Last month, I was fortunate to be part of a group of 100 senior citizen community leaders from around the country who attended the White House Senior Summit. As a retired educator, it was really important to me that I get the opportunity to hear what the Obama administration is doing to protect Social Security and to hear concerns that many have on the future of these important programs. I’m happy to report that the concerns and needs of our senior citizens are being listened to by this administration.
For over 70 years Social Security has been America’s most successful social insurance program. It provides a rock-solid lifeline for millions of Americans — for more than half of senior citizens in this country Social Security is their only means of support. In a time of economic uncertainty, where pensions and 401(K)s for retirees are becoming a rare commodity, Social Security has remained stable.
In spite of all of this, we are hearing more and more politicians call for cuts to the program. The idea that budget cuts have to be tied to cuts in benefits for Social Security is wrong. Social Security did not contribute to the federal deficit and shouldn’t be “borrowed” from in the form of reduced benefits or coverage. Unfortunately, there will be pressure from both sides to include cuts to Social Security, Medicare and Medicaid in budget discussions.
Two budget plans in particular pose a substantial threat to these programs. During the briefing at the White House, I was very pleased to hear that the administration is firmly against the budget plan presented by Republican Congressman Paul Ryan.
The “Ryan plan” as it is sometimes known, would put Social Security and Medicare on the chopping block by privatizing the program, cutting benefits and breaking Social Security into block grants. Given the track record of Wall Street, why would we want to gamble the lifeline of millions of disabled and retired workers on the stock market? Social Security was created in a time of financial crisis as a system apart from Wall Street for precisely these reasons. The Ryan plan would also privatize Medicare, putting insurance companies between seniors and their doctors while raising out-of-pocket costs. Surveys have shown that some seniors are already spending more than a quarter of their Social Security checks to cover out-of-pocket Medicare costs. Decreasing benefits while increasing costs would be disastrous for many seniors.
In addition to the Ryan plan in the House, the Senate is floating a similar plan called the Simpson-Bowles plan.
While Simpson-Bowles is not as clearly partisan as the Ryan plan, it relies too heavily on benefit cuts to programs such as Social Security and Medicare. Included in this plan is a proposal to raise the retirement age to almost 70. In Maine, where wait staff, carpenters, loggers and many others work very physical jobs for most of their lives, the expectation that they can continue to work, or even find work, well into their late 60s is ridiculous.
Social Security and Medicare shouldn’t be the targets of “reform” that cuts vital services simply for purposes of balancing the budget. The debate in D.C. has far reaching implications for thousands of people back home, too.
We are now the oldest state in the country. Almost 300 thousand Mainers are beneficiaries of Social Security. These people are retirees, widows and widowers, disabled workers, spouses and children. All contribute to Maine’s economy and, for many, the benefits from the program can mean the difference between retiring in poverty or with a livable income.
I am glad the Obama administration is listening and willing to fight to protect these programs from reckless cuts. Seniors are not living “high on the hog.” For over half of us, Social Security is our only means of support. I believe in life with dignity from birth until death. I hope our senators realize the importance of these programs and vote against any budget that includes cuts that undermine the social insurance principles that make these programs so popular and effective.
Sheryl Lee is a retired educator from Portland and a member of the Maine People’s Alliance and the National Committee to Preserve Social Security and Medicare.
Community Organizer White House Summit?
Did the anointed one come up with a plan to assure the fund doesn’t go in the red? If Social Security was only used for what it was originally intended, we would have a money issue. Unfortunatly Social Security has been raided for more things than it was designed for. Just another piggy bank to empty.
cmy6, believe it or not on this one issue we both agree. I can remember back in the days of Ford when the Social Security Trust was raided to balance the budget with a huge, back then, IOU that has yet to be made good on. Once Ford did it, with a GOP House and Senate by the way, it became a regular way for the Budget to be balanced. That chicken has now come home to roost. What would be a smart move is for those overseas profit’s coming back to be brought back, at 25 %, and be split between the deficit and the Social Security Trust Fund permanently. Once the deficit is paid off the entre Trust is funded by the repatriation money. It may not be the best solution but I have yet to seen anyone, from either side, come up with something. Any taker’s, please, don’t be bashful !
It was virtually impossible for anyone before Clinton to ‘raid’ the Trust Fund. It did not exist at a meaningful level until Clinton’s Presidency. GWB is the number 1 borrowers from the Trust Fund. His administration borrowed more from the Trust Fund than all other [residents combined. If you exclude GWB, Clinton borrowed more from the Trust Fund than all other presidents combined.
What is missing from your plan is the amount of money you expect to see repatriated per year. The debt is now around 15 trillion. You need to have 1/2 trillion brought back, just to pay interest.
The President has no proposals on the table. He is doing nothing. This is the White House webpage for Social Security. In it you will find what the President will not do.
http://www.whitehouse.gov/issues/seniors-and-social-security
“(The President) believes that no current beneficiaries should see their basic benefits reduced and he will not accept an approach that slashes benefits for future generations”
There is no evidence that money has been raid (up until Ben Bernanke used the money at zero interest). It has been borrowed just as money has been borrowed from you. You do not say however that your pension fund was raided.
According to the man who ran Social Security in 1944, payroll taxes needed to be tripled. Congress waived all of the tax increases called for in the original law. Then it used Social Security as a campaign re-election tool increasing benefits every election year between 1950 and 1966. So I would question the statement that we wouldn’t have a money issue.
It’s amazing how many conservatives are willing–even eager–to roll over and let Republican leaders slash Social Security.
It’s as though they assume they themselves will never be old, never lose a job (with resulting reduction of total benefits), never be financially hard-up. They must picture themselves working at an excellent job–a DESK job–into their 90s. Or else assume that, because they are wealthy now, they always will be.
Republican politicians say, “We’ve decided Social Security will go bankrupt, it’s everyone for himself into a desperately poor old age–that’s the American way–suffering is good for you!” And their followers believe them.
But the real Republican aim is to force all of us into the stock market, where the politicians’ cronies will rake in fees while elderly people take all the risks, and will become destitute the next time the market crashes.
Liz, No one want SS to go bankrupt, but it is on its way. As the workforce ages there are fewer and fewer younger workers contributing. You can make all the arguments you want about the “lock box” the fact remains that money has to come from somewhere. Democrats intransigence is assuring that the end will not be pretty.
Stick your head in the sand like your buddies but:
http://www.usdebtclock.org/
Social Security “insolvent” or “bankrupt.” Even the worst dire forecast is still two decades away (in 2033 there still will be money to pay about 75% of currently scheduled benefits). Economic recovery alone will improve that forecast. Incidentally, despite facing the worst economic conditions in its history, the program ran a surplus of $69 billion last year, increasing the trust fund to nearly $2.7 trillion.
Social Security is keeping 20 million Americans out of poverty. Money in their hands is spent locally, on goods and services. Social Security needs to be expanded, not slashed. Austerity measures are destroying Europe. Republican leaders keep pushing them in the US. It is not necessary to “destroy us to save us,” to paraphrase what a general once said about a Vietnam village.
I’m certain that if Republicans wanted to start another war (Romney’s been making some hints in that direction), they would do no fretting about how “the money has to come from somewhere.”
To destroy Social Security would devastate this country’s most vulnerable population while enriching Wall Street. And you can’t argue that elderly people should just go on working, since many of them can’t work and those who want to find new employment face formidable barries.
The Economic Policy Institute notes:
“Continuing to work is not an easy option for older workers, many of whom have difficult jobs or retire sooner than planned due to job loss, illness, or the need to care for a sick family member:
Poor health remains a significant barrier to continued employment for older Americans. Roughly 20–30 percent of Americans in their 60s have a health problem that limits their ability to work or to perform basic physical tasks.”Many older workers continue to work in physically demanding or difficult jobs. According to recent studies, 45 percent of workers age 62 to 69 have physically demanding jobs or work under difficult conditions, and an even greater share have jobs that require at least sporadic physical effort.An estimated 20 percent of older adults provide unpaid care to a frail senior or other adult, according to one study.”The argument that most workers can offset cuts by working longer assumes there are jobs for these additional older workers, including those who are laid off or otherwise find themselves unemployed. Returning to work is a particular challenge for unemployed older workers, who are likely to be out of work longer than prime-age workers and to experience larger pay cuts if they manage to find jobs.About 40 percent of workers retire earlier than planned due to poor health, caregiving responsibilities, job loss, or similar reasons.” [http://www.epi.org/publication/bp343-social-security-retirement-age/]
Again, No one wants to ‘destroy” social security. Make those claims as many times as you want and that would still not be true.
Social Security will be destroyed by its own weight. The trust fund doesn’t exist Democratic demagoguery not withstanding.
Your EPI report actually begs for change pointing out the reason for it.
EPI is a think-tank. You will do better with information coming from SSA, CBO, or CRS. They may be wrong, but at least you know that governmental offices are not paid to be wrong.
You have a number of factual problems :
“Social Security “insolvent” or “bankrupt.” Even the worst dire forecast is still two decades away (in 2033 there still will be money to pay about 75% of currently scheduled benefits). ”
This is not what the Trustees said at all. But you are factually wrong to describe this ‘the worst dire forecast’. The high cost forecast ( which actually uses generous assumptions) is 2027.
” Economic recovery alone will improve that forecast. ” I really doubt that you have looked at the economic assumptions to make that statement. The assumptions are aggressive as it is. Real interest is vastly overstated. Fertility is overstated.
“Social Security is keeping 20 million Americans out of poverty” The number I have seen is closer to 13 million, and that does not include the people who were put into poverty by Social Security. You should realize that money in SS comes from somewhere. So I would like to see your source, and hope that it isn’t EPI.
According to the Social Security Administration 50% of workers take their first check before full retirement age. So it is a stretch to say that all of these people can’t work. Mind you, if they can’t work they are on disability.
So exactly what is the solution? Because certainly privitizing SS isn’t going to change the fact that there are millions of aging Americans without the wherewithall to feed and house themselves from retirement to death. Cutting the benefits won’t change that fact either, and it is a fact. How do you propose that those people be housed and fed going forward? Despite plenty of Republican plans for cutting SS I never see or read anything about what will happen to the very real people who are on the receiving end of those benefits.
I don’t claim to have all the answers but the current system is unsustainable. Many of the studies going forward claiming solvency are based on a sustained GDP growth rate of 3%. We haven’t had that for awhile and there are very few prognosticators saying we will have 3% anytime in the foreseeable future.
It doesn’t help when people that are trying to find ways to save the system are in fact trying to destroy it. Change is necessary and maybe retirement age is one way.
A few years ago when privatizing came up I pulled my social security history form out of the draw (2009) and ran the numbers. If the money I and my employer contributed to SS on my behalf over my lifetime had tracked the stock market my monthly take out of it would be about 3 times my projected benefit amount of social security. This was even with the downturn in the stock market. To be honest I wouldn’t advocate that now as I don’t have as much confidence in our countries future as I once did.
I work with Fix Social Security Now. We provide a site with all of the alternatives, and commentary without all of the polarizing rethoric. We list a number of privatization plans all of which we pan. They subsidize risk, and none of them fully disclose the cost of shifting to a PSA system. If you feel that we are unfair to these plans, please tell us that is how the site grows.
http://www.fixssnow.org/contentdetails_Alternatives_6.aspx
If you see solutions that we are missing please tell us.
MEPac,
Like the name.
I work with Fix Social Security Now. We provide a site with all of the alternatives, and commentary without all of the polarizing rethoric.
http://www.fixssnow.org/contentdetails_Alternatives_6.aspx
If you see solutions that we are missing please tell us.
The Social Security Trust Fund is owed $2.7 trillion of that debt. We, as a nation, have borrowed from our own retirement fund.
Absolutely, with no ability to pay it back.
No choice. We working people invested in a secure retirement plan backed by the full faith of the United States Government. Default on its obligations (Treasuries) isn’t an option the government can consider.
I think we, as a nation are going to have to reexamine our priorities. Taking away old age insurance the American citizens bought and paid for would lead to an uprising I can’t even imagine.
Selling treasuries means printing money in order to make good on them. That makes our currency next to worthless on the open market. Anything we purchase from overseas— most everything—- will cost far more and be priced out of the reach of common people.
Ponzi schemes often end this way.. Its why they are illegal for everyone except for the government.
Well, taking it away from people who need it *should* lead to an uprising. SS needs to change fundamentally…taxing all levels of income and means testing benefits are a good start.
What would be the result of means testing? How would the government decide who gets what?
Social Security benefits have been means-tested since 1984. If you have outside income, your social security becomes taxible. Thet taxes collected on your benefits is returned to Social Security.
The means tests now affects up to 1/3rd of retirees.
We have more than the capacity to repay the money borrowed from the Social Security Trust Fund. The problem is that once it is repaid, the system remains short 20.5 trilllion.
The Trust Fund is real, but it is like a checking account which has $1,000 on which $10,000 in checks have been written. In the case of Social Security those checks take a long time to clear. The Trust Fund will pay 2.7 trillion to beneficiaries just like the checking account will cover the first $1,000 of checks. The problem is the other checks.
Cheesecake, it’s because the Treasury continues to “borrow” trillions from the SS Trust Fund and not replace it. That and the fact that the money is put in Treasurey Bonds at the same rate that it currently lending to banks. It’s no wonder they can’t make money and stay solvent. SS didn’t create this problem. It didn’t contribute a penny to the National Deficit. LEAVE IT ALONE!
Listen. I have no problem with leaving it alone. But the politicians didn’t and won’t. The problem is it doesn’t exist except as promissory notes in one form or another. Perhaps you would like to get paid with promissory notes. Would that solve your problem?
The fact is the politicians keep SS off books so it doesn’t look like it contributes.
Cheesecake, Let’s not forget the fact that the Treasury continues to borrow trillions from the SS Trust and invests in Treasury Bonds at the same rate that it lends to banks. It hasn’t added one penny to the National Deficit. KEEP YOUR HANDS OFF MY SS AND MEDICARE! I’ve paid for this for all of my life. It is my only retirement plan.
If SS is your only retirement plan…
“It hasn’t added one penny to the National Deficit.”
One penny? no but it has added hundreds of billions of dollars to the debt.
Social Security received $103 billion subsidy in dollar-for-dollar deficit spending as a result of the payroll tax-holiday. The EITC has been a dollar for dollar deficit spending subsidy since the mid-1970s. This is dollar for dollar increases in the debt.
As we tax jobs, jobs go overseas or go away infact. Fewer jobs create less income taxes which would in fact help balance the budget.
@Cheesecake1955:disqus , I am not sure that there are fewer workers contributing. The merchants of the demographics issue point more to declining workers per retiree (where retirees are rising rapidly). While the worker to retiree ratio has fallen, it hasn’t fallen as much as costs of have risen.
If the problem really was demographic, why did the system reach a state of insolvency in 1983.
Could you point me to a Republican plan that cuts Social Security benefits?
Simpson-Bowles mentioned above is a bipartisan plan. The description of the ‘Ryan Plan’ is a year or two out of date. The latest Ryan Plan doesn’t have any cuts for Social Security. Romney has shown a willing to make cuts, but hasn’t told anyone what they are or how they would work.
Concern would be politicians who want to cut Social Security and Medicare fail to realize that in all instances monies have been collected from tax payers over the years to finance these plans. Every time I earned a nickle FICA wanted a cut. Then later Medicare wanted it’s share. Medicare continues to collect monthly premiums from my Social Security payment. The “concept” that these funds were an ATM to balance the budget has come home to roost. Time to conceptualize a fairer tax and spend program that does not rely on “borrowing” from Social Security to “pay the piper.”
This article is nothing more than propaganda.
” Social Security has remained stable.” Not according to the Trustees, who described the financial outlook as troubling. In 2012, the unfunded liability increased 14%. That isn’t stable. It is laughable to call the system ‘a rock-solid lifeline’. The Trustees who get paid to ensure the fianancial stability of the system have said the exact opposite. It is short 20.5 trillion dollars.
“The “Ryan plan” as it is sometimes known, would put Social Security and Medicare ” It is unclear which Ryan plan she is talking about. The latest plan does nothing to Social Security. It says that if the systems outlook isn’t stable, then politicans are required to talk about it.
That has not changed anything. The outlook according to the Trustees is ‘troubling’ and politicans are talking about it.
The President has no proposals on the table. He is doing nothing. This is the White House webpage for Social Security. In it you will find what the President will not do.
http://www.whitehouse.gov/issues/seniors-and-social-security
“(The President) believes that no current beneficiaries should see their basic benefits
reduced and he will not accept an approach that slashes benefits for future
generations”
His approach – do nothing – will assure that people as old as 63 today experience forced benefit reductions – according to the Trustees Of The System. If he doubts the numbers that these people have presented to Congress, he needs to fire them and get someone who can present a clear case on how the system will not fail older Americans.
“Social Security did not contribute to the federal deficit and shouldn’t be “borrowed” from in the form of reduced benefits or coverage. ”
At this point the writer has left the point of propaganda, and now is simply lying to you. Social Security received $103 billion subsidy in dollar-for-dollar deficit spending as a result of the payroll tax-holiday. The EITC has been a dollar for dollar deficit spending subsidy since the mid-1970s. This is dollar for dollar increases in the debt.
The idea that the government is cutting benefits to ‘borrow’ money from the system is silly. Benefit reductions will mean that the system will be able to provide ‘scheduled’ benefits for a longer period of time.
In this sentence, you should get the feeling that you are being lied to, and that the person has an agenda.