Title: Senator Sheldon Whitehouse on Saving Social Security & Medicare
ANNOUNCER: It’s You Earned This, the Social Security and Medicare podcast, brought to you by the National Committee to Preserve Social Security and Medicare, and now your host, Walter Gottlieb.
WALTER: Senator Sheldon Whitehouse of Rhode Island is what you’d call a passionate but practical progressive on Capitol Hill. He is a key ally of American seniors in the fight to protect Social Security and Medicare. Senator Whitehouse says we owe it to the seniors who have paid into these programs over a lifetime of hard work. The senator recently sat down with our organization’s president, Max Richtman, to talk about strengthening seniors’ earned benefits and opposing attempts from the other side of the aisle to cut them. Here’s Max and Senator Whitehouse.
MAX: So, Senator, first of all, thank you for being on our podcast. It’s an honor to have you. I’m just curious, what got you so deeply involved and invested in Social Security and Medicare?
SENATOR WHITEHOUSE: What got me so invested in Social Security and Medicare was seeing Rhode Islanders for whom this was a life changing program. You know, Social Security doesn’t exactly make you rich and Medicare has its foibles. But there are so many people in Rhode Island for whom those twin lifelines make all the difference. And it’s not just for the recipient. It’s also for their kids who don’t have to worry about and spend money for the retirement and the health care of aging parents — that frees up the younger generation to pursue its own goals, its own future, its own interests. So it’s really a double benefit. And you see it play out in the lives of your constituents, the people you know, that it becomes impossible to not feel that importance.
MAX: You know, I’m glad you brought that up with especially younger people, because I think a lot of younger people are more open to some of the social media that this is part of, this podcast. And I’ve been trying to explain to younger people that, yes, Social Security is important for their parents, for their grandparents, but for them right now. If you are a 27 year-old worker with a spouse and two children, you have right now… never mind what happens when you retire… you’ve got almost two million dollars in value of life and disability insurance right now for your family.
SENATOR WHITEHOUSE: Setting aside when you get a little bit older and have to worry about taking care of your parents. And the burden of that is lifted from you by Social Security and Medicare.
MAX: So I want to quote you, Senator. You tweeted a few months ago, “If the American people knew that Social Security and Medicare would be solvent for the indefinite future, it would have a calming and reassuring effect.” And how, in your view, should Congress respond to this challenge?
SENATOR WHITEHOUSE: Well, I, interestingly enough, have a piece of legislation precisely to that end. To go back a step, Max, you know, if you look around in our country right now, there is a lot of drama. There is a lot of unhappiness. There’s a lot of uncertainty. There’s a lot of division and there’s a lot of stress. And I think for a lot of families, as they’re thinking about their future, the asterisk next to Social Security, is it really going to be there for me? The asterisk next to Medicare, is that going to be there for me? Is a worry. And we can scrub that asterisk right out. We can scrub that worry right off the list of innumerable American families by simply fixing the unfair tax code in ways that make Social Security and Medicare solvent. For literally as far as the eye can see, the actuaries look out 75 years. They can’t look beyond that for that whole 75 years these bills would make those programs solvent and secure and sound. In addition to the immediate value of people who in those years received those benefits, there’s the relief of having that reliance, of having that security, of having that comfort, of knowing that it’s going to be there. And I think if we can de-stress the American people by doing things for them that are both obvious and right and that they want and that support very successful existing programs. Why would we not want to do that?
MAX: Well, yes, you know we support and have endorsed your legislation. It would bring revenue into the program, I think in a fair way, would not impose any additional tax on anybody making less than four hundred thousand dollars a year. And I think that is that is the best approach. Now some people propose to fix that problem by cutting benefits, raising the retirement age. Raising the retirement age, as you know, is a cut in benefits. You’re gonna get less money during the time you’re collecting benefits. It’s a cut in benefits. And having a COLA which is, I say, is a stingier COLA by changing the way it’s calculated. So I just wanted to know your thoughts about that approach as opposed to yours.
SENATOR WHITEHOUSE: We have two problems in this country right now. We have more than two, but two that bear on this one is: we have a Social Security and Medicare system that are looking at cash liabilities coming up in the not-too-distant future; and the second is: we have a tax code that has been deeply, deeply, corrupted in favor of billionaires and big corporations and people who can afford the enterprise of tax evasion — when, 30 years ago, corporations paid, between 20% and 30% of the United States’ revenue. That’s, I think, a reasonably fair share. They’re down to 6% now. Yeah, the public’s share of contributing to the United States’ revenue has gone up from 70% to 80% all the way to 94%. So there’s plenty of room to make an adjustment back to the good old days before all this tax trickery was baked into the code and have a tax system that is fairer. And when you put those two things together, you get a double win: you’ve got a fairer tax code and you get security for Americans, for Social Security and Medicare. And, by the way, in terms of de-stressing the country, I think it will de-stress the country if people believe that the tax code is more fair, that as a plumber they don’t have to pay a higher tax rate than a hedge fund billionaire. That is the kind of thing that can really aggravate people, and so I think not only are both the right thing to do economically, but they’re also both to the advantage of a calmer, fairer, more decent America.
MAX: Well, I couldn’t agree with you more. And along those lines, 25, 30 years ago, about 92% of wages were subject to the FICA tax and payroll tax. Now it’s closer to 80%. Because of the disparity and in the incomes of our workers, and of course, so many people are getting paid in other ways than wages, which kind of skews that collection of payroll taxes.
SENATOR WHITEHOUSE: Sometimes for that purpose.
MAX: Sometimes entirely for that purpose. Now can we talk about Medicare for a minute?
SENATOR WHITEHOUSE: Sure
MAX: The Inflation Reduction Act which passed the Senate by one vote. Yeah, thank God you were there to vote for it. It will save money for people in Rhode Island and across the country, especially when it comes to prescription drug costs. I wondered if you would speak to that for a minute.
SENATOR WHITEHOUSE: That was, I think, one of the biggest wins in the Inflation Reduction Act. When I first ran for the Senate, my race started in 2005 and went through 2005 and 2006 to the election in 2006. I was sworn in in 2007. All through 2005 and 2006, I was going around Rhode Island saying we’ve got to give Medicare the ability to negotiate with the pharmaceutical companies over price, first, the VA can do it, and we see lower prices for VA pharmaceuticals than Medicare pharmaceuticals because of that. And second, how do you think Walmart brings low prices to you every day as they advertise? Because they negotiate. So why would you want Walmart to be able to negotiate low prices, but not have a system as big as Medicare be able to negotiate low prices? By the way, that’s the market at work. So it was very, very rewarding to me last year to be able to finally, finally, accomplish that goal and, of course, we led into it with the insulin price cap, which is an immediate benefit that we wanted to provide while Medicare worked through which the first 10 or 12 drugs were going to be that they were going to look at and then, work forward to resetting those prices and then going on to other drugs.
MAX: I think over time, more and more people will feel the positive impact because, as you say, more drugs will be subject to the negotiation. The other thing that is often overlooked in talking about the Inflation Reduction Act and its impact on prescription drug costs is that companies that raise their prices faster than average inflation are going to have to put that money back in a form of a rebate to the Medicare program, which is going to help the program and help the beneficiaries over time. So, it will take a few years, I think, for the full impact. Now, the insulin is important. It’s immediate. A $35 a month cap.
SENATOR WHITEHOUSE: That was like our down payment for the American people. This starts now and then the rest begins to roll in in the years ahead.
MAX: Right. You know, I worked on, in 2003, when Medicare added a Part D prescription drug component, I was working on that at the time and I was new to the committee, but it always seemed so bizarre that there was a specific prohibition from negotiating with the prescription drug companies. You know where that came from, where that originated?
SENATOR WHITEHOUSE: It wasn’t just substantively bizarre. It was procedurally bizarre because that slipped in, before my time here, but my understanding is that that slipped in, in conference, with no fingerprints. You know that the pharmaceutical industry was behind it, but nobody would lay claim to being the actor who got that stuck in. And then it was stuck in the law, neither side had voted on it, got stuck in in conference once the doors were closed, and we’ve had to live with it ever since until now.
MAX: It took a long time.
SENATOR WHITEHOUSE: It took a long time. The lobbyists who got that in, I hope, got a nice fat fee.
MAX: Well, not just the lobbyists, but the member of Congress. We found some fingerprints, actually.
SENATOR WHITEHOUSE: Did you?
MAX: Yeah.
SENATOR WHITEHOUSE: Tell.
MAX: And one of the key players in getting that, I think in an underhanded way, as you explained it, put in, happened to go over to the Pharmaceutical Research Association as their chief executive after leaving Congress.
SENATOR WHITEHOUSE: Oh, the Louisiana guy?
MAX: What’s that?
SENATOR WHITEHOUSE: The Louisiana guy. What was his name?
MAX: Oh, you got it.
SENATOR WHITEHOUSE: Yeah. Okay. Yeah. Okay. Interesting.
MAX: So, you know.
SENATOR WHITEHOUSE: Well, well, well.
MAX: We’re shocked, aren’t we?
SENATOR WHITEHOUSE: We’re shocked, shocked.
MAX: So, listen, Senator, I know you’ve got [to go].
SENATOR WHITEHOUSE: He’s got the rewards.
MAX: I really want to thank you for taking the time. I know usually I see you with Lawrence O’Donnell, so it’s really an honor to be able to see you in person. And my final question, in this picture, it’s about 10 years, 10 or 11 years ago. How come I look 10 years older, you look the same? I want an explanation.
SENATOR WHITEHOUSE: You know, I would have to debate you on that. I think you look pretty good. And I think Bernie looks the same, although we had a more recent haircut there. But I definitely look like my hair is not so white.
MAX: I think Senator Sanders has looked like that.
SENATOR WHITEHOUSE: Always.
MAX: Yeah.
SENATOR WHITEHOUSE: Yeah. He probably graduated high school looking like that.
MAX: Listen, thank you so much, Senator. Really appreciate it.
SENATOR WHITEHOUSE: It’s great to be with you, Max. Thanks for all your wonderful work to make sure that seniors are protected.
MAX: Thank you very much.
WALTER: And if you’d like to help Max and all of us at the National Committee protect your earned benefits that you work so hard for, why not join us? Visit ncpssm.org and click join. Become a member today. That’s ncpssm.org. I’m Walter Gottlieb. And of course, you earned this.