Sorting Fact from Fiction in the 2013 Trustees Report on Social Security and Medicare
The 2013 Trustees report shows, once again, Social Security is not facing a crisis.
- Trustees project Social Security will be able to pay full benefits until the year 2033. After that, Social Security will have sufficient revenue to pay 77% of benefits.
- Social Security is still well funded. In 2013, as the economy regains its footing, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020.
- Trustees project a Cost of Living Adjustment increase of 1.5% to 2.5% in 2014.
With so little bad news to report in this 2013 Trustees report, critics have now shifted their attention to Social Security Disability, which faces a more immediate fiscal challenge
- Trustees project the Disability Trust fund will be depleted in 2016, the same year projected in last year’s report. This projected shortfall is not a surprise and Congress should reallocate income across the Social Security Trust funds, as it has done 11 times before, to cover the anticipated shortfall. Disability expenditures have increased primarily due to demographic trends. The increase in full retirement age from 65 to 66 has also contributed to the increase in disability expenditures, as people remain on the disability rolls longer before shifting to retirement. However, when Congress took action in 1994 to address a then-reported shortfall in DI, it knew that it would have to take action again in 2015 or 2016.
The 2013 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund.
- Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2026, two years later than the 2012 report. Health care spending has also grown much more slowly. Since late 2010, CBO has reduced its projection of cumulative Medicare and Medicaid spending over the 2011-2020 period by $900 billion – or nearly 10 percent.
- Medicare Part B premiums are not projected to increase in 2014.
Here’s reaction from NCPSSM’s President/CEO, Max Richtman:
“As we emerge from the worst economic downturn since the Great Depression, it’s clear our nation’s retirement security programs, Social Security and Medicare, continue to do their jobs admirably by protecting millions of Americans during these troubled times. Unfortunately, for too many in Washington, this annual Trustees report is little more than an opportunity to re-issue the same doom-and-gloom news releases and renewed calls to cut these programs in order to ‘save’ them, regardless of the fiscal facts. The truth is the Trustees 2013 report shows Social Security has a $2.7 trillion surplus which continues to grow. Social Security isn’t bankrupt; it hasn’t contributed a dime to our fiscal woes and, in fact, has performed its mission without fail.
On the Medicare front, the good news is health care reform has extended the solvency of the Medicare Trust Fund and health care cost growth is slowing. The Affordable Care Act is making a difference not just in Medicare, but is also slowing the rising cost of health care for all Americans.”
Pitting Young Vs. Old: Enough is Enough
Max Richtman Michael Petit
NCPSSM, President/CEO Every Child Matters, President
Federal budgets are far more than just numbers on a page. They represent national priorities for our fiscal future. However, some in Washington hope to deflect our attention away from the real fiscal challenges facing our nation – unemployment, growing income inequity and a slow economy – in favor of an intergenerational warfare campaign pitting America’s young against old. This billion dollar austerity campaign is backed by Wall Street lobbyists who hope to convince younger generations that the only way for them to succeed is to cut the very programs their families depend on now, and which they’ll also need as they raise their own families later in life. The ultimate goal of this intergenerational warfare strategy is to divert attention away from a trillion dollars in wasteful tax breaks benefiting the wealthiest in our nation in favor of benefit cuts for middle class and poor Americans, of all ages. However, the truth is, grandma isn’t an economic threat to her children and grandchildren – the real threat is our skewed national priorities.
As lifetime advocates for children and seniors, we will join Rep. Diana DeGette at a town hall meeting in Denver on May 30th to make the case for fiscal policies which put America’s priorities back where they belong – on the side of our nation’s middle-class families. For too long, many in Washington have claimed that “shared sacrifice” means that if a millionaire loses a tax break then the middle-class and poor must also lose their modest benefits in Medicare, Social Security, Head Start, WIC and school lunches. This false equivalency pretends that a tax dollar lost to a millionaire or huge corporation is the same as a benefit dollar lost to a retiree living on $14,000 a year from Social Security, or a poor family which depends on food programs to feed their children. Americans know that’s not a fair and balanced fiscal approach, it’s not sensible reform and it’s not the path to economic recovery.
In 1900 the U.S. infant mortality rate was 165 deaths per 1,000 live births. Today it is six. In 1960 the elderly had the highest poverty rate and had no access to affordable health care. Today their poverty rate is the lowest and persons 65 and older are covered by Medicare. How are these tremendous advancements in human health and dignity related? They are the direct result of the American people telling their elected federal officials — presidents and Congresses both — to stop the preventable deaths of babies, and avoidable poverty and medical despair of the elderly. And it worked, the direct result of voter and taxpayer support for smart investments in the common welfare.
These and scores of other social advances over the last century contributed to most Americans enjoying what is perhaps the highest standard of living in the world. In combination with the benefits of a moderately regulated market economy, America’s national investments in its citizens — in itself — produced the planet’s strongest military and economic power. Now there are some in power who would junk this formula.
The latest version of trickle-down economics was soundly rejected by voters just last fall; however, the House GOP budget passed in a party line vote and recycles this failed fiscal plan by sharply cutting social spending and targeting programs which improve the lives of virtually every American family. If this budget vision prevails, big insurance companies could once again deny help to millions with pre-existing conditions. Tens of thousands of eager young learners could be denied Head Start. Seniors would face higher out-of-pocket costs while having to navigate the complex private marketplace with their Medicare vouchers. This radical, ideologically driven budget is a departure from decades of pragmatic, successful bipartisan policies aimed at lifting all Americans. Breaking our national promise to families, who have worked and contributed to help build this nation and the programs which have served us well for generations, to keep tax loopholes and subsidies for wealthy individuals and corporations does not reflect the priorities of the majority of Americans, young or old.
There is a way to return fairness and equity to our budget priorities. A balanced approach would target cuts to low-priority programs plus add new revenues, starting with the elimination of unnecessary tax breaks for the wealthy and huge corporations. We should preserve and strengthen proven safety-net programs in the face of a rapidly aging population and make critical investments in children and youth in order to remain competitive in a global economy. Throughout our history, America has never had to impoverish one generation in order to support another. As advocates for seniors and children we know that it doesn’t have to happen today either.
The future of our families and our nation depend on economic security at the beginning, middle and end of life. The fates and lives of the old and young are intertwined. Grandparents love their grandkids and grandkids their grandparents. Both want and need the other to succeed. Making that happen for millions of average American families is simply a matter of priorities.
Michael Petit is the president of Every Child Matters, a national child advocacy organization. Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare.
Social Security Benefits “Excessive”? Are You Kidding….
The Kaiser Family Foundation has prepared a new state-by-state snapshot of poverty among seniors which is a must-read for Washington politicians who might buy into the claim by some, like the Heritage Foundation, that Social Security benefits are “excessive”. According to Heritage:
“Adopting the chained CPI (Consumer Price Index) in Social Security to more accurately account for changes in the cost of living is a small first step toward fixing a broken program that is currently accelerating its own demise by paying excess benefits.”
The AARP Bulletin has the terrific summary of the Kaiser Senior Poverty report and what it means if Washington cuts Social Security benefits by adopting the Chained CPI.
Is Poverty Among Older Americans Undercounted?
Posted on 05/24/2013 by Tamara Lytle
Poverty levels are much higher for older Americans when you factor in how much they need to spend on health care, the Census Bureau has found.
Factoring in health care costs changes poverty statistics
While 9 percent or so of all Americans 65 and older were below the official poverty threshold in 2011 ($10,788 for an individual), 15 percent were below an alternative threshold that takes into account spending on health care.
The alternative measure also takes into account variations in the cost of living, taxes, whether a person receives food stamps, and whether a person is a homeowner, for example.
Now comes a report from the Kaiser Family Foundation that takes a state-by-state look at the alternative threshold (formally known as the “supplemental poverty measure”).
It finds that the share of older Americans living in poverty is higher in every state under the alternative measure, and at least twice as high in 12 states: California, Colorado, Connecticut, Hawaii, Massachusetts, Maryland, Minnesota, New Hampshire, New Jersey, Nevada, Wisconsin and Wyoming. In five states (California, Hawaii, Louisiana, Nevada, Georgia and New York) and the District of Columbia, roughly one of every five residents 65 and older are living in poverty, the report says.
Politico notes that there’s a political context to the Kaiser report: “The Kaiser brief says it’s meant to provide context for the many spending proposals being tossed around — particularly those that focus on shifting costs in Medicare and paring down Social Security benefits. It also notes that adopting ‘chained CPI,’ which slows the growth of Social Security benefits, would most likely make for higher poverty rates for older seniors across both census measures.”
Max Richtman, the president of the National Committee to Preserve Social Security and Medicare, said it’s proof that the safety net needs strengthening. “The Kaiser study validates that – for a larger share of seniors – the death of a spouse or serious illness is all it takes to push many older American into the indignity of a poverty-ridden old age,” he says. “That’s why we continue to tell lawmakers that it is wrong to cut benefits for the oldest and most vulnerable Americans who would be least able to afford it. In fact, the decline of employer-sponsored retirement, and the recession’s erosion of retirement savings, mean that the percentage of Americans who depend on Social Security for most of their income will only continue to grow.”
Social Security from a Young Person’s Perspective
Ivy Ngo
Southeast Asia Resource Action Center (SEARAC)
Ivy also blogs for the Diverse Elders Coalition
Reflections on Social Security from a Young Person
Social Security is so often thought of as a program for the elderly and those who are retired. But as a young person who hopes to be able to retire one day, I am struck by the broad impact of the program to reach nearly every American at every age, every income level, able-bodied as well as differently-abled. More than 6.5 million American children receive family income from Social Security. Specifically, more than 1 million children are kept out of poverty from Social Security benefits. And, unfortunately, a 20-year-old worker has a 3 in 10 chance of becoming disabled before reaching the normal retirement age, making Social Security Disability Income an important asset.
Much of the negative press around Social Security has accused the program of running out of money, paying out poor returns, and being an overall poor investment. In actuality, Social Security is incredibly stable. Social Security is fully financed until 2033, and even if Congress takes no action, Social Security will still be able to pay about 85% of obligations until 2086. If the future still seems uncertain, refer to Social Security’s track record: it has never missed a payment since its inception in 1935, and has consistently paid out benefits on time and in full. Social Security has outlasted wartime turmoil, Wall Street booms and busts, and political fluctuations. But most importantly, Social Security is insurance that has been there to support individual Americans through our personal life events.
This year, my father took early retirement. He came to the United States in the early 1980s as a refugee from Vietnam after years in the re-education camps – prison labor camps operated by the Vietnamese government after the end of the war. Since his arrival and resettlement, he has worked tirelessly to support my mother and I as well as our extended family here and abroad. I am so glad he was able to retire, and I am thankful that he has Social Security to provide him with some measure of economic security – he’s earned it. I have seen how tired my father became in recent years from working at a job that required him to be on his feet and mobile throughout the day. I think about how difficult it would be for him, as well as those who worked in physically demanding and labor intensive jobs, to continue working well into their 60’s.
Because of his early retirement, my father will receive a diminished benefit for the rest of his life relative to if he had retired at the normal retirement age. Social Security benefits are modest enough as it is – the average payment is $1,230. It is frustrating to me to hear arguments to reduce Social Security benefits even further – through any number of changes such as raising the retirement age or adopting a smaller measure of inflation.
These arguments are misguided but also unreflective of our country’s diversity: reductions in benefits would have a disproportionate impact on communities of color and LGBT communities. For refugees and immigrants like my father and diverse communities especially, Social Security is a highly effective anti-poverty program for communities that have historically faced barriers to accessing economic security: In 2009, 56% of unmarried elderly African Americans, 62% of unmarried elderly Hispanics, 48% of unmarried elderly Asian American Pacific Islanders, and 45% of elderly unmarried American Indians relied on Social Security for 90% or more of their income. More details on how Social Security affects communities of color and policy recommendations to strengthen the program can be found in the Diverse Elder’s Coalition recent report, Securing Our Future: Advancing Economic Security for Diverse Elders.
I am confident that Social Security will be there for me when I retire, just like it is supporting my father now, but we need to work now to combat the attacks on the program and continue to ensure that Social Security provides adequate and sufficient support to all Americans. I especially encourage my peers and other young folks to join me in making sure that Social Security stands strong for future generations to come.
More Proof that “Deficit Reduction” is Really Just Code for Social Security & Medicare Cuts
The Congressional Budget Office’s new budget projections show that despite the sky-is-falling crisis calls made by Wall Street backed austerity fanatics like: Fix The Debt, Bowles-Simpson and the rest of the Pete Peterson funded anti-Social Security brigade, our deficit is now the smallest it’s been since 2008. And that’s without the so-called “Grand Bargain” this billion dollar lobby claims is absolutely necessary for our nation’s survival. The Daily Intelligencer explains:
It’s hard not to see the CBO’s projections as the latest in a long series of demoralizing developments for the Simpson-Bowles-led deficit scold movement. Overall, the CBO says that barring unforeseen policy changes, the deficit will shrink to 2.1 percent of GDP in 2015. That’s better than the 2.3 percent target Simpson and Bowles originally set out in their 2010 report. And it will happen even without the grand bargain they’ve so desperately sought.
Neither is the federal debt piling up to unsustainable levels. As the CBO’s chart shows, the debt-to-GDP ratio is now projected to peak in 2014 at 76.2 percent, before falling to 70.8 percent in 2018. That’s a long way from the now-discredited 90 percent threshold budget scolds have used to scare policymakers, and the projections —combined with record-low interest rates and eerily calm bond markets — should put our concerns about an immediate debt crisis to rest.
Now, it’s really hard to keep a crisis mentality ginned up if the facts keep getting in the way (see also the Reinhart Rogoff debacle). So, as expected, the Wall Streeters have chosen just to ignore what doesn’t fit their frame:
The Campaign to Fix the Debt, which marshals corporate resources to lobby for deficit reduction, said that “the rosier-than-expected near-term projections do not change the fact that rising health care costs, an aging population, Social Security’s looming insolvency, and ever-increasing interest payments will greatly expand the national debt as a share of the economy starting at the end of the current decade.” The Hill Newspaper
Again, the true challenge facing this nation is health care costs. Reforms through the Affordable Care Act have helped reduce the deficit and system-wide reforms need to continue, not just in Medicare. Talking about Social Security and Medicare, as if they’re the same program, is a favored ploy of these Wall Streeters; however, it conveniently ignores the fact that there is $2.7 trillion currently in the Social Security trust fund and that figure keeps growing. Economist Jared Bernstein offers some too-little-heard fact-based analysis:
Longer term, even with the recent improvement in the pace of health care costs, we still face pressure from the intersection of our aging demographics and health care spending. To bend those curves at the end of the figure, we’ll need to keep up the pressure on health costs as well as boost our revenues. Cuts alone won’t do it.
It would be nice if policy makers looked at the figure below and recognized that we need less austerity now and more health savings/revs later. But that would mean spraying water on their flaming heads, and that can be kind of uncomfortable.
Sorting Fact from Fiction in the 2013 Trustees Report on Social Security and Medicare
The 2013 Trustees report shows, once again, Social Security is not facing a crisis.
- Trustees project Social Security will be able to pay full benefits until the year 2033. After that, Social Security will have sufficient revenue to pay 77% of benefits.
- Social Security is still well funded. In 2013, as the economy regains its footing, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020.
- Trustees project a Cost of Living Adjustment increase of 1.5% to 2.5% in 2014.
With so little bad news to report in this 2013 Trustees report, critics have now shifted their attention to Social Security Disability, which faces a more immediate fiscal challenge
- Trustees project the Disability Trust fund will be depleted in 2016, the same year projected in last year’s report. This projected shortfall is not a surprise and Congress should reallocate income across the Social Security Trust funds, as it has done 11 times before, to cover the anticipated shortfall. Disability expenditures have increased primarily due to demographic trends. The increase in full retirement age from 65 to 66 has also contributed to the increase in disability expenditures, as people remain on the disability rolls longer before shifting to retirement. However, when Congress took action in 1994 to address a then-reported shortfall in DI, it knew that it would have to take action again in 2015 or 2016.
The 2013 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund.
- Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2026, two years later than the 2012 report. Health care spending has also grown much more slowly. Since late 2010, CBO has reduced its projection of cumulative Medicare and Medicaid spending over the 2011-2020 period by $900 billion – or nearly 10 percent.
- Medicare Part B premiums are not projected to increase in 2014.
Here’s reaction from NCPSSM’s President/CEO, Max Richtman:
“As we emerge from the worst economic downturn since the Great Depression, it’s clear our nation’s retirement security programs, Social Security and Medicare, continue to do their jobs admirably by protecting millions of Americans during these troubled times. Unfortunately, for too many in Washington, this annual Trustees report is little more than an opportunity to re-issue the same doom-and-gloom news releases and renewed calls to cut these programs in order to ‘save’ them, regardless of the fiscal facts. The truth is the Trustees 2013 report shows Social Security has a $2.7 trillion surplus which continues to grow. Social Security isn’t bankrupt; it hasn’t contributed a dime to our fiscal woes and, in fact, has performed its mission without fail.
On the Medicare front, the good news is health care reform has extended the solvency of the Medicare Trust Fund and health care cost growth is slowing. The Affordable Care Act is making a difference not just in Medicare, but is also slowing the rising cost of health care for all Americans.”
Pitting Young Vs. Old: Enough is Enough
Max Richtman Michael Petit
NCPSSM, President/CEO Every Child Matters, President
Federal budgets are far more than just numbers on a page. They represent national priorities for our fiscal future. However, some in Washington hope to deflect our attention away from the real fiscal challenges facing our nation – unemployment, growing income inequity and a slow economy – in favor of an intergenerational warfare campaign pitting America’s young against old. This billion dollar austerity campaign is backed by Wall Street lobbyists who hope to convince younger generations that the only way for them to succeed is to cut the very programs their families depend on now, and which they’ll also need as they raise their own families later in life. The ultimate goal of this intergenerational warfare strategy is to divert attention away from a trillion dollars in wasteful tax breaks benefiting the wealthiest in our nation in favor of benefit cuts for middle class and poor Americans, of all ages. However, the truth is, grandma isn’t an economic threat to her children and grandchildren – the real threat is our skewed national priorities.
As lifetime advocates for children and seniors, we will join Rep. Diana DeGette at a town hall meeting in Denver on May 30th to make the case for fiscal policies which put America’s priorities back where they belong – on the side of our nation’s middle-class families. For too long, many in Washington have claimed that “shared sacrifice” means that if a millionaire loses a tax break then the middle-class and poor must also lose their modest benefits in Medicare, Social Security, Head Start, WIC and school lunches. This false equivalency pretends that a tax dollar lost to a millionaire or huge corporation is the same as a benefit dollar lost to a retiree living on $14,000 a year from Social Security, or a poor family which depends on food programs to feed their children. Americans know that’s not a fair and balanced fiscal approach, it’s not sensible reform and it’s not the path to economic recovery.
In 1900 the U.S. infant mortality rate was 165 deaths per 1,000 live births. Today it is six. In 1960 the elderly had the highest poverty rate and had no access to affordable health care. Today their poverty rate is the lowest and persons 65 and older are covered by Medicare. How are these tremendous advancements in human health and dignity related? They are the direct result of the American people telling their elected federal officials — presidents and Congresses both — to stop the preventable deaths of babies, and avoidable poverty and medical despair of the elderly. And it worked, the direct result of voter and taxpayer support for smart investments in the common welfare.
These and scores of other social advances over the last century contributed to most Americans enjoying what is perhaps the highest standard of living in the world. In combination with the benefits of a moderately regulated market economy, America’s national investments in its citizens — in itself — produced the planet’s strongest military and economic power. Now there are some in power who would junk this formula.
The latest version of trickle-down economics was soundly rejected by voters just last fall; however, the House GOP budget passed in a party line vote and recycles this failed fiscal plan by sharply cutting social spending and targeting programs which improve the lives of virtually every American family. If this budget vision prevails, big insurance companies could once again deny help to millions with pre-existing conditions. Tens of thousands of eager young learners could be denied Head Start. Seniors would face higher out-of-pocket costs while having to navigate the complex private marketplace with their Medicare vouchers. This radical, ideologically driven budget is a departure from decades of pragmatic, successful bipartisan policies aimed at lifting all Americans. Breaking our national promise to families, who have worked and contributed to help build this nation and the programs which have served us well for generations, to keep tax loopholes and subsidies for wealthy individuals and corporations does not reflect the priorities of the majority of Americans, young or old.
There is a way to return fairness and equity to our budget priorities. A balanced approach would target cuts to low-priority programs plus add new revenues, starting with the elimination of unnecessary tax breaks for the wealthy and huge corporations. We should preserve and strengthen proven safety-net programs in the face of a rapidly aging population and make critical investments in children and youth in order to remain competitive in a global economy. Throughout our history, America has never had to impoverish one generation in order to support another. As advocates for seniors and children we know that it doesn’t have to happen today either.
The future of our families and our nation depend on economic security at the beginning, middle and end of life. The fates and lives of the old and young are intertwined. Grandparents love their grandkids and grandkids their grandparents. Both want and need the other to succeed. Making that happen for millions of average American families is simply a matter of priorities.
Michael Petit is the president of Every Child Matters, a national child advocacy organization. Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare.
Social Security Benefits “Excessive”? Are You Kidding….
The Kaiser Family Foundation has prepared a new state-by-state snapshot of poverty among seniors which is a must-read for Washington politicians who might buy into the claim by some, like the Heritage Foundation, that Social Security benefits are “excessive”. According to Heritage:
“Adopting the chained CPI (Consumer Price Index) in Social Security to more accurately account for changes in the cost of living is a small first step toward fixing a broken program that is currently accelerating its own demise by paying excess benefits.”
The AARP Bulletin has the terrific summary of the Kaiser Senior Poverty report and what it means if Washington cuts Social Security benefits by adopting the Chained CPI.
Is Poverty Among Older Americans Undercounted?
Posted on 05/24/2013 by Tamara Lytle
Poverty levels are much higher for older Americans when you factor in how much they need to spend on health care, the Census Bureau has found.
Factoring in health care costs changes poverty statistics
While 9 percent or so of all Americans 65 and older were below the official poverty threshold in 2011 ($10,788 for an individual), 15 percent were below an alternative threshold that takes into account spending on health care.
The alternative measure also takes into account variations in the cost of living, taxes, whether a person receives food stamps, and whether a person is a homeowner, for example.
Now comes a report from the Kaiser Family Foundation that takes a state-by-state look at the alternative threshold (formally known as the “supplemental poverty measure”).
It finds that the share of older Americans living in poverty is higher in every state under the alternative measure, and at least twice as high in 12 states: California, Colorado, Connecticut, Hawaii, Massachusetts, Maryland, Minnesota, New Hampshire, New Jersey, Nevada, Wisconsin and Wyoming. In five states (California, Hawaii, Louisiana, Nevada, Georgia and New York) and the District of Columbia, roughly one of every five residents 65 and older are living in poverty, the report says.
Politico notes that there’s a political context to the Kaiser report: “The Kaiser brief says it’s meant to provide context for the many spending proposals being tossed around — particularly those that focus on shifting costs in Medicare and paring down Social Security benefits. It also notes that adopting ‘chained CPI,’ which slows the growth of Social Security benefits, would most likely make for higher poverty rates for older seniors across both census measures.”
Max Richtman, the president of the National Committee to Preserve Social Security and Medicare, said it’s proof that the safety net needs strengthening. “The Kaiser study validates that – for a larger share of seniors – the death of a spouse or serious illness is all it takes to push many older American into the indignity of a poverty-ridden old age,” he says. “That’s why we continue to tell lawmakers that it is wrong to cut benefits for the oldest and most vulnerable Americans who would be least able to afford it. In fact, the decline of employer-sponsored retirement, and the recession’s erosion of retirement savings, mean that the percentage of Americans who depend on Social Security for most of their income will only continue to grow.”
Social Security from a Young Person’s Perspective
Ivy Ngo
Southeast Asia Resource Action Center (SEARAC)
Ivy also blogs for the Diverse Elders Coalition
Reflections on Social Security from a Young Person
Social Security is so often thought of as a program for the elderly and those who are retired. But as a young person who hopes to be able to retire one day, I am struck by the broad impact of the program to reach nearly every American at every age, every income level, able-bodied as well as differently-abled. More than 6.5 million American children receive family income from Social Security. Specifically, more than 1 million children are kept out of poverty from Social Security benefits. And, unfortunately, a 20-year-old worker has a 3 in 10 chance of becoming disabled before reaching the normal retirement age, making Social Security Disability Income an important asset.
Much of the negative press around Social Security has accused the program of running out of money, paying out poor returns, and being an overall poor investment. In actuality, Social Security is incredibly stable. Social Security is fully financed until 2033, and even if Congress takes no action, Social Security will still be able to pay about 85% of obligations until 2086. If the future still seems uncertain, refer to Social Security’s track record: it has never missed a payment since its inception in 1935, and has consistently paid out benefits on time and in full. Social Security has outlasted wartime turmoil, Wall Street booms and busts, and political fluctuations. But most importantly, Social Security is insurance that has been there to support individual Americans through our personal life events.
This year, my father took early retirement. He came to the United States in the early 1980s as a refugee from Vietnam after years in the re-education camps – prison labor camps operated by the Vietnamese government after the end of the war. Since his arrival and resettlement, he has worked tirelessly to support my mother and I as well as our extended family here and abroad. I am so glad he was able to retire, and I am thankful that he has Social Security to provide him with some measure of economic security – he’s earned it. I have seen how tired my father became in recent years from working at a job that required him to be on his feet and mobile throughout the day. I think about how difficult it would be for him, as well as those who worked in physically demanding and labor intensive jobs, to continue working well into their 60’s.
Because of his early retirement, my father will receive a diminished benefit for the rest of his life relative to if he had retired at the normal retirement age. Social Security benefits are modest enough as it is – the average payment is $1,230. It is frustrating to me to hear arguments to reduce Social Security benefits even further – through any number of changes such as raising the retirement age or adopting a smaller measure of inflation.
These arguments are misguided but also unreflective of our country’s diversity: reductions in benefits would have a disproportionate impact on communities of color and LGBT communities. For refugees and immigrants like my father and diverse communities especially, Social Security is a highly effective anti-poverty program for communities that have historically faced barriers to accessing economic security: In 2009, 56% of unmarried elderly African Americans, 62% of unmarried elderly Hispanics, 48% of unmarried elderly Asian American Pacific Islanders, and 45% of elderly unmarried American Indians relied on Social Security for 90% or more of their income. More details on how Social Security affects communities of color and policy recommendations to strengthen the program can be found in the Diverse Elder’s Coalition recent report, Securing Our Future: Advancing Economic Security for Diverse Elders.
I am confident that Social Security will be there for me when I retire, just like it is supporting my father now, but we need to work now to combat the attacks on the program and continue to ensure that Social Security provides adequate and sufficient support to all Americans. I especially encourage my peers and other young folks to join me in making sure that Social Security stands strong for future generations to come.
More Proof that “Deficit Reduction” is Really Just Code for Social Security & Medicare Cuts
The Congressional Budget Office’s new budget projections show that despite the sky-is-falling crisis calls made by Wall Street backed austerity fanatics like: Fix The Debt, Bowles-Simpson and the rest of the Pete Peterson funded anti-Social Security brigade, our deficit is now the smallest it’s been since 2008. And that’s without the so-called “Grand Bargain” this billion dollar lobby claims is absolutely necessary for our nation’s survival. The Daily Intelligencer explains:
It’s hard not to see the CBO’s projections as the latest in a long series of demoralizing developments for the Simpson-Bowles-led deficit scold movement. Overall, the CBO says that barring unforeseen policy changes, the deficit will shrink to 2.1 percent of GDP in 2015. That’s better than the 2.3 percent target Simpson and Bowles originally set out in their 2010 report. And it will happen even without the grand bargain they’ve so desperately sought.
Neither is the federal debt piling up to unsustainable levels. As the CBO’s chart shows, the debt-to-GDP ratio is now projected to peak in 2014 at 76.2 percent, before falling to 70.8 percent in 2018. That’s a long way from the now-discredited 90 percent threshold budget scolds have used to scare policymakers, and the projections —combined with record-low interest rates and eerily calm bond markets — should put our concerns about an immediate debt crisis to rest.
Now, it’s really hard to keep a crisis mentality ginned up if the facts keep getting in the way (see also the Reinhart Rogoff debacle). So, as expected, the Wall Streeters have chosen just to ignore what doesn’t fit their frame:
The Campaign to Fix the Debt, which marshals corporate resources to lobby for deficit reduction, said that “the rosier-than-expected near-term projections do not change the fact that rising health care costs, an aging population, Social Security’s looming insolvency, and ever-increasing interest payments will greatly expand the national debt as a share of the economy starting at the end of the current decade.” The Hill Newspaper
Again, the true challenge facing this nation is health care costs. Reforms through the Affordable Care Act have helped reduce the deficit and system-wide reforms need to continue, not just in Medicare. Talking about Social Security and Medicare, as if they’re the same program, is a favored ploy of these Wall Streeters; however, it conveniently ignores the fact that there is $2.7 trillion currently in the Social Security trust fund and that figure keeps growing. Economist Jared Bernstein offers some too-little-heard fact-based analysis:
Longer term, even with the recent improvement in the pace of health care costs, we still face pressure from the intersection of our aging demographics and health care spending. To bend those curves at the end of the figure, we’ll need to keep up the pressure on health costs as well as boost our revenues. Cuts alone won’t do it.
It would be nice if policy makers looked at the figure below and recognized that we need less austerity now and more health savings/revs later. But that would mean spraying water on their flaming heads, and that can be kind of uncomfortable.