The latest stories and commentary in the battle to save America’s most successful government program.
I’m writing a series of posts as a blogging fellow for the Strengthen Social Security Campaign, a coalition of more than 270 national and state organizations.
(Sorry I missed this for the last few days, was taken out of commission by the flu… These are a little behind, but I’ll get caught up over the next few days…)
Do you have a mother?
Is she over 65?
How is she set financially?
How would she fare if she was entirely on her own?
Now answer that question and take her Social Security out of the equation. How would she fare if she was entirely on her own?
You may not realize it, but Social Security is the single most effective program to keep women out of poverty in their retirement years that the nation has ever created.
Here are some facts about women and Social Security that you may not know, but should…
One of the most frustrating things about both the catfood commission’s work and the ongoing discussions about “fixing” Social Security is that it seems to be happening in a vacuum in which the economic reality of recessions is not recognized at all. Which is kind of ironic, considering where we’re at right now.
Sen. Richard Shelby’s brilliant plan to keep raising the retirement age until after everyone is dead was included in the list of proposals highlighted, along with Sen. Rand Paul’s promise to put Social Security “on the chopping block,” and Reps. Paul Ryan’s and Eric Cantor’s “roadmap” to privatization.
So far, Reid has been steadfast in standing against any kind of cut to Social Security. Where there’s a question in Senate leadership is with Sen. Dick Durbin, a member of the Simpson-Bowles commission who supported its recommendations (though they were unofficial), and who is generally regarded as a close ally of President Obama. We’ve seen a White House that is keeping changes to Social Security on the table, without ruling out much beyond privatization.
Meanwhile, in the House, Steny Hoyer and John Boehner sat down in their ergonomic office chairs and agreed that everyone can work until they’re 70. Reid is going to have his work cut out for him.
President Franklin D. Roosevelt, once said, “The only thing we have to fear is fear itself.” He challenged fear because the right wing was busy spreading it during the early 1930s debate for the enactment of Social Security. They spread fear that Social Security was a socialist scheme or worse yet a communist plot. Sound familiar? Roosevelt knew then that fear could wreck his effort to enact Social Security, and so he spoke directly to the people of how they should respond to the unfounded fear being spread. Congress and the people overcame the preaching of fear and Social Security was enacted and signed into law by President Roosevelt in 1935.
Will we overcome today’s fears and press on as was successfully done in the 1930s? Or will we give in to fear and throw out the program that has worked so well throughout all these years? Just as was in the case in the 1930s, it will be a tough struggle regardless of the outcome.
I predict most of us will place our faith in the Social Security Trust Fund and its very reliable history and reject the Wall Street attempt to raid the trust fund knowing its many hits and misses over the years. Retirees who rely on personal savings have recently felt the brunt of Wall Street crashes and are well aware that even with their stock market losses, their Social Security and Medicare benefits were left fully intact. That’s something we should all keep in mind as the debate heats up in the new congress.
And, WXEL quoted Simpson in a just-released interview, as declaring, “We’re not talking about privatization. These jerks that keep dragging that up are lying. We never suggested that.”
But just a few weeks ago, he and co-chair Erskine Bowles let loose their deficit reduction report. Its “Recommendation 5.10” urged: “A serious bi-partisan conversation…regarding incentives to generate personal retirement savings that supplement Social Security…Americans need a fiscally responsible personal retirement savings system…”
If you ruled the world and you could fix Social Security, how would you do it?
The University of Maryland Program for Public Consultation asked that question of about 2,000 people and found that given a series of possibilities and the percentage of the problem each would fix, 75 percent were willing to make choices that eliminated the shortfall.
Raising payroll tax limit to $156,000 solves 25 percent of the problem and 83 percent found it tolerable.
Completely eliminating the payroll tax limit solves 75 percent of the problem and 78 percent found it tolerable.
Calculating starting benefits based on the inflation rate of prices not wages solves 25 percent of the problem and 79 percent found this tolerable.
Adjusting cost of living increases to buying patterns most relevant to older Americans solves 25 percent of the problem and 75 percent found it tolerable.
Raising the retirement age to 68 by 2034 solves 13 percent of the problem and 65 percent found it tolerable.
Raising the retirement age to 70 by 2048 solves 38 percent and 41 percent found it tolerable.
Increasing the Social Security tax 1 percent over 20 years solves 75 percent of the problem and 85 percent found it tolerable.
Reducing benefits by 25 percent overall solves 50 percent of the problem and 19 percent found it tolerable.
Third Way, the Wall Street oriented think tank, is apparently feeling newly emboldened now that one of its board members, Bill Daley, is President Obama’ chief of staff. Last week it sent out an “infographic” that purported to show why Social Security needed to be fixed.
The punchline was its warning of a $44 trillion shortfall in Social Security over its 75-year planning horizon. Referring to “trillions” of dollars over some long future horizon is a good way to scare people, but not to have serious conversations on the budget or Social Security. It would be much more meaningful to people to describe the projected shortfall as a share of future income. This number, 0.6 percent, can be easily found in the Social Security trustees report. Of course that is not quite as scary.
Some Social Security recipients are upset about a new Social Security Administration policy, claiming that it is “changing its rules in the middle of the game.”
As Bucks reported, the agency recently decided to curtail the ability of Social Security recipients to receive what amounted to an interest-free loan from the agency.
Under the old policy, people eligible for benefits could take them early, then change their mind and then withdraw their application for benefits — as long as they repaid the full amount of the benefits received. That allowed them to restart the clock, and reapply for higher benefits later.
While the old policy was intended to help people who took early retirement and then went back to work, the agency said it was increasingly promoted in the media and by some financial professionals as a way to get a “free loan” from the government for at least several years.
Sen. Rand Paul (R-Ky.) said Tuesday he’s readying a proposal to reform Social Security that he’ll unveil in the coming weeks.
Paul, the author of an aggressive bill to slash $500 billion from discretionary spending, will take a similar approach to his Social Security plan, details of which are coming “within a few weeks.”
“In one fell swoop, we’re going to fix Social Security for 75 years,” Paul said Tuesday on MSNBC.
The Tea Party Republican hinted that a centerpiece of his proposal would be raising the retirement age, though he did not get specific. During his 2010 campaign for Senate, Paul said he would oppose “any cuts in benefits for seniors and those nearing retirement.”