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What You Did and Did Not Hear about Social Security Last Night

Debate watchers predicted last night’s Vice Presidential debate might put policy above personality (for a change) and to some degree that happened.  For starters, the words Social Security and Medicare were finally uttered by participants.  That’s progress given that millions of average Americans and their families depend on these programs, plus the fact that the candidates’ records couldn’t be more different. The discussion itself; however, certainly wasn’t very deep. Here is the exchange.

There are a couple key points here.  Mike Pence absolutely refused to acknowledge or address in any way his record as one of Congress’ leading supporters of privatization.  As we reported earlier, when Pence was in the House he supported a privatization scheme that was even more draconian than the failed effort by President Bush.  Even after the President admitted defeat, Pence continued to push for the privatization of Social Security.  But Pence’s dodge and deflect skills were in full force last night:

KAINE: But -- but you have a voting record, Governor.

PENCE: And I get all of that. I just, look...

KAINE: I...

PENCE: There's a question that you asked a little bit earlier that I want to go back to.

KAINE: I can't believe that you won't defend your own voting record.

PENCE: I have to go back to.

QUIJANO: We...

PENCE: Well, look, I -- you're running with Hillary Clinton, who wants to raise taxes by $1 trillion, increase spending by $2 trillion, and you say you're going to keep the promises of Social Security. Donald Trump and I are going to cut taxes. We're going to -- we're going to -- we're going to...

KAINE: You're not going to cut taxes. You're going to raise taxes on the middle class.

PENCE: ... reform government programs so we can meet the obligations of Social Security and Medicare.

Republican talking points have long required that candidates use “reform” when they mean cut, and “protect” when they mean privatize.  The promise to protect current seniors’ benefits is also a poll-tested strategy designed to misdirect attention away from plans to cut benefits for future generations. This “greedy geezer” approach assumes seniors only care about their own benefits, not their children and grandchildren’s.   

“The purest articulation of intergenerational warfare as a wedge to break up Social Security's political coalition is a 1983 paper published by the libertarian Cato Journal. It was titled "Achieving a 'Leninist' Strategy," an allusion to the Bolshevik leader's supposed ideas about dividing and weakening his political adversaries.

The paper advocated making a commitment to honor Social Security's commitment to the retired and near-retired as a tool to "detach, or at least neutralize" them as opponents of privatization or other changes. Meanwhile, doubts among the young about the survival of the program should be exploited so they could be "organized behind the private alternative."

So when you hear a politician promising to exempt the retired and near retired from changes to Social Security, while offering to make it more "secure" for future generations, you now know the game plan.”...Los Angeles Times, 2012

Senator Tim Kaine was right to try and force some clarity from the Trump/Pence campaign on their specific plans for the nation’s most effective retirement and health security programs because, in a nutshell, the Donald Trump of this campaign does not resemble the “Social-Security- is-a-Ponzi scheme” Donald Trump of any other year.  Why, is not really mystery as Trump 2.0 himself has said:

"As Republicans, if you think you are going to change very substantially for the worse Medicare, Medicaid and Social Security in any substantial way, and at the same time you think you are going to win elections, it just really is not going to happen" ...Trump at 2013 Conservative Political Action Conference

Hopefully, last night’s VP debate won’t be our only chance to hear the Presidential campaigns address Social Security and Medicare.  American voters deserve to hear specifics about what these candidates have done and said...not just what they promise they’ll do. 

Why Tonight’s Debate Matters – Especially for America’s Seniors

By most accounts, tonight’s Vice Presidential debate candidates Democratic Senator Tim Kaine and Republican Governor Mike Pence will meet for the only time as virtual unknowns to many voters. NBC has this analysis:

 

“The two running mates are among the least known vice presidential candidates in recent elections. Remember Sarah Palin, Dick Cheney and even Joe Biden? Of course. But many voters in 2016 have never heard of Clinton's and Trump's number two. In the latest NBC/WSJ poll, 55 percent of respondents either didn't know enough about Kaine to form an opinion about him or were completely neutral. And 49 percent said the same thing about Pence.

 “While both candidates' primary goal is to reassure skeptical voters that their ticket can be trusted and that they compensate for the presidential candidates' perceived weaknesses, a secondary goal will be to drive home policy differences. Because both Pence and Kaine, with long histories of governing, are well steeped in policy, this could be the most substantive debate of any of the three presidential debates.”

If issues finally take center stage tonight, we would certainly hope to hear the stark differences between the two candidates on Social Security and Medicare described for voters. As we first detailed here, Mike Pence, was one of Congress’ most aggressive Social Security privatization supporters. As leader of the Republican Study Committee, the House’s far-right wing caucus, during the Bush administration, Pence doubled-down on President George Bush’s failed privatization efforts by calling for an even larger private accounts scheme to be implemented sooner, putting Americans at even greater fiscal risk than the President’s doomed plan. The Washington Times reported in 2005:

“The Bush plan allows workers to divert 4 percent of their wages into investment accounts, and to choose from a set of investment strategies. But the conservatives are leaning more toward a plan sponsored by Rep. Paul Ryan, Wisconsin Republican, which would allow diversion of 6 percent of wages.

‘Conservatives want to see personal retirement accounts that have immediate relevance to younger Americans, that they can see the value, and that will require that they be big and that they be implemented in the final bill without delay,’ said Rep. Mike Pence, Indiana Republican and chairman of the 100-member Republican Study Committee (RSC).”

Beyond privatization, Pence’s comments make it clear there isn’t a Social Security, Medicare or Medicaid benefit cut he won’t embrace:

“I think everything has to be on the table...I think it’s absolutely imperative, whether it’s Social Security, Medicare or Medicaid.”

“With regard to entitlements we’re going to have to take some deep cuts in domestic spending.” CNN, 2010

“I was tea party before it was cool.”  Indianapolis Monthly, 2011

On health issues, Pence’s record is just as anti-senior as his Social Security stance. He aggressively opposed the Affordable Care Act (ACA) and fought for its repeal, which would worsen Medicare’s solvency and take away billions in added benefits and cost savings for seniors.  He voted against the creation of a prescription drug benefit (Part D) in Medicare, opposes allowing the re-importation of prescription drugs and allowing Medicare to negotiate for lower drug prices, he supported legislation that would deny non-emergency treatment for lack of a Medicare co-pay, and most importantly supports the GOP/Ryan budget which would destroy Medicare in favor of “Couponcare,” giving seniors a voucher to take shopping for insurance rather than protecting traditional Medicare’s guaranteed coverage.

Not surprisingly given his legislative history, we scored Mike Pence at 0% on issues important to seniors during the 2011-2012 Congress since he voted for multiple pieces of legislation that would cut benefits and programs that protect senior’s health and financial security.

Tim Kaine, on the other hand, has long opposed the privatization of Social Security.  He supports healthcare reform through the Affordable Care Act and has co-sponsored the Medicare Prescription Drug Negotiation Act (S. 31), which would end the ban on prescription drug price negotiations for Medicare, allowing the government’s largest health care program to use the same price negotiation process that the Veterans Administration uses to negotiate with pharmaceutical companies.  Kaine is also a member of the Senate Special Committee on Aging and co-sponsored the reauthorization of the Older Americans Act. 

The differences between the two Vice Presidential candidates on the issues of Social Security and Medicare couldn’t be starker.  We only hope tonight’s debate provides an opportunity for voters to hear about the issues which directly impact millions of Americans’ lives. 

Republican Senators Say Now’s the Time to Cut Social Security, Medicare & Medicaid

A group of freshman GOP Senators has decided the time is right to launch a frontal assault on funding for Social Security, Medicare and Medicaid.  Led by Georgia’s David Perdue, the conservative Senators claim the only way to tackle the nation’s debt is to fundamentally change the way America’s earned benefit programs have been managed since their creation. 

Specifically, they want to give Congress new authority to cut benefits each year (or at least every other year) including the creation of arbitrary spending caps.  Both moves ignore the unique nature of how Social Security and Medicare are funded; specifically, the fact that American workers contribute to these earned benefits through their payroll taxes.

“We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.”...President Franklin Roosevelt

“In the 1983 Social Security Amendments a provision was included mandating that Social Security be taken "off-budget" starting in FY 1993. This was a recommendation from the National Commission on Social Security Reform (aka the Greenspan Commission). The Commission's report argued: "The National Commission believes that changes in the Social Security program should be made only for programmatic reasons, and not for purposes of balancing the budget. Those who support the removal of the operations of the trust funds from the budget believe that this policy of making changes only for programmatic reasons would be more likely to be carried out if the Social Security program were not in the unified budget." (Note that this was a majority recommendation of the Commission, not the unanimous view of all members.) This change was in fact enacted into statute in the Social Security Amendments of 1983, signed into law by President Reagan on April 20, 1983.”...Social Security Administration

For years, the billion dollar anti-Social Security lobby and their allies in Congress have tried to use our nation’s economic woes as an excuse to cut the earned benefits that millions of average Americans have paid for and depend on. This latest effort would put Social Security and Medicare on the chopping block for each and every budget battle.

Not surprisingly, Republican spin-meisters acknowledge that the vast majority of Americans, no matter their political affiliations, oppose cutting Social Security and Medicare to balance the budget.  Their solution?  Just don’t admit that’s the goal.  Instead, stick to talking points that promise you’re “saving” the program rather than the truth...that you’re slashing benefits:

“Republican pollster Whit Ayres says that despite the long-held conventional wisdom, it’s not suicide to talk about entitlement reform right before an election. But he cautioned senators to proceed cautiously.

‘Here’s what voters want to see: A healthy and thriving Social Security and Medicare system,” Ayres said. ‘If Social Security and Medicare are going to be jeopardized without any changes, then voters will support changes.’ 

 But he warned that entitlement reforms have to be framed as proposals to extend the solvency of Social Security and Medicare and not primarily as a strategy to balance the budget. 

‘The Democrats then come along and say we should not balance the budgets on the backs of our seniors and they win the argument,” he added. “But it’s very effective to argue that we have to reform our entitlement programs to preserve and protect those programs for current and future generations.’ ...The Hill, 10/1/16 

In an attempt to appeal to America’s (understandable) frustration with Congress (or more likely to deflect attention away from this attack on middle-class benefits) these GOP Senators suggest that if Congress doesn’t pass a budget (which could include cuts to Social Security and Medicare) then lawmakers would be penalized with a “steep reduction” to their paychecks. While that might make the populists out there say, “it’s about time,” don’t forget the fact that the majority of U.S. Senators are millionaires. You can be sure that the Social Security and Medicare benefit cuts they propose for you will hurt far more than any threat to trim Congressional salaries: 

“The median net worth for all senators increased to $2.7 million from $2.5 million, but in that body it was the Republicans who were better-off. Senate Democrats reported a median net worth of $1.7 million (a decline from 2011’s $2.4 million), compared to Senate Republicans, at $2.9 million (an increase from $2.5 million).”...Open Secrets 

Seniors should not fall for this political bait and switch. If Congress really wants to strengthen Social Security and Medicare for future generations then let’s talk about lifting the payroll tax cap or allowing Medicare to negotiate for cheaper prescription drug costs. However, you won’t see these proposals offered by fiscal hawks. Why? 

Because they don’t cut benefits. That’s what this is all about.

What Are the Social Security & Medicare Questions You'd Ask Candidates in Monday’s Debate?

Presidential Candidates Hillary Clinton and Donald Trump meet in their widely-anticipated and already heavily-analyzed first debate on Monday. NBC’s Lester Holt will moderate. We’ve already thrown in our two cents on why we believe Social Security and Medicare should be included in this debate (and it’s not because, as the U.S. Chamber of Commerce claims, benefits need to be cut to reduce the deficit).

Past experience has shown that not all debate questions are created equal. In fact, when a moderator addresses Social Security and Medicare in a question that’s actually about deficit reduction that should be a huge red flag for the millions of American families which depend on these programs. As we told Mr. Holt earlier this week:

“We urge you to avoid buying into the premise that “saving” Social Security and Medicare has anything to do with cutting the deficit. It doesn’t.”

What Americans really want to know is what these candidates plan to do to strengthen these programs not slash them – and please, give us details!

What do you want to hear from the candidates on Monday? We’ve created this Presidential Question survey to get your thoughts. Take just a couple of minutes and rank these 5 questions about Social Security and Medicare from 1-5 stars on importance to you. If you love a question it’s a 5, your next best option would be 4 and so on...all the way down to 1 star which is the question that doesn’t really thrill you.

We’ll take all of your answers and share them Monday before the debate.

The Sneak Attack on Social Security

Since before Social Security was created 81 years ago, the actuaries at the Social Security Administration have been tasked with making real-time analysis and long-term projections of the program’s health. Their record has been impressive. For example: in 1934, actuaries projected that the percentage of the U.S. population aged 65 and over would be 12.65 percent in 1990. It turned out to be 12.49 percent.

Given that 60 million Americans depend on Social Security, it’s obvious why accurate and consistent information on the program’s finances is vital to the economic health of so many families and our nation.  That’s why it’s also disturbing to see the possibility that politics might be interjected into Social Security’s financial analysis and projections by the creation of dueling reports.  Some background...

During the Bush administration, the Congressional Budget Office was tasked for the first time in its history to do its own analysis of Social Security.  Now, CBO is staffed with economists who examine many federal programs but they’re not actuaries or Social Security experts.  In fact, they’ve chosen different assumptions on mortality, interest rates, income inequality and disability rates for their Social Security calculations than the experts at SSA.  Not surprisingly that means their predictions are also different. 

“When CBO first got into the act, it projected somewhat smaller shortfalls than the actuaries. Then, in 2013 - soon after Senator Elizabeth Warren and other prominent members of Congress began publicly advocating for expansion - CBO’s projected shortfall increased by 73 percent in just one year. It jumped again in 2014, and yet again in 2015. According to CBO’s non-actuaries, Social Security’s projected long-range shortfall more than doubled, increasing by a whopping 125 percent in just three years. 

The smooth operation of Social Security oversight and policymaking depends on projections that are reliable and trustworthy. The actuaries spend all year long, every year, studying trends, perfecting techniques, and refining their projections. Their projections are steady and consistent, wavering only slightly from year to year. 

Not so, CBO. Estimates that more than double the projected shortfall in the span of just three years should raise red flags in and of themselves. Not surprisingly, CBO’s underlying assumptions are highly questionable.”...Nancy Altman, Social Security Works

  • CBO assumes 75 years of very low interest rates, far lower than we’ve seen over four decades. 
  • CBO predicts income inequality will grow substantially despite efforts in Congress to reverse that trend. 
  • While disability rates are slightly lower, CBO predicts they’ll increase.
  • CBO assumes longevity rates will improve, even for the oldest Americans. Meaning a 95 year old will see the same longevity increase at a 55 year old?

With hundreds of assumptions to consider, it would be logical that some changes might balance the analysis; however, in CBO’s case, each of the assumptions they changed led to a significantly larger shortfall. Coincidence? These graphs, introduced in the House Ways and Means subcommittee hearing on this issue today illustrates that dramatic shift, which more than doubled the shortfall prediction in just three years. 


Members of Congress asked the SSA and CBO today which prediction should they believe --  the nation’s actuaries whose sole job is manage the Social Security program or economists at the CBO, who’ve taken a new and different path to come up with very different answers.

Unfortunately, this case of dueling reporting isn’t happening in a vacuum.  Political pressure to exclude data on the size of Social Security’s benefit replacement rates in the annual Trustees Report (by those who’ve long claimed that benefits are much larger than can be proved) has been successful.  This important data (which has been reported for decades) is no longer provided, meaning the public can no longer see the replacement rates which Social Security benefits provide its beneficiaries.  This clears the way for those who hope to persuade Congress that benefits are more generous than the actual numbers would show.

Earlier this year, CBO also had to issue a correction for errors it made in a widely-reported brief on the exactly the same replacement rate issue.  Once again, these errors played into the same political argument that seniors are getting more from Social Security than actuaries believe, that the retirement crisis is phony and that Social Security costs more and is more generous than the actuarial evidence demonstrates.  As reported by economist Dean Baker at the Center for Economic and Policy Research, this is far from the first time CBO has made errors in its long-term analysis:

“While this was a serious error, unfortunately it was not the first time that CBO had made a major error in an authoritative publication. In 2010, in its annual long-term budget projections it grossly overstated the negative effect on the economy of budget deficits. The 2010 long-term projections showed a modest increase in future deficits relative to the 2009 projections, yet the impact on the economy was far worse. 

The 2010 projections showed a drop in GDP of almost 18 percent by 2025, compared to a balanced budget scenario. This was more than twice as large as the impact shown in the prior year’s projections. The sharp projected drop in GDP could have been used to emphasize the urgency of deficit reduction. As was the case with the recent Social Security projections, CBO corrected its numbers after the error was exposed.”

The Social Security actuaries are universally respected for their straight-shooting and consistent approach to reporting and projecting on the program’s finances.  These days, that type of bi-partisan respect is hard to come by.  That’s why we say it’s time for outside influence-peddlers to quit creating confusion over a system which has served our nation well for more than three-quarters of a century. 




Questions?

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