How the “Inform Act” actually MisInforms on Social Security & Medicare
Thanks, once again, to Los Angeles Times columnist Michael Hiltzik for providing some desperately needed truth-telling about an especially outrageous proposal backed (quietly, of course) by the billion dollar austerity lobby. It’s called “generational accounting”…long-ago debunked and discredited but revived again by Washington’s anti-Social Security and Medicare lobby as a way to fuel a crisis which does not exist while pitting young versus old. We recommend you read Hiltizik’s entire piece here, but these are some highlights:
For starters, generational accounting doesn’t make a distinction between spending and investment. An appropriation to send a congressional committee on a junket to the Bahamas carries the same weight as building a schoolhouse or a bridge.
That’s a real flaw. The government’s decision in the 1950s to spend billions to create the interstate highway system shows up in generational accounts as a huge burden on post-1950s taxpayers. That’s you and me. But we’re obviously reaping economic benefits from that decision, as will our children and grandchildren.
The same goes for education, which obviously packs a lot of value for its youthful recipients, who are also the taxpayers of the future.
Kotlikoff’s view of Social Security and Medicare, which is that they’re devices for the old to rip off the young, is especially faulty. Middle- and high-income wage-earners are paying their own way in Social Security, as C. Eugene Steuerle of the Urban Institute has shown. According to his figures, a two-income couple who earned an average wage and retired in 2011 had paid an average $598,000 in Social Security taxes (adjusted for inflation) and will collect an average $556,000 in benefits. Sounds like they’re redistributing their income to the young, not the other way around. Low-earning workers do much better, but that’s a redistribution from rich to poor, not young to old.
“There’s no agenda here,” he says. “It’s not a Tea Party agenda or a left-wing agenda for less spending or more spending. It’s about truth in government operations — it’s a be-honest-with-our-kids act.”
That’s disingenuous. For one thing, among the Inform Act’s champions is an organization called The Can Kicks Back. The group bills itself as a grass-roots anti-deficit lobby for today’s younger generations but actually has links to hedge fund billionaire Peter G. Peterson, whose hostility to Social Security and Medicare is a byword.
Pretty soon, this group will launch their full page ad in the New York Times and their so-called “Inform Act” will no doubt work its way through Congress, even though the deficits they claim are at the heart of their proposals continue to be reduced. Clearly the austerity crowd’s goal is to, “never let a crisis go to waste,” and they’re determined to cut benefits to middle class Americans who depend on Social Security and Medicare…regardless of the fiscal facts. The truth is, our nation still faces a system-wide healthcare crisis. Obamacare is a good start but we need to finish the job of bringing down the high cost of healthcare in America, not just in Medicare but in our private system.
Social Security and Hispanics
Join us as we celebrate Hispanic Heritage month.
Each year, Americans observe National Hispanic Heritage Month from September 15 to October 15, by celebrating the histories, cultures and contributions of American citizens whose ancestors came from Spain, Mexico, the Caribbean and Central and South America.
The observation started in 1968 as Hispanic Heritage Week under President Lyndon Johnson and was expanded by President Ronald Reagan in 1988 to cover a 30-day period starting on September 15 and ending on October 15. It was enacted into law on August 17, 1988, on the approval of Public Law 100-402.
The day of September 15 is significant because it is the anniversary of independence for Latin American countries Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. In addition, Mexico and Chile celebrate their independence days on September 16 and September18, respectively. Also, Columbus Day or Día de la Raza, which is October 12, falls within this 30 day period.
The National Committee will mark the month in a variety of way and will also highlight the importance of Social Security and Medicare to the Hispanic population. For example, did you know?
Hispanics Rely on Social Security for More of Their Retirement Income
While Social Security is expected to be only one part of a person’s retirement income, many minorities rely on it for a large share. Because Hispanics tend to have lower earnings and less pension coverage than white Americans, Social Security is extremely important for Hispanic retirees.
- More than three-fourths (77%) of Hispanic beneficiaries rely on Social Security for at least half their income compared to almost two-thirds (65%) of all beneficiaries
- Approximately 55% of Hispanic beneficiaries rely on Social Security for 90% or more of their income
- Approximately 45% of Hispanic beneficiaries rely on Social Security for all of their income
Minorities rely more heavily on Social Security due to a lack of other income in retirement. Few elderly minorities receive income from pensions and assets. The greatest disparity is in the receipt of income from assets.
- In 2010, 24% of Hispanics received income from private assets, compared with more than 56% of whites
- In 2010, 13% of Hispanics 65 years old and over reported receiving income from private pensions or annuities, compared to 28% of whites 65 years old and older
Elderly Hispanics are more dependent on Social Security than others, because they are more likely to be in poverty than non- Hispanic elderly. They are also more likely to have been poor prior to old age than non- Hispanics. Social Security reduces poverty for Hispanic elderly.
In 2010, 18% of Hispanics 65 years old and older had income below the poverty line, compared to 8% of white elderly.
If not for Social Security, 49% of older Hispanic Americans would be in poverty.
Busting Social Security Myths
Busting Washington’s biggest Social Security myths
Busting Washington’s biggest Social Security mythsBY MAX RICHTMAN
Special to The Tampa Tribune
Published: September 12, 2013
There is no other issue where the disconnect between Congress and the American people is more stark than the future of Social Security. Thanks to Washington’s well-financed austerity lobby, the truth about Social Security has become obscured by political propaganda designed to persuade lawmakers to use Social Security’s revenues to fix fiscal problems completely unrelated to the program.
Whether it’s cutting benefits in the name of deficit reduction (even though Social Security by law cannot contribute to the debt) or using Social Security as political leverage in Washington’s version of “Let’s Make a Deal,” these approaches ignore the fact that Social Security is paid for, earned by, and promised to American workers.
Myth One: Social Security is a driver of our nation’s deficit.
Although some in Washington claim America can’t afford Social Security, the truth is, this program provides economic benefits to every state and community in our nation.
Nationwide, families spend $775 billion in Social Security benefits annually. In Florida, $56 billion dollars in Social Security benefits are paid to four million retirees, disabled and survivors, including children, each year. When those families use the purchasing power of their benefits, they are supporting local businesses and the state economy with billions of dollars they simply wouldn’t have without Social Security.
Unfortunately, this economic reality has been ignored by those who want to cut middle-class benefits in the name of austerity. Targeting families who rely on vital programs such as Social Security ignores our real economic problems in favor of a political strategy to cut safety net programs. Members of Congress should take a look at the state-by-state economic profiles from the National Committee to Preserve Social Security and Medicare and ask themselves, “Can my community afford to lose millions of dollars from our economy?” Step outside Capitol Hill and the answer is a resounding “No.”
Myth Two: Seniors are “greedy geezers.”
One of the favorite messages used widely by Washington’s billion-dollar, anti-Social Security lobby is that America’s “greedy geezers” are stealing from their grandchildren. They claim that if we allow retirees to collect the Social Security benefits they’ve paid for throughout their working lives, then somehow our children will suffer. This mythological link between funding for seniors programs and children’s programs makes for good propaganda but there’s literally no basis in reality for such linkage. In fact, new research by the Center for Economic and Policy Research shows that real linkage may exist between the dollars spent on our nation’s top 1 percent income earners and reduced spending on children.
Cutting benefits to generations of middle-class families won’t help the children, parents or grandparents in those families. The Recession Generation and beyond will need Social Security as much, if not more, than current generations. It’s time to reverse a 40-year trend of income inequality and redistribution to the wealthy while reigniting the American dream for middle-class families, which benefits young and old alike.
Myth Three: Immigration reform and the repeal of DOMA will bankrupt Social Security.
Those opposed to immigration reform and the repeal of the Defense of Marriage Act have attempted to use vital programs, such as Social Security, as an economic excuse to avoid doing the right thing. The truth is, neither legislative issue threatens Social Security. The Congressional Budget Office estimates new taxes paid by undocumented workers granted provisional legal status would cut federal budget deficits by $197 billion over 10 years. Social Security’s chief actuary estimates immigration reform would increase Social Security’s Trust Fund reserves by $248 billion by the end of 2024 and extend the program’s solvency by two years. The actuary also predicts providing benefit equity to qualified same-sex couples in retirement is a break-even proposition.
Myth Four: The whopper of all — Social Security will be bankrupt.
The truth is, even if Congress does nothing at all, Social Security is projected to deliver full guaranteed benefits until at least 2033. Even after 2033, Social Security will be able to pay about 77 percent of promised benefits out of the payroll contributions that will continue coming into the system. If Congress enacts modest changes, such as requiring the wealthy to pay their fair share of payroll taxes, Social Security will be able to meet its full benefit obligations well beyond 2033. No one wants to see benefits cut to 77 percent; however, that’s not bankruptcy by any definition of the word.
The state of Social Security is strong today and should be made stronger for the future. But if our nation’s leaders want to be serious about addressing the long-term outlook for our nation’s most successful government program, then myths have no place in any Social Security debate.
Max Richtman is president and CEO of The National Committee to Preserve Social Security & Medicare, based in Washington, D.C.
Cutting Social Security Benefits NOT the Only Way
As part of our on-going series EQUAL TIME, today we take on a story which appeared in TIME’s business report.
“Report: Fix Social Security Now – or Pay a Stiff Price”
Dan Kadlec, Reporter
“…a 16.5% across-the-board cut in benefits or a 20% cut for new beneficiaries, according to the report from the bipartisan Committee for a Responsible Federal Budget. That’s not painless. But it beats the alternative.”
Time Business Reporter Dan Kadlec took the concept of fair and balanced and threw it out the window while dutifully reporting the myopic results from one of Washington’s well-financed austerity lobby group’s “report” urging cuts to Social Security benefits. Incredibly, in his 447 words of coverage, not one was offered with alternate solutions offered by countless organizations proving you don’t have to slash benefits to keep Social Security strong for generations. In NCPSSM’s report, “Breaking the Glass Ceiling” we detail many other options which would not only close the 23% funding gap in 2033 as predicted by the Social Security Trustees, but also would not require harmful cuts for millions of working Americans who will rely upon their Social Security benefits for the majority of their income during retirement or disability.
The Best Ways to Boost Social Security Income
Here are some handy hints on how to increase the amount of Social Security benefits you are eligible to receive. Thanks to NCPSSM’s Social Security expert Mary Jane Yarrington for this welcome advice.
Patience (and working longer) Really Pays Off
Workers can file to claim benefit payments as early as age 62. But they will lose approximately 25% of their monthly benefit that way. Waiting to claim benefits until the full retirement age (currently age 66) or later can increase your monthly benefit amount. A worker whose full retirement age is 66, receives a delayed retirement credit of 2/3 percent per month or 8 percent per year. Any benefit payable to a surviving spouse includes the delayed retirement credits. Benefits further increase for each year you delay claiming up until age 70.
If you file early and then decide it may not have been the best decision for you financially, you have up to one year from the time you began benefits to withdraw your original application. To exercise that option you must repay the benefits received thus far. When you again want to receive benefits, you would submit a new application and the delayed claim will increase your benefit amount.
Special Extra Earnings for Military
Under certain circumstances, special extra earnings for your military service from 1957 through 2001 can be credited to your record for Social Security purposes. These extra earnings credits may help you qualify for Social Security or increase the amount of your Social Security benefit. If you served between 1957 and 1977, you are credited with $300 in additional earnings for each calendar quarter in which you received active duty basic pay. If you served between 1978 through 2001, for every $300 in active duty basic pay, you are credited with an additional $100 in earnings up to a maximum of $1,200 a year. If you enlisted after September 7, 1980, and didn’t complete at least 24 months of active duty or your full tour, you may not be able to receive the additional earnings. After 2001, there are no special extra earnings credits for military service.
Get Money from Your Honey
A worker’s spouse who is at least age 62 may be eligible for a benefit based on the worker’s earnings. The spousal benefit can be as much as half of the worker’s monthly benefit, depending on the spouse’s age at retirement. If the spouse begins receiving benefits before full retirement age, the benefit will be reduced.
To see the full list view here.