of “economic patriotism” by shifting the target from known corporate tax dodgers to American families who depend on Social Security, Medicare, Medicaid and the Children’s Health Insurance Program:
“I must disagree with the administration's position that we should, in the short term, enact punitive, retroactive policies designed to force companies to remain domiciled in the United States.”
“My hope is that your definition of "economic patriotism" is not so narrow as to only include a particular business practice ... I hope that you share my view that "economic patriotism" includes a desire to fix the problems that are truly ailing our country and threatening the livelihoods of future generations. Non-partisan watchdogs and rating agencies have been issuing warnings about our ballooning national debt and runaway entitlements for years now. These issues represent the greatest threat to our fiscal and economic security...”
Welcome to Washington, where you’re an “economic patriot” if you turn a blind eye to corporate tax dodgers who owe this nation billions of dollars and instead take it from middle-class benefits paid for by average Americans , the truest patriots of all, who worked a lifetime building the economy that fuels those corporate profits to begin with.
The Social Security Administration’s budget has been under assault for years. Today the Senate Special Committee on Aging will examine the real-life impact these cuts are having on millions of seniors, people with disabilities, survivors and their families:
“The hearing, the culmination of a bipartisan committee staff investigation into service reductions at the Social Security Administration (SSA), comes at a time when baby boomers are filing record numbers of retirement, disability and survivor claims with the agency. Despite the rising demand, the SSA is currently in the midst of the largest five-year decline in field offices in its 79-year history. Budget cuts have, in part, led the agency to close 64 field offices and 533 temporary mobile offices since 2010. The SSA has also shed some 11,000 workers over the last three years and continues to reduce or eliminate a variety of in-person services while trying to shift seniors and others online to conduct their business.”
According to the New York Times:
“The field offices served over 43 million people last year. About 10 percent of the visitors filed for benefits, and 30 percent were seeking new or replacement Social Security cards.
... Nancy A. Berryhill, a deputy commissioner at the agency, said its budget and work force had not kept pace with what she described as “a staggering 27 percent increase” in claims for retirement benefits, to 3.3 million last year, from 2.6 million in 2007.
Social Security encourages consumers to use the Internet to do business with the agency. In 2013, Ms. Berryhill said, ‘we received nearly half of all Social Security retirement and disability applications online, and the percentage of people who choose to file online continues to grow.’”
Michael Hiltzik at the Los Angeles Times correctly points out the problem with this shift to online services:
But is that an adequate substitute? No way. For one thing, you have to know that your statement is available via the Internet, you have to know where to find it, and you have to be able to navigate a registration procedure that is not all that user-friendly -- especially for someone not familiar with navigating the Web, and double-especially for someone without easy access to a computer. Despite a claim that we all live in the digital world today, those are not small groups.
Importantly, the Social Security Administration has made no discernible effort to proactively advise Americans that the paper statements are a thing of the past. In other words, what was once its most effective outreach to millions of people has disappeared without a trace, or a single word of warning.
Social Security says that if you have problems accessing the online service, you can get help at a Social Security office. Of course, those offices, which used to be open until 4 p.m., are now open only till 3:30. Starting in mid-November, they'll only be open till 3. And starting Jan. 2, they'll be closing at noon Wednesdays.
"There's already an enormous amount of unhappiness for people who walk to their Social Security office and find a sign saying, 'We closed at 3:30,'" says Webster Phillips, a former Social Security associate commissioner who now works with the National Committee to Preserve Social Security and Medicare.”
In testimony submitted to the Senate Aging Committee, NCPSSM President/CEO Max Richtman says:
“...the National Committee believes any individual who has paid Social Security taxes has the right to face-to-face service within a reasonable distance of their home.
The National Committee also is concerned that seniors and low-income individuals who are accustomed to conducting business on a face-to-face basis will suffer undue hardship when faced with the need for a benefit verification letter or SSN printout. Many in this population lack access to and are not familiar with computers and printers. I am also concerned that shifting this administrative burden to SSA call centers will only increase the current average wait time of 26 minutes.”
While some Members of Congress appear quick to blame the Social Security Administration for these closures, as if they’ve happened in a vacuum, others have been warning years of budget cuts to the SSA -- happening at the same time service needs are increasing -- would ultimately hurt millions of Americans who rely on the Social Security benefits they've worked a lifetime to earn:
“Representative Xavier Becerra of California, the senior Democrat on the Ways and Means Subcommittee on Social Security, has repeatedly expressed concerns about the agency’s operating budget, which was $11 billion in 2013, about 4 percent less than in 2010. ‘No one should be surprised that service hours have been reduced, wait times have increased and local offices have closed,’ Mr. Becerra said.”
Reducing access to Social Security Administration field offices has been underway for a long time. In 2012, the SSA announced it would reduce field office hours, closing at 3:00pm weekdays and noon on Wednesdays. 80 field offices have also been shuttered permanently. In addition, the mailings of annual statements—which are the SSA’s most effective form of communication sent directly to beneficiaries about their earnings and benefits-- were cut off completely in 2011. All in the name of cost-savings. Thankfully, SSA has announced paper mailings will resume.
“The Social Security Administration is finalizing plans to resume mailing paper Social Security statements to some workers in September 2014. Statements will be sent to workers every five years in the year they attain ages 25, 30, 35, 40, 45, 50, 55 and 60, if they are not registered to receive online statements or already receiving benefits.” US News & World Report
But, as reported in labornotes, SSA employees are concerned there is much worse news still to come for SSA offices across the nation if a proposed strategic plan called Vision 2025 is adopted:
“Bureaucrats are mulling closure of most of SSA’s more than 1,000 community field offices in the U.S., where 43 million people sought services last year.
Even as the number of visitors continues to grow, Vision 2025 would virtually eliminate face-to-face service, replacing it with Internet services and an 800 phone number.
Thirty thousand field office employees would be laid off—following nearly 11,000 positions already eliminated. When SSA sought its employees’ input for Vision 2025, they responded overwhelmingly that field offices were vital to the agency’s mission.”
Front line SSA workers understand the importance of person-to-person contact and worry about replacing it with a website:
“... according to surveys of SSA employees, many claimants who file on the internet make decisions that could lead to the permanent loss of benefits. SSA employees are trained to catch those mistakes.
Ryan Gurganious, a claims rep for the disabled in North Carolina, cited an example: “When a disabled person is working, we’ll ask them, ‘In your job do you have any special expenses you have to pay to be able to work?’ They might say, ‘I have to get the county transportation service to come pick me up in my wheelchair, and that’s a $40 fee every month.’
“We know that that $40 comes out of the equation when we’re figuring their benefit, so they’ll get a larger SSI check. But the computer’s not going to ask them that.”
Labor Notes staffer Jenny Brown cites a personal example. Her father was originally told he was just shy of the required work credits to get Social Security benefits. He’d worked for many years for a state college that wasn’t part of the system at the time.
But an alert field office worker realized that he was also a World War II combat veteran—and a special rule for those vets put him over the limit to get a monthly check.
David Sheagley, an AFGE representative and SSA teleservice-center representative in Cleveland, notes that SSA workers “assist folks during stress-filled transitions whether it be death, disability, or retirement. In other words, our mission at SSA absolutely requires that human beings be available to talk with the public.”
We couldn’t agree more about the importance of person-to-person service for Social Security beneficiaries and hope any long-range planning at SSA keeps this at the heart of it's mission.
Attempts to reignite the intergenerational warfare campaign against Social Security -- led by the billion dollar austerity lobby -- seem to have hit a new high. Alternet highlights just a few of the recent instances:
A string of recent examples—rants  from MSNBC’s wealthy young commentator, a notorious elderly-attacking  House candidate, think tanks promoted  on NPR—generational warfare cheerleaders are proclaiming that America is heading toward an epic and immoral conflict as better-off seniors are robbing millennials of shrinking federal dollars because retirement programs cost too much. That’s simply false, as Social Security is solvent  through 2033, and spending on all mandatory programs as a percentage of GDP is close to  where it’s been since 1975, at 21 percent.
This line of attack isn’t in a political vacuum. It comes as some Democrats are reframing  the debate on Social Security and campaigning  for increased benefits. Nor is it a new argument, as a right-wing club of libertarians, Wall Street bankers and deficit hawks have tried for decades to undermine and privatize the program.
For MSNBC’s, Abby Hunstman, this is the second time in as many weeks that she’s taken to the airwaves with a monologue chock-full of errors and political rhetoric heavy of drama and light on the facts. NCPSSM’s Equal Time, joined the Los Angeles Times and others in pointing out just a few of those errors in her first attempt to “educate” millennials:
Millennials Face Big Problems – Abby Hunstman, MSNBC
“Here’s the reality, at the rate we’re spending, the system (Social Security) will be bankrupt by the time you and I are actually eligible to get these benefits.”
“We can’t afford it.”
“While we’re living two decades longer we haven’t made any changes.”
MSNBC anchor Abby Huntsman (daughter of GOP Presidential Candidate Jon Huntsman) clearly misunderstands Social Security’s funding and twists both life expectancy data and worker ratios to the breaking point to build a false case for cutting Social Security benefits for millennials. Contrary to Huntsman’s claims, there is not a single scenario or economic projection in which Social Security goes bankrupt, most Americans aren’t living 20 years longer and there have been numerous reforms to Social Security in the past, including raising the retirement age.
If Washington does nothing at all by the time the Trust Fund is depleted in 2033, millennials and generations after them will receive a 25% benefit cut. Huntsman urges raising the retirement age to 70-75 on top of that which means an even larger benefit cut for our children and grandchildren. Unfortunately, rather than educating her fellow millennials with the facts, her “fix” for Social Security comes straight from the multi-billion dollar anti-entitlement lobby’s talking points. There are ways to fill the funding gap without hitting future generations with huge benefit cuts. Rather than gutting Social Security under the guise of “fixing it”, Congress should lift the payroll tax cap and enact other meaningful reforms to strengthen the program for future generations.
Inexplicably, rather than address her mistakes Huntsman then chose to double-down on them with a second error-laden missive. Michael Hiltzik with the Los Angeles Times tried, a second time, to help her with the “basic math” she claims to understand:
Huntsman complained that I called her out for asking how we're going to pay the rising costs of the health and social insurance programs, as though "even raising the question means you're automatically anti-Social Security or against the elderly."
No. I called her out for raising the question using bogus numbers, such as life-expectancy rates from birth, which have risen sharply since the '30s but aren't relevant to Social Security's fiscal health. Instead, the key figure is life expectancy from age 65, which hasn't risen very sharply. (Huntsman appears to accept this point.)
Huntsman offered several possible remedies for rising costs in these programs -- means-testing benefits, increasing the retirement age, raising the Medicare eligibility age to 67 from 65 -- and complained that we're not even debating these options.
That's where she really goes off the rails. We have been debating those options, for years. They've all been studied, measured, calculated and scored. The reason they haven't been implemented is that none of them is simple. None of those she listed would have an appreciable positive effect on the fiscal health of the programs, and some, such as raising the Medicare eligibility age, might make the overall federal budget picture worse.
Economist Dean Baker also gave it a try:
“The far greater risk to the living standards to the people of Huntsman's generation is the risk that we will continue to see the upward redistribution of income over the next three decades that we have seen over the last three decades. As a result of this upward redistribution of income, people like Ms. Huntsman's father have benefited enormously, while most workers have seen little or none of the gains from economic growth. If this pattern continues then most people in Ms. Huntsman's cohort will not fare well financially even if we eliminated their Social Security taxes altogether.”
So Huntsman continues to take her cues directly from the billion dollar Wall Street campaign to paint Social Security & Medicare as the biggest threat to future generations while ignoring the income inequality which will curse millennials for a lifetime.
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