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From the monthly archives: February, 2011

We are pleased to present below all posts archived in 'February, 2011'. If you still can't find what you are looking for, try using the search box.

Social Security Administration Cuts or Social Security Administration Cuts – the new GOP Budget Options

Republican leaders in the House apparently remember the political fallout from their last government shutdown in 1995 & 1996 and don’t want to risk that backlash again.  The National Journal reports House leaders will introduce a two-week stopgap funding bill tomorrow that mirrors the 2011 budget they passed last weekend (which, by the way, has no chance of passage in the Senate):
“This approach reflects Boehner’s deep-seated belief that the 1995 Gingrich-led Congress risked everything in its shutdown confrontation with President Bill Clinton, and in the aftermath Republicans not only lacked the stomach to fight for more spending cuts, they veered in the opposite direction and targeted federal spending to vulnerable districts to protect the GOP majority.”
The Hill newspaper provides a bit of a history lesson in this glimpse back at what the 1996 shutdown meant for the Social Security administration:
“During the 1996 standoff, the Social Security Administration (SSA) initially kept 4,780 employees on, because they were in positions necessary to ensure that various benefits, including Social Security, continued to be paid. The remaining 61,415 employees were furloughed, according to the CRS report.  However, the SSA realized shortly afterward that it lacked the manpower to answer phone calls from customers needing new cards or requesting that their files be changed to reflect a news address for benefit checks.  Another 49,715 employees were brought back to help run the agency.”
If history is any predictor, then a government shutdown is clearly not good news for the 50 million Americans who depend on their Social Security checks to arrive as expected and need experienced SSA staff available to handle problems. But what’s also bad news for Social Security beneficiaries is the GOP’s new alternative to a shutdown – SSA cuts which would also furlough workers, cut administrative funding and increase the backlog of claims.  In short, the Republican solution being offered to America’s retirees, the disabled and survivors is furloughs, cuts and backlogs through a government shutdown or furloughs, cuts and backlogs through a draconian stop-gap bill which provides political cover but no relief for the average American. The latest 2-week proposal is the same budget bill House Republicans passed to fund the remainder of this year. Same 9.3% cut to the SSA budget – same devastating affects – just a shorter time frame.  Here’s Nancy Altman’s, of Social Security Works, description of the House-passed bill:
...the Republicans in the House of Representatives want to strip away $1.7 billion from the already underfunded agency, money that is needed simply to keep offices open. If the Republicans' budget plan goes through, the entire agency, including all 1,300 field offices might have to close for a month. A letter in anticipation of this has already been sent out to all employees. The phones would not be answered, and claims processing would halt. Even worse, given the well documented need to replace SSA's aging computer system, the Republicans' proposed cuts threaten the whole program, if the current system and its backup were to fail before the building of the new system, already behind schedule, were completed.”
Social Security Subcommittee Ranking Member Rep. Sander Levin(D-M) sums it up best:
“This Republican proposal is as irresponsible as it is shortsighted.  To jeopardize a lifeline for half a million new Social Security beneficiaries in order to score short-term political points is simply bad policy…It’s a perfect example of how little House Republicans seem to care if their rigid ideological crusade hurts real people.”
Lastly, you can see a full breakdown of SSA impacts under the GOP funding bill and the SSA letter urging a preparation for furloughs.

Social Security and Capitol Hill

Now that the White House and GOP budgets are out it’s time for both sides to start explaining them.  The White House team has been on Capitol Hill testifying before Congress.  This is our favorite bit of testimony so far, between Sen. Bernie Sanders and  OMB Director, Jack Lew, on the role Social Security plays (or doesn’t as the case may be) in our national debt.  Go Bernie… House Ways and Means Committee Democrats came out swinging against the GOP budget provisions for Social Security.  Their news release said:
“The 2011 budget plan presented this week by the House Republican Majority strips $1.7 billion away from the Social Security Administration (SSA) for the remainder of the year, a cut so drastic that SSA would need to impose the equivalent of a month of furloughs.  The entire agency would have to shut down all operations for 20 working days.  The phones would not be answered, field offices would be closed, and claims processing would halt.  Over half a million new retirees, disabled workers and survivors would be forced into a backlog before they could receive the benefits they earned.”
And then, just in case you missed the full White House News conference yesterday, here are a few of President Obama's Social Security comments.  We clearly have work ahead of us:
THE PRESIDENT: Now, you talked about Social Security, Medicare and Medicaid.  The truth is Social Security is not the huge contributor to the deficit that the other two entitlements are.I'm confident we can get Social Security done in the same way that Ronald Reagan and Tip O’Neill were able to get it done, by parties coming together, making some modest adjustments.  I think we can avoid slashing benefits, and I think we can make it stable and stronger for not only this generation but for the next generation. Medicare and Medicaid are huge problems because health care costs are rising even as the population is getting older.  And so what I've said is that I'm prepared to work with Democrats and Republicans to start dealing with that in a serious way.  We made a down payment on that with health care reform last year.  That's part of what health care reform was about.  The projected deficits are going to be about $250 billion lower over the next 10 years than they otherwise would have been because of health care reform, and they’ll be a trillion dollars lower than they otherwise would have been if we hadn’t done health care reform for the following decade. But we're still going to have to do more.  So what I've said is that if you look at the history of how these deals get done, typically it’s not because there’s an Obama plan out there; it’s because Democrats and Republicans are both committed to tackling this issue in a serious way. THE PRESIDENT:  Well, we're going to be in discussions over the next several months.  I mean this is going to be a negotiation process.  And the key thing that I think the American people want to see is that all sides are serious about it and all sides are willing to give a little bit, and that there’s a genuine spirit of compromise as opposed to people being interested in scoring political points. Now, we did that in December during the lame duck on the tax cut issue.  Both sides had to give.  And there were folks in my party who were not happy, and there were folks in the Republican Party who were not happy.  And my suspicion is, is that we’re going to be able to do the same thing if we have that same attitude with respect to entitlements. But the thing I want to emphasize is nobody is more mindful than me that entitlements are going to be a key part of this issue -- as is tax reform.  I want to simplify rates.  And I want to, at the same time, make sure that we have the same amount of money coming in as going out. Those are big, tough negotiations, and I suspect that there’s going to be a lot of ups and downs in the months to come before we finally get to that solution.  But just as a lot of people were skeptical about us being able to deal with the tax cuts that we did in December but we ended up getting it done, I’m confident that we can get this done as well. THE PRESIDENT: Well, the fiscal commission put out a framework.  I agree with much of the framework; I disagree with some of the framework.  It is true that it got 11 votes, and that was a positive sign.  What's also true is, for example, is, is that the chairman of the House Republican budgeteers didn’t sign on.  He’s got a little bit of juice when it comes to trying to get an eventual budget done, so he’s got concerns.  So I’m going to have to have a conversation with him, what would he like to see happen. I’m going to have to have a conversation with those Democrats who didn’t vote for it.  There are some issues in there that as a matter of principle I don't agree with, where I think they didn’t go far enough or they went too far.  So this is going to be a process in which each side, both in -- in both chambers of Congress go back and forth and start trying to whittle their differences down until we arrive at something that has an actual change of passage. And that's my goal.  I mean, my goal here is to actually solve the problem.  It’s not to get a good headline on the first day.  My goal is, is that a year from now or two years from now, people look back and say, you know what, we actually started making progress on this issue. THE PRESIDENT:  This is a matter of everybody having a serious conversation about where we want to go, and then ultimately getting in that boat at the same time so it doesn’t tip over.  And I think that can happen. THE PRESIDENT: And all of us agree that we have to cut spending, and all of us agree that we have to get our deficits under control and our debt under control. And all of us agree that part of it has to be entitlements. But, look, I was glad to see yesterday Republican leaders say, how come you didn’t talk about entitlements?  I think that’s progress, because what we had been hearing made it sound as if we just slashed deeper on education or other provisions in domestic spending that somehow that alone was going to solve the problem. So I welcomed -- I think it was significant progress that there is an interest on all sides on those issues.
Actually,  most Americans don’t agree "entitlements" should be a part of this deficit conversation.

Tired of the Lies about Social Security? So are we...

National Committee’s Truth Squad Arms Americans with the Facts about Vital Seniors' Programs and Our National Debt

America’s seniors have a huge stake in the national economic debate. Unfortunately, fiscal hawks have launched a well-publicized misinformation campaign to persuade Washington that Social Security is to blame for our fiscal mess when, in fact, nothing could be further from the truth.  Social Security has not contributed one dime to our federal debt; however, it is being targeted to pay the price. To counter the misinformation, the National Committee to Preserve Social Security and Medicare has mobilized a Truth Squad to give seniors the facts about Social Security and Medicare and the roles these vital programs play in our budget debate. The Truth Squad campaign includes:
  • The “Whopper of the Week” highlighting the latest false claim plus our myth-busting response
  • Myth-busting fact sheet which details the Myths being spread and the Facts to rebut them
  • Social Security and Medicare Tool Kits to help activists engage
  • Online E-card to send to your members of Congress
  • Our Legislative Action Center with sample letters that can be emailed directly to Congressional representatives and your local newspaper
  • “Washington Watch”, providing the latest news on efforts to target Social Security & Medicare for cuts
  • Send a postcard to the White House in our “Cutting Social Security Makes No ‘Cents’ Campaign”
See more at: http://www.ncpssm.org/Truth_Squad/

Budget Battle Begins - What about Social Security?

“I applaud President Obama for proposing a budget that does not target Social Security beneficiaries to foot the bill for years of deficit spending. This gives those of us who advocate for Social Security, additional time to inform more in Congress that Social Security is not the cause of this budget crisis nor is it the solution. Seniors, who have gone two years without a COLA increase, are also thankful for the $250 one-time economic recovery payment included in this budget. Proposing $1.1 trillion in budget cuts requires some tough choices, however, preserving the guaranteed benefits that American workers have paid for and depend on is the right budget strategy. Older Americans especially continue to suffer in this economy and they are thankful the President did not cut Social Security and Medicare benefits. They know Social Security has not contributed a dime to our deficit crisis and, contrary to claims by fiscal hawks, should not be used to balance our federal books.”…Barbara B. Kennelly, President/CEO The National Committee and its millions of members and supporters nationwide have delivered hundreds of thousands of petitions, emails, and phone calls to Congress and the White House reminding our elected leaders that Social Security has not contributed to our national debt. However, well-financed Washington special interests have used our rising debt as a political opportunity to push cuts in Social Security under the guise of deficit reduction.  Cutting Social Security benefits should not be used as a litmus test for ‘fiscal responsibility’, ‘serious debate’ or being an ‘adult’. We will continue to send that message to Washington as the budget debate continues. The National Committee’s “Truth Squad” is the heart of our campaign to provide analysis, myth busting and grassroots tools for activists nationwide.

They Did the Social Security Math – So You Don’t Have To

Those who are opposed to Social Security have always tried to make the case that somehow it’s a bad deal for Americans.  Yet time after time, real world economics and retirement math prove that claim false. Here’s a must-read piece from BankRate.com that breaks it down so that even the math-challenged can see that Social Security does exactly what it promises – provides a stable and secure benefit not victim to the whims of a market run amok.  We encourage you to use the share button on this post and send it to all those you know who claim they can do better with private accounts.
Annuities vs. Social Security By Jennie L. Phipps · Bankrate.com Thursday, February 3 Posted: 4 pm ET My right-brained, accountant husband stayed home yesterday because it snowed. We started talking about the number of people who attack Social Security as an inefficient retirement fund and insist they could do much better on their own. Just for the heck of it -- because he loves math and me -- my hubby unearthed his most recent annual Social Security statement and plugged the numbers into a spreadsheet to test how his accumulated Social Security compares to a conservative investment of the same amount of money outside Social Security. He was surprised to learn that Social Security isn't such a bad deal after all. Hubby listed his taxable wages beginning in 1963 on the spreadsheet. In the second column, he put the annual percentage of Social Security deducted from his wages -- it's changed over time, from 3.32 percent the first year he paid in to 6.2 percent last year. He calculated his annual contributions and his employers' annual contributions based on his wages. Then he totaled the contributions. Next, he assumed that Uncle Sam would invest the money in 30-year Treasuries, and he plugged in interest on the accumulated money based on the Treasury rates, calculating a purchase every six months and reflecting the actual change in rates. Finally, he added up the annual totals and a grand total. He took that grand total and plugged it into ImmediateAnnuties.com and got a monthly payout for a single male, age 66. He compared that number to what Social Security says he'd get at 66. According to ImmediateAnnuities.com, he would be able to take his total accumulated savings and purchase an annuity worth $3,427 paid monthly beginning at age 66 for the rest of his life. If he wanted to share the money with me, he could get a joint-lives payout that would pay $2,828 until we both died. There are no inflation adjustments during that time, and when both of us die, the insurance company gets to keep what's left. By comparison, Social Security will pay my husband $2,415 monthly beginning at age 66. If I didn't have my own Social Security, I could claim half of his -- $1,207 -- for a family total of $3,622. That's $794 more than the private annuity would pay us. Plus, the Social Security money is indexed for inflation. When one of us dies, the other gets the highest amount of the two payments. When both of us die, the government keeps anything that's left. By my lights, Social Security is clearly the better deal. The Bush administration wanted to partially dismantle Social Security and let people invest at least some of their contributions in the stock market. I haven't heard much about that plan since the market went south in 2008. But some regular posters here still suggest that they could do better on their own. And maybe they could. But Social Security is a program designed to protect all of us, including those of us who don't have what it takes to save and invest money on our own. I think that's a retirement planning blessing.
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