Tucked into the massive spending bill Congress passed this weekend was legislation that reversed 40 years of federal law protecting retirees’ pensions. The change will allow benefit cuts for more than 1.5 million workers, many of them part of a shrinking middle-class workforce in businesses such as construction and trucking. There wasn’t a single Congressional hearing on the plan before it was slipped into the spending bill, outraging senior’s advocates...including NCPSSM.
“Allowing plans to break the fundamental ERISA promise - that pensions paid to retirees and their surviving spouses will not be reduced - represents an extreme response to a problem that can be addressed through other means by strengthening the funding of the Pension Benefit Guaranty Corporation.
Additionally, the National Committee is deeply concerned that this provision could set a dangerous precedent for other defined benefit programs, such as single employer plans, public sector plans and Social Security. We believe a change this fundamental to the retirement security of Americans should be subject to a Congressional hearing and should be considered by the appropriate committees, with legislative language reviewed by Congress and the public, particularly those who will be affected by these reductions.” Letter to Congress - Max Richtman, NCPSSM President/CEO
Senate Finance Committee Chairman, Sen. Ron Wyden (D-OR), shares our concerns as he described to the Wall Street Journal:
“Some Democrats in particular were uneasy with the solution, saying it is being rushed through Congress and could create a dangerous precedent encouraging other retiree benefit cuts.
‘This is unprecedented and I worry about the impact on retirees and the slippery slope we’re about to head down,’ said Sen. Ron Wyden (D., Ore.), the Finance Committee chairman, in a statement. ‘I am working hard to protect retirees’ pensions, and jamming this bill through Congress virtually sight unseen is no way to solve this issue.’ “
In fact, some House Republicans see this pension cut strategy as an example of how Congress should handle Social Security in the new GOP controlled Congress. Make no mistake about it, Congress needed to come up with a long-term solution to the multi-employer pension shortfall; however, there was no urgency plus there were other options beyond a cuts-only solution hitting current retirees with no way to prepare for a cut in their income.
“Wall Street banks, automakers and insurance giants got bailouts during the economic meltdown that started in 2008. But when it comes to the pensions of retired truck drivers, construction workers and mine workers, it seems that enough is enough.” Time.com
‘It bothers me no end that we have Congress and legislators that think that the proper way to correct problems that banks and corporations made is to take it out on the workers,’ said Dave Cook, president of Local 655 of the United Food and Commercial Workers.” St. Louis Post Dispatch
The Pension Rights Center has a calculator
on its website that lets retirees under age 75 see how much their pensions might be reduced under the bill.
NCPSSM Board Chair, Catherine Dodd, testified before the Senate Finance Committee today on the retirement challenges facing America's women and the National Committee's Eleanor's Hope initiative to improve Social Security benefits:
“22 million older women receive Social Security benefits yet the inequalities they face threaten their retirement security. Persistent gender wage discrimination, work gaps taken to care for loved ones, the lack of pensions and generally longer lives mean women receive a significantly lower Social Security benefit than men. While the Social Security system is gender-neutral, life is not and America’s senior women pay the price for that inequality for as long as they live. We urge Congress to level the playing field for millions of our nation’s older women.” Catherine Dodd, PhD, RN and NCPSSM Board Chair
Members of the Senate Finance Committee heard testimony from witnesses today in a hearing entitled, “Social Security: Is a Key Foundation of Economic Security Working for Women?” National Committee to Preserve Social Security and Medicare Board Chair, Catherine Dodd, urged the Senate to address the inequities that reduce the average monthly Social Security benefit for women. In 2012 the average woman retiree received $1,103 a month while a retired man received a $1,414 monthly benefit. The National Committee believes women deserve an adequate retirement income whether a work life is spent in the home in the paid workforce or a combination of the two. Toward that end, our new initiative, Eleanor’s Hope -- named in honor of first lady and activist Eleanor Roosevelt -- is mobilizing women of all ages to advocate for income equality, retirement security and health protection for women.
Some of the National Committee’s proposals for improving benefits in Social Security presented to the Senate Finance Committee today include:
· Providing Social Security credits for caregivers
· Improving Social Security survivor benefits
· Equalizing Social Security’s rules for disabled widows
· Strengthening the Social Security Cost of Living Allowance
· Boosting the basic Social Security benefit of all current and future beneficiaries
You can see Catherine Dodd’s full Senate testimony here.
Virtually the first order of business for Congress after November’s Congressional election was to pass $42 billion in tax breaks going largely to corporations. The House has already approved these giveaways (without providing the “pay fors” they’ve demanded for bills to help average Americans like unemployment extensions or even disaster relief) and the Senate is expected to follow suit this week. Incredibly, it could have been much worse as the House originally wanted ten times more in corporate giveaways. A veto threat from President Obama is all that derailed that plan. Bill Moyers detailed the original package:
“The 10-year, $444 billion package includes a few provisions that were popular with Democrats, but would phase out existing tax credits for clean energy development. Mostly, it’s a boon for some of the top corporate tax-avoiders in America. Some 90 percent of the cuts would benefit their bottom lines. One of the biggest beneficiaries would be GE, which, according to Citizens for Tax Justice, claimed tax refunds of $3.1 billion on $27.5 billion in profits between 2008 and 2012. That means the company had a negative tax rate of 11 percent. Other big winners would include Wall Street financial firms, pharmaceutical companies and computer and Internet businesses.”
Frank Clemente, executive director of Americans for Tax Fairness, highlights one especially outrageous provision in this legislation:
“The most disturbing part of this legislation is it provides $6.2 billion in tax breaks to companies that ship profits offshore. One of these loopholes – the Active Financing exception, otherwise known as the GE Loophole – benefits General Electric and big Wall Street banks. Congress should be closing offshore tax loopholes, not continuing them.”
Citizens for Tax Justice offered this analysis:
Here are just a few of the problems with H.R. 5771:
■ Most of the tax breaks fail to achieve any desirable policy goals. For example, they include bonus depreciation breaks for investments in equipment that the Congressional Research Service have found to be a “relatively ineffective tool for stimulating the economy, a tax credit for research defined so loosely that it includes the work soft drink companies put into developing new flavors, and a tax break that allows General Electric to do financial business offshore without paying U.S. taxes on the profits.
■ The tax breaks cannot possibly be effective in encouraging businesses to do anything because they are almost entirely retroactive. The tax breaks actually expired at the end of 2013 and this bill will extend them (almost entirely retroactively) through 2014. These tax provisions are supposedly justified as incentives for companies to do things Congress thinks are desirable, like investing in equipment or research, but that justification makes no sense when tax breaks are provided to businesses for things they have done in the past.
■ The bill increases the deficit by $42 billion to provide tax breaks that mostly benefit businesses, even after members of Congress have refused to enact any measure that helps working people unless the costs are offset. The measures that Congress refused to enact without offsets include everything from creating jobs by funding highway projects to extending emergency unemployment benefits.
As we’ve said before, budgeting is all about priorities. Did you cast your vote in November supporting candidates who promised to drain billions of dollars from federal revenues for America’s largest corporations, while simultaneously claiming our nation can’t afford programs benefiting average Americans like Social Security and Medicare?
Probably not. However, that’s exactly the course currently being charted in the lame duck and beyond to the 114th Congress.
We would like to wish everyone a Happy Thanksgiving and safe travels this week!
While the well-financed Wall Street-backed campaign
to convince Americans that Social Security is in crisis (even though the facts
prove just the opposite) has sputtered over time, that hasn’t stopped some in Congress from inflicting a death-by-a-billion-cuts budget strategy on the Social Security Administration's administrative finances. SSA has received less than its budget request
in 14 of the last 16 years. In FY 2011-2013 alone, SSA received nearly $3 billion
less than it requested from Congress to do its job. A job that is increasingly challenging as the agency serves near record number of visitors as the nation’s baby boomers retire. Not surprisingly these short-sighted “serve more with less” budgets mean beneficiaries
are paying the price:
“Each day, almost 163,000 people visit field offices and more than 348,000 people try to reach an SSA agent for assistance. In FY 2014 about 13% of SSA’s visitors waited over an hour for service. Despite agency online service initiatives and the reductions of public service ours, field offices in FY 2014 served 40.7 million visitors. Field office visitors waited 50% longer in FY 2014 than in FY 2012. In FY 2014, nearly 5.5 million SSA visitors waited over an hour to be served and over 2 million visitors left without service. SSA’s 800 number network had a marked deterioration in FY 2014 in answering calls to agents, demonstrated by an answer rate of about 54%. The field office answer rate was about 67%, which also represents a substantial degradation in performance over the past few years.” -- Letter to Office of Management and Budget, signed by 35 Social Security advocacy organizations, November 2014
64 SSA field offices and 533 temporary mobile offices have closed, which is the largest five-year decline in the agency’s 79 year history. In testimony submitted to the Senate Aging Committee earlier this year, NCPSSM President/CEO Max Richtman urged the SSA to reject suggestions that online and self-service options should replace in-person services currently provided in field offices:
“...the National Committee believes any individual who has paid Social Security taxes has the right to face-to-face service within a reasonable distance of their home. The National Committee also is concerned that seniors and low-income individuals who are accustomed to conducting business on a face-to-face basis will suffer undue hardship when faced with the need for a benefit verification letter or SSN printout. Many in this population lack access to and are not familiar with computers and printers. I am also concerned that shifting this administrative burden to SSA call centers will only increase the current average wait time of 26 minutes.”
Social Security advocates, including NCPSSM's Max Richtman, SSA Acting Commissioner Carolyn Colvin and Chairwoman of the Senate Appropriations Committee, Senator Barbara Mikulski (D-MD) were among the attendees of a Capitol Hill conference on the challenges facing the Social Security Administration. All agreed on the need to fund SSA far beyond what Congress has approved in recent years. Results of a new national poll were also released showing the majority of Americans want to keep Social Security field offices open to serve the millions of Americans who need the one-on-one attention they provide.
It’s time to end the “starve the beast” politics promoted for decades by those opposed to programs like Social Security. Annual defunding of SSA fulfills a political goal at the expense of millions of American seniors, the disabled, survivors and their families who depend on Social Security.
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