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From the category archives: Disability

2014 Social Security & Medicare Trustees Report

Hold the Rhetoric, Pass the Truth on the 2014 Trustees Report

This year’s projections come as no surprise to anyone who understands how Social Security and Medicare work. In fact, historically, the solvency date for the Social Security Trust Fund has fluctuated from a depletion date as distant as 2048 in the 1988 report to as soon as 2029 predicted in 1994 and 1997. On Medicare, each year since passage of the Affordable Care Act, the Trustees have reported the program’s improving solvency, this year adding an additional four years until 2030.  We should build on that success and continue reducing the high cost of health care system-wide, not just in Medicare.

This year’s Trustees reports prove, once again, how successful and stable Social Security and Medicare continue to be for the American people and the federal government.”... Max Richtman, NCPSSM President/CEO

Here are some of the key points in the 2014 Trustees Report:

·         Trustees project Social Security will be able to pay full benefits until the year 2033.  After that, Social Security will still have sufficient revenue to pay 77% of benefits if no changes are made to the program.

·         Social Security remains well-funded. In 2014, as the economy continues to improve, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2019. 

·         Trustees project a Cost of Living Adjustment increase of about 1.5% in 2015.

·         The Trustees report there is now nearly $2.76 trillion in the Social Security Trust Fund, which is $32 billion more than last year and that it will continue to grow by payroll contributions and interest on the Trust Fund's assets.

With so little bad news to report in this 2014 Trustees report, critics have now shifted their attention to Social Security Disability Insurance (SSDI), which faces a more immediate challenge and requires Congress’ action for a reallocation.

·         Trustees project the Disability Trust fund will be depleted in 2016, the same year projected in last year’s report. This projected shortfall is not a surprise and Congress should reallocate income across the Social Security Trust Funds, as it has done 11 times before, to cover the anticipated shortfall.  Disability expenditures have increased primarily due to demographic trends.  When Congress took action in 1994 to address a shortfall in SSDI, it knew that it would have to take action again in 2015 or 2016. Unfortunately, some in Congress have politicized this anticipated shortfall and threatened to delay action in order to force cuts throughout the entire Social Security program.

On Medicare, the 2014 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund.

·         Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2030, four years later than the 2013 report. Health care spending has also grown much more slowly.

·         Medicare Part B premiums are not projected to increase in 2015. 

Disabled Americans are Conservatives’ New “Welfare Queens”

“There is a quiet, covert war being waged on Social Security. The tactic? Divide and conquer. Today, detractors try to use Social Security Disability Insurance as a back door to cut the program as a whole. And, we will organize and fight back against today’s attacks aimed at some of the most vulnerable Americans: the disabled.”  Sen. Sherrod Brown (D-OH)

Divide and conquer politics is certainly nothing new in Washington.  From Ronald Reagan’s mythological nation of “welfare queens” to Alan Simpson’s “greedy geezer” myth of hordes of seniors driving Lexus’ to their gated communities – politicians love to create villains, even if the facts simply don’t back up the political spin.

"It hangs together as a good story because it's consistent with people's perception of the real world," says Craig R. Smith, who was a speechwriter for former President Gerald Ford and a consulting writer with President George H.W. Bush.  "Like in any good mythology, you need heroes and villains and in the Welfare Queen, you had a villain who was taking advantage of the system."

And so it goes with conservatives’ latest target – disabled Americans receiving Social Security benefits. No doubt, you’ve already heard the messaging: 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 2014 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.” Nina Easton, Fox News commentator

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 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

 “...four-fifths of the program’s total enrollment in 2013 — and over two-thirds of the growth in enrollment since 1980 — stems from five easily quantifiable factors:  growth in the overall working-age population, the aging of that population, growth in women’s labor force participation, the rise in Social Security’s full retirement age, and the growth in DI receipt among women eligible for benefits to match men’s rate of receipt. In short, the factors driving DI’s growth are reasonably well understood, were long anticipated, and do not depict a program that is ‘out of control.’” Center on Budget and Policy Priorities

“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

 An investigation by the Social Security Administration’s Office of the Inspector General looked at the 10 states with the highest increase in disability applications from 2007-2011.  That report found that while the number of applications increased...approvals declined. Social Security Administration OIG

Rep. Darrell Issa (R-CA) is a leading promoter of the Disability Myths. .  His committee has zeroed in on the casework of just four out of 1,400 disability judges to bolster his claims of widespread fraud in the program. 

“Issa's report twists all these facts and figures to create a fantasy of a program running amuck. He says "an extraordinary number" of administrative judges "were allowing the vast majority of their decisions"; in fact the overall approval rate of cases that come before the judges is 58%.”  Michael Hiltzik, Los Angeles Times

“First, these judges were deliberately selected by the House Oversight Committee because they were outliers who approve a high percentage of the cases brought to them. The Social Security Administration has almost 1400 administrative judges. Undoubtedly many are also outliers on the other side, denying most of the cases brought to them.” Dean Baker, Center for Economic and Policy Research

“...not all judges are "rubber-stamping" disability claims, and the overall allowance rate fell from 72 percent in 2005 to 56 percent last year.” Andrew Biggs, American Enterprise Institute   

The timing of this attack on Social Security’s disability program is not an accident. It’s the cornerstone of Congressional Republicans’ campaign to oppose both President Obama’s nomination of a new Social Security Administration Commissioner and (what in the past has been) the routine reallocation of the Trust Fund to prevent a 20% disability benefit cut in 2016.

Rather than address the disability shortfall head-on, as so many Congresses have before, conservatives hope to hold the disability program hostage in return for cuts throughout the entire Social Security program.

“Playing chicken with the trust fund would be devastating, Ruffing said. “If Congress allows the disability trust fund to run dry, then what will happen is benefits to all recipients will be cut by approximately 20 percent, which is obviously an unacceptable outcome,” she said. “It’s a completely unnecessary form of brinkmanship.” Kathy Ruffing, Center on Budget and Policy Priorities on NBC News

 “Since Social Security was enacted, Congress has "reallocated" payroll tax revenues across the OASI and DI trust funds – about equally in both directions – some 11 times to account for demographic shifts. In 1994, the last time such reallocation occurred, SSA actuaries projected that similar action would next be required in 2016. They were right on target.” Open Letter from former SSA Commissioners

“Reallocation is a straightforward process and the need for it does not come as a surprise,” Virginia P. Reno, NASI Vice President for Income Security Policy

Just as with Ronald Reagan’s “welfare queen” story, there is no doubt that fraud exists. But it’s clearly not what Disability Mythologists claim.  As Social Security advocates, we’ve long supported efforts to crack down on fraud and abuse because strong Social Security and Medicare programs depend on the efficient and appropriate payment of benefits only to those who qualify.  The American people expect the contributions they’ve made throughout their working lives will be spent appropriately.  So, if it is possible to further rid Social Security’s disability program of it’s tiny percentage of fraudulent claims then we whole-heartedly support those efforts. 

However, let’s be very clear about one thing -- that’s not what the Disability Myth is all about.  This isn’t a debate between one side that supports Social Security fraud and those who oppose it.  This is a debate between those who refuse to allow Americans with disabilities to be held as political hostages with threats of a 20% benefit cut by those whose true goal is to cut the entire Social Security program, through privatization or countless other means. That’s the ultimate goal of this divide and conquer strategy which portrays America’s disabled workers, the same people who have paid for their earned benefits, as villains.

We’ll end just as we began, with this warning from Senator Sherrod Brown (D-OH):

“Opponents of Social Security realize that when they attack the program head on, they lose. So, their strategy is two-fold: First, convince the public that the disability insurance program is bankrupt. Second, separate Social Security from disability insurance in the eyes of voters. We need to recognize these attacks for what they are – backdoor attempts to weaken Social Security by dismantling disability insurance.”

Sorting Fact from Fiction in the 2013 Trustees Report on Social Security and Medicare

The 2013 Trustees report shows, once again,  Social Security is not facing a crisis.  

  • Trustees project Social Security will be able to pay full benefits until the year 2033.  After that, Social Security will have sufficient revenue to pay 77% of benefits.
  • Social Security is still well funded.  In 2013, as the economy regains its footing, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020. 
  • Trustees project a Cost of Living Adjustment increase of 1.5% to 2.5% in 2014.

With so little bad news to report in this 2013 Trustees report, critics have now shifted their attention to Social Security Disability, which faces a more immediate fiscal challenge

  • Trustees project the Disability Trust fund will be depleted in 2016, the same year projected in last year’s report. This projected shortfall is not a surprise and Congress should reallocate income across the Social Security Trust funds, as it has done 11 times before, to cover the anticipated shortfall.  Disability expenditures have increased primarily due to demographic trends.  The increase in full retirement age from 65 to 66 has also contributed to the increase in disability expenditures, as people remain on the disability rolls longer before shifting to retirement.  However, when Congress took action in 1994 to address a then-reported shortfall in DI, it knew that it would have to take action again in 2015 or 2016.

The 2013 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund.

  • Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2026, two years later than the 2012 report.   Health care spending has also grown much more slowly. Since late 2010, CBO has reduced its projection of cumulative Medicare and Medicaid spending over the 2011-2020 period by $900 billion - or nearly 10 percent.
  • Medicare Part B premiums are not projected to increase in 2014.

Here's reaction from NCPSSM's President/CEO, Max Richtman:

“As we emerge from the worst economic downturn since the Great Depression, it’s clear our nation’s retirement security programs, Social Security and Medicare, continue to do their jobs admirably by protecting millions of Americans during these troubled times. Unfortunately, for too many in Washington, this annual Trustees report is little more than an opportunity to re-issue the same doom-and-gloom news releases and renewed calls to cut these programs in order to ‘save’ them, regardless of the fiscal facts.  The truth is the Trustees 2013 report shows Social Security has a $2.7 trillion surplus which continues to grow.  Social Security isn’t bankrupt; it hasn’t contributed a dime to our fiscal woes and, in fact, has performed its mission without fail.

On the Medicare front, the good news is health care reform has extended the solvency of the Medicare Trust Fund and health care cost growth is slowing. The Affordable Care Act is making a difference not just in Medicare, but is also slowing the rising cost of health care for all Americans.” 

 



African American History Month

When President Gerald Ford created the first National African American History Month in 1976, he urged Americans to “seize the opportunity to honor the too-often neglected accomplishments of black Americans in every area of endeavor throughout our history.” Since then, every American president has issued African American History Month proclamations.

This year, the National Committee to Preserve Social Security & Medicare will commemorate the month with blog posts from a number of the nation’s leading policy analysts, lawmakers, and community leaders.  We’ll examine the importance of programs like Social Security, Medicare, and Medicaid to the African American community while also paying tribute to generations of African Americans who have struggled with adversity to achieve full citizenship in American society.  NCPSSM Board Chair, Dr. Maya Rockeymoore, begins the month with a look to the future.

 

Dr. Maya Rockeymoore

NCPSSM Board Chair and President/CEO of Global Policy Solutions

                   

Strengthening Social Security for a Changing America

Some may be afraid of the news.

Children of color are now a majority of all babies born in the U.S.

And the Census Bureau projects that people of color will exceed the number of whites by the year 2043.

From debt reduction proposals to education and health policies, our nation’s changing racial and ethnic demographics have implications for a wide range of policy decisions at the forefront of the national debate about America’s future. Social Security is a case in point.

The strength of Social Security will be more important than ever because people of color are the least likely to have other sources of wealth to rely on in retirement or in the event of disability or the early death of a breadwinner. The ongoing debate about inequality in America has virtually ignored the racial wealth gap even as demographic shifts indicate its growing significance for the nation. A recent Pew Research Center report showed that in 2009 the typical African American and Latino household owned only five and six cents respectively for every one dollar in assets held by the average non-Hispanic white family.  This wealth disparity is reflected in how racial and ethnic groups use Social Security.

The program accounts for the bulk of retirement income for 70 percent of Americans, but its importance as a retirement savings vehicle is even larger for people of color. According to the Social Security Administration, African American and Hispanic seniors are more likely than whites to rely on Social Security for all or almost all of their retirement income.

Reasons for racial wealth disparities are complex but include the fact that people of color have less access to private pension plans and lower enrollment in or contributions to them when they are available, lower rates of investing and home ownership, and fewer opportunities for wealth creation through business ownership. People of color also have a heavier reliance on Social Security’s survivor and disability benefits.  For example, only 26 percent of whites receiving Social Security rely on it for non-retirement benefits compared to 47 percent of African Americans and 41 percent of other people of color. The poorer health status, lower levels of education, and higher rates of poverty experienced by some people of color contribute to their disproportionate rates of disability and early death.

Some believe that race or ethnicity doesn’t matter when it comes to reforming Social Security. But this perspective ignores the fact that there are demographic winners and losers depending on how the program is structured. For example, raising the retirement age—a popular reform option among Republicans and some Democrats—disadvantages those with shorter life spans: a group that is blacker, browner, poorer, and more blue-collar than those who live longer.

There is a fairer way to reform Social Security so that it is well financed and strong for at least another 75 years. One approach, advanced by the Commission to Modernize Social Security (of which I am a co-chair), recommends removing the cap on payroll taxes so that high wage earners contribute more, extending coverage to all newly hired state and local workers and slowly increasing the Social Security payroll tax by a fraction of a percent over a 20-year period to close the funding gap. The Commission’s report also calls for strengthening benefits to meet the needs of an increasingly diverse and economically insecure society. It recommends boosting benefits for the very old, widowed spouses, and the very poor; providing credits for workers taking time off to care for family members; and restoring benefits for college students whose working parent has died, become disabled, or retired.

In his remarks upon the release of the Social Security Trustees report, Treasury Secretary Timothy Geithner called for a solution that “…strengthens Social Security and does not hurt current recipients, slash benefits for future generations, or tie the program to the stock market.” By prioritizing an equitable reform approach that secures Social Security’s finances while making benefits stronger for everyone, the Commission’s proposal meets Mr. Geithner’s test. As a result, it should receive a full and fair hearing in Washington.

Some politicians, backed by the billion dollar anti Social Security and Medicare lobby, have tried to use a series of self-created Congressional fiscal “crises” to justify benefit cuts to millions of American families. Cutting already modest benefits in Social Security ignores the true causes of our federal deficit and weakens our nation’s most successful anti-poverty and retirement security program. Given the high stakes for U.S. workers of all backgrounds, our nation’s leaders should resist back room deal making in favor of an open process that gives ample consideration to proposals strengthening, not cutting, Social Security to address the needs of an increasingly diverse America.   

Dr. Maya Rockeymoore is Board Chair of the National Committee to Preserve Social Security & Medicare, Co-chair of the Commission to Modernize Social Security, and President of Global Policy Solutions, a policy consulting firm based in Washington, DC.

Will We Honor Our Veterans by Cutting their Benefits?

How ironic that, as our nation prepares to honor those who’ve served in America’s military on this Veterans Day, some in Washington are proposing benefit cuts targeting millions of military retirees and disabled veterans. A coalition of veterans, seniors, and disability organizations has mobilized in opposition to proposals which would change the annual cost of living adjustment (COLA), cutting benefits to pay down the debt.

Social Security is the largest program serving veterans and their families. Over 9 million veterans receive Social Security benefits—four out of ten veterans. The chained CPI will be a double benefit cut for veterans who receive both Social Security and VA benefits.

• The Chained CPI cuts benefits and raises taxes, largely on the poor and middle class, totaling $208 billion over ten years.  $112 billion in benefits cuts come from Social Security alone with up to $24 billion coming from VA benefits and civilian and military retirement pay cuts.

The National Committee has organized a coalition of more than 50 national organizations to urge Congress to oppose passage of the Chained CPI. Senator Bernie Sanders (I-VT) joined us on a media conference call to detail the real-life impact this COLA change would have on millions of average Americans, especially retired military.

“This Sunday is Veterans Day – a special day to honor the men and women who have bravely served our country. It is also a time to remember the promises we have made to our nation’s wounded warriors and to keep those promises,” said Sanders.  “The chained CPI has been referred to by Republicans and some Democrats in Washington as a ‘minor tweak,’ but let’s be clear: for millions of disabled veterans and seniors living on fixed incomes, the chained CPI is a significant benefit cut that will make it harder for permanently disabled veterans and the elderly to make ends meet,” Sanders continued.

 “A chained CPI has a very insidious effect on retired pay by reducing cost-of-living adjustments by about one-quarter of a percentage point each year. Although that doesn’t sound like much, the compounding effect over a retiree’s lifetime is significant, especially for military and disabled retirees because they start drawing inflation-adjusted pay at relatively younger ages.”… Herb Rosenbleeth, National Executive Director, Jewish War Veterans of the USA

“A Chained CPI would cut important benefits to disabled veterans, military retirees, their families and their survivors from the World Wars to the current conflicts in Iraq and Afghanistan.  As a nation, we share a solemn obligation to help those who honorably served and their families keep pace with inflation, not to erode their quality of life.” Rick Jones, Legislative Director, National Association for Uniformed Services

More than 50 national organizations representing veterans, military retirees, retired federal workers, seniors, and people with disabilities have also signed a letter to members of Congress urging them to oppose cutting benefits through passage of the chained CPI. In addition to cutting veterans benefits, the chained CPI would mean a benefit cut of $130 per years for the typical 65-year old retirees growing exponentially to a $1,400 cut after 30 years of retirement.

“Targeting the oldest of America’s retirees, including our veterans, for benefit cuts they simply can not afford is neither honorable nor responsible. The chained CPI is a backdoor benefit cut and tax increase which politicians hope to pass off on average Americans to pay for tax cuts the wealthy don’t need. Congress needs to recognize the long term, negative impact this decision carries with it. We’re talking about placing more financial stress on people who have served their country, their communities and their families. Are they really who Congress should be aiming for?”…Max Richtman, NCPSSM President/CEO

“The chained CPI would especially hurt people with disabilities, who often rely on Social Security or Supplemental Security Income to survive and may need benefits for many years. Cuts from the chained CPI will add up over the years at an alarming rate and make it increasingly hard for people with disabilities to live in the community and pay for essentials like housing, utilities, clothing, and food.” … Marty Ford, Policy Director, The Arc of the United States

“The chained-CPI proposal amounts to a tax increase for America’s seniors, who are living on fixed incomes. After our nation’s retired federal employees served their country for decades – including many who also served in the military – it is wrong to shortchange them with lowballed cost-of-living adjustments.” …Joseph A. Beaudoin, President, NARFE

A copy of the joint letter to Congress is posted on the National Committee’s website.

 

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