From the category archives: entitlement reform
Today might be a good day for a financial exercise...
Chances are if your retirement savings are in a 401K or countless other market-based products, you may have seen what the latest Wall Street downturn has done to your balance. If not, go ahead and bite the bullet and check it. After you get over the shock, check your Social Securitystatement. Take some solace in knowing that while your market savings have taken a hit, the good news is your estimated Social Security benefit today is the same it was on Wednesday.
That’s why Social Security exists. That’s why it works. That’s why it’s beyond reason that so many in the GOP still support sending your Social Security to Wall Street and destroying the stable income protection (it’s not an investment) Social Security provides.
“In June, presidential candidate Jeb Bush said that he thinks the next president will have to try to privatize Social Security. Others have gotten behind the idea as well: Sen. Rand Paul (R-KY) drafted a plan in 2013 that included partial privatization, and Sen. Ted Cruz (R-TX) is in favor of using private accounts. Rep. Paul Ryan (R-WI) has included privatization in his budget blueprints.
The market drop, and ones before, expose the dangers of such a plan, which usually entails diverting some or all of the money workers contribute to Social Security through their paychecks into private investment accounts.” Think Progress
Governor Mike Huckabee also prefers a privatized Social Security system but says he opposes benefit cuts. The problem is benefits would have to be cut to create private accounts. John Kasich has also supported privatizing Social Security.
No doubt, conservatives will remind us that over the long-term the market has been good to us. Maybe so, but as previous market collapses have shown, retirees don’t have the benefit of the long-term to rebuild savings now lost.
“Look at successive 45-year periods, as I did for my 2005 book, "The Plot Against Social Security," and you find huge variability. The average worker who invested $1,000 every year in the stock market starting at age 20 in 1954 would have $470,000 when he or she was ready to retire in 1998. But the worker who started just five years later, in 1959, would end up with only $234,000 at age 65--half as much--despite investing exactly the same sum over the same time span.
Market crashes could destroy a nest egg that took a lifetime to nurture. A near-retiree with, say, a half-million in stock in 2007 had just over $300,000 a year later, following a 37.22% plunge in 2008. Those who held fast managed to recover their losses, but that took five and a half years--and what about those who didn't have the luxury of time?”...Michael Hiltzik, Los Angeles Times
Trading Social Security’s guaranteed benefit for a ride on Wall Street makes no sense for Americans who need to be secure in their retirement. That’s true whether the market is up or down.
We suppose we should at least give Jeb Bush brownie points for honesty since he was actually caught saying out loud what the GOP has been trying to do Medicare for years, without actually admitting it.
MSNBC first reported on Jeb Bush's comments made to a room full of Koch Brothers supporters:
"We need to make sure we fulfill the commitment to people that have already received the benefits, that are receiving the benefits," Bush said. "But we need to figure out a way to phase out this program for others and move to a new system that allows them to have something, because they're not going to have anything."
Promising to protect current beneficiaries (because according to the standard GOP meme “greedy geezers” only care about their own Social Security and Medicare benefits not what’s left for their kids or grandkids) is a tried and true GOP strategy. Attempting to destroy Medicare piece by piece is also a strategy we’ve already seen tried by conservatives in Congress. So it’s likely Bush didn’t even realize he was making news. Vox described it best this way:
“For years now, Republicans in Congress have been unified around a plan to promise continued Medicare benefits to everyone over the age of 55 while phasing out the program for everyone else. This is the famous — or perhaps infamous — Paul Ryan plan for Medicare. But denying that this is what their plan amounts to has been an important part of the political strategy for getting it done. Except Jeb Bush messed up, and in a talk at an Americans for Prosperity event Wednesday night he said that America needs to "phase out" Medicare.
His argument is that once Medicare is phased out, the GOP can offer the 54-and-under set "something," because the alternative will be to get "nothing."
Recall that back in 2011, the GOP whined endlessly about allegations that they wanted to end Medicare, and PolitiFact dubbed the idea that the GOP wants to end Medicare their "lie of the year."
But as Jeb Bush reveals here, it was never a lie of any sort. Conservatives' preferred answer to the challenge of paying for Medicare in the future is to scrap the program, and that idea has gained wider and wider currency in GOP circles in recent years.”
Bush’s comments were chock-full of other seriously flawed assumptions which MSNBC also breaks down including:
- The “left” hasn’t done anything to help Medicare – Uhh, how about this week’s Trustees Report which confirms (yet again) an additional 13 years of Medicare solvency thanks to healthcare reform (which the GOP would repeal).
- Going door-to-door has shown him the American people support phasing out benefits - We’re not sure what doors Bush is knocking on but there’s not a national poll anywhere (legitimate or otherwise) which shows Americans support ending Medicare.
In just over a week federal funding runs out for the nation’s highways, bridges and roads. The House has passed a temporary fix but the Senate, led by Mitch McConnell, wants to take an entirely different approach.
What does this have to do with Social Security or Medicare? The answer should be “nothing” but thanks to legislation now being debated in the Senate, the real answer is “everything.” Once again, GOP leaders want to use Social Security and/or Medicare benefits to pay for something entirely unrelated to the income and health security of millions of Americans.
NCPSSM President/CEO, Max Richtman, has written to the Senate urging Members to reject efforts to use Social Security benefits to pay for the Transportation bill:
“...there are at least two Social Security policy changes that are currently being considered as “offsets” for legislation that would extend highway transportation funding. One of these is a measure barring payment of Social Security benefits for seniors with outstanding warrants for their arrest. Almost none of the seniors who would be affected by this provision are actual fugitives from justice and most of the warrants in question are many years old and involve minor infractions. Moreover, the Social Security Administration attempted to administer a similar provision for a number of years, with catastrophic effect for many vulnerable elderly seniors, employing procedures that did not withstand judicial scrutiny. Reenacting this requirement should be something the Congress does only after careful analysis and with ample opportunity for public discussion.
The second provision relates to the concurrent receipt of both Social Security Disability Insurance (SSDI) benefits and unemployment compensation. Given the importance that all policy makers ascribe to encouraging disabled Americans to return to the workforce, I am perplexed by the desire on the part of some in the Congress to strip working SSDI beneficiaries of their eligibility to receive unemployment compensation when, through no fault of their own, they lose a job. Concurrent eligibility, which derives directly from a disabled person’s efforts to return to work, is a work incentive. That incentive should be altered only after the committees of jurisdiction have carefully considered all of the ramifications associated with such a change and, again, after ample opportunity for public comment.”
This is the third time in less than a year that Congress has attempted to use Social Security and/or Medicare as an ATM to pay for a completely unrelated priority. Last year Congress voted to extend the Medicare sequester cuts into 2024 to cover a reversal of cost-of-living cuts to veterans' pension benefits. This summer Medicare was cut again to help pay for the Trade bill. Now it appears, rather than consider tax reform for huge corporate tax dodgers sending billions of profits oversee to avoid paying taxes, GOP leaders in the Senate prefer cutting benefits to seniors, people with disabilities and their families who depend on Social Security.
The Senate is expected to vote on the highway funding bill and these proposed Social Security benefit cuts this week. While we all want good highways, Congress should not pay for them by cutting Social Security benefits for seniors, people with disabilities and their families. Social Security is our money – not the government’s. We’ve worked hard to earn our benefits.
Call our Legislative Hotline ASAP and we’ll connect you to your Senators. Tell them to oppose cutting Social Security to pay for the Transportation bill.
A new Kaiser Foundation poll confirms (again) that the vast majority of Americans, of all political stripes, support Medicare and Medicaid and don’t want Washington to replace Medicare with CouponCare. Kaiser reports:
“A strong majority (70%) say that Medicare should continue to ensure all seniors get the same defined set of benefits. Far fewer (26%) say that the program should be changed to instead guarantee each senior a fixed contribution to the cost of their health insurance – a system known as premium support that has been proposed to address Medicare’s long-term financing challenges.
By at least two-to-one margins, majorities of Democrats, Republicans and independents favor keeping Medicare as is rather than changing to a premium support program. Adults under 65 years old are somewhat more likely than seniors to favor premium support (28% compared to 18%), though large majorities in all age groups prefer Medicare’s current structure.”
In spite of the American people’s strong support of Medicare, Republicans in Congress continue their campaign to end traditional Medicare and replace it with a voucher program that gives seniors a coupon they then have to use to try and buy their own health coverage. This plan would create a death spiral for traditional Medicare, make it harder for seniors to choose their own doctors while passing more costs to Americans so they’ll pay more for less coverage. The Congressional Budget Office has predicted the Ryan CouponCare Plan could cost seniors $20,000 more each year.
The Kaiser poll also found that Americans support reforms designed to improve Medicare’s long-term financial picture. The most popular reform; however, has consistently been ignored by this Republican controlled Congress.
“By far the most popular change to Medicare is allowing the federal government to negotiate with drug companies. Overall, 87% of the public supports such an option, including majorities of Democrats, Republicans and independents and across generations.
Smaller majorities favor increasing Medicare premiums for wealthier seniors (58%), which already occurs and was expanded earlier this year as part of Medicare’s physician payment reforms; and reducing payments to Medicare Advantage plans (51%). Fewer support raising Medicare’s age of eligibility from 65 to 67 (39%), raising premiums for all Medicare beneficiaries (31%), or increasing cost-sharing for future Medicare beneficiaries (24%).”
The vast majority of those polled (89%) want Medicare’s funding expanded or at least maintained. Which is in stark contrast to ongoing efforts in Congress to use Medicare as an ATM by cutting the program to pay for other items such as the Trade Agreement.
As we celebrate Medicare and Medicaid’s 50th Anniversary on July 30th it’s important we remain vigilant in support of these vital programs. That means constantly reminding Congress Medicare and Medicaid should be strengthened not cut.
The fight to defend and strengthen Social Security, Medicare and Medicaid has seemed relentless in recent years as the programs have been under almost constant assault by the billion dollar anti-"entitlement" lobby and their supporters in Congress. For staff here at the National Committee to Preserve Social Security & Medicare it's been a challenging yet rewarding year as we have won many important battles in Washington to stop the shredding of America's social safety. But it's not over yet.
Here is our 2014-15 Annual Report for look back at a very important year in the fight to strengthen Social Security, Medicare and Medicaid.
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