House Bill to Expand, Strengthen Social Security

Published in Woosocket Call on February 3, 2019

With the 116th Congress kicking off on January 3, 2019 and the Democrats seizing control of the House, it did not take long for a bill to emerge that would strengthen and expand the nation’s Social Security program. Seven years ago, when U.S. Congressman John Larson (D-CT) first introduced the Social Security 2100 Act during the 113th Congress, the GOP controlled Congress blocked a fair hearing and vote. Now, with a Democratic majority in the House Larson’s Social Security proposal will finally get a thorough review as Democrats take control of the House Ways and Means, Energy and Commerce, and Education and Labor. These committees have oversight of Social Security.

Larson chose to throw the bill into legislative hopper on the 137th anniversary of President Franklin D. Roosevelt’s birth, who signed Social Security into law in 1935.

On January 30, 2019, Larson, recently appointed to chair of the House Ways and Means subcommittee on Social Security, introduced H.R.860, the Social Security Act 2100 Act, with over 202 House Democrats cosponsors (including Rhode Island Representatives David N. Cicilline and James R. Langevin), to ensure the retirement security of working Americans for another century.

Passage of the Social Security 2100 Act only requires a simple majority vote of 218 lawmakers. With 235 Democratic lawmakers sitting in this chamber, it is expected to pass. But, with the Senate-controlled by Republican Majority Leader Mitch McConnell of Kentucky and his GOP caucus, it will be difficult for Senators Chris Van Hollen (D-MD) and Richard Blumenthal (D-CT) to see their companion measure make it to the Senate floor for a vote.

H.R. 860’s eight provisions expand benefits for 62 million Social Security beneficiaries. It would provide an across-the-board benefit increase for current and new beneficiaries that is the equivalent of 2 percent of the average benefit. It also calls for an improved cost-of-living adjustment (COLA), through adopting a CPI-E formula, that takes into account the true costs (include health care expenses) incurred by seniors and a stronger minimum benefit set at 25 percent above the poverty line, tied to their wage levels to ensure that the minimum benefit does not fall behind. Finally, the bill would ensure that any increase in benefits from the bill do not result in a reduction in SSI benefits or loss of eligibility for Medicaid or Children’s Health Insurance Program. Finally, 12 million Social Security recipients will receive a tax cut through the eliminating the tax on their benefits.

Increasing the Financial Solvency of Social Security

According to an independent analysis of the Social Security’s Office of the Chief Actuary, H.R. 860 proposal would also strengthen and protect the Trust Funds by 75 years.

H.R. 860 would have wealthy individuals pay the same rate as everyone else. Presently, payroll taxes are not collected on wages over $132,900.
Larson’s legislation would apply the payroll tax to wages of $400,000, affecting the top 0.4% of wage earners. The bill gradually phases in an increase in the pay roll contribution rate beginning in 2020, of 50 cents per week, so that by 2043 workers and employers would pay 7.4 percent instead of 6.2 percent. Finally, the bill’s provisions would combine the Old-Age and Survivors, called Social Security, and the Disability Insurance trust funds into one Social Security Trust Fund, to ensure that all benefits will be paid.

“Social Security is a promise that after a lifetime of hard work, you should be able to retire with dignity and economic security. It’s critical that Congress preserve and strengthen this promise for years to come,” said Cicilline, who serves as Chair of the Democratic Policy and Communications Committee, representing Rhode Island’s 1st congressional district.

Larson, recently appointed chair of the House Ways and Means Subcommittee on Social Security, noted, “With 10,000 baby boomers becoming eligible for Social Security every day, the time to act is now. The Social Security 2100 Act will provide economic security not just for today’s seniors but for future generations too,” said Larson, as the bill was thrown into the legislative hopper.”

There have not been any significant adjustments to Social Security since 1983, when Tip O’Neill was Speaker and Ronald Reagan was President, said Larson. “It’s time for Congress and the President to come together again, just like Speaker O’Neill and President Reagan did to make this a reality, he said.

“For years, fiscal hawks have told us that the only way to ‘save’ Social Security is to cut benefits for future retirees. Congressman Larson’s bill is a resounding rebuke to those claims. The Social Security Act 2100 keeps the program financially sound for most of this century while boosting benefits for millions of beneficiaries,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.

Richtman says, “Congressman Larson has promised that, for the first time, this legislation will receive thorough consideration in the U.S. House, including hearings with testimony from experts and the public. We applaud him for his vision, persistence, and advocacy on behalf of America’s current and future retirees in moving this bill forward.”

Today, more than 222,000 Rhode Islanders receive Social Security benefits today. It is the most important retirement income for 4 out of 5 seniors and provides financial protections to disabled workers and families who have lost a breadwinner.

For decades, GOP lawmakers pushed its Social Security reforms by privatization, raising the retirement eligibility age and imposing stingier COLA formulas. But, national poll after poll, across party lines and age groups, revealed the public’s strong support for the nation’s retirement program.

Washington Insiders expect Larson’s Social Security bill to pass the House. While GOP Senate leadership keeps the companion measure at arms-length, the upcoming 2020 elections may well grease the legislative wheels for passage. Over 20 Republican Senate, whose seats are at serious risk, may well vote for passage with Democratic Senators.
Stay tuned…

Bush will fight to Privatize Social Security

Published in Senior Digest on January 2005

The Bush administration and aging groups are about to battle over the privatization of Social Security.

More than four years ago, the 16-member Presidential Commission divided evenly between Republicans and Democrats, voted unanimously to send its 165-page final report to the Bush White House. The charge of the commission was to develop a road map to reform the nation’s Social Security program.

With the commission kicking off the Social Security reform debate by releasing this report in December 2001, the federal panel called for three approaches to change the 70-year-old federal program. All the recommendations involved personal accounts, with a premise that workers’ investments would yield higher retirement benefits.

With President Bush keeping control of the White House and the GOP retaining control of Congress, Social Security is again under attack and the debate is expected to heat up.

According to recent Business Week On-Line article by Richard S. Dunham, Bush will begin to sell the partial privatization of Social Security by launching a “marketing blitz.”

“Advisors say the president, who sees private accounts as essential to his ownership society agenda, is determined to make retirement reform his top domestic priority for 2005,” Dunham wrote.

According to Dunham, Bush’s “three-phase sales plan” started with his Dec. 12 radio address Bush followed by calling for privatization of Social Security at his economic summit on Dec. 16.

Phase Two, a $ 40 million broadcast advertising campaign underwritten by nation’s corporations will tout the economic benefits of allowing workers to put a portion of their payroll taxes into investment accounts and the negative impact of inaction. Dunham wrote Phase Three would give the public the specifics.

A Wall Street Journal/NBC News poll found that Bush had his work cut out for him to sell the public. Results showed people are skeptical about any changes to Social Security, and that the public believes it is a bad idea to let workers risk their Social Security taxes in the stock market.

Critics are quick to pounce on Bush for his calls for radical changes to Social Security. They charge that the securities industry which heavily supported Republican candidates in the last election, would benefit financially under the president’s plan.

“Wall Street and big business are seated at the conference table-where are the voices of seniors?” asked Barbara Kennelly, president and chief executive officer of the National Committee to Preserve Social Security and Medicare.

“This seems like a repeal of the president’s Social Security Commission, where privatization wasn’t debated. It was a foregone conclusion – and that is a sure path to bad public policy,” she said in a prepared statement released after the White Houe Economic Conference.

Furthermore, Kennelly said that “a carefully orchestrated conference can’t hide the fact that privatizing Social Security may result in cuts in benefits and will dismantle Social Security, while dramatically increasing our nation’s debt.”

Just blocks away at the National Press Club, a diverse coalition of groups held a press conference on the day of Bush’s economic summit. The assembled groups, including the AFL-CIO, NAACP, National Organization for Women (NOW), disability groups, and the Alliance for Retired Americans, announced their strong opposition to Bush plan.

Those groups are part of the Campaign for America’s Future, which intends to mobilize opposition in every congressional district throughout the nation to Save Social Security benefits that would be slashed by the president’s plan.

At the news conference, George J. Kourpias, president of the 3 million plus member Alliance for Retired Americans,” told the crowd that the Social Security system is not broke or in the dire trouble Bush would have American’s believe.

“Let me remind those naysayers who conspired not to save Social Security but to bury it, that Social Security hasn’t missed a paycheck in almost 70 years, Kourpias said.

“With some changes designed to strengthen and secure the program, Social Security is well positioned to keep delivering monthly checks to millions of Americans for decades to come.”

Adds, NOW President Kim Gandy, “Social Security is not in trouble. George Bush is in trouble. More than half of elderly women would live in poverty without the benefits of this guaranteed insurance program. This destructive proposal is effectively economic violence against women- he’s risking our livelihoods to satisfy Wall Street donors and corporate cronies.

AARP President Marie Smith is also weighing in on the privatization issue by placing an open letter to 33 million plus members, on the nonprofit group’s Web site

Smith counters Bush’s statements that Social Security is in danger of going broke. Changes do not have to be drastic, she says. “Creating private accounts would only weaken Social Security and put benefits at risk for future generations.”

Smith estates that a new Social Security system would cost the nation as much as $2 trillion or more in benefit cuts new taxes or more debt.

In Rhode Island, a quick poll of the state’s Democratic U.S. senators and congressmen indicate that they oppose Bush’s retirement policy gamble. (Republican U.S. Senator Lincoln Chafee’s position could not be obtained). While each oppose the concept of privatization, the lawmakers are waiting to see the specific legislative proposals that will be introduced.

But even with Bush pushing for a major Social Security overhaul, only a bipartisan coalition of congressional lawmakers can either strengthen the existing Social Security program or scrap it through privatization.

It is crucial for seniors to send a message to Bush and the Republican congressional leadership that it’s time to go back to the drawing board to examine other approaches to strengthen America’s most popular domestic program.

Presidential Commission Kicks off Social Security Reform Debate

Published in Pawtucket Times on December 17, 2001

Amid the nation mobilizing for a global fight against terrorism, a sliding economy with a rising unemployment rate, the President’s Commission to Strengthen Social Security last week released its bipartisan plan to fix the ailing Social Security program.

With elections looming next year, Congress will be forced to turn it attention to politically sticky domestic issue, how to modernize and restore the fiscal soundness of the Social Security program.

Finishing up its seven months of work, the 16-member Presidential Commission, divided evenly among Democrats and Republican, voted unanimously to sent its 165-page final report in draft form to the Bush White House. Two days after the panel released its report, House Republicans threw two bills into the legislative hopper, mirroring several of the recommended approaches. The Social Security debate has begun.

While the Commission estimates that it will cost at least $2 trillion to revamp Social Security, it does not identify where the funds will come from.

Specifically, three approaches were suggested by the federal panel as a way of bringing reforms to the Social Security program. All involved the creation of voluntary personal accounts with a premise that workers investing in these accounts would ultimately receive higher retirement benefits by their investing in the social market. Meanwhile, two plans seek provide better retirement benefits by their investing in the stock market. Meanwhile, two plans seek to provide better benefits to low-income workers. All plans would seek to restore the fiscal stability of Social Security.

Senior advocacy groups are now weighting in on this highly visible and controversial policy issue that will likely become a key election issue next year. “None of the three draft plans put forward by the Commission today achieves the goal set out by the President, closing the gap in the program’s solvency over the next 75 years. None of the plans explain how it will achieve solvency. These plans do not change the fact that private accounts expose future beneficiaries to unnecessary risk and widely varying outcomes in retirement security,” charges Max Richtman, executive director of the National Committee to Preserve Social Security and Medicare.

Furthermore, with the push to privatization through individual accounts, the Commission does not address the issue of the impact to the existing Social Security program if moderate and higher-wage earners pull their money out of the system, states Richtman, stressing that the Commission does not see to have considered the potential impact of such an adverse selection on the stability of the program.

“With privatization, the devel is always in the details, and the Commission has failed to provide adequate details,” Richtman adds. ”They have not provided the nuts and boots of how the plans would work and how they would affect real people.”

According to AARP CEO William Novelli, a number of questions remain unanswered by the Commission report, specifically, “the long-term financing of benefit guarantees, particularly if current budget projects and market rates of return prove to be overly optimistic.”

When the Social Security debate begins, Novelli calls for other reform proposals to be considered, such a diversifying the Social Security Trust Funds’ investments by including federally-backed debt instruments, along with raising the wage base for payroll taxes and adding newly hired state and municipal employees to the program.

U.S. Rep. T. Matsu (D-CA), Ranking Member of the Social Security Subcommittee of the House Ways and Means Committee agrees with the concerns of senior advocates. Restoring solvency of the Social Security program by workers investing part of their payroll tax in the stock market is a flawed approach and not the best strategy to restore the fiscal integrity of the Social Security program, he says.

Privatization of Social Security would either require benefit cuts or a large infusion of federal dollars, warns U.S. Rep. Patrick Kennedy (D-RI), who serves on the House Appropriations Committee and sits as a member of the House Aging Caucus.

The Rhode Island Democrat who gives the Commission report a thumbs-down, states, “There is no question that we need to encourage American’s to save more for retirement, but while we do this, we should not throw the ‘baby out with the bath water’ by raising the retirement age, diverting the Social Security Trust Fund into privatization schemes or cutting benefits to seniors.” The four-term Congressman, whose legislative district has a large elderly constituency plans to make Social Security reform a key for his campaign in the upcoming elections next year.

Jeff Neal, a spokesperson for U.S. Sen. Lincoln Chafee (R-RI), tells All About Seniors that the senator does not necessary support or oppose some amount of privatization. “No amazingly specific proposal has come forward, been debated or has been thoroughly analyzed yet, Neal says. “Until that happens, it is impossible to determine if it is a good idea or not.”

Neal adds that Sen. Chafee believes that all the Democratic concerns need to be debated and resolved before Congress goes forward with any plan. “Democratic talking points look at the Commission work as a very simplistic level. Social Security is possible, besides the Medicare program, the most complex federal program, and a great deal of debate and input from both sides will be needed to tackle the solvency issue,” he says.

“Rhode Islanders need to step up and take credit for being leaders in the best social reform, notably Medicare,” urges AARP Executive Director Kathleen S. Connell. The late Democratic Congressman John Fogery and Aime J. Forand were the moving forces to create the is key federal program to protect the health and well-being of America’s seniors. “It is up to the current Rhode Island delegation to pick up the torch and lead the efforts to enact meaningful legislation to preserve and protect the Social Security program.”