Let Rhode Island’s Social Security Debate Begin

Published in Woonsocket Call on August 21, 2016

It’s less than 80 days before the upcoming 2016 presidential election. At press time, Social Security has been placed on the backburner as the GOP standard bearer Donald Trump and his Democratic opponent, Hillary Clinton, turn their attention to crime, national security, health care and the economy.

On the sideline, nearly 218,000 Rhode Islanders who collect Social Security benefits, including 155,710 seniors, 37,476 disabled workers, and 17,802 survivors of a deceased spouse or parent, are closely watching one of the nation’s nastiest political campaign unfold. Political insiders and aging groups know that whoever takes over the White House and controls Congress will control in the year’s to come how retiree’s receive their retirement checks.

Putting a Spotlight on Social Security

Earlier this week David N. Cicilline (D-RI) and John B. Larson (D-CT) came to the Rumford Towers in East Providence to put the spotlight on Social Security, both stressing how important it is to keep Social Security solvent through the end of this century. The two Democratic lawmakers called on GOP House Speaker Paul Ryan to move their introduced legislation, “Social Security 2100 Act,” from House Committee to floor vote.

“Social Security is a promise that after a lifetime of hard work, you should be able to retire with dignity, economic security, and peace of mind. It’s critical that Congress act expeditiously to preserve and strengthen this promise for years to come,” said Cicilline to over 80 attendees at the 90 minute event.

Larson noted that Social Security is not an entitlement but benefits that have been earned by hard-working Americans who have paid into the retirement system their whole lives. “Two-thirds of retirees rely on Social Security for the majority of their income, and it is a lifeline for the disabled and those who have lost a loved one,” he said, calling those pushing for Social Security cuts as “fundamentally misguided.”

The Nuts & Bolts

The “Social Security 2100 Act,” introduced by Cicilline and Larson in 2015, expands Social Security benefits, cuts taxes for 11 million seniors, provides stronger cost of living adjustments, and requires millionaires and billionaires to pay their fair share. The legislative proposal also provides an immediate increase equivalent to 2% of the average benefit for all Social Security recipients. This change is projected to yield an annual increase for the typical retiree of $300.

The Democratic lawmakers Social Security fix also improves the annual cost-of-living-adjustment (COLA) formula to reflect the prices of goods and services seniors actually buy – especially housing, health care, and transportation – to ensure that seniors aren’t asked to go without a COLA to protect against inflation. In three of the past seven years, Rhode Island seniors did not receive a COLA as a result of the inadequate formula that is used today.

Finally, the Cicilline-Larson Plan also lifts the cap on payroll taxes for individuals making more than $400,000 each year, requiring the wealthiest 0.4% of Americans to pay the same rate as all other workers. The increased revenue generated as a result will provide a tax cut for 11 million seniors and establish a new minimum benefit so that no one who has worked hard and played by the rules is asked to retire into poverty. Tax relief for Social Security beneficiaries due to an increase in the threshold for taxation of Social Security benefits to $50,000 for individuals and $100,000 for joint filers, up from $25,000 and $32,000 respectively.

While current projections indicate that the Social Security Trust Fund will begin generating annual deficits in 2019 and stop paying out full benefits in 2033, the Cicilline-Larson Plan expands the lifeline of Social Security through the end of this century by gradually phasing in an increase in the contribution rate equivalent to 50 cents per week for the average worker.

NCPSSM Gives Thumbs Up

In an endorsement letter, Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM), calls the Cicilline-Larson Plan “a bold step on behalf of seniors and all Americans by strengthening and safeguarding Social Security for future beneficiaries while at the same time making important improvements in the adequacy of the benefits the program provides.”

According to Richtman, the “Social Security 2100 Act” strengthens the retirement programs “financial foundations.” He says: “First, it extends the payroll tax to all wages paid to workers that are in excess of $400,000. Over time, the bill would completely eliminate the cap on Social Security payroll taxes. Second, the “Social Security 2100 Act” implements a small,
gradual increase in workers’ and employers’ contributions to Social Security. Because the increase is phased in over a long period of time, the average worker would see his or her annual contributions to the Social Security program increase by about 50 cents per week.”

In this presidential election cycle, Darrell M. West, Ph.D., Vice President and Director of Governance Studies at the Brookings Institution, sees Democrats making a “big push” to strengthen and expand the Social Security program. “This will not likely happen as long as there is a Republican Congress as many members of the GOP want to cut the future rate of growth of Social Security and increase the retirement age,” he says, predicting that there is a good chance Democrats will get the Senate back.

West adds, “whether the GOP regain control of the House will depend on how big the presidential victory is. If Clinton wins big, she may sweep in enough Democrats to have control of that chamber. In that situation, this legislation has much better prospects. A President Clinton could very well be interested in this proposal and be willing to sign it into law.”

Where’s the Beef?

Political newcomer and GOP challenger H. Russell Taub, calls on Cicilline, his Democratic opponent in the 1st Congressional District race, to not attach new benefits to Social Security, a self-funded program. Taub wonders how new federal expenditures to pay for added Social Security benefits will impact the heavily burdened retirement program.

Taub sees a need to have a “serious public discourse” on the nation’s budget. “When we’ve come to a conclusion lets craft meaningful legislation to get the law to reflect that decision. Let’s not drop flash-in-the-pan, headline grabbing false initiatives just because it’s an election year. Our Constituents in the First District deserve much better than that shabby treatment,” he says.

“AARP Take a Stand volunteers and members of our staff were on hand to listen to what the Congressmen had to say,” said AARP State Director Kathleen Connell. “Having candidates for office outlining their specific plan for making the necessary changes to preserve Social Security is what Take a Stand is all about. We are not at this time endorsing specific proposals, but we are engaging our members to keep asking for substantive answers. We’ve been saying ‘sound bites aren’t good enough.’ The Congressmen, indeed, go beyond a sound bite by presenting this plan in a public venue open to the media. People deserve to know how the plans will affect our families, what it will cost, and how they’ll get it done.

“Doing nothing is not an option.” Connell continued. “Every time the candidates dodge the question, our families pay the price.

If our nation’s leaders don’t act, future retirees stand to lose up to $10,000 a year. And every year our leaders wait and do nothing, finding a solution grows more and more difficult.”

Rhode Island voters are now able to see Cicilline’s fix for strengthening Social Security and expanding its benefits, detailed in his introduced legislative proposal, “Social Security 2100 Act.” GOP challenger Taub must throw in his two cents for strengthening the nation’s retirement program, but give us the details. Do you favor the GOP approach for privatizing Social Security? What is your position on raising the cap on Social Security payroll contributions to address the retirement program’s projected shortfall? Do you support raising the retirement age? What are your thoughts about slowly increasing the payroll contribution rate by 1/20th of one percent over 20 years to strengthen the program’s financial condition? Or even changing the current COLA formula.

While the presidential candidates put the economy, crime, and national security in the spotlight at their rallies, town meetings and speeches, Social Security receives little coverage. Let the serious debate begin in the Ocean State. Hopefully, this act will spread like wild fire across the country.

How the Election Impacts Social Security

Published in Woonsocket Call on July 24, 2016

On the final night of the Republican National Convention (RNC) an average of 32 million Americans tuned in to watch Donald J. Trump, a New York Real Estate Developer, author, television personality and now politician, formally accepted the GOP nomination for President of the United States.

After he delivered his July 21 speech, reporters, political commentators, and even postings trending on twitter called Trump’s hour and 15 minute speech (4,400 words) “dark” because of its stark tone and content. This GOP presidential candidate’s speech was even referred to as being the longest acceptance speech in history since 1972.

Before more than 2,400 delegates Trump, 70, pledged to be the nation’s law and order president who would crack down on crime and violence. America first would be Trump’s mantra during the negotiation of international trade deals and the existing NAFTA trade accord would be renegotiated.

Trump also called for defending the nation’s borders against illegal immigrants and giving parents more choice in choosing schools for their children. And to the forgotten men and woman across the country who were laid-off because of President Obama’s mishandling of the economy Trump promised to be their voice. Syrian refugees would be vetted and only those individuals who “will support our values and love our people” will be admitted, he said.

Trump Ignores Social Security in Speech

Aging advocates say that Trump’s acceptance speech was short on details when it can to domestic policy, specifically Social Security and Medicare. But, you won’t need tea leaves to read how a future Trump Administration will change the way the nation supports its retirees. .

According to Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM), the choice of Governor Mike Pence as Trump’s running mate should send “a very clear message to America’s seniors that their priorities will hold little weight in a Trump administration.” While Trump has promised on the campaign trail that he won’t cut Social Security and Medicare.

During his 12 years serving as a U.S. Congressman, Pence consistently voted in favor of GOP legislative efforts to cut benefits in Social Security, Medicare and Medicaid, says Richtman, charging that Trump’s vice presidential running mate is one of a few Congressional lawmakers that has a strong “anti-seniors voting record.”

Richtman says that “Mike Pence was one of Congress’ biggest proponents of privatization. He supports cutting Social Security benefits by raising the retirement age, reducing the COLA, means-testing and turning Medicare into “CouponCare.” As he told CNN, ‘I’m an all of the above guy. I think we need to look at everything that’s on the menu,’ and the record shows he has done just that by supporting every form of Social Security, Medicare and Medicaid benefit cut proposed in the past decade.”

While Trump has promised not to cut Social Security benefits on his year-long campaign trail, he continues to surround himself with advisors who are “polar opposite” of his positions says Richtman. “They say actions speak louder than words — Donald Trump’s choice of Mike Pence as his Vice-Presidential running mate will speak volumes to American seniors,” he adds.

Political Experts Weigh in

Darrell M. West, Ph.D., Vice President and Director of Governance Studies at the Brookings Institution, says that “Trump is on record as saying he does not want to cut Social Security so that is considerably different from most Republican leaders, who support benefit reductions as a way to balance its books. This probably is the reason the [GOP] platform is vague on Social Security. The party could not reconcile Trump’s view on not cutting benefits with the party’s general view that cuts are needed. That left them with a reference to market solutions without explaining what that meant.”

“Party leaders have said they want to raise the retirement age for people under age 50. That issue certainly would be on the issue in a Trump presidency although it is not clear how he views that issue. But there would be significant support in a GOP-run Congress for doing that and cutting the benefits of future retirees,” adds West.

West believes that “Democrats have a very good chance of recapturing control of the Senate. If that happens, that will allow them to block benefit reductions or raising the retirement age, he says.

Wendy Schiller, professor and chair, Department of Political Science at Brown University, warns that talking about changing Social Security can be risky and this “involves a depth of knowledge about entitlement financing that eludes most political candidates especially those without any political experience.”

The Brown professor of politics does not see Trump tackling this issue in any meaningful way in the campaign and she does not believe it will be a priority for him or the GOP if he wins. “Recall George W. Bush tried to reform Social Security immediately after he won reelection in 2004 – by late January 2005 it was dead on arrival in Congress,” she says.

“Overall I am not sure the GOP leadership in the Congress has fully processed what a Trump presidency would look like in terms of policy or what his priorities might be. It is unclear to me that they will align closely and getting anything through Congress these days is nearly impossible, no matter who sits in the Oval Office,” she adds.

Stark Differences in Platforms to Fix Social Security

On Friday, the released Democratic Platform released reveal a stark difference as how to the Democratic and Republican parties will fix the ailing Social Security program. The GOP platform. Although current retirees and those close to retirement will receive their benefits, changes are looming with a Trump administration and a Republican-controlled Congress. For younger generations all benefit cut options to be put on the table, opposing the lifting of the payroll tax cap and sees privatization of Social Security as a way for older American’s to create wealth for use in retirement. On the other hand, the Democratic Party platform calls for a strengthening and expansion of the existing Social Security program. The Democrats oppose any attempts to “cut, privatize or weaken” Social Security, and calls for lifting the payroll tax and exploring a new COLA formula.

NCPSSM’s Richtman notes “ It’s also very telling that while the GOP buried their cuts and privatization plans for Social Security under the Platform’s Government Reform heading, the Democrats addressed Social Security, as they should, as part of their plan to restore economic security for average Americans. That’s been Social Security’s fundamental role for more than 80 years — providing an economic lifeline impacting the lives of virtually every American family.”

As AARP’s John Hishta noted in his July 22 blog, even though the “political spotlight was not on Social Security” at the RNC in Cleveland, delegates, rank-and-file politicians and even political operatives that he talked with clearly understand the programs importance to retirees and younger generations.

“If political leaders fail to act, future retirees could lose up to $10,000 a year. All beneficiaries could face a nearly 25 percent cut in their benefit,” warns Hishta. .

Hishta tells his blog readers that “AARP’s Take a Stand campaign left the RNC with renewed determination to make updating Social Security a bigger part of the presidential debate.” He pledges to continue pushing for strengthening and expanding the nation’s Social Security program at next week’s Democratic National Convention in Philadelphia and until the November presidential elections.

To keep informed about Social Security discussion during this presidential campaign go to http://takeastand.aarp.org/,

We Need Congress to Step Up and Fix Social Security, Medicare

Published in Woonsocket Call on July 3, 2016

Expect the nation’s Social Security program to be fully funded for nearly two decades, and Medicare’s solvency to continue courtesy of health care reforms. Social Security beneficiaries may even get a very small .2 percent cost of living (COLA) adjustment next year but will get wacked with a Medicare premium increase. These facts are reported in the recently leased 262 page report issued by the Trustees of the Social Security and Medicare funds, transmitted to Congress and President Obama. This is the 76th report issued by the Trustees that financially reviews these two of the nation’s largest entitlement programs.

This 2016 Trustee Report, released on Jun 22, should be of interest to Rhode Island’s retirees who receive checks from Social Security, According to AARP, 153,349 Rhode Islanders received Social Security checks as of the end of 2014. Also, 22 percent of Rhode Island retirees depend on their Social Security check for 90 percent or more of their income. Their average benefit is $1,341 per month.
The Devils in the Details

The recently released 2016 Trustees Report notes there is now $2.81 trillion in the Social Security Trust Fund, which is $23 billion more than last year and that it will continue to grow by payroll contributions and interest on the Trust Fund’s assets.

Meanwhile, Social Security remains well-funded. In 2016, as the economy continues to improve, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020.

The Trustees say that Social Security will be able to pay full benefits until the year 2034, the same as projected in last year’s Report. After that, Social Security will still have sufficient revenue to pay about 79% of benefits if no changes are made to the program.

Although the Trustees project a .2% Cost of Living Adjustment increase, retirees will be hit with a premium increase next year. Medicare Part B premiums are projected to increase by only a very small amount for about 70 percent of beneficiaries in 2017 from $104.90 to $107.60. The standard monthly premium is projected to increase from $121.80 to $149.00 while the annual deductible is projected to increase from $166 to $204 for all beneficiaries.

The Trustees peg Medicare solvency to the passage of healthcare reform, with the program paying full benefits until 2028, 11 years later than was projected prior to passage of the Affordable Care Act. However, this is two years earlier than projected in 2015.

Congress Must Step to the Plate

Responding to the Social Security Trustees report, recently released report, AARP CEO Jo Ann Jenkins, said, “While the Trustees once again report that the combined Old Age, Survivor and Disability Insurance Trust can pay full retirement, survivor and disability benefits for some time, we know that if no action is taken, benefits could be cut by nearly 25 percent in 2034, and families could lose up to $10,000 per year in benefits.”

“Social Security remains a critical part of the fabric of our lives to protect us from both expected and unexpected challenge,” says Jenkins.

Jenkins calls on Presidential candidates and those running for Congress and the Senate to make a commitment to strengthening Social Security and outline their plans for the fix. “Throughout the 2016 election, we’ll continue to push candidates to take action if elected,” she says.

As to Medicare, Jenkins adds, “This year’s Medicare Trustees report reinforces the recent progress that has been made through greater Medicare savings and lower costs per enrollee. The report also highlights the financial challenges that continue to face the Medicare program, which is projected to provide critical health coverage to 64 million Americans by 2020.”

“A typical senior today has an annual income of just under $25,000 and pays roughly one out of every six dollars of this in out-of-pocket health care costs. The more than 55 million older Americans who today depend on Medicare for guaranteed, affordable health coverage simply cannot afford more than they already pay,” says Jenkins.

The Solution Could Be Simple

Jenkins urges Congress to make simple solutions to bring stability to the nation’s Medicare program. She suggests Congress find ways to reduce high prescription drug costs, improve the nation’s health care outcomes, eliminate unnecessary diagnostic testing, curb excess paperwork, and identify waste and fraud in the program.

Adds, Max Richtman, President/CEO of the National Committee to Preserve Social Security and Medicare, “What’s likely to be missing in headlines about today’s Social Security Trustees Report is that the program remains well-funded with total income, again, projected to exceed expenses. However, in order to head off a benefit cut in 2034 Washington should embrace the growing movement to lift the payroll tax cap and expand benefits for the millions of seniors struggling to get by on an average $1,300 retirement benefit.

The Trustees also project a tiny .2% cost of living adjustment next year yet Medicare premiums will increase in 2017, says Richtman. “Seniors continue to see their modest Social Security benefits eaten away by growing healthcare costs which illustrates, once again, that the current Social Security COLA formula isn’t accurately measuring seniors’ expenses. Congress needs to adopt a fully developed CPI for the elderly (CPI-E) and begin work on the many Social Security expansion bills now languishing in the House and Senate,” he adds.

This [Trustee’s] report reinforces the importance of ensuring that Social Security and Medicare are preserved and guaranteed, especially for working and middle class Rhode Islanders,” said Rep. David Cicilline (D-Rhode Island) who is a co-sponsor of the Protecting and Preserving Social Security Act. “Reasonable measures, such as raising the cap on high-income contributions, should be considered by Congress to extend the solvency of these programs. I will continue to advocate for commonsense legislation that strengthens benefits for working families and ensures the long-term stability of Social Security and Medicare,” he says.

RI. Reps Protect Social Security

Like Cicilline, Rep. Jim Langevin and Democratic Senators Jack Reed (D and Sheldon Whitehouse both view Social Security as an earned benefit and the primary source of income to millions of retirees that must be protected. The Rhode Island Congressional Delegation has fought off Republican efforts to privatize Social Security and have supported legislation to strengthen this program and Medicare.

It is very clear to aging advocates and to the Trustees of the Social Security and Medicare trust funds that the next President and Congress put political differences aside to make legislative fixes to strengthen and ensure the long-term stability of Social Security and Medicare.

The Trustees say this very clearly in their report, “Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare. Lawmakers should address these financial challenges as soon as possible. Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.”

Political compromise will be the way to hammer out Social Security and Medicare reforms. When the dust is settled after the upcoming November president elections hopefully this message was delivered at the ballet box.