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.

GAO Report Reveals Social Security Benefits Gap between Rich, Poor

Published in Woonsocket Call on May 1, 2016

We intuitively know that there is a growing income gap between America’s rich and poor. We heard it for months during the presidential democratic debates. But a newly released GAO report documents this charge, the disparities and their impact on Social Security Benefits.

Growing disparities in life expectancy between America’s rich and poor is eroding the progressive nature of Social Security. A new Government Accountability Office (GAO) report, “Shorter Life Expectancy Reduces Projected Lifetime Benefits for Lower Income,” requested by Senator Bernie Sanders, shows that low-income American men (making about $20,000 a year) will lose 11 percent to 14 percent of their lifetime Social Security benefits while high-income men (making $80,000 annually) will see a 16 percent to 18 percent benefit boost due to this growing gap.

Life Expectancy Impacts SSA Benefits

The GAO study, released on April 4, 2016, found that raising the Social Security retirement age would result in even fewer benefits for lower-income groups. Lower-income men are living between 4 and 13 fewer years than higher-income men, and lower-income women are living between 2 and 14 fewer years than higher-income women.

“Poverty should not be a death sentence,” said Sanders, who serves as ranking member on the Primary Health and Retirement Security Subcommittee. “When over half of older workers have no retirement savings, we need to expand, not cut, Social Security so that every American can retire with the benefits they’ve earned and the dignity they deserve,” he says.

According to 64 page GAO report, the wealthiest Americans are not only living longer and collecting more in Social Security benefits, they are also contributing less of their income toward Social Security. Almost all of the income gains over the past three decades have gone to those earning above the $118,500 earnings cap and have therefore been exempt from Social Security taxes, costing the Social Security Trust Fund over $1.1 trillion, says the report.

“Today, the wealthiest Americans contribute less to Social Security than at any other time in recent history. We must reject calls to raise the retirement age and instead strengthen Social Security by ensuring millionaires and billionaires pay their fair share,” Sanders said.

Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM), says that the GAO report is especially important when you consider the push in Congress to raise Social Security’s retirement age to reduce benefits. “Forcing average Americans to delay retirement until 70, as suggested by some in Washington, would mean even smaller benefits for lower-income groups,” he says.

Richtman notes that NCPSSM has long opposed increasing the Social Security retirement age, stating that it is “nothing but a cruel cut in benefits” The GAO report shows exactly how cruel it would be, he says.

Instead of cutting Social Security, Richtman calls on Congress to boost benefits so that retirement income program can continue to fulfill its promise providing an adequate base of income for America’s seniors.

Lawmakers Push to Protect Social Security

Sanders, a presidential Democratic candidate, has introduced legislation that would ensure that Social Security would be able to pay every benefit owed to every eligible American for the next 58 years. His plan would increase benefits by more than $1,300 a year for seniors with less than $16,000 in annual income. This includes boosting yearly cost-of-living adjustments by making the consumer price index better reflect seniors’ rising costs for health care and prescription medicine.

To shore up the retirement program’s trust fund, the Senator would lift the cap on taxable income so everyone who makes more than $250,000 a year would pay the same percentage of their income into Social Security as middle-class working families.

“This report reinforces the importance of strengthening Social Security and preserving the guarantee of Medicare, especially for working and middle class Rhode Islanders,” said Congressman Cicilline (D-RI), who is a co-sponsor of the Protecting and Preserving Social Security Act. “After a lifetime of hard work, Rhode Islanders should be able to retire with economic security and peace of mind, he says, pledging to continue his efforts to support “commonsense” legislation that strengthen Social Security benefits.

The GAO study is a warning that proposals to raise the retirement age “would fall hardest on those who can least afford it,” says Senator Sheldon Whitehouse (D-RI). As a founding member of the Defending Social Security Caucus, Whitehouse plans to explore ways to strengthen the Social Security, “the bedrock of American retirement security.”

GAO made no recommendations in this report. However, in comments the Social Security Administration (SSA) agreed with GAO’s finding that it is important to understand how the life expectancy in different income groups may affect retirement income. The federal agency sees financial literacy as a key factor in preparing for a “secured retirement.”

According to a SSA official, “Social Security offers one of the best tools for the public to plan for their retirement and educate themselves about their benefits – a my Social Security account which is a secure, personalized online account that can be created at http://www.socialsecurity.gov/myaccount. With a my Social Security account, people can check their Social Security Statement to learn about future Social Security benefits, verify annual earnings, and plan for their financial future. More than 23 million people have already created secure, convenient accounts,” he says.

In recent years Congress has looked for ways to keep the Social Security program afloat by adjusting Social Security tax contributions, increasing retirement age, and reducing benefit amounts. Now with the release of the new report findings, the message is clear. Congress must not tinker with Social Security until it understands the unanticipated impact on those receiving the benefit checks, especially on the lower-income retirees.

For more information, contact Charles Jeszeck at (202) 512-7215 or jeszeckc@gao.gov.

AOA Reauthorization Bill Goes to President Obama for Signing

Published in Woonsocket Call on April 10, 2016

The Older American’s Act (OAA) current authorization expired in fiscal year 2011 because lawmakers were unable to reach an agreement on its reauthorization. On a bipartisan basis, Congress has finally passed the long-stalled legislation reauthorizing the OAA when the Senate passed the House-amended bill on April 7. Three weeks earlier the House had passed an amended version of S. 192, the Older Americans Act Reauthorization Act of 2016, by a unanimous voice vote. This legislative proposal amended the bill passed by the Senate on July 16, 2015. Now the passed legislation goes to President Obama, once signed it becomes law.

The very bi-partisan Senate reauthorization bill was sponsored by Chairman Lamar Alexander (TN) and Ranking Member Patty Murray (D-WA), of the Senate Committee on Health, Education, Labor and Pensions, and had 27 co-sponsors from each party.

OAA Authorization Has Lots of Positives

OAA’s latest reauthorization offers new support for modernizing multipurpose senior center, highlights the importance of addressing senior’s economic needs, permanently requires health promotion and disease prevention initiatives to be evidence-based, and promotes chronic disease self-management and fall prevention.

The law also includes: stronger elder justice and legal services provisions; needed clarity for caregiver support and Aging and Disability Resource Centers; new opportunities for intergenerational shared sites, and promotes efficient and effective use of transportation services.

Legislative inertia and a general undercurrent of opposition to any government programs by some members of Congress slowed consideration of the bill , says Dan Adcock, Director of Government Relations and Policy for the National Committee to Preserve Social Security and Medicare (NCPSSM). “You need champions to break through the ‘legislative inertia’ and OAA just did not have enough,” he says.

Senators Lamar Alexander (R-TN), Patty Murray (D-WA) and Bernie Sanders (I-VT) along with Reps. John Kline (R-MN) and Bobby Scott (D-VA) worked hard to finally get the Senate and House to pass this year’s OAA reauthorization, Adcock noted, stressing that there was no opposition to the bill when it passed the House and Senate on voice votes

While the passed OAA reauthorization bill has many positives, its chief weakness is that it does not raise the funding authorization level enough, says Adcock. “Unfortunately, the Older Americans Act has suffered under flat funding and sequestration cuts for several years and will need significant increases in appropriations to meet the critical demands of a senior population that will nearly double by 2030, warns Adcock, noting that that an increase of 12 percent a years is needed for the next several years to raising funding to an acceptable level.

“AARP urges President Obama to quickly sign this bill,” said AARP CEO Jo Ann Jenkins. “We are appreciative of the bipartisan work to get this bill passed. Reauthorizing the OAA will help the millions of vulnerable older Americans who depend on the programs and services that the OAA helps to fund.

“Reauthorizing the OAA is as important as ever to modernizing and improving the aging services network in our country. It’s passage reflects the heroic efforts of many advocates working together to educate Congress about how programs funded by the OAA support older Americans,” observed Steven R. Counsell, MD, AGSF, American Geriatrics Society President.

Adds Senator Sheldon Whitehouse (D-RI), who serves on the Senate Select Committee on Aging, “I am glad we were able to reauthorize and improve the Older Americans Act. This legislation authorizes more funding for meals and social services seniors depend on. It includes new protections against elder abuse, which I’ve been fighting to pass. And it gives residents of long-term care facilities-who often can’t communicate their wishes-a stronger advocate to speak on their behalf.”

Ratchet Up AOA Funding

For more than 50 years the Administration on Aging with its National Aging Network (State Units on Aging and Area Agencies on Aging) has provided federal funding, based on the percentage of the locality’s population 60 and older, for nutrition and supportive home and community-based services, disease prevention/health promotion services, elder rights programs, the National Family Caregiver Support Program and Native American Program.

Aging advocates will tell you that Congressional funding has not kept with the rising inflation or the increased demands of an aging society. Deep Congressional budget cuts, push by the GOP, have significantly reduced OAA’s ability to provide services to those on increased waiting lists. Being “penny-wise and pound foolish” should not be the way Congress looks at future OAA reauthorizations. NCPSSM’s Adcock will tell you that programming geared to helping seniors to age in place at home in their communities can save billions by reducing costly nursing facility and hospital stays.

Hopefully, the President is expected to sign it in a week or two. Hopefully he signs this it quickly on Monday .