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From the monthly archives: August, 2007

We are pleased to present below all posts archived in 'August, 2007'. If you still can't find what you are looking for, try using the search box.

Let’s Set the Record Straight…One last time

Ask Mary Jane, NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

“I’ve contributed 40 hours to Social Security but can’t collect my benefit”…Yes, you can.

Here’s a sampling of the different ways the myth surrounding the Windfall Elimination Provision comes to me from questioners:

“My wife heard that she won't be able to collect her own SS at retirement age because she will collect from a school retirement plan. Can that be true?”

or

“When I went to the Social Security office I was devastated to learn that I would never receive any social security benefits (even though I have a minimum of 40 credits). I never knew such a thing as the Windfall Elimination Provision existed”

In short, if you hear “you can’t collect any of your Social Security” because of the WEP then you have been misinformed. Any citizen or legal resident who earns 40 quarters of Social Security coverage is entitled to a retirement benefit at retirement age. There are no exceptions.

The Social Security Act’s Windfall Elimination Provision (WEP) requires the determination of a Social Security benefit by a separate, lower benefit calculation. This applies if the wage earner contributed to a pension rather than Social Security, for example, some state, local and federal pensions. The benefit is reduced, but never to zero.

If you were given misinformation by the Social Security Administration, go to your local Social Security office and insist on filing an application dated retroactive to the date you were told you were ineligible for a benefit. There is no time limit on correcting administrative errors.Do you have questions about Social Security? If so, feel free to drop me an email at Ask Mary Jane.

Let’s Set the Record Straight

Ask Mary Jane, NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

It’s been said a “lie told often enough becomes the truth”. How sadly true, especially for those determined to convince future generations that Social Security just won’t be there for them. Not a day goes by that I don’t see the same old myths about Social Security appear in news articles, speeches by elected leaders (who should know better) and seniors who’ve been scared by these malicious myths. For the next few days I’ll offer some Social Security Myth-busting…Mary Jane style.


“Members of Congress don’t contribute to Social Security”…Wrong

Congress got the message years ago and since 1983 all members of Congress, Executive Office appointees, the President, Vice President , the federal Judiciary and newly hired federal employees have been paying into Social Security. Unfortunately, here we are 24 years later and some just won’t let this one go (even though it’s just not true).

All Federal employees, including Members of Congress, pay the same FICA payroll tax as anyone else. Upon retirement, disability or death, Social Security benefits for a Member of Congress or his or her dependents is determined under the same rules and by the same calculations as any other worker who contributed to Social Security.

Do you have questions about Social Security? If so, feel free to drop me an email at Ask Mary Jane.

Let’s Set the Record Straight…Again

Ask Mary Jane, NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

“Social Security is a Ponzi Scheme” …No it’s not.

Anyone who tells you Social Security is a Ponzi scheme either doesn't understand what a Ponzi scheme is or their mother’s didn’t teach them not to fib. This myth is a favorite of conservatives who just hate the idea of social insurance in general. The Social Security Administration has a good history describing why this is nonsense. But here’s my take on this myth.

A Ponzi scheme is that e-mail you receive inviting you to send a fancy guest towel to the top three names on a list and instructing you to cross off the first name, add your name and send the same e-mail to three others. Whoever starts the list likely will receive the towels, but ultimately, there is no one left to continue the chain. The final entrants won’t receive anything. The original Ponzi played the game with dollars but the principle is the same. He borrowed money from his first investors and paid them back with money obtained from subsequent investors. He quickly ran out of sufficient investors to keep his scheme going.

Social Security is not a Ponzi scheme. Social Security is a pay-as-you-go system with the contributions of today’s workers going to today’s retirees or into the reserve to pay benefits to future retirees. The ratio of workers to retirees has changed over time, but unless this nation allows the system to be abolished, there will never be a time of no workers paying into the system. The most recent report of the Social Security Board of Trustees forecasts that even with no changes in the system, reserves will last through 2041 and even after that, 75% of promised benefits could be paid with incoming payroll taxes.

And don’t give any credence to the nonsensical comparison that in 1940 there were 40 workers to each retiree and today it is only three to one. Of course, there were fewer beneficiaries. 1940 was the first year a benefit was paid so millions of then-retired workers didn’t have the opportunity to contribute payroll taxes and earn benefits. Many of those ineligible for benefits in 1940 then relied on public assistance or their children to survive their retirement years. Hardly the “good old days” those who hate Social Security should be so eager for us to return to.

Do you have questions about Social Security? If so, feel free to drop me an email at Ask Mary Jane.

Have YOU ever given away $34 million?

Apparently the Centers for Medicare and Medicaid Services has.
A new GAO report investigates CMS audits of private insurance providers offering Medicare Advantage plans. These private MA plans will collect billions in government subsidies while also charging $1000 more per beneficiary to provide the same coverage already provided by Medicare.

This latest GAO report finds:
“CMS has not met the statutory requirement to audit the financial records of at least one-third of the participating MA organizations for contract years 2001-2005, nor has it done so yet for the contract year 2006 bid submissions.”

Even worse, the audits that CMS has performed turned up $34 million dollars which Medicare beneficiaries should have received in additional benefits, lower co-payments or lower premiums. Good news for seniors, right? Think again.

“However, in late May 2007,CMS officials told us they were planning to close out the audits without pursuing financial recoveries because legal counsel had determined that the agency does not have the legal authority to recover funds from MA organizations based on ACR audit results.“

In other words, private MA insurers get to keep another $34 million of our taxpayer dollars, because CMS won’t enforce its own contracts with the insurance industry.

Welcome to the world of privatized Medicare.

An Oldie but Goodie

72 years ago today President Franklin D. Roosevelt signed the Social Security Act. Today, nearly 50 million seniors, the disabled, and survivors receive Social Security benefits and for many it will make the difference between living independently or in poverty.

No other government program in American history can claim the successes achieved by Social Security. Period. Attacks and misleading predictions about sustainability have been leveled against the program since its creation and still, Social Security checks go out on time and as promised. Whether you’re 72 or 22, it appears Social Security is poised to play an even larger role in your life.

A new report by the Center for American Progress details the decline in pensions, personal savings and median incomes, which increase the importance of the only, guaranteed retirement income…Social Security. These are especially important facts for our younger workers who have been told repeatedly that “Social Security won’t be there for you”.

What nonsense.

Here’s a great source for some historical perspective. “The Battle for Social Security—From FDR’s Vision to Bush’s Gamble”. Author Nancy Altman says Social Security’s most important champion has always been the American people.
“Through its many challenges, Social Security has always emerged victorious,because Americans have remained committed to this essential program. The large majority of Americans have supported Social Security because it embodies the best of American values, including reward for work, compassion, fairness, foresight, and prudent, conservative management. This unflagging support has permitted Social Security to eradicate much of the economic insecurity of the past and to transform society.”

Ultimately, it will be the next generation of workers who will have to see through the political hype and the privatization schemes, and come to the same conclusion generations before them have...Social Security can and must be strengthened for generations to come.
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