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No Spring Break Ceasefire in the War on the Working Class

Congress may be home for Easter break and President Trump is busy dropping bombs in Syria and Afghanistan, but the War on the Working Class continues unabated.  In fact, it was quite a busy week for floating dangerous ideas about our nation’s healthcare and retirement security. 

First, the Associated Press ran a story based on information from an unnamed “GOP lobbyist” saying that Republicans are considering repealing the Social Security payroll tax.  Under this alleged plan, Social Security would be funded from general revenue and therefore subject to competition with other domestic programs --- and the whims of Congressional budget cutters.  Never mind that the payroll tax is what makes Social Security an earned benefit.  President Franklin D. Roosevelt set it up that way on purpose to “give the contributors a legal, moral and political right to collect” their Social Security checks.  Plus, the current payroll tax deduction has been working pretty well for the past 80 years.

Since enough members of Congress realize this is an awful proposal that would never pass the House and Senate, clearly someone is out there floating crazy ideas in the press.  (In addition, the A.P. story itself lacked any real sense of balance or context.) While the source for the A.P. story was unnamed, a top Trump administration official very publicly floated notions that seem to undermine President Trump’s promise not to touch Social Security and Medicare.  In an interview with CNBC’s John Harwood on Tuesday, Budget Director Mick Mulvaney just couldn't say whether President Trump would veto legislation to privatize Medicare.  “Let [Congress] pass that and let’s talk about it,” he demurred. 

When Harwood asked if Social Security Disability Insurance (SSDI) was on the list of potential programs to be cut, Mulvaney offered this non-reassuring response:

“I continue to look forward to talking to the president about ways to fix that program. Because that is one of the fastest growing programs that we have. It's become effectively a long-term unemployment, permanent unemployment program.” – Mick Mulvaney

Of course, that response is riddled with inaccuracies.  SSDI is not growing, it’s leveling off at a lower rate that is likely to plateau for the next 20 years.  It most definitely is not an unemployment program of any kind – permanent or otherwise. SSDI is one of the strictest federal disability programs in the world in terms of qualifying for benefits.  Only those who are able to demonstrate that they are unable to work for medical reasons qualify.  Among all the people who apply, only 40% are accepted.  If accepted, the average beneficiary receives only $1,170 per month, less than one could earn in a full time job at the federal minimum wage.

That didn’t stop the Washington Post from echoing some of the same right-wing myths about SSDI in a recent feature story and an editorial entitled, “The Social Security Disability Program Needs Reform.”  The story wrongly intimates that rural, working-class Americans are using SSDI as a unemployment program.  On Monday, Media Matters for America attempted to correct the record:

“The Post’s mischaracterization of SSDI follows a long history of misinformation from mainstream outlets, which often publish error-riddled stories filled with anecdotal evidence portraying disability recipients as undeserving. These pieces sound as if they come from right-wing media, which have spent years attacking the program and its recipients.” – Media Matters, 4/10/17

While the press was replete with nutty notions about Social Security and Medicare, the President and Congressional Republicans were reviving the specter of the moribund GOP healthcare bill.  Just when you thought it was dead, Freedom Caucus members say they are close to a deal with the White House and Speaker Ryan to repeal and replace Obamacare within three weeks.  Meanwhile, Politico reports that President Trump is threatening to cut off cost-sharing subsidies that help pay for low income earners’ health coverage in order to force Democrats to the negotiating table on the GOP health plan.

Fortunately, protesters are out in full force this week at town halls pushing back against supporters of the Republican bill, including one of the National Committee’s own grassroots volunteers who organized a rally outside a Florida congressman’s office.  This proves that Spring break is a good time for grassroots action. Just because it’s holiday time doesn’t mean those waging war against the working class won’t put some rotten eggs in our Easter baskets.

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New Bill in U.S. House Boosts Social Security Benefits, Keeps System Solvent for Decades

 

Legislation just introduced in the U.S. House would put extra money in Social Security beneficiaries’ pockets while keeping the system solvent through the rest of this century.  Rep. John Larson’s Social Security 2100 Act does all of that and something more:  It gives lie to the myth that Social Security is going bankrupt and the only way to fix it is by cutting benefits.

Larson’s solution is simple… and fair.  It asks the wealthy to pay their fair share of Social Security payroll taxes. In exchange, the legislation ensures Social Security stays solvent through the year 2100 – with no benefit cuts and no turning over the program to Wall Street, which budget hawks have long dreamed of doing. 

The Act provides much needed relief to seniors who are having a difficult time paying for basic expenses like healthcare, housing, and utilities.  The bill includes a modest 2% benefit increase for all beneficiaries, higher cost of living adjustments (COLAs), and a tax break for 11 million seniors.  Since 2014, the National Committee’s Boost Social Security Now campaign has lobbied Congress to pass expansion legislation on behalf of its millions of members and supporters.  

In a Facebook Live interview with the National Committee, Congressman Larson says he hopes his bill will ride the wave of grassroots energy that defeated the GOP healthcare plan last month.  “What we saw was people saying, ‘Wait a minute, keep your hands off my healthcare.’  It’s the same with Social Security.  We want to continue to build a groundswell in this country.” Larson says the bill has already attracted more than 150 cosponsors in the House. The Congressman calls on President Trump to support it, based on his campaign promises to “protect” Social Security.

In order to keep the system solvent through the year 2100, the Larson bill would apply the Social Security payroll tax to wages above $400,000, which only would affect the top 0.4% of wage earners.  (Currently, earnings above $127,200 are exempt from the payroll taxes.)  Eventually, the cap would be phased out completely.  In addition, the legislation would gradually raise the overall payroll tax rate by 1% over 25 years – an increase of only 50 cents per week for a worker making $50,000 per year (or, as Larson himself is fond of pointing out, the price of one Starbucks coffee drink every nine weeks).  These financing changes would not only keep Social Security flush, they would allow for a modest 2% benefit increase for all beneficiaries --- and a tax break for 11 million seniors earning under $50,000 a year (or $100,000 for older married couples).

The Larson bill not only provides an increase in benefits, it would help retirees better keep up with inflation by linking cost of living adjustments (COLAs) to an index called the CPI-E (Consumer Price Index for the Elderly).  The CPI-E takes into consideration what seniors really spend for crucial goods and services, including housing and medical costs. 

The National Committee has enthusiastically endorsed the Social Security 2100 Act.  As President and CEO Max Richtman explains, “This bill is a win-win for beneficiaries and the entire country, because it protects the commitment to hard working Americans who pay into the system and enhances benefits.”

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Watch Congressman Larson’s full Facebook Live interview here.

Watch the Social Security 2100 Act event on Capitol Hill Facebook Live here

 


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Disability Insurance is Part of Social Security Whether Mick Mulvaney Likes It or Not

The President’s budget director can’t seem to help casting doubt on the administration’s commitment to keep its hands off Social Security and Medicare. Appearing on CBS Face the Nation this weekend, Mick Mulvaney openly questioned whether disability insurance should be part of Social Security.

"Let me ask you a question, do you really think that Social Security Disability Insurance is part of what people think of when they think of Social Security?” he asked. “I don’t think so... It’s a very wasteful program and we want to try and fix that.” – Budget Director, Mick Mulvaney 3/19/17

The moderator cut to a commercial right after that statement, so Mulvaney was not asked to elaborate on what he meant by “fixing” Social Security Disability Insurance.  We can only assume that “fixing” really means cutting benefits.  His remarks demonstrate a disregard for the facts about Social Security Disability Insurance (SSDI), and its very history.

Nearly 11 million Americans currently collect Social Security Disability Insurance benefits. Disability insurance has been part of Social Security since 1956. During the two decades after Social Security was created in 1935, a consensus evolved that not only retirees – but the disabled – require social insurance to stay out of poverty.  It was a natural extension of the philosophy underpinning Social Security that President Franklin D. Roosevelt so eloquently summarized as protecting the population against “the hazards and vicissitudes of life.”

A few dangerous myths underlie Mulvaney’s statements about Social Security disability insurance.  Here are the facts:

*SSDI is not a handout.  The truth is that anyone receiving SSDI must meet the same basic qualifications as other Social Security beneficiaries do.  Beneficiaries – or their parents – must have worked and contributed payroll taxes to Social Security in order to collect disability benefits.  

*There’s a stringent set of parameters that SSDI applicants must meet.  Only 40% of applicants actually qualify for disability benefits.

*SSDI beneficiaries do not have minor disabilities. 28% of beneficiaries have serious musculoskeletal disorders; 28%, serious mental illness; 9%, nervous system disorders and 9% circulation disorders, among others.  

In case the seriousness of these conditions is still in doubt, consider this:  a beneficiary collecting disability benefits beginning at age 50 only lives an average of 8 years past that point. Some 8,000 applicants died in Fiscal Year 2016 waiting for a decision on their disability claims – due to backlogs at the Social Security Administration caused by draconian budget cuts. 

When an official like Mulvaney makes comments about “fixing” Social Security Disability with the benefit cuts that implies, he is playing off of worries about the solvency of the Social Security Disability Insurance (SSDI) trust fund.  The SSDI trust fund is separate from the retirement (OASI) trust fund, and is projected to remain solvent until 2022 if Congress takes no action to fortify it.   The National Committee supports Congressman John Larson’s Social Security 2100 Act (to be re-introduced in the House later this month), which – among other things – combines OASI and SSDI into a single, more durable Social Security Trust fund.  This, along with legislation proposed by Senator Bernie Sanders and others, could preserve the solvency of Social Security well into this century without cutting benefits – including the ones that help people with serious disabilities maintain their financial security and their dignity. 

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Mulvaney Actively Subverting Trump’s Promises on Social Security and Medicare

We have been skeptical since last fall about President Trump’s promises not to touch Social Security and Medicare, partly because of the privatizers and cutters he appointed to high office.  Now, according to an article in today’s Washington Post by reporter Dave Weigel, Trump’s budget director, Mick Mulvaney, is actively agitating for the Trump administration to “work around” those promises:

"I’ve already started to socialize the discussion around here in the West Wing about how important the mandatory spending is to the drivers of our debt.  I think people are starting to grab it.”  - Mick Mulvaney on Hugh Hewitt radio program

Mulvaney claims that he is not really advocating that the President break his promises.  Instead, the budget chief seems to be playing a semantic game by redefining what Trump really meant.  

"Mulvaney… has said that any Republican reform would be consistent with Trump’s promise, by defining the act of ‘saving’ Social Security and Medicare as anything that allows them to meet obligations — even and especially if those obligations are reduced.” – Washington Post 3/6/17

That is a dubious bending of the President’s words on the campaign trail.  Mulvaney is, in effect saying, we have to cut Social Security and Medicare in order to save them, which is patently wrong.  The two programs could be kept solvent deep into the 21st century through modest and manageable measures that we have detailed many times since last Fall, with no benefit cuts.  In fact, Senator Bernie Sanders’ new bill in Congress would increase benefits and extend Social Security’s solvency until 2078.  

Mulvaney is being even more disingenuous, though, because candidate Trump explicitly promised not to cut either program.  Trump told a post-election rally in Des Moines in December:

"You’ve been paying into Social Security and Medicare… We’re not gonna cut your Social Security and we’re not cutting your Medicare.”  - President-elect Trump, December, 2016

It’s hard to see how Trump could have been any clearer, or how Mulvaney could claim the President could be convinced to cut Social Security and Medicare without violating his campaign promises.  Yet, Mulvaney’s proposals on earned benefits programs would undeniably lead to benefit cuts.   The Post points out that at his January confirmation hearing, he advocated raising the Social Security retirement age to 70, and supported means-testing to reduce Medicare spending, two unpopular measures with voters in the National Committee’s recent public poll.

Of course, Mulvaney is not the only Trump administration official gung ho to cut and privatize our retirement security programs.  HHS Secretary Tom Price played a similar word game to Mulvaney’s last week, affirming that Medicare is a “guarantee” to seniors while implying that it has to be modified in order to uphold the guarantee.   

We wrote last week about the potential bait-and-switch that the administration and Congressional leaders may use, by promising that current retirees won’t be affected by any changes, but that younger Americans might be by the time they are seniors. 

None of this lends much comfort to current or future retirees – nor offers much reassurance that the President’s promises on Social Security and Medicare won’t be eroded, if not now, then in the near future.


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Trump Snubs Seniors in Speech to Congress

Millions of current and future retirees were no doubt hoping that President Trump would use last night’s speech to Congress to reaffirm his promises not to touch Social Security and Medicare.  Instead, the President ducked and covered.  He did not even utter the words “Social Security” or “Medicare” in his entire hour-long address.  As for Medicaid – which millions of American seniors rely upon for skilled nursing care – the President only touched on it once, with a veiled reference to converting guaranteed benefits into block grants, which would hurt beneficiaries.   

This begs the question – why the silence on Social Security and Medicare?  After all, during the campaign the President broke with Republican orthodoxy and repeatedly promised not to cut either earned benefit program. “I am going to protect and save your Social Security and your Medicare.  You made a deal a long time ago,” he told a crowd of supporters in November.  The most likely explanation for omitting America’s retirement security programs from last night’s speech is that the President knows his fellow Republicans on Capitol Hill vehemently disagree with him.  

There are proposals in both the House and Senate to cut and privatize Social Security and Medicare.  In fact, voucherizing Medicare is one of Speaker Paul Ryan’s highest priorities.  Perhaps the President did not want to unnecessarily ruffle feathers on the Hill last night.  If so, his refusal to recommit to protecting Social Security and Medicare is not an encouraging sign. If he’s afraid to even mention his position in a speech to Congress, he may roll over on campaign promises under pressure from the Congressional GOP.

President Trump may also be leaving himself wiggle room in negotiations with Congress over Social Security and Medicare.  The problem is, any compromise on his promise will hurt seniors and people with disabilities who depend on these programs, whether it’s cutting benefits, raising the retirement age, or trimming COLAs.  He may also be setting up a dodge, where the Congress agrees not to cut Social Security or Medicare for current retirees while leaving open the possibility of downsizing or privatizing both programs for younger Americans.  This approach is based on the falsehood that cutting benefits for future retirees doesn’t hurt current seniors, and cynically pits one generation against the others for political expediency. Mark Miller of Reuters has an excellent piece today explaining this ploy:

"The [Republicans’] political goal will be to defang public opposition, since younger workers tend not to focus much on retirement when it is several decades away. But that approach is not going to work. Retirees and their advocacy groups will fiercely resist cutting benefits down the road, because they understand the critical importance of Social Security and Medicare benefits. They also care about the future retirement of their own children.  - Mark Miller, Reuters

Social Security and Medicare are commitments that the government made to working class Americans who paid into the system most of their lives.  The President could have confirmed that commitment last night and comforted seniors who are worried about losing their retirement security and healthcare.  His silence on Capitol Hill was not reassuring.

 

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