Category Archives for Congress

AARP: Social Security is an Economic Generator

Published in Pawtucket Times, October 4, 2013

For those who view Social Security bennies as just a drain on the nation’s economy, just adding the nation’s spiraling deficit, AARP, the nation’s largest aging advocacy group has always seen it differently. Now, according to a new report, released by AARP’s Public Policy Institute on Oct. 1, 2013, researchers found that for each dollar paid to Social Security beneficiaries generates nearly two dollars in spending by individuals and businesses, adding about $1.4 trillion in total economic output to the U.S. economy in 2012. More over, the report’s findings indicate that $762 billion paid in Social Security benefits in 2012 helped Americans keep or find more than nine million jobs.

If Congress is successful in putting Social Security on the budgetary chopping block, the economy will take a hit, warns the AARP report. According to the reports analysis, “reducing benefits by 25 percent across the board in 2012 (by $190 billion), which the Social Security will project will occur around the year 2033, could cost the U.S. economy about 2.3 million jobs, $349 billion in economic output, about $194 billion in GDP, and about $83 billion in employee compensation.”

A Multiplier Effect When Benefits Spent

The 25 page report, Social Security’s Impact on the National Economy, authored by Gary Koening of AARP’s Public Policy Institute, and Al Myles, of Mississippi State University, details the powerful multiplier effect created when Social Security recipients spend their benefits and the companies which receive those dollars spend their profits and pay their employees, who in turn spend their wages. The report provides both national and state-level data.

The researchers use an economic modeling system known as IMPLAN to calculate the multiplier effect and trace the impact of Social Security spending through the national and state economies.

“This report tells us that any adjustments Washington makes to Social Security will have a profound effect on individuals of all ages, businesses and our economy as a whole,” said AARP Executive Vice President Nancy LeaMond. “That’s why AARP is fighting the chained CPI and calling for a national conversation about the future of Social Security – so those who paid into the system can have a voice in the debate and so future generations get the benefits they’ve earned.”

Social Security benefit payments in 2012 supported more than $370 billion in salaries, wages and compensation for workers. Of the more than nine million jobs supported by Social Security spending, about four million were in just ten industries. Nationally, the largest employment impacts were seen in the food services, real estate, health care and retail industries.

In addition to illustrating Social Security’s vital role in supporting national and local economies, jobs and workers’ incomes, this report reiterates the importance of Social Security as a vital source of income for millions of Americans. Social Security benefits keep 22 million people out of poverty, including more than 15 million older Americans, and serve as the foundation of a secure retirement for millions more.

AARP’s Public Policy Institute calls the Social Security Program critical in promoting the income stability among the nation’s seniors, by providing a steady stream of income to replace wages lost due to retirement. “About 1 out of 6 Americans – 57 million people – receive Social Security benefits, including 9 out of the 10 individuals aged 65 and older,” says the Washington, DC-based policy institute.

According to the Social Security Administration, the program is a key source of retirement income for the nation’s retirees, noting that “it is the only inflation-protected, guaranteed income they have. Among the age 65 and over recipients, 23 percent of the married couples and 46 percent of the unmarried couples rely on the program for 90 percent or more of their income. Also, 53 percent of the married couples and 74 percent of those unmarried in this age group receive 50 percent or more of their income from Social Security.

Experts Weighing in on AARP Report

According to Lisa Mensah, Executive Director, of the Aspen Institute’s Initiative on Financial Security, “The AARP study fills a key void in the debate around Social Security. Social Security is not only important for individual financial security but also it has a major impact supporting jobs and economic activity in every state. When weighing Social Security as a budget matter, the fiscal coin has two sides—what it costs and what it delivers—and too often what Social Security delivers for the broader economy is poorly understood.”

Adds, Dean Baker, Co-Director of the Center for Economic and Policy Research,
“In a context where the economy is below full employment, as is clearly the case today, Social Security provides an important boost to demand. The report it released showed the importance of Social Security in each of the 50 states. When the economy is near full employment, the demand generating by Social Security may not be needed, but for now and the foreseeable future this demand will be providing an important boost to growth.”

Impact on State Economies

The AARP report details the spending of Social Security checks on the economy on all fifty states. Of course, California, the state with the largest economy in the nation, has the largest impact. In this state along, Social Security benefits supported 888,000 jobs, $147.4 billion in output, and $8.7 billion in state and local revenues.

Meanwhile, for the littlest state in the nation, “People need to consider a Rhode Island economy without Social Security benefits,” said AARP State Director Kathleen Connell. “Could the state live without $2.9 billion a year in federal money being spent on medications, rent, food, utilities, clothing and services?

“When a person spends Social Security benefits, the lawn gets mowed, the driveway gets plowed, CVS sells toilet paper, and the corner market sells milk. Someone gets paid and then spends that money – which means retailers and service providers are getting paid. And then they spend. It’s a cycle, and each step along the way, sales tax is collected by the state – more than $280.7 million,” says Connell. The AARP study shows that this spending supports 33,000 jobs in the Ocean State. So, Social Security makes life better for retirees and people with disabilities, it supports Rhode Island jobs and Rhode Island taxpayers benefit significantly, she says.

“Social Security was engineered with this in mind. The money paid into the system is not doing much if it stays in the Treasury,” observes Connell. “Social Security allows people to live more comfortably, improves their health and quality of life, and benefits the economy,” she adds.

“Seen this way, what would we be saving if we cut Social Security benefits?” quips Connell.

Congressman David Cicilline notes, this report confirms that almost 80 years after it was established, Social Security strengthens Rhode Island’s economy and provides significant benefits for families across this state.” Cicilline, representing the Ocean State’s 1st Congressional District, states that while other lawmakers propose Social Security benefit cuts of one kind or another; he has introduced legislation to protect the program by strongly opposing the use of chained CPI to calculate cost of living increases.

In Conclusion

Inside the Washington, DC beltway, Congressional lawmakers continue to seek out ways to rein in rising Social Security program costs. Some call for a combination of reducing program benefits while raising revenues. Others support only benefit cuts warning that raising the payroll tax or bringing other forms of additional revenue would hurt the nation’s fragile economy.

After the Federal Shutdown, when Congress comes back to continue the people’s business and begins to seriously debate policies for reforming Social Security, it becomes crucial for these lawmakers to bring the AARP Policy Institute’s economic impact study findings into their discussions. Slashing benefit checks will hurt financially vulnerable seniors, but as shown by the findings of this recently released report it can also have a drastic impact on fragile state economies by slowing job growth, and reducing retail and other spending, even lowering tax revenues at the local, state and the federal levels.

For a copy of the report, go to http://www.aarp.org/work/social-security/info-09-2013/social-security-impact-on-the-national-economy-AARP-ppi-econ-sec.html.

Herb Weiss, LRI ’12, is a Pawtucket-based writer covering aging, health care and medical issues. His weekly commentaries can be found on his blog, herbweiss.wordpress.com. He can be reached at hweissri@aol.com.

Older Voters Talk Turkey to Congress

Printed October 26, 2012, Pawtucket Times 

            Even the Presidential election less than two weeks away, registered voters across the nation should exercise their Democratic right to vote.  Since the beginning of July local and state political candidates attended hundreds of public events scattered throughout the OceanState, passing out campaign literature, putting up signs throughout their legislative districts, along with distributing bumper stickers to promote their candidacy on their supporter’s vehicles. .

             During this current election cycle AARP moved to push Congress to address the major issues surrounding Social Security and Medicare, gathering opinions from millions of Americans in thousands of communities across the nation. 

            “People of all ages and across party lines believe Medicare and Social Security are critical to the health and retirement security of older Americans and yet all voters are hearing from the candidates about these programs are attack ads and 30-second sound bites,” says AARP Rhode Island State Director Kathleen S. Connell. “The next President and Congress could determine the future of Social Security and Medicare. Voters want and deserve to know where the candidates stand.”

Setting the Record Straight. 

            Last March, AARP, the nation’s largest aging advocacy group and its state groups, unrolled a new initiative to educate voters about the nation’s two largest domestic programs, Social Security and Medicare and to gather their thoughts to forward to decision makers inside the Washington Beltway.  

            Following its national headquarters’ lead, AARP Rhode Island geared up its final phase of its “You’ve Earned a Say,” initiative, an effort to gather grassroots feedback from “Outside the Beltway” to bring to Congressional lawmakers as they continue their heated debates as to how to bolster the solvency of the nation’s Social Security and Medicare programs.  The educational initiative was created to fuel conversations at the state and national levels to ensure that workers in every state, who have faithfully contributed into Medicare and Social Security Programs, had a direct say in the future reforms of these programs.

            AARP Rhode Island reached out to 130,000 Rhode Island members and its Washington, DC headquarters, to nearly 40 million members to raise awareness of the “You’ve Earned a Say” initiative.  It’s website, www.earnedasay.org, provided both factual and straightforward information as to policies that are being considered and enabled a person to share their ideas with Congress and those running against Congressional incumbents, as how to strengthen these programs. 

            So far, AARP’s educational initiative brought over 3 million people into this conversation on Medicare and Social Security and held over 3,000 events.  At the local level, AARP Rhode Island staff met over 4,000 aging baby boomers and seniors who shared their concerns about the future of these programs. 

            According to Connell, AARP’s “You’ve Earned a Say” initiative was created to bring balanced information to voters — both the pros and the cons — about the policy options being debated during the upcoming Presidential and Congressional elections for both programs. 

            Earlier in this summer, AARP released a series of national surveys on the opinions of voters ages 50 and over, which found that these voters overwhelmingly think the candidates have not done a good job of explaining their plans on Social Security (67%) and Medicare (63%). Voters 50-plus – across party lines – say that getting more information on the candidates’ plans on Social Security (72%) and Medicare (70%) will help them determine their vote on Election Day on Tuesday, November 6, 2012.

            Through the reports and ongoing You’ve Earned a Say events, AARP worked hard to elevate the voices of Rhode Island voters and provide them with nonpartisan information about candidates’ positions on issues important to aging baby boomers and seniors.  In August, AARP launched the “You’ve Earned a Say: Vote for Retirement Security” 2012 Voters’ Guides featuring information from presidential, senatorial and congressional candidates – in their own words – on their own specific plans to strengthen Social Security, Medicare and financial security.

            This week, AARP Rhode Island volunteers delivered a 10 page report entitled “Rhode Islanders Have Their Say about Medicare and Social Security” to Rhode Island Members of Congress and congressional candidates.  The state-specific report conveys the opinions of over 2,100 Rhode Islanders who have participated in the AARP initiative.  National and state-specific versions of the report were also delivered to both presidential and congressional candidates in every state, as well as sitting lawmakers, so they could hear directly from their constituents about their views of how to strengthen these vital domestic programs. 

A Rhode Island Snap Shot

            Out of  2,182 respondents, 32 percent believe Social Security is “okay as is,” followed by 26 percent who only saw a need for minor fixes.    Twenty three percent of those responding believed that Congress must make major changes to the program with 19 percent seeing this domestic program in “a state of crisis.”

            As to Medicare, 26 percent of the respondents say that Medicare “is ok as is” followed by 28 believing that only minor policy fixes are need to keep it solvent.  However, a whopping 31 percent believes major changes are needed to fix Medicare, followed by 15 percent saying Medicare is in “a state of crisis.”

            Twenty eight percent say that they expect the benefits from participating in Social Security and Medicare will equal the contributions they paid while 28 percent will get less benefits.  Forty four percent believe that they might get more back from these two programs the same that they contributed.

            Thirty six percent of the respondents say that more funding is needed to maintain the same benefits while 13 percent fear that benefits will be slashed.  Forty percent expect more funding is needed to shore up the program, but expecting a cut in benefits.  Twelve percent have no opinion.

            Finally, ninety one percent of the respondents want their voice heard by Washington policy makers but 47 percent do not expect it will make a difference.  Nine percent are not interested in getting involved.

            The majority of respondents (51 percent)  called for some changes to be made now, but suggested that Congress should wait before making major changes.  They (35 percent) also believed that higher paid workers aren’t paying enough into the Social Security program and that the program should become solvent before bettered benefit are paid out (68 percent).

            Additionally, the majority (70 percent) also called for a balanced approach when making revenue and benefit changes to ensure there is retirement benefits to future retirees. Fifty five percent also supported upper income workers get higher benefits because they contributed more into the system.

            Most of the respondents (48 percent) also suggested that Congress move slow in making major changes to Medicare, only making small fixes now.   Thirty six percent  believe that the biggest challenge facing Medicare is rising health care costs.  Seventy five percent agreed that all future retirees continue to get guaranteed coverage and care as those get now.  As with Social Security, a majority (62 percent) also called for a balanced approach when making revenue and benefit changes to ensure Medicare is available to future retirees.  Forty four percent say that premiums and funding from the genera federal revenues should not be used to cover increased health care costs.

            Voting may be more difficult in this heated partisan political campaign where voters must learn to separate political rhetoric and negative innuendoes from the substance of issues.  AARP’s “You’ve Earned a Say” initiative is a successful attempt to give back power to voters, helping them become more knowledgeable about Social Security and Medicare in order to rise above negative campaigning.  Your vote must be made by understanding the facts and not be influenced by the fiction of negative attack ads.

            Herb Weiss is a Pawtucket-based freelance writer who covers aging, health care and medical issues.  He can be reached at hweissri@aol.com.

Delegates Reject Bush’s Policies

Published in Senior Digest on January 2006

President George Bush and congressional Republican leaders supporting Social Security reform through private savings accounts, saw their policy soundly rejected at the White House Conference on Aging (WHCoA) held last month in Washington, D.C.

According to AARP State Director Kathleen Connell, who was appointed to the Rhode Island WHCoA delegation by U.S. Sen. Jack Reed, Bush’s private sector approach to Social Security reform got a big thumbs down.

The president also took a hit on his new Medicare prescription drug benefit program, which offers insurance coverage through the private sector. Delegates voted for a strategy that calls for replacing the new Medicare drug benefit with a government-run program.

By the end of the fifth WHCoA, 50 resolutions dealing with a variety of policy issues were approved by the 1,200 delegates. Most of the top 10 resolutions concern the need to create a comprehensive national strategy to address the long-term care of the nation’s frailest and most vulnerable seniors.

While the delegates took a couple of swings at Bush, the president made an obvious political snub when he failed to appear at the four-day conference and sent Health and Human Services Secretary Michael O. Leavitt, as a replacement. That goes in the record books as the first time a president was no-show at the national aging conference, held every decade since 1962.  Presidents John Kennedy, Richard Nixon, Ronald Reagan and Bill Clinton did make a showing to welcome the delegates.

Moya Thompson, WHCoA deputy director for outreach, stated the conference’s Policy Committee had initially approved 73 resolutions, sharing them with the 1,200 delegates before they arrived in Washington.  Thompson said that three voting sessions were scheduled at the beginning of the WHCoA, with each delegate having an opportunity to vote once to choose their top 50 resolutions. The 50 resolutions that received the most votes were presented at the conference.

According to Thompson, 56 implementation strategy workshops, at least one for each of the 50 resolutions, were held. By law, the resolutions must be delivered to the president and Congress six months after conference, Thompson said.

Counnell said many of the delegates felt that the WHCoA agenda was controlled too much by the Policy Committee appointed by the Bush administration and the Republican-controlled Congress. “This was very visible to those attending,” she said.

Another organizational issue, Connell said, was concern over the Policy Committee not allowing delegates to submit resolutions for a vote in addition to the selected 73. At previous conferences, she said, additional resolutions could be considered if petitioned by 10 percent of the delegates.

Connell said that the Rhode Island delegates were a very cohesive group. “Everybody was on the same page in advocating for issues. Given the size of our delegation, we were very effective,” she said.

Corinne Calise Russo, director of the state Department of Elderly Affairs, said she was pleased that the top vote-getting resolution was the reauthorization of the Older Americans Act, a priority of the Rhode Island delegation.

Russo, appointed by Gov. Donald Carcieri as a delegate, said, “Delegates throughout the nation attending the conference felt that the Older Americans Act should be enacted with increased funding for all of the act’s titles, within the first six months following the end of the conference.”

Ensuring older Americans have transportation options to maintain  their mobility and independence was another resolution that received strong support, Russo said, stressing the importance of keeping seniors independent and driving for as long as possible. She believes the resolution can be implemented at the state level by using new signage on highways, making lane markings extremely visible in rain and at night and designing larger and more visible crossing signs at busy intersections.

While older worker issues and affordable housing designed to allow seniors to age in place are in the top 50 resolutions, and are high on Russo’s agenda, she stressed federal and state policy makers must not forget the growing numb er of grandparents who are raising their grandchildren.

“We need to expand our national family caregiver programs funded by the Older Americans Act, to provide more support for older persons taking on this new role,” she said.