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From the category archives: entitlement reform

Same As It Ever Was: The GOP's Post-Election Plans for Social Security and Medicare

This article was originally posted on Huffington Post.


Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare

The 114th Congress will see many new faces after the 2014 midterms; however, the face of our nation's middle class remains largely unchanged - they're poorer, more diverse, getting older and facing a retirement crisis which threatens millions. How will this new Congress address this old reality? Not one of the newly-elected Members of Congress campaigned on promises to cut benefits to Social Security and Medicare, yet it's already clear the new GOP majority considers lowering corporate tax rates and cutting benefits to middle-class seniors a priority. Same as it ever was.

The disconnect between many in Congress and average Americans on Social Security and Medicare is certainly nothing new. In poll after poll, the American people clearly do not support cutting middle-class benefits in these programs to balance the budget or bankroll tax cuts for the wealthy or large corporations already dodging billions in taxes each year. Contrary to the current political mythology that the American people aren't willing to be "grownups" and make the "tough choices" for our nation, the fact is, they simply don't support the benefit-cutting strategy preferred by many Washington politicians. Not only do they oppose cutting benefits, most Americans support boosting benefits.

A new report by the National Academy of Social Insurance, "Americans Make Hard Choices on Social Security" shows that Americans' support for Social Security is unparalleled and they are willing to pay more in taxes to stabilize the system's finances and improve benefits. NASI reported:

Seven out of 10 participants prefer a package that would eliminate Social Security's long-term financing gap without cutting benefits. The preferred package would:

• Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security. With this change, the 6 percent of workers who earn more than the cap would pay into Social Security all year, as other workers do. In return, they would get somewhat higher benefits.
• Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2 percent of earnings to 7.2 percent. A worker earning $50,000 a year would pay about 50 cents a week more each year, matched by the employer.
• Increase Social Security's cost-of-living adjustment to reflect the inflation experienced by seniors.
• Raise Social Security's minimum benefit so that a worker who pays into Social Security for 30 years or more can retire at 62 or later and have benefits above the federal poverty line.

Exit polling after the midterm election, even in Republican-leaning states, mirrored the findings in the NASI report. Public Policy Polling found 86 percent opposition to allowing any cuts to Social Security and Medicare with 79 percent opposition among Republicans. Voters say they are also less likely to vote for a candidate who supports making cuts to Social Security and Medicare by 70 points. Of course, this isn't really a surprise to political candidates. It's why you will rarely hear politicians telling voters they plan to cut Social Security and Medicare benefits for the millions of middle-class families who depend on them. Instead, candidates have successfully deployed a dodge-and-deflect strategy built on Orwellian language in which they say they'll "preserve" these programs when they actually mean privatize, "strengthen" when they mean slash, or "give you choices" when they mean you're on your own. While that strategy has certainly worked on the campaign trail, what remains to be seen is if the new Republican majority can successfully govern using the same approach.

Congress' new leadership may want to give former President George Bush a call. Not so many years ago, he believed his "voter mandate" cleared the way to privatize Social Security - cutting benefits and putting workers' guaranteed benefits at risk on Wall Street. That didn't turn out so well for the President simply because the American people understood then, as they do today, the abiding value of America's retirement and health security programs. Outside Washington, Social Security and Medicare aren't regarded as political or partisan because they are synonymous with economic survival for millions of workers, retirees, people with disabilities and their families.

The difference between campaigning and governing is vast -- something the members of the 114th Congress will discover first hand if cuts to Social Security and Medicare remain on their legislative agenda.

Follow Max Richtman on Twitter: www.twitter.com/maxrichtman

Social Security, Medicare and the GOP Congress

The Senate’s new majority leader has been true to his word...Mitch McConnell still won’t talk about his plans for Social Security and Medicare, even now that he’s been re-elected and will serve as the new leader of the Senate.

However, House Speaker John Boehner has no problem laying out the GOP plan.  There are no real surprises here, it’s basically the GOP/Ryan Budget version 4 (or 5, we’ve lost count) which has only avoided full passage because of the formerly Democrat-controlled Senate. As usual, lowering corporate tax rates while cutting Social Security and Medicare are items #1 and #2 of the GOP 5 point plan.  Lower taxes for businesses, Couponcare for seniors and raising the retirement age for Social Security are now back on the table with the Republican-led Congress.

Is anyone really surprised?

Care About Social Security & Medicare? Then VOTE

The Social Security Disconnect Between Congress and Everywhere Else

It’s that time of the year (just days before Election Day) when every Congressional candidate extolls the virtue of Social Security.  Too many of these candidates will then return to Congress (with your vote) singing a different tune lamenting that America simply “can’t afford entitlements” like Social Security and Medicare.  Only after Election Day will you discover that “save” actually means “slash” and “protect” means “privatize.” They’ll claim your benefits must be cut or programs privatized to “save” the programs for future generations.  The problem is...that’s simply not true and the American people of all political parties, ages and incomes don’t believe that cutting benefits is the best way to strengthen Social Security.

This Social Security disconnect is illustrated in a big way in a new report released today by the National Academy of Social Insurance“Americans Make Hard Choices on Social Security” shows that Americans’ support for Social Security is unparalleled and they are willing to pay more in taxes to stabilize the system’s finances and improve benefits.  We highly recommend you read the entire study (it’s important!) but here are some key highlights:

To gauge Americans’ policy preferences, the survey used trade-off analysis — a technique that is widely used in market research to learn which product features consumers want and are willing to pay for. The trade-off exercise allowed survey participants to choose among different packages of Social Security changes. As lawmakers would do, they weighed how each policy change would affect workers, retirees, and the program’s future financing gap, and then chose among different packages of reforms.

Seven out of 10 participants prefer a package that would eliminate Social Security’s long-term financing gap without cutting benefits. The preferred package would:

  • Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security. With this change, the 6% of workers who earn more than the cap would pay into Social Security all year, as other workers do. In return, they would get somewhat higher benefits.
  • Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2% of earnings to 7.2%. A worker earning $50,000 a year would pay about 50 cents a week more each year, matched by the employer.
  • Increase Social Security’s cost-of-living adjustment to reflect the inflation experienced by seniors.
  • Raise Social Security’s minimum benefit so that a worker who pays into Social Security for 30 years or more can retire at 62 or later and have benefits above the federal poverty line.

Again, not only do Americans value Social Security they are willing to pay to sustain and improve it.  This package was preferred by large majorities across political parties and income levels. 68% of Republicans, 74% of Democrats, and 73% of independents favored this no-cuts plan, as do 71% of study participants with incomes above $75,000 and 68% of those with incomes under $35,000. 

We suggest that if you see a political candidate on the campaign trail between now and Election Day ask him/her about this plan and its support by the vast majority of all Americans.   Will they support fixing Social Security’s long-term solvency while also improving benefits without cutting the program?

It can be done, if only there was the political will to do it.

Why a Medicare Flat Line is Good News for Seniors

While a flat line in the medical world is usually bad news...when it comes to health care costs in Medicare, this flat line is a good thing.  We reported earlier on the latest Congressional Budget Office forecast for Medicare and why that news is being ignored by Washington’s well-financed anti-entitlement lobby and the fiscal hawks they support in Congress. 

Today, the New York Times provides even more good news for Medicare and bad news for anti-Social Security and Medicare scolds:

“Medicare spending isn’t just lower than experts predicted a few years ago. On a per-person basis, Medicare spending is actually falling.

If the pattern continues, as the Congressional Budget Office forecasts, it will be a rarity in the Medicare program’s history. Spending per Medicare patient has almost always grown more rapidly than the economy as a whole, often by a wide margin.”

 

For years now, Wall Street funded fiscal hawk groups have been promising fiscal Armageddon unless Congress immediately cut benefits to middle-class seniors and their families. Contrary to that billionaire-financed bluster, the truth is there are clearly ways to see savings in Medicare through lower health care costs, not just by slashing benefits:

“The recent pattern reflects two main factors. One is that the baby boom generation is entering the program. In the long term, that’s a problem for Medicare’s finances because the number of people it must care for is going to surge. But in the short term, it skews the group enrolled in Medicare toward a younger, healthier population.

The second factor is more surprising and consequential. Over the last few years, Medicare patients have been using fewer expensive medical services, particularly hospital care and prescription drugs. The budget office is increasingly persuaded that such a pattern is going to last for a while.”

And there are even more proposals that could be enacted which don’t single out seniors for benefits cuts.  How about allowing Medicare to negotiate for lower drug costs like the VA does for veterans?  Or fully allow the proposed reductions in billions of dollars in federal overpayments to MA private insurance companies to be enacted, as proposed by the Affordable Care Act?  This CBO report clearly proves there are ways to manage costs beyond the benefit-cutting or privatization schemes preferred by Congress’ self-proclaimed deficit hawks:

Joan McCarter at Daily Kos sums it up best this way:

“Here's what's particularly significant in this: "Reductions made in the last four years alone are responsible for 10-year savings of more than $715 billion, which dwarfs nearly every deficit-reduction measure currently under discussion." Take that, Paul Ryan.

Here's the thing. Medicare is going to be facing issues when the baby boom cohort gets older and sicker. But this trend in shrinking costs gives policymakers time to look at reforms that do not require benefit cuts, that don't require pain for Medicare patients. That means there's no reason for another Paul Ryan budget that slashes the safety net or for another catfood commission calling for raising the Medicare eligibility age or more cost-sharing by patients. Take note, Democrats, and stop with the deficit fetish already.”

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