When President Gerald Ford created the first National African American History Month in 1976, he urged Americans to “seize the opportunity to honor the too-often neglected accomplishments of black Americans in every area of endeavor throughout our history.” Since then, every American president has issued African American History Month proclamations.
This year, the National Committee to Preserve Social Security & Medicare will commemorate the month with blog posts from a number of the nation’s leading policy analysts, lawmakers, and community leaders. We’ll examine the importance of programs like Social Security, Medicare, and Medicaid to the African American community while also paying tribute to generations of African Americans who have struggled with adversity to achieve full citizenship in American society. NCPSSM Board Chair, Dr. Maya Rockeymoore, begins the month with a look to the future.
Dr. Maya Rockeymoore
NCPSSM Board Chair and President/CEO of Global Policy Solutions
Strengthening Social Security for a Changing America
Some may be afraid of the news.
Children of color are now a majority of all babies born in the U.S.
And the Census Bureau projects that people of color will exceed the number of whites by the year 2043.
From debt reduction proposals to education and health policies, our nation’s changing racial and ethnic demographics have implications for a wide range of policy decisions at the forefront of the national debate about America’s future. Social Security is a case in point.
The strength of Social Security will be more important than ever because people of color are the least likely to have other sources of wealth to rely on in retirement or in the event of disability or the early death of a breadwinner. The ongoing debate about inequality in America has virtually ignored the racial wealth gap even as demographic shifts indicate its growing significance for the nation. A recent Pew Research Center report showed that in 2009 the typical African American and Latino household owned only five and six cents respectively for every one dollar in assets held by the average non-Hispanic white family. This wealth disparity is reflected in how racial and ethnic groups use Social Security.
The program accounts for the bulk of retirement income for 70 percent of Americans, but its importance as a retirement savings vehicle is even larger for people of color. According to the Social Security Administration, African American and Hispanic seniors are more likely than whites to rely on Social Security for all or almost all of their retirement income.
Reasons for racial wealth disparities are complex but include the fact that people of color have less access to private pension plans and lower enrollment in or contributions to them when they are available, lower rates of investing and home ownership, and fewer opportunities for wealth creation through business ownership. People of color also have a heavier reliance on Social Security’s survivor and disability benefits. For example, only 26 percent of whites receiving Social Security rely on it for non-retirement benefits compared to 47 percent of African Americans and 41 percent of other people of color. The poorer health status, lower levels of education, and higher rates of poverty experienced by some people of color contribute to their disproportionate rates of disability and early death.
Some believe that race or ethnicity doesn’t matter when it comes to reforming Social Security. But this perspective ignores the fact that there are demographic winners and losers depending on how the program is structured. For example, raising the retirement age—a popular reform option among Republicans and some Democrats—disadvantages those with shorter life spans: a group that is blacker, browner, poorer, and more blue-collar than those who live longer.
There is a fairer way to reform Social Security so that it is well financed and strong for at least another 75 years. One approach, advanced by the Commission to Modernize Social Security (of which I am a co-chair), recommends removing the cap on payroll taxes so that high wage earners contribute more, extending coverage to all newly hired state and local workers and slowly increasing the Social Security payroll tax by a fraction of a percent over a 20-year period to close the funding gap. The Commission’s report also calls for strengthening benefits to meet the needs of an increasingly diverse and economically insecure society. It recommends boosting benefits for the very old, widowed spouses, and the very poor; providing credits for workers taking time off to care for family members; and restoring benefits for college students whose working parent has died, become disabled, or retired.
In his remarks upon the release of the Social Security Trustees report, Treasury Secretary Timothy Geithner called for a solution that “…strengthens Social Security and does not hurt current recipients, slash benefits for future generations, or tie the program to the stock market.” By prioritizing an equitable reform approach that secures Social Security’s finances while making benefits stronger for everyone, the Commission’s proposal meets Mr. Geithner’s test. As a result, it should receive a full and fair hearing in Washington.
Some politicians, backed by the billion dollar anti Social Security and Medicare lobby, have tried to use a series of self-created Congressional fiscal “crises” to justify benefit cuts to millions of American families. Cutting already modest benefits in Social Security ignores the true causes of our federal deficit and weakens our nation’s most successful anti-poverty and retirement security program. Given the high stakes for U.S. workers of all backgrounds, our nation’s leaders should resist back room deal making in favor of an open process that gives ample consideration to proposals strengthening, not cutting, Social Security to address the needs of an increasingly diverse America.
Dr. Maya Rockeymoore is Board Chair of the National Committee to Preserve Social Security & Medicare, Co-chair of the Commission to Modernize Social Security, and President of Global Policy Solutions, a policy consulting firm based in Washington, DC.
CATEGORY: [Disability], [entitlement reform], [Social Security]
The billion dollar anti-Social Security and Medicare lobby has been working in overdrive for years to convince Washington that the only way to cut deficits is to cut middle-class benefits. They really don’t want to talk about the true drivers of our budget deficits, and they usually completely ignore the long-term impact that sky-rocketing health care costs (not just in Medicare) have on our economy. They certainly don’t want to acknowledge current trends which show a slowing in health cost growth. To do so, would completely undermine their "sky is falling" strategy. Economist Jared Bernstein explains:
While our approach at CBPP has been to point out what’s needed to stabilize the debt over the next decade—and stress that the extent of further-out-in-time budget pressures depend on health care costs and the impact of new policies to curb them—the basic approach taken here (in the Peterson report) is to get people worried enough about post-2022 projections that they’re willing to pass “entitlement reforms” now.
That is both unwise and unnecessary. First, as mentioned, we need to see the trajectory of health costs that have slowed in recent years. If that sticks, the forecasts will be improved.
Second, this Congress is the wrong Congress with which to engage in such reforms. They cannot be trusted to do so in such a way as to protect economically vulnerable beneficiaries. They will fix social insurance by breaking social insurance.
That “we have to destroy it to fix it” approach is most evident in the Wall Street and CEO arm of the anti-entitlement lobby called Fix the Debt and bolstered by the Business Roundtable. These multi-millionaire CEO’s (many representing companies which pay zero in corporate taxes) are preaching “shared sacrifice” while also fighting to protect their trillion dollars in millionaire tax breaks and corporate boondoggles.
We don’t have to slash benefits to middle class families to reduce the deficit. Here is a breakdown of just some of the common sense options America’s multimillionaire CEO’s and Wall Street don’t want to talk about:
CATEGORY: [Budget], [entitlement reform], [healthcare], [Medicare], [Social Security]
Rep. Paul Ryan is apparently feeling the sting after hearing his infamous “makers and takers” philosophy referenced in the President’s inaugural address
“The commitments we make to each other through Medicare, Medicaid and social security, these things do not sap our initiative, they strengthen us. They do not make us a nation of takers, they free us to take the risks that make this country great.” President Barack Obama Inaugural address
Clearly Congressman Ryan is hoping some revisionist history combined with fuzzy math will gloss over his well known antipathy for Social Security and Medicare (trying to clean the slate for 2016?). The fuzzy math part of his strategy came in his incredible “maker-taker” rework in an interview with Politico after the inauguration:
“When the president does kind of a switcheroo like that, what he’s trying to say is that we are maligning these programs that people have earned throughout their working lives,” he said. “So it’s kind of a convenient twist of terms to try and shadowbox a straw man in order to win an argument by default…No one is suggesting that what we call our earned entitlements, entitlements you pay for like payroll taxes for Medicare and Social Security, are putting you in a taker category,” Ryan said. “No one suggests that whatsoever. The concern that people like me have been raising is we do not want to encourage a dependency culture.” Rep. Paul Ryan, January 22, 2013
Hmmmm. There’s that “dependency culture” again, another favored Ryan meme along with the safety net hammock he frequently claims lulls retirees into “dependency and complacency.” See the recurring theme here?
“Right now about 60 percent of the American people get more benefits in dollar value from the federal government than they pay back in taxes," Ryan said. "So we're going to a majority of takers versus makers in America and that will be tough to come back from that. They'll be dependent on the government for their livelihoods [rather] than themselves." Paul Ryan, 2010
This is why it’s impossible to believe that retirees were ever excluded in his “makers-takers” metric. If Rep. Ryan isn’t including the approximately 40 million seniors who receive Social Security and Medicare in his political equation, you simply can’t get to his 60% number. No matter how fuzzy the math or revisionist the history.
**Additional note. Not only is it impossible, Mother Jones provides this must-read break down of exactly where that 60% number comes from and the fact that is DOES include Social Security and Medicare, despite Congressman Ryan's claims to the contrary.
Which leads us to another incredible bit of political sloganeering devoid of facts, in the same Politico interview:
“These programs, because of the way they were designed in the last century — which did not predict the aging of America, the baby boomer generation retiring at a tune of 10,000 people a day, and the cost of health care, which compounds these issues — are going bankrupt.”
Pretending that because Social Security was designed “last century” (which also means just fourteen years ago but we digress) the program is somehow archaic or inflexible not only revises history but completely ignores it. Social Security has been amended 30 times (1939, 1950, 1952, 1954, 1956, 1958, 1960, 1961, 1965, 1966, 1967, 1969, 1971, 1972, 1973, 1977, 1980, 1981, 1983, 1984, 1985, 1986, 1987, 1989, 1990, 1993, 1994, 1996, 1999, 2000) since it’s creation in response to changing needs and an evolving nation. In fact, the 1983 reforms raised the retirement age and payroll tax rates creating the Trust Fund surplus in advance of the baby boomers’ retirement. To claim that the United States didn’t “predict the aging of America” or know about the baby boom generation is absurd.
Social Security and Medicare aren’t going bankrupt. Medicare is suffering from the same high health costs hurting our economy system wide. We must reign in those costs but not just in Medicare. Medicare reform has already started with the addition of 8 years of solvency thanks to the Affordable Care Act (legislation Paul Ryan wants repealed). Social Security currently has a $2.7 trillion dollar surplus and even if nothing is done (which no one believes will happen) the program will have enough incoming payroll contributions to pay 75% of benefits come 2033. As the Chairman of the House Budget Committee, Rep. Paul Ryan knows that is not bankruptcy.
This single interview shows just how far those who’ve set their sights on radical reforms to Social Security and Medicare will go to hide their true goals. We say:
Don’t Buy Their Lie…Save doesn’t mean Slash and Protect doesn’t mean Privatize.
CATEGORY: [baby boomers], [entitlement reform], [Medicare], [privatization], [Social Security]
The Business Roundtable
has presented the latest CEO/Wall Street attempt to convince Washington that slashing Social Security and Medicare benefits for the average American is the brave thing to do to cut our deficits. Their proposal is nothing more than a knock-off of the Bowles Simpson
and the Ryan plan
– two plans that have been soundly rejected by a majority of Americans in poll
and at the ballot box
in November. Incredibly, this plan doubles-down and includes virtually every bad idea Washington has considered over the past decade all rolled into one proposal. In short, America’s CEO’s say raising the retirement age
to 70, cutting benefits
immediately for seniors, the disabled and veterans, turning Medicare into CouponCare
while also raising the Medicare eligibility age
, really isn’t too much to ask from millions of middle-class American families still reeling in this economy.
Now maybe if you were a millionaire or billionaire, you might think these were good ideas too. But most Americans are living well below what these CEOs earn, explaining why preserving and strengthening Social Security and Medicare benefits is so vitally important for the middle class. It’s clearly not a priority for America’s corporate class. But there’s also another explanation for this disconnect between Wall Street and Main Street. The dirty little secret the Business Roundtable doesn’t want to talk about is the vested interest that corporate and Wall Street CEO’s have in convincing Congress we can’t afford Social Security and Medicare.
The Business Roundtable is fighting to protect more than $1 trillion dollars in tax giveaways—paid for with working American’s tax dollars. Roundtable leaders portray their plan cutting benefits to millions of American families as “practical.” What’s “practical” about spending a trillion dollars in tax expenditures to pad corporate bottom lines and executive bonus checks while telling an average senior receiving only $14,000 a year in Social Security income to live on less? While they decry the high cost of providing healthcare to seniors and veterans they conveniently ignore the fact that tax code spending is up 60% since 1986 and is a bigger part of the budget than SS, Medicare, Medicaid or national defense.
The Business Roundtable’s so-called “practical” approach also shows that “shared sacrifice” really just means middle-class families should sacrifice so corporations and wealthy CEO’s can share the gains of a trillion dollar tax giveaway. If these captains of industry are truly concerned about the future of Social Security then why not why not lift the payroll cap and subject all income such as deferred compensation to FICA? Or how about limiting just two of those massive tax breaks for the wealthy & corporations, which saves much more than raising the retirement age?
· Limit some itemized deductions for high earners ($114 billion)
· Eliminate Corporate meals and entertainment write offs ($84 billion)
These two common sense changes save $198 billion over just 5 years while raising the retirement age to 70 saves $120 billion over the next decade.
Surely, writing off expensive business dinners for multimillionaires isn’t a higher priority for our nation than providing enough income so the average senior can afford to buy groceries.
This debate really is about America's priorities for generations of middle-class families. Unfortunately, America’s CEO’s have made their priorities perfectly clear.
CATEGORY: [Budget], [entitlement reform], [Medicare], [privatization], [Retirement], [Social Security]
Kudos to Jared Bernstein for this spot-on analysis of how we got here, specifically why is Washington now consumed with self-inflicted "crisis" after "crisis". We recommend you read the entire post but here is a sample:
"I’m reminded of a particularly pernicious rule of today’s politics: the self-fulfilling prophecy of dysfunction. Many of today’s conservatives run for office on a platform that government doesn’t work. And when they’re elected, they work their hardest to prove it true. They say, “we’re Greece!” when of course we’re nothing like Greece, then they threaten default to make us Greece.
This is an alarmingly simple ploy, but once you tune into it you see it everywhere. The prophets of dysfunction must convince us a spending crisis, an entitlement crisis, and debt crisis despite their factual inaccuracies. It there’s no crisis—if, as is clearly the case—our fiscal challenges can actually be met with reasonable policies involving analysis (e.g., squeezing inefficiencies out of health care delivery) and compromise (spending cuts and revenue increases), these hair-on-fire-slash-and-burners have no use.
An important job of progressives throughout history is the exposure of such false prophets. Of course, these prophets have huge profits riding on their ruse, so they won’t leave quietly. But we must expose them nevertheless. Our system is broken because a broken system works for the false prophets of dysfunction. It doesn’t work for the rest of us."
CATEGORY: [Budget], [entitlement reform], [Medicare], [Social Security]
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