To: Lester Holt, NBC Nightly News anchor and moderator of the first 2016 Presidential Debate
Subject: The most important – but overlooked – issue in the presidential election isn't finding a way to cut benefits to millions of middle-class Americans
In a campaign that’s been far more about personalities and proclivities than policy and practical solutions, we agree with the U.S. Chamber of Commerce that issues need to take center stage as you moderate next week’s Presidential debate. We also agree that, for millions of average Americans and their families still struggling to see the full benefits of our economic recovery, understanding (in detail) what the Presidential candidates plan for future Social Security and Medicare benefits is important. But 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.
The push for benefit cuts to Social Security, Medicare and Medicaid in the name of deficit reduction has always been the goal of the billion dollar corporate and Wall Street backed crisis campaign driving Washington's deficit hysteria. “Never let a good crisis go to waste” was a strategic political move capitalizing on deficits as a way to force middle-class benefit cuts on Americans already shell-shocked in the Great Recession. Once deficits reduced (without the drastic cuts to benefits that corporate lobbyists assured us must happen), the anti-“entitlement” lobby lost its inside-the-Beltway political momentum. No doubt, they hope you’ll help them get their benefit-cutting mojo back.
Not surprisingly, the Chamber’s recitation of deficit woes failed to mention the billions of dollars in federal revenue lost to the Treasury each year thanks to tax cuts for corporations and the wealthy over decades. There was zero mention of corporate inversions which have literally robbed our nation of legally-owed taxes. If you want to ask the candidates a question about bringing down deficits, how about:
“What will you do to prevent the loss of hundreds of billions of federal revenue from American corporations who dodge paying their taxes through corporate inversions and loopholes?
There is an important Social Security and Medicare conversation to be had. We must find long-term solvency solutions that also address our nation’s retirement and health security crisis. Obamacare went a long way toward improving the health care picture but more work remains to be done. Retirement USA reports the gap between what Americans need to retire and what they actually have is $7.7 trillion. In fact, about half of households age 55 and older have no retirement savings and a third of current workers aged 55 to 64 are likely to be poor or near-poor in retirement. Unfortunately, the median retirement account balance is a puny $3,000 for all working-age households and $12,000 for near-retirement households. Vanguard reports that 401K balances, for those who do have them, fell a median of 11% last year. Social Security remains the only stable retirement income for many Americans.
While the Chamber sees Social Security as solely a source of “investment-draining and economy-staling uncertainty,” the truth is, Social Security is a hugely stabilizing force for the economy. A new report from the National Committee to Preserve Social Security and Medicare Foundation shows that, in 2014 alone, Social Security delivered a $1.6 trillion fiscal boost nationwide as benefits were spent and cycled through the economy. Seniors spend their Social Security for the basics of everyday living which fuels businesses large and small. Unfortunately, Social Security’s economic contributions to communities, counties, and states continue to be misunderstood and ignored in Washington’s fiscal debates.
The American people understand how important programs like Social Security and Medicare are to re-building and strengthening the fiscal health of millions of families and our nation. They know we cannot ignore program adequacy in favor of a benefit-cuts only approach when addressing long-term solvency. Thankfully, the economic recovery and time have provided many Members of Congress the space to craft meaningful legislation that not only extends Social Security’s solvency by decades but also boosts benefits, which is exactly what the American people have said in poll after poll they support. In fact, the latest survey by the National Academy of Social Insurance shows large majorities of Americans, both Republicans and Democrats, agree on ways to strengthen Social Security, without cutting benefits. Of those polled, 74 percent of Republicans and 88 percent of Democrats agree that “it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.”
Simply put, the American people are willing to pay more for Social Security. They understand the growing impact these benefits have on individual lives and on our larger economy. Not just for today’s seniors but also for future generations which will likely depend on these programs as much, if not more, than current retirees.
With this in mind, we strongly urge you to ask the candidates:
“What is your specific plan to ensure Social Security and Medicare’s long-term solvency?”
The National Committee to Preserve Social Security & Medicare
Congress has cut the Social Security Administration’s core operating budget by 10 percent since 2010, after adjusting for inflation. Incredibly, this is happening at the same time a record number of Americans retire each year. It’s not like the baby boom generation is a surprise. Our nation built extra schools when they were young and housing as they reached adulthood; however, today’s Congress has chosen to ignore the fiscal realities of their retirement.
A new report by the Center on Budget and Policy Priorities details the dramatic impact Congress’ SSA budget cuts have on service nationwide:
- SSA’s staff has shrunk 6 percent nationwide since 2010. Five states — Alaska, Iowa, Kansas, Nebraska, and West Virginia — have lost more than 15 percent of their staff since 2010.
- Disability Determination Service (DDS) staff, who decide whether applicants’ disabilities are severe enough to qualify for Disability Insurance (DI) or Supplemental Security Income (SSI) has shrunk 14 percent nationwide since 2010. Seven states — Indiana, Kansas, Louisiana, Mississippi, South Dakota, Tennessee, and Texas — have lost over 20 percent of their DDS staff.
- Staff shortages have contributed to a record-high disability hearing backlog of over 1 million applicants.
- SSA has been forced to close 64 field offices since 2010, at least one in nearly every state.
Added to this list, according to a recent audit of the SSA, are reduced hours of service at the remaining offices, the limited mailing of the annual earnings statement, increased wait times, crowded lobbies and limited appointment availability.
As we reported last month:
Unfortunately, this budget slashing effort is nothing new. “Starve the beast” and shrinking government “down to the size where we can drown it in the bathtub" are long-held goals for Congressional conservatives. Today’s budget cutters are continuing that decades-long campaign to diminish successful government programs which, since the vast majority of the American public of both parties supports them, can’t be killed outright.
“Cutting staff when SSA is processing historically high claims is irresponsible and a sign that the Republicans who voted for this cut are not interested in providing tax payers with good service regarding SSA,” said Witold Skwierczynski, president of the American Federation of Government Employees SSA Council. “Instead they appear to be creating a scenario that insures the collapse of the program and will enhance the push to privatize it. If the public loses trust and faith that the federal government can administer SSA, they will look to privatization proposals as an alternative.”...Washington Post, August 9, 2016
We recommend you read the full CBPP report here to see what’s happening in your state and nationwide.
It’s become an all-too-common story...
America’s drug industry has raised the prices of nearly 400 generic drugs by over 1,000% between 2008 and 2015. The truth is, these drugs are not cutting-edge and revolutionary discoveries but in fact many weren’t even developed by the company which jacked up the price. Instead, these lifesaving treatments, which have often been on the market for years, are being bought with the purpose of raising the price and maximizing profits.
Remember Turing and pharma bad-boy Martin Shkreli’s decision to raise the cost of a life-saving AIDS drug 5,000%? Most recently we have pharma giant, Mylan’s, announcement that EpiPen’s price tag would jump more than 400%. Skyrocketing costs for prescription drugs certainly isn’t news for America’s seniors who’ve already seen a growing percentage of their retirement income eaten away by health care costs but the trend continues.
That’s why today’s announcement by the Clinton campaign to create a consumer panel to protect Americans from unjustified price hikes is especially welcomed by seniors.
“The National Committee’s members and supporters applaud Hillary Clinton’s plan to create a consumer response team to identify and intervene in cases where drug manufacturers are hiking costs without justification. For too long America’s drug industry has been allowed to raise prices excessively for treatments that have been available for years. The recent EpiPen 400% price hike is just the latest example of companies putting profits ahead of patients. The sky-rocketing cost of prescription drugs is hurting average Americans, our health system and the federal budget.
This growing trend is especially harmful for seniors who spend a higher percentage of their income on healthcare costs and have seen their prescription drug costs grow exponentially in recent years. The Medicare Trustees report out-of-pocket costs, premiums and cost-sharing consumes 23 percent of the average Social Security check. This trend is devastating for America’s seniors.
This move, combined with Clinton’s early proposal to allow Medicare to negotiate drug prices and demand higher rebates for beneficiaries are important proposals which could make a real difference in the fiscal and physical health of millions of American seniors.” ...Max Richtman, NCPSSM President/CEO
According to her statement, this newest addition to Clinton’s prescription drug plan would:
“establish dedicated consumer oversight at our public health and competition agencies. They will determine an unjustified, outlier price increase based on specific criteria including:
1) the trajectory of the price increase;
2) the cost of production; and
3) the relative value to patients, among other factors that pose a threat to public health.
Should an excessive, outlier price increase be determined for a long-standing treatment, Hillary’s plan would make new enforcement tools available, including:
Making alternatives available and increasing competition: Directly intervening to make treatments available, and supporting alternative manufacturers that enter the market and increase competition, to bring down prices and spur innovation in new treatments.
Emergency importation of safe treatments: Broadening access to safe, high-quality alternatives through emergency importation from developed countries with strong safety standards.
Penalties for unjustified price increases to hold drug companies accountable and fund expanded access: Holding drug makers accountable for unjustified price increases with new penalties, such as fines – and using the funds or savings to expand access and competition.”
A Kaiser Family Foundation poll found a large majority of the public (72%) view the cost of prescription drugs as unreasonable. Our NCPSSM polling, and many others too, shows most Americans across party lines support allowing Medicare to negotiate with drug companies as a way to lower drug costs for seniors. Reigning in high drugs costs is a critical step to making America’s health care more affordable for both patients and federal programs like Medicare.
New analysis by the Center for Public Integrity of Medicare Advantage audits show that 35 of the 37 companies audited by the Centers for Medicare & Medicaid Services (CMS) overcharged the government by millions of dollars each year. By “upcoding” claims, insurance companies report patients as being sicker than they are and thus collect higher payments from Medicare.
By overstating the severity of medical conditions like diabetes and depression, extra payments are made to health plans which claimed some diabetic patients also had complications of the disease, such as eye or kidney problems. After the CMS audits, these claims were ultimately reduced or invalidated in nearly half the cases, sometimes more. This CPI report isn’t the first time private insurers in Medicare Advantage have come under fire. In May, a Government Accountability Office report called for “fundamental improvements” to curb excess charges linked to faulty risk scores. In addition, at least half a dozen health-industry insiders have filed whistleblower lawsuits that accuse Medicare Advantage insurers of manipulating risk scores to boost profits.
CPI also found:
Auditors on average could confirm just 60 percent of more than 20,000 medical conditions plans were paid to treat. The confirmation rates were much lower for some conditions, such as diabetes with serious complications, depression and some forms of cancer.
Overpayments triggered by unsupported medical diagnoses at the 37 plans audited topped $10,000 per patient for more than 150 patients. The health plans overcharged the government by $2,000 or more for at least 3,500 people in the 2007 sample group.
The health plans overall were three times as likely to charge Medicare too much as too little for some of the 70 medical conditions examined as part of the audits.
None of the plans faced closer scrutiny following the audits, no matter the size of the overpayment. The 2007 audits, which collected a total of $12 million in overpayments, are the only ones CMS has completed since officials adopted risk scores in 2004 at the behest of Congress. In some cases, health plans are still appealing the results, nine years later.
17 million seniors are enrolled in Medicare Advantage and in 2014, Medicare paid the health plans more than $160 billion. The Center for Public Integrity reported that overspending tied to inflated risk scores has cost taxpayers tens of billions of dollars in recent years.
Since immigration is a key issue for Donald Trump’s Presidential campaign, we knew it was only a matter of time before one of the biggest Social Security myths would work its way into campaign rhetoric – and so it has, in a new Trump for President campaign ad:
In Hillary Clinton’s America, “illegal immigrants … [are] collecting Social Security benefits, skipping the line.” –voice-over in a Donald Trump campaign ad, Aug. 19, 2016
As we’ve reported many, many times, undocumented workers do not receive Social Security benefits. In fact, because they don’t have legal Social Security numbers what frequently happens is they end up contributing but not collecting:
“Stephen C. Goss, the chief actuary of the Social Security Administration, has reported that unauthorized immigrants contributed about $12 billion a year to Social Security, adding an estimated $300 billion over the years to the Social Security trust fund. During the most recent attempt to reform our immigration system in 2007, the Congressional Budget Office (CBO)estimated granting permanent status would generate $57 billion in additional revenue over a decade.”
Fact checkers took a look at the new Trump campaign ad and came to the same conclusion, earning Trump his 42nd “Whopper” ranking:
“The Republican presidential nominee makes a bizarre claim that undocumented immigrants will collect Social Security under a Clinton presidency. In general, people in the United States illegally are not eligible to collect Social Security benefits. They must be granted some type of lawful status — either by obtaining legal status or being granted deferred action. Even then, it’s not accurate to say they are “skipping the line.” People who obtain lawful status under DACA need to work for at least 10 years, pay taxes and reach retirement age before they are eligible to receive Social Security benefits.
Trump has already earned 41 Four-Pinocchio ratings. We would have liked to see the nominee finally stick closer to the facts in his first general-election ad. Unfortunately, this ad is — to borrow a line from its script — “more of the same.” The broad assertion in this ad is just not supported by facts, and thus earns Four Pinocchios.”
You can read more about what Immigration reform means for Social Security in our Issue Brief. Here are some basics:
- As legal status is granted to current undocumented immigrants, allowing workers to step out of the shadows, contributions to the Social Security program will increase. The CBO estimated that reform would increase the growth of the economy by as much as 1.3 percent.
- Social Security trustees project that an increase in immigration of 100,000 persons a year would improve the long-term actuarial balance of the Social Security’s trust fund by about 3.5% of the projected 75-year deficit.
- The immigrant population, in particular undocumented workers, is very young. In fact 59% arebetween 25 and 44 years of age. History has shown that their children, as legal second- generation Americans, would make measureable contributions to our nation and economy. A Pew research study of the 20 million adult U.S.-born children of immigrants shows that these adult children have median incomes and homeownership rates similar to the general U.S. population. In fact, second generation adult children of immigrants have a lower poverty rate and higher college graduation rates. All of these demographic factors are potentially good - not bad - news for Social Security.
Have a Social Security or Medicare question?