Tag Archives for AARP State Director Kathleen Connell

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.

Complete Streets Legislation Stalled in House Committee

Published May 19. 2012, Pawtucket Times

            A properly designed road system helpsolder Rhode Islanders to successfully “age in place” and stay safely and comfortably in their homes for as long as they choose. But the benefits of so-called Complete Streets design benefits people regardless of age, abilities or mode of transportation.  AARP Rhode Island has joined a broad-based coalition of 17 aging, health and transportation groups and smart growth advocates to push state policy makers into making the Ocean State’s streets, highways and byways more accessible and safer for all users. Out of 2,111 legislative proposals submitted this year for consideration by the Rhode Island General Assembly, H 7352 and S 2131, its companion measure in the Senate, would accomplish this lofty goal.

          Coalition members fear that their efforts to make sure that the state’s transportation infrastructure becomes more user friendly for all ages and abilities is in jeopardy with the House Committee on Municipal Government which has held H 7352 for further study.  While the Senate passed the companion measure (for the second year in a row) last month, this House Committee might just kill the legislation unless it can be resuscitated. 

The Details of H 7352

            The legislationwould require that whenever the state is building or modifying a road, planners and designers must consider Complete Streets design concepts – that is, considering safe travel by all users, current and projected, particularly pedestrians and bicyclists of all ages and mobility capabilities.  Features of Complete Streetsdesign include sidewalks, paved shoulders suitable for use by bicyclists, lane striping, bicycle lanes, “share the road” signage, “road diets” (narrower lanes to discourage speeding and leave room  for pedestrians and bicyclists), roundabouts, crosswalks, pedestrian control signalization, bus pull-outs, curb cuts, raised crosswalks and ramps and traffic-calming measures.

            Meanwhile, this legislation allows common-sense exceptions, such as on interstate highways, where pedestrians and bicyclists are prohibited, and on projects where the space is too limited or costs would be disproportionate to the use such features would likely get.

            Furthermore, this legislation also requires the State’s Department of Transportation to issue a report within two years detailing what it has done to comply with the law, how it has changed its guidelines on such features as lane width, design speed and more, and what best practices the agency has employed.  It would also be required to include information on exceptions made, and why they were made.

            In a press release touting the passage of S 2131, bill sponsor, Senator Louis P. DiPalma, noted that the legislation’s goal is to plan streets that encourage people to use healthy, greener, transportation modes whenever possible, contributing in their own health as well as the wellbeing of the environment.

            “Cars shouldn’t be the only consideration when public roads are being built.  The health and environmental benefits of walking, bicycling and other active modes of transportation are well know, and we should be building our roads in ways that are safe for those activities and encourage people to choose them,” said Senator DiPalma.

Pushing for Safer Roads, Highways and Byways

            In her testimony before the House Committee on Municipal Government, AARP State Director Kathleen Connellsaid the goal of H 7352 is to direct the Department of Transportation  to plan with all users in mind.  “Making it easier for older people to get around is an obvious reason we’re involved, but Complete Streets design promotes public safety, helps revive our towns and cities and increases property value,” she said.

            Molly Clark, Manager, Health Promotion and Public Advocacy for the American Lung Association, also testifying to support H 7352, predicted that Complete Streets design that would promote walking and bicycling and this would ultimately improve the health of Rhode Islanders.

             Also attending the Committee Hearing, Co-Chair John Flaherty, of the Coalition for Transportation Choices, advocated for 21st century transportation system “that’s good for the economy, good for the environment and that provides clean, healthy and affordable transportation choices for all Rhode Islanders.”

            There is no fiscal note estimating the true costs of H 7352 due to the multitude of factors that must be considered.  However, bill supporters believe that this legislative proposal does not necessarily add costs to the road construction project.

            Addressing concerns about the legislative proposals “possible” fiscal impact on the State’s budget, Senator DiPalma notes that H 7352 has been crafted in such a way to reduce the fears of fellow lawmakers that there could be initial and future costs if the legislation is enacted.  Provisions would protect the state’s coffers by requiring common sense exceptions to take effect if a road construction design project incurs a cost that is disproportional to its benefits, he says.

It’s All About the Economy

            Doing it right the first time makes economic sense,” says AARP Associate Director for Advocacy Deanna Casey.

             Enacting H 7352 is just good economic policy, adds Scott Wolf, Executive Director of Grow Smart Rhode Island.  According to Wolf, “forRhode Islandto thrive economically it needs to attract and retain talented young people. These people, research shows, are looking for places that are vibrant, user friendly and possess an abundant natural and architectural beauty.” 

            Wolf stated “Rhode Island has many of these ingredients but we need to be much more user friendly with regard to transit, walk ability and bike ability to maximize our appeal to this new segment of workers. He added, “Adopting an aggressive complete street strategy that requires all roads built to accommodate bikes, pedestrians, and mass transit as well as autos could do a lot to increase our appeal to this critical cadre of mobile young talented workers.”   

             In these tough economic times usually a price tag on a legislative proposal is just enough for General Assembly leadership to doom a legislative proposal’s passage by not taking action on it.  Just refer it for further study.  Complete Street supporters are puzzled by the inaction in the House panel because of the protections built into the measure to rein in initial or future costs of a project.  At press time, the City of Pawtucket along with eight other cities and towns, have already passed resolutions supporting the Complete Street legislation being considered by the Rhode Island General Assembly and another eight communities are also considering supporting this legislation by enacting  resolutions.  Most important, the State’s Department of Transportation is not even blocking passage but endorsing it.

           According to the National Complete Streets Coalition, in 2011 alone “over 140 jurisdictions adopted a policy, up from 80 that committed to Complete Streets in 2010. In total, 352 regional and local jurisdictions, 26 states, the Commonwealth of Puerto Rico, and the District of Columbia have adopted policies or have made written commitment to do so.”

           Elections are looming and House and Senate leadership are looking to adjourn in early June.  The Rhode Island General Assembly must move quickly in the waning days of the 2012 legislative session to join 26 states that get it.  House leadership must do the right thing to make streets, highways and byways more accessible and safer for all Rhode Islanders, regardless of age, abilities or modes of transportation.   That is to pass H 7352.    

             Herb Weiss is a Pawtucket-based writer covering aging and health care issues.  His Commentaries are published in two Rhode Island Daily’s The Pawtucket Times and Woonsocket Call.