Trustee Reports predict improved outlook for Social Security and Medicare

Published in RINewsToday on June 6, 2022

On June 2, 2022, following a meeting of the Social Security and Medicare Boards of Trustees, the Social Security Administration (SSA) – joined by the Departments of Health and Human Services and Labor, the Centers for Medicare & Medicaid Services, and the U.S. Department of Treasury — released a 275-page annual report giving us a snapshot of the financial health of the Social Security Trust Funds.

The Trustee reports findings

According to this year’s Trustee Reports, “Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. Costs of both programs will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population. Medicare costs will continue to grow faster than GDP through the late 2070s due to projected increases in the volume and intensity of services provided.”

The Social Security Trustees report that the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds, paying benefits to 65 million retirees, disabled people as well as survivors of deceased workers, are projected to become depleted in 2035, one year later than projected last year, with 80 percent of benefits payable at that time. The DI Trust Fund asset reserves are not projected to become depleted during the 75-year projection period.

“It is important to strengthen Social Security for future generations. The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way to phase in necessary changes gradually,” says Kilolo Kijakazi, Acting Commissioner of Social Security in a statement announcing the released report. “Social Security will continue to be a vital part of the lives of 66 million beneficiaries and 182 million workers and their families during 2022,” she adds.

The Medicare Board of Trustees note in its 263 page report that the projected depletion date for Medicare’s trust fund for inpatient hospital care (Part A), covering around 64 million retirees and disabled persons, moved from last year’s forecast of 2026 to 2028. At this time Medicare will only be able to pay 90% of the scheduled benefits when the fund is depleted.

“We are committed to running a sustainable Medicare program that provides high quality, person-centered care to older Americans and people with disabilities,” said CMS Administrator Chiquita Brooks-LaSure. In a statement “Medicare trust fund solvency is an incredibly important, longstanding issue and we are committed to working with Congress to continue building a vibrant, equitable, and sustainable Medicare program,” she says.

Thoughts from senior advocacy groups

In a statement, AARP CEO Jo Ann Jenkins said that this year’s Social Security and Medicare Trustee report sends this clear message to Congress: “The Social Security and Medicare Trustees’ reports should send this “clear message” to Congress: “Despite the short-term improvement, you must act to protect the benefits people have earned and paid into both now and for the long-term. The stakes are too high for the millions of Americans who rely on Medicare and Social Security for their health and financial well-being.”

“These reports also underscore the urgent need for Congress to pass legislation allowing Medicare to negotiate for lower prescription drug prices, which would result in billions of dollars of savings for seniors, the Medicare program, and taxpayers,” says Jenkins.

Jenkins also calls on Congress to increase funding to fix serious long-time Social Security customer service problems, which currently impede or keep seniors and people with disabilities from getting their benefits in a timely manner.

Following the release of the Trustees Report, Executive Director Alex Lawson, of the Washington, DC-based Social Security Works, (SSW) a social welfare organization that lobbies for Social Security Reforms, also issued a statement: “Today’s report shows that our Social Security system remains strong. Protecting and expanding benefits is a question of values, not affordability. That this year’s projections are even stronger than last year’s proves once again that Social Security is built to withstand times of crisis, including pandemics.”

We don’t have a Social Security crisis, but we do have a retirement income crisis. With prices rising, seniors and people with disabilities are struggling to afford food and medicine. The solution is to expand Social Security,” says Lawson.

According to SSW, the 2020 Social Security Trustee’s Report reported that Social Security has an accumulated surplus of about $2.85 trillion. It projects that, even if Congress took no action whatsoever, Social Security not only can pay all benefits and associated administrative costs until 2035, it is 90 percent funded for the next quarter century, 84 percent for the next half century, and 81 percent for the next three quarters of a century.

“At the end of the century, in 2095, Social Security is projected to cost just 5.86 percent of the gross domestic product (“GDP”), less than most other wealthy countries spend on their counterpart programs,” says SSW.

Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM), throws in his two cents about this year’s Trustee Report. “The takeaway from the latest Social Security Trustees report is this: Congress must strengthen the program’s finances without delay. The Trustees project that the combined Social Security retirement and disability trust fund will become depleted by 2035, one year later than projected in their previous report. At that point, every Social Security beneficiary will suffer a 20% cut to their benefits.”

“Seniors struggling to meet rising living expenses need Social Security to be boosted and strengthened. The pandemic, runaway inflation and devastating stock market losses serve to remind us how vital a robust Social Security program is to workers, retirees, the disabled and their families. The clock is running down. The time for fair, just, and equitable action that safeguards Social Security’s financial stability is now,” adds Richtman.

While acknowledging that the trust fund insolvency date may fluctuate from year to year, the urgent need to boost the program’s financing and benefits remains consistent, says Richtman.

NCPSSM’s Richtman says, over the years, the GOP has opposed the expansion and strengthening of Social Security and has called for raising the retirement age, privatization, and more recently, ‘sunsetting’ Social Security and Medicare every five years. He calls for passage of Rep. John Larson’s Social Security 2100: A Sacred Trust legislation that would extend trust fund solvency by requiring high wage earners to contribute their fair share through an adjustment in the payroll wage cap.

A Washington Insider says that House Speaker’s Nancy Pelosi (D-CA) policy staff are concerned about the cost of Larson’s Social Security fix legislation and are seeking a CBO cost estimate. At press time this measure has more than 200 Democratic cosponsors in the House. The Congressional Asian Pacific American Caucus (CAPAC), Congressional Black Caucus (CBC), the Congressional Hispanic Caucus (CHC), the Task Force on Aging and Families, and the Congressional Progressive Caucus have all called on Pelosi to bring the bill to the House floor for a vote.

“Thanks to the American Rescue Plan, our economic recovery has strengthened both the Social Security and Medicare Hospital Insurance Trust Funds and improved financial projections for these vital programs. But to ensure that every American worker, senior, child, and person with disabilities receives the necessary and earned benefits provided by both Social Security and Medicare, we need to act. That’s why I am an original cosponsor of legislation like Social Security 2100: A Sacred Trust, to not only enhance benefits for seniors and some of our most vulnerable neighbors, but to also guarantee access to these programs for generations to come,” said Congressman David Cicilline, (D-RI).

Congress can step in to financially strengthen the Social Security and Medicare programs. A message from the Social Security and Medicare Boards of Trustees suggest Congress pass legislation to reduce or eliminate the long-term financing shortfalls in both the Social Security and Medicare. “Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare,” say the Trustees.

Congress should look for “medium-term solvency” fixes to ensure that Social Security program can pay full benefits for several decades rather than for the full 75-year projection period, suggests Paul N. Van De Water, Senior Fellow at the Washington, DC-based Center for Budget and Policy Priorities, a nonprofit nonpartisan research organization and policy institute that conducts research on government policies and programs. “But shoring up the program’s financing for a substantial period of time is important for assuring both current and future beneficiaries that Social Security will be there for them in the years to come,” he says.

At a crossroad

NCPSSM’s Richtman believes Social Security’s future is now at a crossroads. “We can either cut benefits or expand benefits and pay for it by requiring the wealthiest to pay their fair share,” he says, calling on Congress to hold an up or down votes on Larson’s Social Security legislation.

Polling shows that voters support fixing Social Security and Medicare. Seniors may well go to the polls, sending a message with their vote that strengthening and expanding Social Security is important to them.

For a copy of the 2022 Social Security Trustee Report, go to https://www.ssa.gov/OACT/TR/2022/tr2022.pdf. For a copy of the 2022 Medicare Trustee Report, go to https://www.cms.gov/files/document/2022-medicare-trustees-report.pdf

National Aging Coalition pushes to bring back House Aging Committee in DC

Published in RINewsToday on March 28, 2022

In 1992, aging advocacy groups fought unsuccessfully to keep the House Select Committee on Aging (HSCoA) from being eliminated. The House had pulled the plug on funding for the HSCoA as a cost-cutting measure and to stream-line the legislative process at the end of the 102^nd Congress without much notice in the Democratic rules package adopted in Jan.1993 during the beginning of the 103^rd Congress.

As the dust settled after the dissolving of the HSCoA, Congressman Michael Bilirakis (R-FL), a former committee member, stated in an article, “Congress Eliminates Committee on Aging,” published March 31, 1993, in the Tampa Bay Times,” I honestly don’t’ think other committees would cover all aging issues.” AARP agreed with Bilirankis’s assessment. “Seniors need a specific forum,” said Tom Otwell, spokesperson for AARP. “The population is getting older, and issues are certainly not going away,” he said.

During its 18 years of existence, its Congressional oversight on a myriad of aging issues included Social Security, Medicare, nursing homes, aging bias and elderly housing. This oversight influenced the introduction and passage of major legislation enhancing the quality of life of America’s seniors.

Thirty years later, the Washington, DC-based Leadership Council on Aging Organizations (LCAO), representing 69 national aging advocacy groups, recognized the opportunity to bring back the HSCoA by endorsing H. Res. 583, a resolution introduced in the 117^th Congress by Congressman David Cicilline (D-RI) to reestablish the HSCoA when introduced Aug. 10, 2021. The Rhode Island Congressman has also introduced this resolution during the last three congresses.

H. Res. 583 would reestablish the HSCoA without having legislative jurisdiction, this being no different when the initial permanent committee previously existed. The 214-word resolution would authorize a continuing comprehensive study and review of aging issues, such as income maintenance, poverty, housing, health (including medical research), welfare, employment, education, recreation and long-term care. These efforts assisted the House’s 12 Standing Committees in the creation and advocacy for legislation they drafted. At press time, the resolution has been referred to the House Rules Committee for consideration.

According to the Congressional Research Service, it’s quite simple to create an ad hoc (temporary) select committee in the House chamber. All it takes is a simple resolution that contains language establishing the committee – giving a purpose, defining membership, and detailing other issues that need to be addressed. Salaries and expenses of standing committees, special and select, are authorized through the Legislative Branch Appropriations bill.

Calling for co-sponsor support

While supporting Cicilline’s proposal, LCAO went one step further by calling on House lawmakers three weeks ago, in correspondence, to become co-sponsors. LCAO asked its members to co-sponsor the bill in order to drive the House Democratic Caucus to approve it and bring it to the House floor for a vote. As a House committee, it only needs the House’s approval, where there is now a majority of Democrats.

The time is ripe for the HSCoA to be reestablished, say LCAO. “Every day, 12,000 Americans turn 60. By 2030, nearly 75 million people in the U.S. – or 20% of the country – will be age 65 and older. As America grows older, the need for support and services provided under programs like Social Security, SSI, Medicare, Medicaid, and the Older Americans Act also increases,” noted in correspondence signed by 30 Coalition members.

LCAO stressed that the HSCoA worked effectively in partnership with the House’s 12 Standing Committees with jurisdiction over aging programs and services. “The House Aging Committee, which flourished in the 1970s under chairperson Claude Pepper, partnered and magnified the work of the standing committees in a team effort and a bipartisan manner, holding many joint hearings with them and helping to pass the end of mandatory retirement 359-2 in the House and 89-10 in the Senate, as well as protecting Social Security, exposing nursing home abuses and setting transparency standards, expanding home health care benefits as a way older persons could often delay or avoid the need for being forced into nursing homes and so much more. Ways and Means, Education and Labor, Energy and Commerce and Space, Science and Technology were just some of the Committees who benefited from the partnership and appreciated the House Aging Committee’s help in reaching senior citizens,” stated LCAO.

As seniors now settle into living in a post-pandemic world, passage of H. Res. 583 becomes even more important. “Historically, the HSCoA served as a unique venue that allowed the open, bipartisan debate from various ideological and philosophical perspectives to promote the consensus that, in turn, permeated pandemic, and the coronavirus continues to take its toll, exacerbating the problem of social isolation and family separation across generations. Addressing the needs of older Americans in a post-pandemic world will require vigilant oversight and action,” noted LCAO.

Op Ep tells the story and the need for passage of Cicilline’s resolution

Robert Weiner, former Clinton White House spokesman and Chief of Staff of the HSCoA under Congressman Claude Pepper,(D-FL) and Ben Lasky, senior policy analyst at Robert Weiner Associates News and Public Affairs, recently penned an op-ed for the Miami Herald which calls for the passage of Rhode Island Congressman David Cicilline’s H. Res. 583, to reestablish the HSCOA. With threats of Social Security “reforms” (cuts) and the mishandling of Covid in nursing homes which led to hundreds of thousands of deaths, the Committee is needed once again.

Weiner and Lasky say the largest part of Pepper’s congressional legacy, especially as he grew older, was chairing the HSCoA, which featured banning mandatory retirement (with Colonel Sanders as a witness), protecting nursing homes, expanding home health care, and protecting Social Security with solvency through 2034.

“Pepper’s bill that banned mandatory retirement passed 359-2 in the House and 89-10 in the Senate,” they said.

They argue, “The elderly are now threatened with Social Security reforms,” (meaning cuts). Senior citizens also disproportionately died from Covid in nursing homes in Florida, New York and around the country. More than 200,000 have died in nursing homes. Forbes called ‘The Most Important Statistic’ the fact that 42% of US Covid deaths in the first five months of the pandemic happened in nursing homes and assisted living facilities. That number later went down to around 33%. When standards, distance standards, vaccines, and transparency started to kick in (under pressure in many facilities), it got a little better but for many it was too little too late. Tens of thousands died because health care workers failed to follow the transparency, staffing, and safety standards that Pepper had passed into law in nursing homes.”

They continue, “Once vaccines became widely available in 2021, a majority of nursing home workers remained unvaccinated for six more months. Nursing homes and assisted living facilities were let off the hook by governors from Ron DeSantis (R-FL) to Andrew Cuomo (D-NY) for hiding their number of Covid deaths.”

Weiner and Lasky assert, “Older voters vote Democratic and Republican. It’s close. In 2020, while Joe Biden won the popular vote by 7 million, Donald Trump won the senior vote 52% to 47%. It’s not a matter of party. Seniors’ quality of life is not political.”

They conclude, “With Pepper’s legacy as the guide, pandemic deaths, nursing homes, home care, Social Security, and Medicare would be improved by Sunlight of Oversight.”

For the benefit of America’s seniors, House Speaker Nancy Pelosi and her leadership team must consider giving H. Res 583 their political support and blessing, calling for a vote in House Rules Committee, if passed allowing for swift consideration on the floor. As Weiner remembers, “the last HSCoA was so well received and successful because of the strong relationships and bonds to the Standing committees and successful outreach to seniors.” The former HSCoA staff director notes that during his tenure membership grew from 29 to 50 members. “After the committee began, in just a few years, everyone wanted to be on it.”

AARP’s Otwell’s observations that the nation’s population is getting older, and the issues are not going to go away and that “Seniors ‘need a specific forum” are true even 29 years later. House lawmakers must pass H. Res. 583 for America’s seniors to give them this specific forum that they deserve.

To read the Miami Herald Op Ed, go to www.miamiherald.com/opinion/op-ed/article259629314.html

Senate Aging Committee: Seniors urged to prepare for making financial decisions

Published in RINewsToday on January 31, 2022

Over two weeks ago, U.S. Senators Bob Casey (D-PA) and Tim Scott (R-SC), Chairman and Ranking Member of the U.S. Senate Special Committee on Aging, urged seniors and people with disabilities to make a New Year’s resolution to prepare for anticipated financial decisions.

The hearing highlighted the importance of President Joseph Biden’s Dec. 2021 executive order to enhance customer experiences across federal agencies and align services to support people at critical decision points in their lives, like turning 65. This executive order expands retirees’ ability to claim Social Security benefits online, receive updates on their application status and access personalized online tools for Medicare enrollment and coverage options.

At this Senate Aging Committee hearing held on Jan. 13, the Senators released a bipartisan report entitled, “Financial Literacy in Retirement: Providing Just-in-Time Information and Assistance to Older Americans and People with Disabilities” along with a brochure for consumers to help them navigate these decisions.

This Senate Aging Committee report examines the real-time information and help older Americans and people with disabilities need as they face changes in their lives, known as “just-in-time” financial literacy.

“This year, more than 10,000 Americans will turn 65 every day. Around kitchen tables all across the country, retirees and seniors are asking: ‘Should I take my Social Security or should I wait?’ and ‘Do I need to sign up for Medicare, or can I wait?’ These are not simple decisions,” said Casey. “As we begin 2022, I urge seniors to make a New Year’s resolution: take stock of your finances and get prepared for these upcoming decisions, says the Pennsylvania Senator in a statement.

Adds Scott, “Financial literacy is key to making the most out of the financial opportunities our country has to offer. And much like education, it never loses its power — no matter your stage of life,” noting that the report will empower seniors to make wise financial decisions, laying the groundwork for security and peace of mind in their golden years.

The 26-page report identifies the six common decisions that require, and can benefit from, this kind of financial literacy: claiming Social Security, enrolling in Medicare, annuitizing a 401(k), giving to charity, downsizing a home, and responding to a natural disaster.

Putting the spotlight on Financial Literacy in Retirement

Four witnesses testified at the one hour and 18-minute hearing.

In her testimony, Gerri Walsh, President of the Washington, DC-based Financial Industry Regulatory Authority, applauded the timeliness of the hearing because “financial literacy in America is low and has declined over time.” She cited a 2009 study that found 42 percent of American adults demonstrated high levels of financial literacy, this figure deceasing to 34 percent in 2018. “Despite increasing low levels of financial literacy, 71 precent of Americans believe they have a high level of financial knowledge, suggesting widespread over confidence,” she told the attending Senators.

According to Cindy Hounsell, JD, President of the Washington, DC-based Women’s Institute for a Secure Retirement, many workers are not knowledgeable about issues they will face during their retirement. The impact of future inflation and taxes is not known by most and is not included in financial planning for retirement. This can have an impact on retirement income. Individuals also are oftentimes confused about how much income they will need to cover their expenses in retirement. Many retirees struggle to plan how they will draw down assets. Longevity risk is poorly understood and not widely planning for. Finally, women assume they will keep working beyond age 65 but will end up retiring earlier than expected due to job loss due to health issues, or caregiving.

“As a nation with an aging population, we need to educate the public on strengthening existing retirement programs wherever possible,” said Hounsell, “That means focusing especially on the links to both Social Security and Medicare, employer-sponsored retirement programs and emergency saving initiatives, and educating average workers about how these systems work to prevent penalties and loss of benefits,” she added.

Workers Not Knowledgeable About Retirement Issues

According to Hounsell, many workers are not knowledgeable about issues they will face during their retirement. The impact of future inflation and taxes is not known by most and is not included in financial planning for retirement. This can have an impact on retirement income. Individuals also are oftentimes confused about how much income they will need to cover their expenses in retirement. Many retirees struggle to plan how they will draw down assets. Longevity risk is poorly understood and not widely planning for. Finally, women assume they will keep working beyond age 65 but will end up retiring earlier than expected due to job loss, health issues, or caregiving.

Dorothea Bernique, founder and executive director of North Charleston, South Carolina-based Increasing H.O.P.E. a financial training center, reported that 14.9 percent of the South Carolina households have income below the federal poverty threshold and have a lack of basic financial knowledge, this resulting in a very low well-being score of 18 percent in the state.

Bernique noted that lack of basic financial knowledge can result in seniors not having the ability to make choices during retirement. “Hence this is how our seniors end up as greeters at the nearest Walmart when they should be enjoying the golden years of their lives,” she said.

Finally, Patti Szarowicz, a certified Aging and Disability Resource Connection (ADRC) Counselor at the Atlanta Regional Commission Area on Aging, stated that she plays a critical role in assisting seniors navigate complex systems. She helps callers to locate the nearest senior center and to find rides to medical appointments, to identify financial assistance in paying bills, securing home and community-based services and respite support groups for caregivers.

“I can hear the pain and despair in the voices of callers, who say things like, ‘I’m in trouble, and I don’t know what to do. Please call me back, I’m going to be homeless,’” she says.

Szarowicz called on Congress to support ADRCs to hire additional councilors, allocate more funding to enhance user-friendly technology for documenting client data and better integration across technology systems used, which includes telephone, resource database and client management systems. Public awareness of the national network of Area Agencies on Aging is also key to directing people to unbiased guidance for resources.

Take advantage of the Senate Aging Committee’s resources to make financial decisions, in your retirement years. You won’t regret it.

To obtain a copy of the Senate Aging Committee report, go to https://www.aging.senate.gov/imo/media/doc/Financial%20Literacy%20Booklet.pdf.

To obtain a copy of the brochure, go to https://www.aging.senate.gov/imo/media/doc/Financial%20Literacy%20Brochure.pdf

Contact financial_literacy@aging.senate.gov to request printed copies of the brochure.

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