Along with Cherry Blossoms and the White House Easter Egg Roll, Spring has brought fresh talk of “entitlement reform” to the Nation’s Capital. Of course, Social Security and Medicare are not “entitlements.” They are earned benefits that Americans pay into during their working lives in exchange for retirement and health benefits during their senior years. Nevertheless, House Speaker Paul Ryan and other budget hawks prefer to perpetuate the “entitlement” myth. This week, Ryan said that fiscal responsibility means “reforming our entitlement programs.” “Reforming” is code for undermining Social Security and privatizing Medicare, two politically unpopular ideas that nonetheless seem to drive Ryan’s agenda. Never mind that Social Security and Medicare Part A are funded by workers’ payroll contributions and don’t contribute a penny to the deficit.
Meanwhile, House Budget Committee Chairwoman Diane Black (R-TN) is looking to end traditional Medicare through the budget resolution process in May, according to Congressional Quarterly.
“The coming fiscal 2018 plan is likely to include proposals to transform Medicare… into a premium support program. Under one House GOP model… people would be given a choice of traditional Medicare or insurer-run plans starting in 2024.” – Congressional Quarterly, 4/27/17
“Premium support” is an innocuous sounding term that could have dire consequences for seniors. What Diane Black means by “premium support” is converting Medicare into a voucher program. Seniors would be offered the option of leaving traditional Medicare to buy insurance in the private market using vouchers. These vouchers could never keep pace with rising premiums, meaning seniors would have to cover the difference or drop health insurance entirely. Older and sicker seniors would likely remain in conventional Medicare, causing the program’s cost to skyrocket, benefits to be cut, and eventually the death of Medicare itself.
The canard that Ryan and his party use to justify cutting benefits, reducing COLAs, and raising retirement ages is that Social Security and Medicare are going “bankrupt.” While it’s true that the trust funds for Social Security and Medicare Part A won’t be able to pay full benefits after 2034 and 2028 respectively without corrective action, there are modest and manageable solutions that won’t hurt the seniors who depend on them. Senator Bernie Sanders and Congressman John Larson (D-CT) have both offered common sense legislation to keep Social Security solvent for decades. Both bills ask the wealthy to pay their fair share by scrapping the income cap on payroll taxes. Larson’s legislation also increases the FICA tax by 1% over 25 years. (Larson says that for a worker earning $50,000 a year, the payroll tax bump equals one Starbucks coffee drink every 9 weeks). Instead of cutting benefits for our most vulnerable citizens – or raising the retirement age – these bills actually increase benefits and COLAs.
Medicare could be kept solvent well into this century by similarly modest and manageable means, if budget hawks like Ryan would stop insisting that privatization is the only fix. Congress could authorize Medicare to negotiate prescription drug prices (one of the biggest drivers of rising health care costs). Innovative methods for saving Medicare costs under the Affordable Care Act, many of which have already reduced healthcare expenditures, could be expanded instead of repealed. In fact, the Affordable Care Act itself extended the solvency of Medicare by four years. Repealing the ACA – as Ryan and President Trump are still struggling to do – hurts the long-term solvency of the program.
Ryan and many conservative Republicans ignore these alternatives because, at heart, they do not believe in federal programs that provide Americans with retirement and health security – which puts them at odds with the majority of voters. The latest National Committee poll indicates wide public support for progressive solutions for Social Security and Medicare – and significant opposition to the GOP approach. Seventy-nine percent favor increasing Social Security benefits by scrapping the payroll tax income cap. Sixty-five percent oppose raising the Medicare eligibility age. Ninety-three percent want Medicare to be able to negotiate prescription drug prices with pharmaceutical companies.
The National Committee’s social media community seems to agree. Comments on our Facebook posts over the past three months demonstrate deep skepticism about Republican talking points:
Bruce W. These programs are NOT "entitlements"--we have paid into them our entire working lives. If the income subject to SS fees was raised SS would be solvent for decades...
Suzanne S. Social Security has nothing to do with the deficit. It is a stand-alone program funded by workers. LEAVE IT ALONE.
Tom S. Social Security and Medicare are lifelines to millions of seniors; anyone who votes in favor of cutting or reducing benefits should be ashamed of themselves!
Adam R. Social Security has nothing to do with the general budget at all. FACT. It is not an entitlement, This is basically a Trust fund we have paid into all our working lives.
Americans intuitively understand that Social Security and Medicare are social insurance programs that they have already paid for through their hard-earned wages. For 82 years and 52 years respectively, these programs have worked efficiently to keep seniors healthy and out of poverty. Our Facebook commenter is perfectly correct to call them “lifelines to millions of seniors.” Yes, their finances need to be shored up. But asking beneficiaries to bear the burden is not the right way. It’s too bad that some of our most powerful political leaders do not seem to understand… or care.
"The [GOP healthcare bill] is getting better and better"
“A lot of people like it.”
“Things are going very well.”
These are President Trump’s most recent pronouncements about the GOP’s American Health Care Act (AHCA). Let’s hope for the sake of our nation’s seniors (and all Americans) that the President’s statements are wildly optimistic. The White House is pressuring Congress to vote on the AHCA this week – lest the first 100 days of Trump’s presidency expire without a single major legislative victory. Never mind that the healthcare of 24 million Americans hangs in the balance.
The National Committee and other seniors’ advocates rightly breathed a sigh of relief when the bill was pulled from the House floor last month for lack of GOP votes. The Republican healthcare bill would have gutted Medicaid, weakened Medicare, and allowed insurers to charge older Americans up to five times as much as young adults, among other travesties. But just when everyone thought the AHCA was dead, some House Republicans have revived it, zombie-like, to stalk Capitol Hill again. This week, representatives from the right-wing Freedom Caucus and the moderate Tuesday Group let it be known that they were hovering around a deal to get the AHCA passed.
The supposed “deal” would amend the bill to allow states to seek waivers from requiring insurers to provide “essential benefits.” If a state (say a Red one, for instance), didn’t want insurers to be forced to cover hospitalization in all health plans, they could ask the Department of Health & Human Services (led by Obamacare nemesis Tom Price) for permission to waive that requirement. States could also request waivers so that insurance companies could force sicker patients into “high risk pools” where the premiums would be sky high. Meanwhile, all of the really harmful parts of the original bill for seniors would remain intact. President Trump says the GOP healthcare bill has “gotten really, really good.” But in truth, the latest changes make a really bad bill even worse.
Here’s the good news, though: all of this talk about a deal and bringing the AHCA to a vote within President Trump’s first 100 days may be magical thinking. Just because the head of the Freedom Caucus, Rep. Mark Meadows (R-NC), and Tuesday Group co-chair, Rep. Tom MacArthur (R-NJ), seem to be close to agreement does not guarantee that their members will fall in line, especially House moderates who probably know that the new amendment endangers essential benefits coverage and that high risk pools could cost their constituents dearly (which could cost these moderates dearly in the 2018 congressional elections). Congress-watchers have noted that there is no legislative language for the proposed amendment yet, and wonder how it could be produced so soon. Also, the plan to bring healthcare to a vote next week may be overly ambitious, considering the House must also craft an appropriations bill before April 28th to avoid a government shutdown. This is why Democratic sources on the Hill say “no way” is healthcare going to come up for a vote next week.
Here's how National Politics Reporter M.J. Lee summed up the prospects for a quick vote on CNN this afternoon:
"If the White House wants a vote, they will have to win over many members of Congress who are skeptical about tackling this again." - M.J. Lee, CNN
President Trump insists (to no one’s surprise) he wants it all: funding for his border wall AND passage of the American Health Care Act – a demand that, like his pronouncements that “a lot of people like” the GOP healthcare bill and “things are going very well,” are likely only loosely based on reality.
Congress may be home for Easter break and President Trump is busy dropping bombs in Syria and Afghanistan, but the War on the Working Class continues unabated. In fact, it was quite a busy week for floating dangerous ideas about our nation’s healthcare and retirement security.
First, the Associated Press ran a story based on information from an unnamed “GOP lobbyist” saying that Republicans are considering repealing the Social Security payroll tax. Under this alleged plan, Social Security would be funded from general revenue and therefore subject to competition with other domestic programs --- and the whims of Congressional budget cutters. Never mind that the payroll tax is what makes Social Security an earned benefit. President Franklin D. Roosevelt set it up that way on purpose to “give the contributors a legal, moral and political right to collect” their Social Security checks. Plus, the current payroll tax deduction has been working pretty well for the past 80 years.
Since enough members of Congress realize this is an awful proposal that would never pass the House and Senate, clearly someone is out there floating crazy ideas in the press. (In addition, the A.P. story itself lacked any real sense of balance or context.) While the source for the A.P. story was unnamed, a top Trump administration official very publicly floated notions that seem to undermine President Trump’s promise not to touch Social Security and Medicare. In an interview with CNBC’s John Harwood on Tuesday, Budget Director Mick Mulvaney just couldn't say whether President Trump would veto legislation to privatize Medicare. “Let [Congress] pass that and let’s talk about it,” he demurred.
When Harwood asked if Social Security Disability Insurance (SSDI) was on the list of potential programs to be cut, Mulvaney offered this non-reassuring response:
“I continue to look forward to talking to the president about ways to fix that program. Because that is one of the fastest growing programs that we have. It's become effectively a long-term unemployment, permanent unemployment program.” – Mick Mulvaney
Of course, that response is riddled with inaccuracies. SSDI is not growing, it’s leveling off at a lower rate that is likely to plateau for the next 20 years. It most definitely is not an unemployment program of any kind – permanent or otherwise. SSDI is one of the strictest federal disability programs in the world in terms of qualifying for benefits. Only those who are able to demonstrate that they are unable to work for medical reasons qualify. Among all the people who apply, only 40% are accepted. If accepted, the average beneficiary receives only $1,170 per month, less than one could earn in a full time job at the federal minimum wage.
That didn’t stop the Washington Post from echoing some of the same right-wing myths about SSDI in a recent feature story and an editorial entitled, “The Social Security Disability Program Needs Reform.” The story wrongly intimates that rural, working-class Americans are using SSDI as a unemployment program. On Monday, Media Matters for America attempted to correct the record:
“The Post’s mischaracterization of SSDI follows a long history of misinformation from mainstream outlets, which often publish error-riddled stories filled with anecdotal evidence portraying disability recipients as undeserving. These pieces sound as if they come from right-wing media, which have spent years attacking the program and its recipients.” – Media Matters, 4/10/17
While the press was replete with nutty notions about Social Security and Medicare, the President and Congressional Republicans were reviving the specter of the moribund GOP healthcare bill. Just when you thought it was dead, Freedom Caucus members say they are close to a deal with the White House and Speaker Ryan to repeal and replace Obamacare within three weeks. Meanwhile, Politico reports that President Trump is threatening to cut off cost-sharing subsidies that help pay for low income earners’ health coverage in order to force Democrats to the negotiating table on the GOP health plan.
Fortunately, protesters are out in full force this week at town halls pushing back against supporters of the Republican bill, including one of the National Committee’s own grassroots volunteers who organized a rally outside a Florida congressman’s office. This proves that Spring break is a good time for grassroots action. Just because it’s holiday time doesn’t mean those waging war against the working class won’t put some rotten eggs in our Easter baskets.
Legislation just introduced in the U.S. House would put extra money in Social Security beneficiaries’ pockets while keeping the system solvent through the rest of this century. Rep. John Larson’s Social Security 2100 Act does all of that and something more: It gives lie to the myth that Social Security is going bankrupt and the only way to fix it is by cutting benefits.
Larson’s solution is simple… and fair. It asks the wealthy to pay their fair share of Social Security payroll taxes. In exchange, the legislation ensures Social Security stays solvent through the year 2100 – with no benefit cuts and no turning over the program to Wall Street, which budget hawks have long dreamed of doing.
The Act provides much needed relief to seniors who are having a difficult time paying for basic expenses like healthcare, housing, and utilities. The bill includes a modest 2% benefit increase for all beneficiaries, higher cost of living adjustments (COLAs), and a tax break for 11 million seniors. Since 2014, the National Committee’s Boost Social Security Now campaign has lobbied Congress to pass expansion legislation on behalf of its millions of members and supporters.
In a Facebook Live interview with the National Committee, Congressman Larson says he hopes his bill will ride the wave of grassroots energy that defeated the GOP healthcare plan last month. “What we saw was people saying, ‘Wait a minute, keep your hands off my healthcare.’ It’s the same with Social Security. We want to continue to build a groundswell in this country.” Larson says the bill has already attracted more than 150 cosponsors in the House. The Congressman calls on President Trump to support it, based on his campaign promises to “protect” Social Security.
In order to keep the system solvent through the year 2100, the Larson bill would apply the Social Security payroll tax to wages above $400,000, which only would affect the top 0.4% of wage earners. (Currently, earnings above $127,200 are exempt from the payroll taxes.) Eventually, the cap would be phased out completely. In addition, the legislation would gradually raise the overall payroll tax rate by 1% over 25 years – an increase of only 50 cents per week for a worker making $50,000 per year (or, as Larson himself is fond of pointing out, the price of one Starbucks coffee drink every nine weeks). These financing changes would not only keep Social Security flush, they would allow for a modest 2% benefit increase for all beneficiaries --- and a tax break for 11 million seniors earning under $50,000 a year (or $100,000 for older married couples).
The Larson bill not only provides an increase in benefits, it would help retirees better keep up with inflation by linking cost of living adjustments (COLAs) to an index called the CPI-E (Consumer Price Index for the Elderly). The CPI-E takes into consideration what seniors really spend for crucial goods and services, including housing and medical costs.
The National Committee has enthusiastically endorsed the Social Security 2100 Act. As President and CEO Max Richtman explains, “This bill is a win-win for beneficiaries and the entire country, because it protects the commitment to hard working Americans who pay into the system and enhances benefits.”
Watch Congressman Larson’s full Facebook Live interview here.
Watch the Social Security 2100 Act event on Capitol Hill Facebook Live here.
Speaker Paul Ryan made some extraordinary statements on today's CBS This Morning – even for him. First, he chastised President Trump for offering to work with Democrats on health care reform, saying it was “hardly a conservative thing” to do. The reason: “Democrats are not for repealing Obamacare. We are.” Clinging to ideology over reality, Ryan declared, “I don’t want government running healthcare.” Oh really? Has he heard of a program called Medicare? Oh, that’s right - he wants to privatize it. Ryan hasn’t gotten around to turning Medicare into a voucher program just yet, but at least seniors can rest easier knowing that the GOP health plan went down in flames.
Less than a week later, a rift seems to be opening between the President and the Speaker on this issue. President Trump may have finally realized that the only way to get a real healthcare fix through Congress is to work with Democrats and stop coddling right-wingers in the House. He even fired off a tweet this morning aimed squarely at the ultraconservative House Freedom Caucus, which helped defeat the Republican plan:
"The Freedom Caucus will hurt the entire Republican agenda if they don't get on the team, & fast. We must fight them... in 2018!” – Trump Tweet, 3/30/17
Of course, Democrats won’t work with Trump unless he gives up on repealing Obamacare and pivots toward fixing its flaws. That’s something Ryan and the House Republicans have refused to do during the entire seven years that Obamacare has been “the law of the land.” In fact, Republicans have taken measures both on the Hill (and in the new Trump White House) to actively undermine the law. Trump’s offers to work with Democrats won’t mean much unless his HHS Secretary and his administration refrain from manipulating regulations to stifle Obamacare.
This afternoon, Congressman Luis Gutierrez (D-IL) told CNN, “[Obamacare] needs to be modified to give more people coverage. If Trump wants to do that, I’m all for working with him.”
It’s hard to believe, but in this case Trump – not Ryan – may be taking the more politically savvy approach. Here’s why: the American people by and large loathe the defeated GOP healthcare bill. A new Associated Press poll indicates 62% of Americans dislike the dead GOP legislation. Here’s an even more eye-opening number: 8 in 10 Republicans oppose the provision that would have allowed insurers to charge seniors 5 times as much as younger people. President Trump’s spider sense has told him to move toward the middle on health care. Meanwhile, Paul Ryan threatens to bring the moribund GOP healthcare bill back to life. He would be wise to study those poll numbers and let sleeping bills lie.
If you missed our Facebook Live discussion with Social Security champion, Rep. Jan Schakowsky (D-IL), you can watch it here.
Have a Social Security or Medicare question?