Social Security Sense and Nonsense
We don’t often employ the “cut and paste” style of blogging here but sometimes there’s a piece so good…it just doesn’t need any additional context or clarification. This is one of those posts. Consideradding this wonderful Social Security postfrom Paul N. Van de Water from the Center on Budget and Policy Priorities to your must-read, must-forward list for the week!
In a new paper, I?ve tried to correct some of the misinformation that critics of Social Security have been spreading about the program.Here are the facts. Social Security is a well-run, fiscally responsible program. People earn retirement, survivors, and disability benefits by making payroll tax contributions during their working years. Those taxes and other revenues are deposited in the Social Security trust funds, and all benefits and administrative expenses are paid out of the trust funds. The amount that Social Security can spend is limited by its payroll tax income plus the balance in the trust funds.The Social Security trustees ? the official body charged with evaluating the program?s long-term finances ? project that Social Security can pay 100 percent of promised benefits through 2037 and about three-quarters of scheduled benefits after that, even if Congress makes no changes in the program. Relatively modest changes would put the program on a sound financial footing for 75 years and beyond.Nonetheless, some critics are attempting to undermine confidence in Social Security with wild and blatantly false accusations. They allege that the trust funds have been ?raided? or disparage the trust funds as ?funny money? or mere ?IOUs.? Some even label Social Security a ?Ponzi scheme? after the notorious 1920s swindler Charles Ponzi. All of these claims are nonsense.Every year since 1984, Social Security has collected more in payroll taxes and other income than it pays in benefits and other expenses. (The authors of the 1983 Social Security reform law did this on purpose in order to help pre-fund some of the costs of the baby boomers? retirement.) These surpluses are invested in U.S. Treasury securities that are every bit as sound as the U.S. government securities held by investors around the globe; investors regard these securities as among the world?s very safest investments.Investing the trust funds in Treasury securities is perfectly appropriate. The federal government borrows funds from Social Security to help finance its ongoing operations in the same way that consumers and businesses borrow money deposited in a bank to finance their spending. In neither case does this represent a ?raid? on the funds. The bank depositor will get his or her money back when needed, and so will the Social Security trust funds.As far back as 1938, independent advisors to Social Security firmly endorsed the investment of Social Security surpluses in Treasury securities, saying that it does ?not involve any misuse of these moneys or endanger the safety of these funds.?Moreover, Social Security is the ?polar opposite of a Ponzi scheme,? says the man who quite literally wrote the book about Ponzi?s famous scam, Boston University professor Mitchell Zuckoff. The Social Security Administration?s historian has a piece on this topic as well.Unlike the frauds of Ponzi ? and, more recently, Bernard Madoff ? Social Security does not promise unrealistically large financial returns and does not require unsustainable increases in the number of participants to remain solvent. Instead, for the past 75 years it has provided a foundation that workers can build on for retirement as well as social insurance protection to families whose breadwinner dies and workers who become disabled.
More About Paul N. Van de Water
Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.
Poverty and Seniors
There are just some records you don?t want to break. Unfortunately, the U.S. has shattered two of them, according to new numbers released this week by the Census Bureau. The income gap between the richest and poorest Americans is the widest on record and there are now more poor Americans today than in any time since the bureau has measured poverty. The Associated Press reports:
“Income inequality is rising, and if we took into account tax data, it would be even more,” said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty. “More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy.”?The poverty gap between young and old has doubled since 2000, due partly to the strength of Social Security in helping buoy Americans 65 and over. Child poverty is now 21 percent compared with 9 percent for older Americans. In 2000, when child poverty was at 16 percent, elderly poverty stood at 10 percent. Safety nets are helping fill health gaps. The percentage of children covered by government-sponsored health insurance such as Medicaid and the Children’s Health Insurance Program jumped to 37 percent, or 27.6 million, from 24 percent in 2000. That helped offset steady losses in employer-sponsored insurance.?
How ironic that as evidence continues to show, over and over again, how critically important our nation?s safety net programs like Social Security and Medicare are for millions of Americans, so many in Washington continue to target these very same programs for cuts. And at what cost to millions of working Americans? The Center for American Progress addressed the issue of elderly poverty and seniors economic security in ?The Not-So-Golden Years?:
?Social Security is tremendously effective in helping seniors and their families stay out of poverty. Its benefits kept 14 million elderly Americans out of poverty in 2009. The Center on Budget and Policy Priorities estimated in an analysis of 2008 Census data that the elderly poverty rate would actually exceed 40 percent in most states without Social Security benefits. The majority of people kept out of poverty by Social Security are elderly, but the Census data shows almost a third of those kept out of poverty are under 65 and include more than 1 million children.?
The fact that America?s poor are worse off and adding more to their ranks while the wealthiest get richer can?t continue to be ignored in our national economic debate; particularly as some in Washington argue now?s the time to cut safety net programs for working Americans while extending tax cuts to the wealthy.
The Angry Rich
Paul Krugman?s New York Times column today is our selection for a ?Networthy Award? for outstanding coverage on the net. In ?The Angry Rich?, Mr. Krugman challenges the notion that the nation?s workers, retirees and middle class need to sacrifice even more than they already have in this economic crisis, so that America?s top 1% can keep their spoils of recent decades. Please take the time and forward to your friends, because preserving tax cuts for the wealthy while also proposing benefit cuts to Social Security is exactly the game plan proposed by too many, Republicans andDemocrats alike, in Washington today.
Anger is sweeping America. True, this white-hot rage is a minority phenomenon, not something that characterizes most of our fellow citizens. But the angry minority is angry indeed, consisting of people who feel that things to which they are entitled are being taken away. And they?re out for revenge.No, I?m not talking about the Tea Partiers. I?m talking about the rich.These are terrible times for many people in this country. Poverty, especially acute poverty, has soared in the economic slump; millions of people have lost their homes. Young people can?t find jobs; laid-off 50-somethings fear that they?ll never work again.Yet if you want to find real political rage ? the kind of rage that makes people compare President Obama to Hitler, or accuse him of treason ? you won?t find it among these suffering Americans. You?ll find it instead among the very privileged, people who don?t have to worry about losing their jobs, their homes, or their health insurance, but who are outraged, outraged, at the thought of paying modestly higher taxes.The rage of the rich has been building ever since Mr. Obama took office. At first, however, it was largely confined to Wall Street. Thus when New York magazine published an article titled ?The Wail Of the 1%,? it was talking about financial wheeler-dealers whose firms had been bailed out with taxpayer funds, but were furious at suggestions that the price of these bailouts should include temporary limits on bonuses. When the billionaire Stephen Schwarzman compared an Obama proposal to the Nazi invasion of Poland, the proposal in question would have closed a tax loophole that specifically benefits fund managers like him.Now, however, as decision time looms for the fate of the Bush tax cuts ? will top tax rates go back to Clinton-era levels? ? the rage of the rich has broadened, and also in some ways changed its character.For one thing, craziness has gone mainstream. It?s one thing when a billionaire rants at a dinner event. It?s another when Forbes magazine runs a cover story alleging that the president of the United States is deliberately trying to bring America down as part of his Kenyan, ?anticolonialist? agenda, that ?the U.S. is being ruled according to the dreams of a Luo tribesman of the 1950s.? When it comes to defending the interests of the rich, it seems, the normal rules of civilized (and rational) discourse no longer apply.At the same time, self-pity among the privileged has become acceptable, even fashionable.Tax-cut advocates used to pretend that they were mainly concerned about helping typical American families. Even tax breaks for the rich were justified in terms of trickle-down economics, the claim that lower taxes at the top would make the economy stronger for everyone.These days, however, tax-cutters are hardly even trying to make the trickle-down case. Yes, Republicans are pushing the line that raising taxes at the top would hurt small businesses, but their hearts don?t really seem in it. Instead, it has become common to hear vehement denials that people making $400,000 or $500,000 a year are rich. I mean, look at the expenses of people in that income class ? the property taxes they have to pay on their expensive houses, the cost of sending their kids to elite private schools, and so on. Why, they can barely make ends meet.And among the undeniably rich, a belligerent sense of entitlement has taken hold: it?s their money, and they have the right to keep it. ?Taxes are what we pay for civilized society,? said Oliver Wendell Holmes ? but that was a long time ago.The spectacle of high-income Americans, the world?s luckiest people, wallowing in self-pity and self-righteousness would be funny, except for one thing: they may well get their way. Never mind the $700 billion price tag for extending the high-end tax breaks: virtually all Republicans and some Democrats are rushing to the aid of the oppressed affluent.You see, the rich are different from you and me: they have more influence. It?s partly a matter of campaign contributions, but it?s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain ? feel it much more acutely, it?s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes.And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they?ll say; we all have to be willing to make sacrifices.But when they say ?we,? they mean ?you.? Sacrifice is for the little people.
The Deficit No One is Talking About
Washington?s deficit hawks and Wall Street billionaires have invested an enormous amount of time and resources to convince the American public that reducing our national deficit should be a top economic priority, even though our nation is still struggling to create jobs and boost the economy. Many have even targeted Social Security as a way to pay down our debt.But a new report released today provides a startling look at a deficit no one is talking about—the $6.6 trillion Retirement Income Deficit facing millions of Americans. The Retirement Deficit is the gap between the retirement savings and pensions Americans have today and what they should have.?While policymakers talk about budget deficits, there is a massive and growing Retirement Income Deficit that has largely been ignored by Washington. This deficit shows just how bad the crisis has become.? Karen Friedman, Pension Rights Center?The key sources of income that retirees have relied on are either under attack ? in the case of Social Security ? or disappearing ? in the case of traditional pensions. 401(k) plans are not working, and millions of workers have neither a pension nor a 401(k) account. Clearly, the current private retirement system is failing most Americans.? Ross Eisenbrey, Economic Policy Institute?Just to give you a sense of the magnitude of this number, that is about 5 times the projected Federal Deficit for 2010. Another way of understanding the size of this figure is the often-used trip to the moon analogy. $6.6 trillion is enough dollars that, if lined up end to end, they would stretch to the moon and back 1,000 times and still leave enough left over to pay NASA?s budget for the next 83 years ? and you?d still have enough pocket change left over to give every person in this room $100 million each! That is a lot of money.? Maria Freese, National Committee to Preserve Social Security and MedicareRetirement USA, an initiative working for a new retirement system, has launched a month-long campaign ?Wake Up Washington? to do just that?wake up lawmakers to the reality that our nation is facing a retirement income crisis in which working Americans now face a very uncertain future. It?s time America?s retirees ensure Washington is not allowed to continue to ignore the largest deficit threatening working Americans–the Retirement Income Deficit.
$250 Payments to Seniors Stimulates the Economy
The National Committee to Preserve Social Security and Medicare Foundation and the Economic Policy Institute today released a report, Down Payment on Economic Recovery,? that finds that the $250 lump-sum payments that went to recipients of Social Security and Supplemental Security (SSI) benefits were effective economic stimulus. The report?s authors, EPI researchers Josh Bivens and Kathryn Anne Edwards, argue that further job-creation efforts should include another such payment.According to the report, lump-sum payments to Social Security and SSI recipients are an extremely effective job creator:
?While its share of the overall Recovery Act spending was very small, this lump-sum payment was one of the quickest-acting components of the overall package?the majority of payments were received just months after the Act was passed (by the end of May 2009). This Social Security and SSI payment by itself likely boosted GDP by roughly 0.5% in the second quarter of 2009, which would roughly translate to about 125,000 jobs created or saved due to these payments.?— ?Downpayment on Economic Recovery,? September 2010
2011 is expected to be the second year in a row in which Social Security beneficiaries will not receive a cost of living allowance(COLA). However, despite a relatively low rate of general inflation, seniors’ costs are going up. Health care costs especially are rising rapidly, and the elderly on fixed incomes spend a significantly larger share of their income on health care. Ways and Means Social Security Subcommittee Chairman Earl Pomeroy (D-ND) and Senator Bernie Sanders (I-VT) have introduced legislation that would provide an additional one-time $250 payment if there is no inflation adjustment again next year.
?This report confirms that one-time payments to Social Security beneficiaries benefit more than just the individuals who receive them, they also provide real stimulus to our weakened economy. This type of stimulus is a win-win for our nation. It provides COLA relief for millions of seniors suffering in this economy who have already see a third of their Social Security eaten up by health care costs, while also boosting our economy and saving jobs.? Barbara B. Kennelly, President/CEO, National Committee to Preserve Social Security and Medicare
The full analysis, ?Down-Payment on Economic Recovery,? is provided online here.
Social Security Sense and Nonsense
We don’t often employ the “cut and paste” style of blogging here but sometimes there’s a piece so good…it just doesn’t need any additional context or clarification. This is one of those posts. Consideradding this wonderful Social Security postfrom Paul N. Van de Water from the Center on Budget and Policy Priorities to your must-read, must-forward list for the week!
In a new paper, I?ve tried to correct some of the misinformation that critics of Social Security have been spreading about the program.Here are the facts. Social Security is a well-run, fiscally responsible program. People earn retirement, survivors, and disability benefits by making payroll tax contributions during their working years. Those taxes and other revenues are deposited in the Social Security trust funds, and all benefits and administrative expenses are paid out of the trust funds. The amount that Social Security can spend is limited by its payroll tax income plus the balance in the trust funds.The Social Security trustees ? the official body charged with evaluating the program?s long-term finances ? project that Social Security can pay 100 percent of promised benefits through 2037 and about three-quarters of scheduled benefits after that, even if Congress makes no changes in the program. Relatively modest changes would put the program on a sound financial footing for 75 years and beyond.Nonetheless, some critics are attempting to undermine confidence in Social Security with wild and blatantly false accusations. They allege that the trust funds have been ?raided? or disparage the trust funds as ?funny money? or mere ?IOUs.? Some even label Social Security a ?Ponzi scheme? after the notorious 1920s swindler Charles Ponzi. All of these claims are nonsense.Every year since 1984, Social Security has collected more in payroll taxes and other income than it pays in benefits and other expenses. (The authors of the 1983 Social Security reform law did this on purpose in order to help pre-fund some of the costs of the baby boomers? retirement.) These surpluses are invested in U.S. Treasury securities that are every bit as sound as the U.S. government securities held by investors around the globe; investors regard these securities as among the world?s very safest investments.Investing the trust funds in Treasury securities is perfectly appropriate. The federal government borrows funds from Social Security to help finance its ongoing operations in the same way that consumers and businesses borrow money deposited in a bank to finance their spending. In neither case does this represent a ?raid? on the funds. The bank depositor will get his or her money back when needed, and so will the Social Security trust funds.As far back as 1938, independent advisors to Social Security firmly endorsed the investment of Social Security surpluses in Treasury securities, saying that it does ?not involve any misuse of these moneys or endanger the safety of these funds.?Moreover, Social Security is the ?polar opposite of a Ponzi scheme,? says the man who quite literally wrote the book about Ponzi?s famous scam, Boston University professor Mitchell Zuckoff. The Social Security Administration?s historian has a piece on this topic as well.Unlike the frauds of Ponzi ? and, more recently, Bernard Madoff ? Social Security does not promise unrealistically large financial returns and does not require unsustainable increases in the number of participants to remain solvent. Instead, for the past 75 years it has provided a foundation that workers can build on for retirement as well as social insurance protection to families whose breadwinner dies and workers who become disabled.
More About Paul N. Van de Water
Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.
Poverty and Seniors
There are just some records you don?t want to break. Unfortunately, the U.S. has shattered two of them, according to new numbers released this week by the Census Bureau. The income gap between the richest and poorest Americans is the widest on record and there are now more poor Americans today than in any time since the bureau has measured poverty. The Associated Press reports:
“Income inequality is rising, and if we took into account tax data, it would be even more,” said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty. “More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy.”?The poverty gap between young and old has doubled since 2000, due partly to the strength of Social Security in helping buoy Americans 65 and over. Child poverty is now 21 percent compared with 9 percent for older Americans. In 2000, when child poverty was at 16 percent, elderly poverty stood at 10 percent. Safety nets are helping fill health gaps. The percentage of children covered by government-sponsored health insurance such as Medicaid and the Children’s Health Insurance Program jumped to 37 percent, or 27.6 million, from 24 percent in 2000. That helped offset steady losses in employer-sponsored insurance.?
How ironic that as evidence continues to show, over and over again, how critically important our nation?s safety net programs like Social Security and Medicare are for millions of Americans, so many in Washington continue to target these very same programs for cuts. And at what cost to millions of working Americans? The Center for American Progress addressed the issue of elderly poverty and seniors economic security in ?The Not-So-Golden Years?:
?Social Security is tremendously effective in helping seniors and their families stay out of poverty. Its benefits kept 14 million elderly Americans out of poverty in 2009. The Center on Budget and Policy Priorities estimated in an analysis of 2008 Census data that the elderly poverty rate would actually exceed 40 percent in most states without Social Security benefits. The majority of people kept out of poverty by Social Security are elderly, but the Census data shows almost a third of those kept out of poverty are under 65 and include more than 1 million children.?
The fact that America?s poor are worse off and adding more to their ranks while the wealthiest get richer can?t continue to be ignored in our national economic debate; particularly as some in Washington argue now?s the time to cut safety net programs for working Americans while extending tax cuts to the wealthy.
The Angry Rich
Paul Krugman?s New York Times column today is our selection for a ?Networthy Award? for outstanding coverage on the net. In ?The Angry Rich?, Mr. Krugman challenges the notion that the nation?s workers, retirees and middle class need to sacrifice even more than they already have in this economic crisis, so that America?s top 1% can keep their spoils of recent decades. Please take the time and forward to your friends, because preserving tax cuts for the wealthy while also proposing benefit cuts to Social Security is exactly the game plan proposed by too many, Republicans andDemocrats alike, in Washington today.
Anger is sweeping America. True, this white-hot rage is a minority phenomenon, not something that characterizes most of our fellow citizens. But the angry minority is angry indeed, consisting of people who feel that things to which they are entitled are being taken away. And they?re out for revenge.No, I?m not talking about the Tea Partiers. I?m talking about the rich.These are terrible times for many people in this country. Poverty, especially acute poverty, has soared in the economic slump; millions of people have lost their homes. Young people can?t find jobs; laid-off 50-somethings fear that they?ll never work again.Yet if you want to find real political rage ? the kind of rage that makes people compare President Obama to Hitler, or accuse him of treason ? you won?t find it among these suffering Americans. You?ll find it instead among the very privileged, people who don?t have to worry about losing their jobs, their homes, or their health insurance, but who are outraged, outraged, at the thought of paying modestly higher taxes.The rage of the rich has been building ever since Mr. Obama took office. At first, however, it was largely confined to Wall Street. Thus when New York magazine published an article titled ?The Wail Of the 1%,? it was talking about financial wheeler-dealers whose firms had been bailed out with taxpayer funds, but were furious at suggestions that the price of these bailouts should include temporary limits on bonuses. When the billionaire Stephen Schwarzman compared an Obama proposal to the Nazi invasion of Poland, the proposal in question would have closed a tax loophole that specifically benefits fund managers like him.Now, however, as decision time looms for the fate of the Bush tax cuts ? will top tax rates go back to Clinton-era levels? ? the rage of the rich has broadened, and also in some ways changed its character.For one thing, craziness has gone mainstream. It?s one thing when a billionaire rants at a dinner event. It?s another when Forbes magazine runs a cover story alleging that the president of the United States is deliberately trying to bring America down as part of his Kenyan, ?anticolonialist? agenda, that ?the U.S. is being ruled according to the dreams of a Luo tribesman of the 1950s.? When it comes to defending the interests of the rich, it seems, the normal rules of civilized (and rational) discourse no longer apply.At the same time, self-pity among the privileged has become acceptable, even fashionable.Tax-cut advocates used to pretend that they were mainly concerned about helping typical American families. Even tax breaks for the rich were justified in terms of trickle-down economics, the claim that lower taxes at the top would make the economy stronger for everyone.These days, however, tax-cutters are hardly even trying to make the trickle-down case. Yes, Republicans are pushing the line that raising taxes at the top would hurt small businesses, but their hearts don?t really seem in it. Instead, it has become common to hear vehement denials that people making $400,000 or $500,000 a year are rich. I mean, look at the expenses of people in that income class ? the property taxes they have to pay on their expensive houses, the cost of sending their kids to elite private schools, and so on. Why, they can barely make ends meet.And among the undeniably rich, a belligerent sense of entitlement has taken hold: it?s their money, and they have the right to keep it. ?Taxes are what we pay for civilized society,? said Oliver Wendell Holmes ? but that was a long time ago.The spectacle of high-income Americans, the world?s luckiest people, wallowing in self-pity and self-righteousness would be funny, except for one thing: they may well get their way. Never mind the $700 billion price tag for extending the high-end tax breaks: virtually all Republicans and some Democrats are rushing to the aid of the oppressed affluent.You see, the rich are different from you and me: they have more influence. It?s partly a matter of campaign contributions, but it?s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain ? feel it much more acutely, it?s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes.And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they?ll say; we all have to be willing to make sacrifices.But when they say ?we,? they mean ?you.? Sacrifice is for the little people.
The Deficit No One is Talking About
Washington?s deficit hawks and Wall Street billionaires have invested an enormous amount of time and resources to convince the American public that reducing our national deficit should be a top economic priority, even though our nation is still struggling to create jobs and boost the economy. Many have even targeted Social Security as a way to pay down our debt.But a new report released today provides a startling look at a deficit no one is talking about—the $6.6 trillion Retirement Income Deficit facing millions of Americans. The Retirement Deficit is the gap between the retirement savings and pensions Americans have today and what they should have.?While policymakers talk about budget deficits, there is a massive and growing Retirement Income Deficit that has largely been ignored by Washington. This deficit shows just how bad the crisis has become.? Karen Friedman, Pension Rights Center?The key sources of income that retirees have relied on are either under attack ? in the case of Social Security ? or disappearing ? in the case of traditional pensions. 401(k) plans are not working, and millions of workers have neither a pension nor a 401(k) account. Clearly, the current private retirement system is failing most Americans.? Ross Eisenbrey, Economic Policy Institute?Just to give you a sense of the magnitude of this number, that is about 5 times the projected Federal Deficit for 2010. Another way of understanding the size of this figure is the often-used trip to the moon analogy. $6.6 trillion is enough dollars that, if lined up end to end, they would stretch to the moon and back 1,000 times and still leave enough left over to pay NASA?s budget for the next 83 years ? and you?d still have enough pocket change left over to give every person in this room $100 million each! That is a lot of money.? Maria Freese, National Committee to Preserve Social Security and MedicareRetirement USA, an initiative working for a new retirement system, has launched a month-long campaign ?Wake Up Washington? to do just that?wake up lawmakers to the reality that our nation is facing a retirement income crisis in which working Americans now face a very uncertain future. It?s time America?s retirees ensure Washington is not allowed to continue to ignore the largest deficit threatening working Americans–the Retirement Income Deficit.
$250 Payments to Seniors Stimulates the Economy
The National Committee to Preserve Social Security and Medicare Foundation and the Economic Policy Institute today released a report, Down Payment on Economic Recovery,? that finds that the $250 lump-sum payments that went to recipients of Social Security and Supplemental Security (SSI) benefits were effective economic stimulus. The report?s authors, EPI researchers Josh Bivens and Kathryn Anne Edwards, argue that further job-creation efforts should include another such payment.According to the report, lump-sum payments to Social Security and SSI recipients are an extremely effective job creator:
?While its share of the overall Recovery Act spending was very small, this lump-sum payment was one of the quickest-acting components of the overall package?the majority of payments were received just months after the Act was passed (by the end of May 2009). This Social Security and SSI payment by itself likely boosted GDP by roughly 0.5% in the second quarter of 2009, which would roughly translate to about 125,000 jobs created or saved due to these payments.?— ?Downpayment on Economic Recovery,? September 2010
2011 is expected to be the second year in a row in which Social Security beneficiaries will not receive a cost of living allowance(COLA). However, despite a relatively low rate of general inflation, seniors’ costs are going up. Health care costs especially are rising rapidly, and the elderly on fixed incomes spend a significantly larger share of their income on health care. Ways and Means Social Security Subcommittee Chairman Earl Pomeroy (D-ND) and Senator Bernie Sanders (I-VT) have introduced legislation that would provide an additional one-time $250 payment if there is no inflation adjustment again next year.
?This report confirms that one-time payments to Social Security beneficiaries benefit more than just the individuals who receive them, they also provide real stimulus to our weakened economy. This type of stimulus is a win-win for our nation. It provides COLA relief for millions of seniors suffering in this economy who have already see a third of their Social Security eaten up by health care costs, while also boosting our economy and saving jobs.? Barbara B. Kennelly, President/CEO, National Committee to Preserve Social Security and Medicare
The full analysis, ?Down-Payment on Economic Recovery,? is provided online here.