We hardly needed more evidence that President Trump didn’t really mean it when he promised as a candidate “not to touch” Social Security and Medicare. But the past week’s news has once again shown how hollow that promise is. First, the White House floated the idea of temporarily cutting FICA payroll taxes to stimulate an economy buffeted by President Trump’s trade war, only to back off the proposal within 48 hours.
“Trump said Tuesday that a payroll tax is ‘something we think about.’ But when he was asked about it the following day, he said it wasn’t being considered.” – The Hill, 8/23/19
If the payroll tax cut idea truly has been put to rest for now, that’s a good thing. Social Security relies on payroll contributions to fund benefits. Cutting payroll taxes – even temporarily – undermines the financial health of the system. In fact, Social Security needs more, not less, revenue to continue paying full benefits in the decades to come. That’s why Congressman John Larson’s Social Security 2100 Act increases revenue to keep the program financially sound – and expand benefits at the same time.
Not surprisingly, the benefit from a payroll tax cut would accrue mostly to high earners, who tend to save rather than spend extra cash – muting any economic stimulus effect for working people.
“The Penn-Wharton Budget Model estimated in a report Thursday that if a 2 percentage point payroll tax cut were enacted for 2020, about 43% of the tax change would go to those in the top fifth of income (earners).” – The Hill, 8/23/19
On the same day that the President denied that a payroll tax cut was in the works, the New York Times reported that key Republican Senators were pressuring Trump to support Social Security and Medicare cuts if he wins a second term.
“With the budget deficit set to surpass $1 trillion in 2020 thanks in large part to Trump’s tax cuts and trade war, Republicans and right-wing groups are pressuring the president to take a sledgehammer to Social Security and Medicare, widely popular programs Trump vowed not to touch during his 2016 campaign.” – Common Dreams, 8/23/19
Again betraying his pledge not to cut either program, Trump seemed to be receptive to the Republicans’ entreaties. Senator John Barrasso (R-WY) told the New York Times, “We’ve brought it up with President Trump, who has talked about it being a second-term project.”
The administration has already proposed cutting billions of dollars from both Social Security and Medicare in its FY ’19 and ’20 budgets. Fortunately, Congress ignored these proposals. But the past week’s developments foreshadow what President Trump and a Republican-controlled Congress might do if they prevail in 2020. That’s a scenario that current and future seniors – and their families – should find deeply disturbing.
As we rush headlong toward the 2020 election year, the National Committee is ramping up its efforts to engage voters on the issues that matter most to seniors – Social Security, Medicare, and the soaring cost of prescription drugs. During the past week alone, NCPSSM President Max Richtman has been participating in town halls from New York state to California – bearing a message that Social Security and Medicare should be strengthened, not cut – and demanding that Congress act to reduce prescription drug costs.
Today, Richtman meets with voters at a Seniors Town Hall in Santa Rose, CA, hosted by Rep. Mike Thompson (D-CA-05). Last week, Richtman joined Rep. Paul Tonko (D-NY-20) for a forum about seniors’ financial and health security in Cohoes, NY on the 84th anniversary of Social Security. During that event, Richtman promoted the Social Security 2100 Act – introduced by Rep. John Larson (D-CT) – which increases benefits and adopts a more generous formula for calculating cost-of-living adjustments (COLAs).
The expansions in the Social Security 2100 Act would be funded, in part, by adjusting the amount of income subject to FICA payroll taxes – meaning the wealthy would pay their fair share into the system.
“If you are working right now and you make above $132,900 dollars in wages, you don’t pay any more Social Security tax on that. That’s called the cap on wages subject to the payroll tax. So if you make $132,000 or $100 million, you pay the same amount. You think that’s right?” – Max Richtman, National Committee president, 8/13/19
Congressman Tonko has cosponsored the Social Security 2100 Act (which keeps the program financially solvent through the end of the century). He supports several bills to expand Medicare – including the Seniors Have Eyes, Ears, and Teeth Act – which would provide beneficiaries with vision, hearing, and dental coverage. The Congressman also backs legislation that would make cheaper, generic drugs more widely available.
Tonko says health care is a top priority for voters heading into the 2020 elections.
“When we talk about a forum like this, you begin with recognizing the importance and the relevance of (these issues) in the lives of the elderly…. I think that when you look at polling… the number one issue remains healthcare, affordability, and accessibility to quality care.” – Rep. Paul Tonko (D-NY)
Voters’ concern for these issues was palpable at the town hall in Cohoes, a Hudson Valley community within Tonko’s district where a total of 100,000 retirees live. “These voters showed up because they feel these issues keenly in their lives and in their pocketbooks,” says Richtman. “They came, they asked pointed questions, and hopefully they’ll go into the voting booth next year ready to elect candidates committed to strengthening seniors’ earned benefits.”
At the end of the town hall, Richtman presented Tonko with a pair of the National Committee’s trademark red boxing gloves – to signify that the Congressman is a fighter for seniors’ financial and healthy security. Richtman has another pair ready to give Rep. Mike Thompson – another champion of Social Security, Medicare, and prescription drug price reform – at the town hall today in Santa Rosa.
As we commemorate Social Security’s 84th anniversary, lawmakers are working to reverse a brazen attempt by the Trump administration to undermine the rights of Social Security disability claimants. Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) have introduced a bipartisan bill protecting the independence of the administrative law judges (ALJs) who preside over disability insurance appeals. The ALJ Competitive Service Restoration Act is a companion bill to legislation introduced by Rep. Elijah Cummings in the House. Last year, President Trump issued an executive order creating the opportunity for ALJs to be chosen based on their political beliefs instead of more time-honored, objective criteria.
“Administrative law judges perform very important roles for Social Security cases, and it’s essential that they remain independent and not politically influenced in making decisions… They should be knowledgeable about the subject area they’re overseeing and without any conflict of interest.” – Sen. Maria Cantwell
The Senators’ bill effectively overturns Trump’s executive order by moving AJLs back into “competitive service,” ensuring that they are chosen based on their qualifications – unlike political appointees who are not subject to the same criteria. The National Committee supports the new legislation out of concern that politically-appointed ALJs might deny claimants benefits based on ideology rather than the merits of the case.
The executive order is part of an effort to undermine Social Security Disability Insurance itself. The administration’s proposed 2019 budget included more than $64 billion in cuts to SSDI. And Budget Director Mick Mulvaney has argued (disingenuously) that SSDI is not really part of Social Security – a verbal sleight of hand designed to exempt the program from candidate Trump’s repeated promises not to cut Social Security.
Like Social Security retirement and Medicare, SSDI is an earned benefit. Workers can’t collect disability unless they have paid into Social Security for a required amount of time. By various means, the Trump administration is trying to cut benefits that rightfully belong to workers.
This is in keeping with the administration’s insensitivity – some would say cruelty – toward vulnerable populations, including disabled workers. Claimants apply for SSDI because they cannot work due to serious mental or physical disabilities. These include:
* Musculoskeletal problems
* Cardiovascular conditions
* Vision and hearing loss
* MS, cerebral palsy, Parkinson’s disease, and epilepsy
* Depression, anxiety, and schizophrenia
* HIV/AIDS, lupus, and rheumatoid arthritis
Even so, eligibility standards are stringent. Only about 40% of SSDI applications are approved. Claimants who are denied benefits can request a hearing before an administrative law judge. Because Congress chronically underfunded SSA operations from 2010-2017, wait times for disability hearings escalated – up to two years in some cases. Thousands of claimants have died waiting for hearings.
The National Committee believes it’s imperative that once a worker finally receives a hearing, the presiding administrative law judge be fair and impartial, and not politically motivated. The president’s order sabotages that expectation; the Senators’ bill would guarantee a fair process for the millions of Americans whose disabilities prevent them from working.
National Committee president Max Richtman released the following statement today, on the 54th anniversary of the Medicare:
“At the same time as we celebrate the anniversary of a program that has provided generations of seniors with health care they could not otherwise access or afford, we are keenly aware of the growing needs of older Americans today. When President Lyndon Johnson signed Medicare into law on July 30, 1965, he probably could not have imagined the oppressive health care costs that seniors now face — even with the solid foundation of Medicare under their feet. Seniors spend an average 40 percent of their Social Security income on health care, including copays, deductibles, and premiums. Meanwhile, half of all Medicare beneficiaries have an annual income below $26,200. We’ve heard far too many stories of retirees foregoing vital health services or rationing medications because they can’t meet soaring costs, often with fatal results. After 54 years, Medicare still does not cover most dental, vision, or hearing care expenses, though those can easily amount to thousands of dollars per year. The Congress should move legislation already introduced to add those crucial coverages. Lawmakers could also relieve the burden of crushing prescription drug prices by allowing Medicare to negotiate directly with Big Pharma. But the pharmaceutical industry’s allies in Washington have so far impeded this commonsense proposal. Last year, voters spoke loudly and clearly about the need to improve our health care system, delivering a new majority in the U.S. House. There are legislative remedies at the ready to strengthen Medicare for the nearly 60 million Americans who depend on their earned Medicare benefits. Seniors should not have to wait until the program’s next anniversary for the coverage and cost-relief they so desperately need today.” – Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, 7/30/19
National Committee president Max Richtman is urging the House Ways and Means Committee to boost Social Security — and keep the system financially sound for the rest of the century — as it takes up the Social Security 2100 Act. The bill, introduced by Congressman John Larson (D-CT), receives its first full committee hearing today after years of inaction by the former House majority. In his testimony to the committee, Richtman emphasizes that the National Committee enthusiastically endorses the bill on behalf of its millions of members and supporters.
“Congressman Larson’s Social Security 2100 Act is exactly what current and future seniors need. It will put the program on a financially healthy track, cut taxes for many beneficiaries, and provide a modest, but much needed, boost in benefits. This legislation undercuts conservative propaganda that Social Security is ‘going bankrupt’ – and safeguards the system’s long-term future without cutting benefits, raising the retirement age, or imposing more miserly cost-of-living adjustments.” – Max Richtman, president of the National Committee to Preserve Social Security and Medicare.
The bill assures that Social Security remains fully funded for more than 75 years, while expanding the program in significant ways:
*An across-the-board increase for all beneficiaries of about 2 percent of the average benefit.
*Adoption of the Consumer Price Index for the Elderly (CPI-E), which more accurately reflects the true impact of inflation on retirees than the current formula.
*Tax relief for many Social Security beneficiaries.
*An increase in the special minimum benefit so that it equals up to 125 percent of the federal poverty level.
Congressman Larson says the bill will be marked-up in September, and could come to the House floor for a vote this Fall. The legislation was first introduced in 2014, but did not even receive a hearing under GOP control. The new House majority has given the Social Security 2100 Act new life. The bill has more than 210 cosponsors, nearly a majority of House members.
“By passing this bill, the House can give retirees, the disabled, and their dependents a much-needed pay raise at a time of rapidly escalating living expenses… and reassure Americans that Social Security will be there for them in the future, stronger than ever.” – Max Richtman
The enhanced benefits and fiscal guarantees in the Social Security 2100 Act would be paid for in two ways: 1) By adjusting the FICA payroll income cap so that high-earners would contribute to the system on income above $400,000; 2) By slowly raising the FICA payroll tax paid by employees 1.2% over the next 24 years – or about 50 cents extra per week for the average wage earner.
Rep. Larson likes to remind audiences that the small increase in payroll contributions over more than two decades is a good deal for workers. “Is there any other ‘tax’ where you get disability, spousal, and pension benefits?,” he asks. The answer, of course, is a definitive “No.”
Read Max Richtman’s written testimony here.