It’s a natural tendency to look back at the end of each year to take stock of what’s been and then look forward to what will be. For many American seniors, that exercise will inevitably lead to relief (Whew, we made it through 2010
) and trepidation (Will next year be just a difficult
A new survey from the Pew Research Center reports America’s largest generation, Baby Boomers, are pretty downbeat—even more so than other adults—about the future.
Boomers are also more downbeat than other adults about the long-term trajectory of their lives -- and their children's. Some 21% say their own standard of living is lower than their parents' was at the age they are now; among all non-Boomer adults, just 14% feel this way, according to a May 2010 Pew Research survey. The same survey found that 34% of Boomers believe their own children will not enjoy as good a standard of living as they themselves have now; by contrast, just 21% of non-Boomers say the same.2
Economically, Boomers are the most likely among all age groups to say they lost money on investments since the Great Recession began. Baby Boomers also are the most likely (57%) to say their household finances have worsened. And a higher share of Boomers than older Americans (but not younger ones) say they have cut spending in the past year.
Among those Baby Boomers ages 50 to 61 who are approaching the end of their working years, six-in-ten say they may have to postpone retirement. According to employment statistics, the older workforce is growing more rapidly than the younger workforce.
And if Washington fiscal hawks have their way in the New Year, future generations of Americans will face even longer work lives and less Social Security benefits in their retirement, meaning even more economic uncertainty than workers and retirees are facing now. Hard to imagine, right?
This is not the kind of future working Americans have dreamed for themselves or their children. That’s why the National Committee will mark the New Year with a new campaign to remind Washington that cutting Social Security benefits is NOT fiscal responsibility. We’ll mobilize our members and advocates as part of our National Committee Truth Squad to ensure the White House and Congress understands cutting benefits for millions of middle-class Americans under the guise of deficit reduction is simply not an option. We’ll have more details about our 2011 Social Security campaign the first week of January. Until then…
Happy Holidays from the National Committee!
CATEGORY: [entitlement reform], [Social Security]
Charles Dickens' Ebenezer Scrooge feared the Ghost of Christmas Future more than any other he'd met during his long Christmas Eve night. I can relate. After watching congressional passage of the White House-Republican negotiated tax deal, I, too, fear for the future. I fear this tax package is the first step toward radical changes to Social Security that will impact generations of working Americans.
While some elements in the tax package provide desperately needed stimulus for millions of Americans - including far too many who are suffering near-Dickensian levels of poverty and fear - this deal also diverts $112 billion in contributions from Social Security. A "tax holiday" may sound like a wonderful gift for workers now, however this one is wrapped in Washington promises that could turn out to be as thin as tissue paper.
As we've seen in Congress these days, it's easy to enact tax cuts but virtually impossible to allow them to expire. This payroll tax holiday proposal will be no different. Election year politics in 2012 will likely doom the expiration of this $112 billion tax cut because when this "tax holiday" is ready to expire next Christmas, restoring Social Security's funding will be portrayed by those opposed to the program as an enormous tax increase, rather than the legislated end of the "holiday."
Retirees and their families will watch helplessly as Social Security becomes dependent on general fund revenues rather than worker contributions, which have successfully funded the program for 75 years. Proposals like this threaten the program's independence at this time of unprecedented deficits, forcing Social Security to compete for limited federal dollars. If made permanent, this payroll tax cut would then double Social Security's 75-year projected shortfall, a gap denounced by the president's own fiscal commission.
Conservatives have long dreamed of a payroll tax holiday because it fulfills two ideological goals: lower taxes and weakening Social Security's finances. Former Bush presidential spokesman Dan Bartlett described the Republicans' tax cut trap this way: "We knew that, politically, once you get (a big tax cut) into law, it becomes almost impossible to remove it. That's not a bad legacy. The fact that we were able to lay the trap does feel pretty good, to tell you the truth."
Passage of this tax deal now sets the table for another round of "negotiations" that target Social Security for further cuts. Some fiscal hawks are prepared to oppose raising the debt ceiling next year if they don't get Social Security benefit cuts like those proposed by the fiscal commission. That means the new year will bring another opportunity for Social Security to be held hostage in another "Let's Make a Deal"-style "negotiation" in Washington.
The American people have made it clear they do not support trading the long-term prospects of our nation's premier retirement income program for short-term gains. Promises that the diversion of $112 billion in Social Security contributions will be temporary are promises the American people must ensure Congress keeps. Tax cuts for millionaires, reduced contributions to Social Security and benefit cuts for generations of Americans - it's no wonder so many look to Washington and say, "Bah, humbug."
Barbara B. Kennelly is the president and CEO of the National Committee to Preserve Social Security and Medicare and a former member of Congress.
This article appeared on page A - 18
of the San Francisco Chronicle
CATEGORY: [Budget], [Social Security]
“Now that this tax cut deal has passed Congress, and $112 billion in Social Security funds will be diverted from the program, seniors and their families will be watching Washington closely to ensure lawmakers keep their promise that this really is just a one year ‘holiday’. The American people have made it clear they do not support trading the long-term prospects of our nation’s premier retirement income program for short-term gains. Promises that the diversion of $112 billion in Social Security contributions will be temporary are promises that must be kept. This debate has shown working Americans do not want Social Security to be used as a bargaining chip in yet another Let’s Make a Deal style ‘negotiation’ in Washington.
American seniors want fiscal sanity returned to our federal government but they also understand, Social Security is not to blame for our economic crisis and beneficiaries shouldn’t foot the bill for a prosperity party they didn’t attend. Congress and the White House should not mistake passage of this bill as support for undermining Social Security’s long-term financing.” …Barbara B. Kennelly, President/CEO
CATEGORY: [Social Security], [stimulus]
Yesterday’s vote to end debate on the White House/GOP Tax compromise sets the stage for passage in the Senate followed by a vote in the House. USA Today
describes the Senate vote this way:
Nine Democrats and one independent voted against the measure, including Wisconsin Sen. Russ Feingold and New York Sen. Kirsten Gillibrand. Sen. Bernie Sanders, I-Vt., who staged an 8½-hour speech against the proposal last week, also voted against the bill. Five Republicans opposed the bill, including Sens. Tom Coburn of Oklahoma and George Voinovich of Ohio.
And so the Washington Disconnect
continues and you can be sure a year from now, when it’s time for this so-called “holiday” to expire there will be legislation and a battle in Congress to make it permanent or even divert that money into private accounts.
But we’re getting ahead of ourselves…after the Senate’s final vote then it will move to the House where changes are expected to be made. However, the White House has made it clear that changing the payroll tax holiday to any of a number of other more stimulative
proposals is not an option. By all accounts, House Democrats
are not pleased with the package they’ve been presented:
"Hardly anybody in the Democratic caucus here feels that the president tried hard enough to deliver on his campaign promises," said Rep. Alan Grayson of Florida, one of dozens of House Democrats defeated in last month's elections. Obama had House Democratic leaders "go through what turned out to be Potemkin meetings with his staff, when the real negotiations were being done elsewhere," he said.
Rep. Elijah Cummings, a Maryland Democrat who has strongly supported Obama and won re-election last month, told MSNBC the chief House representative "wasn't even in the room, and we did feel left out" during the key tax-cut negotiations.
Lastly, here’s a nod to the one person in Washington willing to speak out strongly against the payroll tax holiday. Senator Bernie Sanders (D-VT) understands the threat this tax deal poses for Social Security. It appears he among a very small group in Washington who does.
Visit msnbc.com for breaking news, world news, and news about the economy
CATEGORY: [Social Security]
The Senate is expected to vote this afternoon to end debate on the bill that extends the Bush tax cuts for the wealthy and cuts $120 billion in payroll contributions to Social Security. The vote for passage could then come as early as tomorrow.
Email your Senator today. NOW is the time for seniors and working Americans to say enough is enough. There are other ways to stimulate the economy without extending tax cuts for the rich combined with cuts to Social Security’s funding. Some of those other ways? Seniors advocates have proposed extending, or even expanding, the “Making Work Pay” tax credit or reducing employees income tax liability. However, as economist and IWPR President, Heidi Hartmann
, explains the White House has shown no interest in alternatives:
What is most troubling now is that even though the risk to Social Security has been pointed out to the White House, these same staffers continue to insist that the rebate must take the form of a payroll tax cut delivered in every paycheck in 2011 and that other alternatives won’t do. For example, Congressman Brad Sherman has suggested issuing a rebate check to each worker early in 2011 for 2 percentage points of the 6.2 percent FICA tax each paid in 2010. Dollar-wise, that’s essentially the same as giving workers 2 percentage points in 2011. Sure, there will be more workers in 2011 (if we’re lucky and get some employment growth), but they could be included by issuing rebate checks early in 2012 based on what they earned in 2011. Also, even though research shows that lump sums aren’t spent as readily as smaller amounts, the portion spent after 3-6 months is quite substantial. And since we will need stimulus all through 2011, the difference between these two distribution systems can’t be so great as to make the Sherman alternative totally unacceptable to the White House — when it has the very important advantage of never reducing the payroll tax rate to 4.2 percent and so never having to figure out how to get it back up to 6.2 percent. While Sherman’s proposal virtually mimics the payroll tax cut, Nancy Altman, co-chair of Social Security Works and a leading advocate against the payroll tax rate cut, suggests a more progressive alternative, one that would likely increase the stimulative value of the tax cut — an identical lump sum to every worker who paid FICA tax. Such a method would direct more dollars toward lower earners (the average benefits would be on the order of $800) and therefore generate more spending.
Social Security Works
has created a graph which clearly shows how this Payroll Tax cut benefits higher earners. While the President and members of Congress would receive $0 under the "Making Work Pay" tax credit extension, they will receive $2,136 in tax cuts under this payroll tax proposal. A minimum wage earner received $400 from "Making Work Pay" in 2010 and could receive $800 if extended again. However, under this payroll tax plan that same worker receives $302. Under this flawed payroll tax plane, millions of state, local and federal workers who are not covered by Social Security receive absolutely nothing.
The American people understand that cutting funding to Social Security
makes no sense and it’s not even the most effective way to provide stimulus to working Americans.
Call your Senator and member of Congress TODAY.
We’ve created a number of easy one-step ways for you to connect with your Senator and Congressional representatives. To phone them…call our Legislative Hotline at:
Would you rather send an email? Go to our Leg Action Center
where you can use our sample Payroll Tax Holiday letter or, even better, write your own.
CATEGORY: [Social Security], [stimulus]
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