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I.O.U.S.A.-Fiscal Fortitude or Trojan Horse?

Let us say, right up front that we haven't seen I.O.U.S.A yet...but soon will.  We're very curious to see if the movie sticks to its billing and delivers the facts about borrow-and-spend policies run amuck.  No doubt about it, there is an important message there to deliver.  However, what worries us is the inevitable next step promised by the billion-dollar Peterson Foundation to target Social Security, Medicare, and Medicaid as the "entitlement monster" that founder and conservative financier Pete Peterson says is bankrupting our nation.   As we all head to the theaters for a dose of fiscal "truth", it's important to know who's delivering the message.  So, here's some background on the organization and its founder.   Peter Peterson is no stranger to the battle over America's retirement safety net.  For decades, the conservative financier and Nixon Commerce Secretary has been writing books, giving speeches, and crusading against social insurance programs. The multi-billionaire co-founder of the Blackstone Group has committed $1 billion to broaden his nationwide "entitlement crisis" campaign through a foundation bearing his name, the Peter G. Peterson Foundation.  I.O.U.S.A is the Foundation's first project out of the box.   Former U.S. Comptroller General, David Walker, is the Peterson Foundation's President.  As a leading voice on the so-called "entitlement crisis", Walker says this new position allows him to campaign even more aggressively than he could in his government role.  According to the foundation's website, its goal is to "target undeniable, unsustainable, and untouchable threats to the nation's future and to future generations of Americans".  Much like President Bush's failed efforts to privatize Social Security, the foundation will focus its message towards young people, business leaders, and the media.  It is headquartered in New York to be closer to the Wall Street and media opinion makers Walker says are critical to their campaign to cut funding for Social Security and Medicare.  According to the New York Times, Peterson also wants to organize an anti-entitlement youth group to counter seniors' advocacy organizations.  With more than a billion dollars at its disposal, the Peterson Foundation is positioning itself to take up where the Bush administration failed, continuing the attack on Social Security and Medicare.  Many of Peterson's reform ideas will sound familiar because they were also a part of the President's privatization plan.  Among them, raising the retirement age (Peterson suggests to 73), means testing, and massive benefit cuts. Peterson has called the current cost of living increases in Social Security, which provide adjustments of roughly 3% a year, "one of the greatest fiscal tragedies of American history" because he considers them excessive.  At the same time, he steadfastly defends a controversial private equity tax break that benefits America's wealthiest investors.  The Peterson Foundation is preparing to pick up where the Bush administration started...launching a nationwide campaign to convince Americans, particularly our younger generations that we can't afford the nation's retirement safety net.  Except this time there's a billion dollars invested to sell that anti-"entitlement" argument.

Double Digit Premium Hikes for Part D

CMS has announced next year's Part D premiums for seniors.  The 12% increase will hike the average monthly premium to $28 for standard coverage in 2009.   CMS says seniors should  be glad this is less than their original estimate 5 years ago which said Part D premiums would be even higher.  Gee, thanks. This is from the CMS Press Release:
The estimated average monthly premium for 2009 of roughly $28 for basic coverage is far below the original estimate for 2009 of $44.12, which was made at the time the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) was enacted in 2003.  
CMS Acting Administrator, Kerry Weems, also offered this not so subtle reminder to seniors that they better plan on shopping for plans again this year since drug insurers may (read that will) be making changes which could dramatically effect coverage.
"Of course, individual plans' premiums and benefits may change. Given their past record of making smart choices, I expect beneficiaries will continue to compare their plan options in the upcoming enrollment period based on cost, coverage and convenience." 
 Lastly CMS says:
Average plan bids have increased at roughly the same rate as drug costs.
And that's part of the problem. Healthcare costs systemwide have been skyrocketing with no end in sight, not just in Medicare but nationwide.  That's one reason we continue to advocate the need for national healthcare reform and drug price negotiation for seniors in Medicare in the short term.  Establishing Medicare as the collective buyer of prescription drugs-rather than thousands of individual private plans-would better harness the purchasing power of Medicare's 43 million beneficiaries and provide substantially lower prices for seniors.

Happy Birthday Social Security!

All of the terrific opinion pieces, issue papers and blog posts written today in honor of Social Security's 73rd birthday truly seem like gifts as we continue to offer the truth about Social Security and counter all of the anti-‘entitlement' propaganda out there these days. Our favorite headline comes from Economic Policy Institute.  "Social Security: Here today, still here tomorrow"  is a wonderful synopsis of the program's true fiscal condition.  They write:
The bottom line is that Social Security is in good shape-we should all be so lucky at age 73. Changes to shore up the program's financing and make it more progressive are warranted, but there is no crisis, and certainly no need to rush to dramatic reform.
Our favorite Oped was written by Nancy Altman and Eric Kingson (both Greenspan Commission advisors in 1983) and appeared today in the San Francisco Chronicle.  They provide some desperately needed historical and philosophical perspective to the privatization debate:
What opponents saw as socialism in the 1930s and what McCain today sees as "an absolute disgrace" - the government compelling citizens to mandatory collective action - we see as the most basic of American values - Americans using, in the words of FDR, "the agencies of Government to provide sound and adequate protection against the vicissitudes of modern life." What some still see as unwarranted government intrusion, most see as our shared responsibility as Americans. Far more than a benefit distribution system, to paraphrase former Sen. Bill Bradley, Social Security is the nation's best expression of community. It is a trust based on broadly shared civic and religiously-based principles - concern for our parents, for our neighbors and for the legacy we will leave for our children and those who follow. The program cleverly combines individual responsibility - benefits are based on individual work effort - with a deep understanding that our nation is strongest when we share both our prosperity and our risk.
Our own President/CEO, Barbara Kennelly blogged in The Hill Newspaper's Congress blog today saying:
As we celebrate Social Security's 73rd Anniversary today I'm reminded of one of my favorite FDR quotes:  "Repetition does not transform a lie into a truth"'. That statement is as true today as it was when Social Security was created 73 years ago. Just because those who are fundamentally opposed to Social Security continue to say it's a failed program, doesn't mean it's true. Social Security is not bankrupt and it's not in crisis; however, it continues to be under attack.  The long-term challenges facing Social Security are modest and manageable and can't be solved by the hollow promise of private accounts. It's time a new Congress and a new President put Washington's focus back where it should be...preserving and strengthening Social Security for future generations not dismantling the program through privatization.  Maybe this time next year we'll be able to celebrate Social Security's anniversary and the end of privatization politics at the same time.
And James Roosevelt, Jr, grandson of President Franklin Roosevelt and son of our organization's founder talked to reporters today about his grandfather's legacy and the future of Social Security.  In this video, he describes FDR's goal for the program:       And lastly, on the political side here is a Social Security Greeting card distributed by the Democrats.

Do Right by Social Security

Today's Des Moines Register's editorial on Social Security is our selection for a "Networthy Award" for outstanding coverage of elder issues on the net. Entitled "Do Right by Shoring up Social Security" the Register gets it right. The editorial board writes:
More than 70 years later, the program (Social Security) doesn't just help retirees. It also helps ensure their daughters and sons don't have to financially support them. It assists the disabled and children who have lost a parent. But it's hard to believe such a program would be created today. We now live in a so-called ownership society, where individuals are expected to go it alone on everything from health care to saving for retirement. Politicians win elections by vowing to cut government-funded programs and the taxes needed to pay for them.
The options out there to improve Social Security's long-term solvency aren't drastic or complicated. The challenges the programs faces don't even come close to the crisis rhetoric we've been hearing from the Bush administration and his anti-entitlement allies for years now as a way to scare Americans into believing privatization is the way to go. It's time we set privatization politics aside. The Register urges presidential candidates McCain and Obama to lay their cards on the table:
The presidential candidates should discuss in detail their plans for shoring up the system. In general, John McCain has supported supplementing the system with personal accounts (which would not address the system's financial problems and could make them worse) and vows to work for a bipartisan solution on its financing. Barack Obama has been more specific; he wants to increase the amount of earnings that will be taxed to finance the system.
We highly recommend you read the full Register article. Technorati Profile

Privatization-Dollars and (Non)Cents

The Institute for America's Future has released a state-by-state breakdown of just what the privatization of Social Security will mean to Americans throughout the nation.   While the whole issue of Social Security funding and benefits can be hard for many to wrap their brains around, breakdowns like these help answer critical questions like:  "What's really at stake for my family?"  
This report updates research previously published by the Institute for America's Future. It estimates the reduction in Social Security benefits that a typical United States resident can expect and the number of seniors exposed to poverty if Social Security were privatized. The main findings are that for future generations, Social Security privatization would: Cut lifetime benefits by $240,264 and make 8.6 million senior citizens vulnerable to poverty.
There are specific reports from each state showing the specific impact privatization would have on you and your neighbors.  Definitely worth a read!

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