National Committee president Max Richtman expressed deep concern today about the lack of an appointed leader at the Social Security Administration (SSA) — and inadequate funding for the agency. Appearing before the House Social Security subcommittee, Richtman said that SSA “needs strong leadership” to achieve its mission, and that a new Commissioner should be nominated and confirmed. However, Richtman testified, a new Commissioner will not be able “to deal with the agency’s significant challenges” without sufficient funding.
SSA, which serves 67 million Americans receiving Social Security and Supplemental Security Income (SSI), has been led by a series of acting directors for the past five years. The Republican-led Senate refused to confirm President Obama’s nominee, Carolyn Colvin, who departed as acting Commissioner after the Trump administration took office. President Trump has yet to nominate a Commissioner (one of the hundreds of crucial federal appointments he has failed to make), leaving a new acting chief, Nancy Berryhill, to lead the beleaguered agency.
Meanwhile, SSA has been hobbled by draconian cuts to its operating budget for the past seven years. In fact, Congress has slashed SSA’s budget by 11% (adjusted for inflation) since 2010, notwithstanding the 10,000 Baby Boomers who turn 65 every single day. As Richtman testified, funding cuts have caused needless headaches and delays for beneficiaries.
These cutbacks take a real human toll. Seniors have to wait on hold for an average eighteen minutes on SSA’s toll-free phone line, if they don’t get a busy signal. Many hang up – and have to call back several times to get a human being on the phone. Elderly beneficiaries encounter long lines, often with no place to sit, at the diminishing number of SSA field offices around the country. The average wait time for a Social Security Disability Insurance (SSDI) hearing has soared to over 600 days. Shockingly, an estimated 10,000 disabled claimants died in FY 2017 awaiting hearings.
Amid this unnecessary delay and suffering, President Trump’s 2019 budget calls for nearly $90 million in additional cuts to the Social Security Administration budget – an effective reduction of $450 million when factoring in SSA’s inflationary costs. This kind of cut would force the agency to freeze hiring, furlough employees, shutter additional field offices, or further restrict field office hours – leading to even longer wait times.
Richtman called on Congressional appropriators to use funds freed up in the recent bipartisan budget deal to boost SSA funding. The National Committee would like to see an appropriation of at least $560 million over the FY 2017 level of $12.482 billion. This increase would help restore cuts made since 2010 and cover inflationary increases in operating costs. Richtman says a similar boost should be included in the FY 2019 appropriations bill, so that when a leader is appointed and confirmed, he or she will have adequate resources to turn the agency around.
Read Max’s full testimony here.
This Valentine’s Day marks the date when Americans with wages exceeding $1 million stop paying into Social Security for the year. That’s because anyone earning at least that much hits the Social Security payroll tax cap of $128,400, barely seven weeks into 2018. In stark contrast, the average American worker contributes payroll taxes throughout the year.
“This red letter day takes on added significance because of the need to address the long-term solvency of Social Security and a political climate where seniors’ earned benefits are under constant threat.” – Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
The payroll tax cap prevents billions of additional dollars from flowing into the Social Security Trust fund, which is projected to be able to pay about 80% of benefits beginning in 2034 if Congress takes no action. While some on the political right have advocated cutting benefits and raising the retirement age to address the shortfall, the National Committee believes that benefits should be boosted and the program’s solvency strengthened by lifting the payroll tax cap – so that millionaires pay their fair share.
“Normal Americans pay social security tax on every cent of income they earn throughout their entire lives, but millionaires like me pay it on just a fraction of our earnings. By raising the cap on payroll taxes, we can guarantee that millionaires pay the same rate as everyone else, and we can ensure that our seniors live and retire in dignity.” – Morris Pearl, Chair of Patriotic Millionaires
“Instead of providing massive tax cuts to the richest one percent, we should be making them pay their fair share by scrapping the cap. America is facing a retirement crisis, and by scrapping by the cap, we can ensure fully-funded Social Security benefits for all generations to come.” – Frank Clemente, Executive Director, Americans for Tax Fairness,
Raising the payroll tax cap needn’t be an elusive goal. There is already legislation in Congress to do just that. Senator Bernie Sanders’ Social Security Expansion Act would subject earned income over $250,000 to the Social Security payroll tax. Congressman John Larson’s Social Security 2100 Act would apply the payroll tax to wages above $400,000, then phase out the cap altogether. Both bills would modestly increase Social Security benefits and keep the system solvent for most of this century.
Perhaps someday – I hope very soon – we will not have to mark this day in mid-February that represents such a gross disparity in what working Americans and the wealthy contribute to Social Security.” – Max Richtman.
For a more detailed analysis of the President’s 2019 budget, click here.
President Trump released an FY 2019 budget today proposing deep spending reductions for Medicare, Medicaid, Social Security Disability Insurance (SSDI), and myriad other federal programs that help older Americans, the poor, and people with disabilities.
“This budget once again lays bare the Trump administration’s terribly misguided priorities. In the wake of massive tax cuts for the wealthy and profitable corporations, President Trump proposes to slash programs that help retirees and working Americans attain proper medical care and make ends meet. Not only is this budget callous toward society’s most vulnerable, it breaks explicit promises that candidate Trump made to the American people ‘not to touch’ Medicare and Medicaid.” – Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
Here are some of the highlights (or lowlights) of the President’s proposed FY 2019 budget that impact society’s most vulnerable:
*Some $500 billion in Medicare spending reductions over ten years, most of which would affect providers and suppliers, but could potentially impact beneficiaries, too.
*$1.4 trillion in cuts to Medicaid (which covers long-term care for millions of seniors).
*Some $700 billion in spending reductions from “repealing and replacing Obamacare.”
*$64 million in cuts to Social Security Disability Insurance (SSDI).
*Reduces the Social Security Administration’s request for administrative funding by $90 million from FY 2017 levels, which would further exacerbate SSA’s customer service issues.
*Defunds the Low Income Home Energy Assistance Program (LIHEAP), which helps low income seniors pay their heating bills.
In stark contrast to the Trump budget, Congress last week struck a bipartisan deal to lift spending caps on non-defense discretionary spending, making billions of dollars available to many of the domestic programs that the White House proposes to cut.
“We strongly favor the bipartisan budget agreement in Congress, which recognizes the real and growing needs of working class Americans. To the extent that the president’s budget is mostly a ‘messaging document,’ we roundly reject the administration’s message that federal taxation and spending policy should favor the wealthy and powerful — at the expense of the elderly, poor, and the disabled.” – Max Richtman
“Seniors will feel these changes in their pocketbooks and even in the way they feel physically. We have been fighting for these measures for quite some time and are happy to see Congress take action on a bipartisan basis.” – Max Richtman, National Committee president
On the positive side, the budget bill:
*Closes Medicare Part D “donut hole” in 2019. The prescription drug coverage gap embedded in the original law, which the Affordable Care Act has been gradually closing, will be altogether eliminated one year early. This will save seniors thousands of dollars in out-of-pocket prescription drug costs.
*Repeals Medicare therapy caps. The bill scraps arbitrary caps on physical, speech, language and occupational therapies that have cost seniors money – or delayed care at crucial times. Beneficiaries will now find it easier – and more affordable – to get the therapies they need without undue interruption.
*Lifts non-defense domestic spending caps, allowing Congress to appropriate more adequate funding for the Social Security Administration’s operating budget. The SSA has suffered from draconian budget cuts since 2011 which have impinged on customer service, even as 10,000 Baby Boomers retire every day. This badly-needed (but yet unspecified) higher level of funding should allow SSA to improve customer service for the program’s 67 million beneficiaries.
On the negative side, the bill increases Medicare premiums for some individuals by further expanding Medicare means-testing.
“Congress continues to expand Medicare means-testing, and they will not stop until middle-class seniors are burdened with higher Medicare premiums.” – Max Richtman.
Here is a more detailed summary of the budget bill’s implications for seniors.
Some of President Trump’s pronouncements in last night’s State of the Union address were outright falsehoods. Others were simply misleading. Some, like his pledge to lower prescription drug prices, were likely hollow promises. Here is what he told assembled lawmakers and television viewers around the country:
“One of my greatest priorities is to reduce the price of prescription drugs. In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.” – President Trump, 1/30/18
Like many of the President’s promises – to rebuild the nation’s infrastructure, to bring back manufacturing jobs, and to protect Social Security and Medicare – this one seems dubious. His administration has been in place for an entire year and so far… hasn’t taken any serious action to bring down the cost of prescription drugs. The United States still pays more for prescription drugs than most other nations.
In fact, as Stat News points out, the President made an identical pledge a year ago:
“[Trump] met with pharmaceutical industry executives and said that ‘we have to get prices down for a lot of reasons.’ Just a few weeks before, he said that the industry is ‘getting away with murder.’” – STAT News, 1/29/18
Trump’s previous Secretary of Health and Human Services, Tom Price, seemed more concerned with undermining Obamacare than lowering drug prices — until he left office under a cloud of scandal.
Alex Azar, who was just sworn-in this week as Trump’s new Health and Human Services (HHS) Secretary, is a former executive at Eli Lilly, Inc. As a Big Pharma exec, Azar presided over prescription drug cost increases — and the company was scrutinized for allegedly fixing the price of insulin on his watch. He seems hardly the ideal candidate to lead a crusade against overcharging. Yet, Azar promised after his swearing-in to bring down prescription drug prices, echoing the President’s so-far empty pledges.
Seniors (especially those on fixed incomes) have a special stake in the Trump administration making good on its word. Soaring drug prices drive medical costs (and Medicare costs) ever upward. However, Medicare is expressly forbidden from directly negotiating lower prescription drug prices with pharmaceutical manufacturers. We have long argued that Medicare should have that prerogative. It could save the government – and patients – billions.
Allowing the importation of prescription drugs from Canada would also ease the financial pain we all feel when we reach the pharmacy counter. If the President were serious about reducing drug prices, he could get behind Senator Bernie Sanders’ Affordable and Safe Prescription Drug Act. The legislation would allow pharmacists and individuals to import drugs from Canada while empowering the FDA to ensure the safety of those imports.
There are several bi-partisan proposals in Congress to facilitate the approval and production of generic alternatives for pricey prescription drugs. Where is the Trump administration in all this? On the sidelines, mostly. Bottom line: There are many steps the administration could take to make prescription drugs cheaper. The question is whether the President and HHS will truly take action — or simply say the right thing, and then do nothing.