A Sacred Trust – moves to strengthen Social Security

Published on November 8, 2021 in RINewsToday

Almost two weeks ago, House Ways and Means Social Security Subcommittee Chairperson John B. Larson (D-Conn.) threw H.R. 5723, the Social Security 2100: A Sacred Trust, into the legislative hopper. During its unveiling in the historic committee room of the House Ways and Means Social Security subcommittee, the same room where Social Security and Medicare legislation was crafted in the 1930s and 1960, the Connecticut Congressman’s proposal comes on the heels of the Social Security Administration’s 2021 estimate that the trust funds that support the program will be depleted in just 13 years, averting an estimated 20 percent cut in benefits by 2034.

The Sacred Trust Act is the successor to Larson’s original Social Security 2100 Act, which he first introduced in 2014.The House Ways and Means Committee is planning to hold a hearing on the bill in Nov. followed by a markup.

At press time, 194 House Democratic Members are cosponsoring the 100-page House Democratic proposal with no Republican lawmakers crossing the aisle. Almost 40 advocacy groups are endorsing the House Democratic proposal.

At the Oct. 26 news conference unveiling Larson’s legislative proposal, the Connecticut congressman noted that Congress expanded Social Security during the past 50 years and it has been 38 years since lawmakers have taken any comprehensive action to strengthen the program.“ With 10,000 Baby Boomers a day becoming eligible, and with millennials needing Social Security more than any generation, the time for Congress to act is now,” he said.

Taking a Close look at H.R. 5723

According to the legislative fact sheet released at the news conference, H.R. 5723 gives a benefit bump for current and new Social Security beneficiaries. It provides an increase for all beneficiaries (receiving retirement, disability or dependent benefits) equivalent to an average of 2% of benefits to make up for inadequate Cost-of-Living Adjustments (COLA) since 1983.

Larson’s Social Security proposal also protects Social Security beneficiaries against inflation. It improves the annual COLA formula by adopting a Consumer Price Index for the Elderly (CPI-E), to better reflect the costs incurred by seniors who spend a greater portion of their income on health care and other necessities. Although the 2022 COLA 5.9%, the largest in years, the average for the past 10 years is roughly 1.5% and in 3 of the past 12 years, beneficiaries received no COLA at all.

It protects low-income works that provides a new minimum benefit stet at 25% above the poverty line and would be tied to wage levels to ensure that minimum benefits doe not fall behind. Currently, 5 million seniors live in poverty.

The Sacred Trust Act also contains other provisions that seniors and their advocates have sought for years, including:

Improving Social Security benefits for widows and widowers in two income households so they are not penalized for having two incomes.
Ending five-month waiting period to receive disability benefits so those with ALS or other severe disabilities no longer have to wait.
Providing caregiver credits for Social Security wages to ensure that caregivers are not penalized in retirement for taking timeout of the workforce to care for children and other dependents.
Extending Social Security benefits for students to age 26 and for part-time students.
Increasing access to Social Security dependents for children who live with grandparents or other relatives.
Requiring Social Security Administration (SSA) to mail annual statements to all workers detailing the FICA contributions they make and projects of their benefits in the future.
Preventing unwarranted closures of SSA offices to improve customer serve
Improving access to legal representation for people seeking long-term disability benefits.

H.R. 5723 would pay for strengthening the Social Security Trust Fund by having millionaires and billionaires pay the same rate as everyone else.Currently, payroll taxes are not collected on an individual wages over $142,800.The legislative proposal would apply payroll taxes to wages above $400,00.This provision would only impact the top 0.04% of wage earners.

Larson’s proposal would also extend the solvency of Social Security by making a significant contribution to the programs solvency, making up more than half of the shortfall in the Social Security Trust Funds.

Finally, H.R. 5723 would combine the Old-Age and Survivors Insurance with Disability Insurance into one Social Security Trust Fund, to ensure all benefits will be paid.

It’s Now Time to Fix Social Security

Larson’s Social Security proposal would “take historic steps to expand Social Security — delivering for retirees, people with disabilities, and their families the first real boost in benefits in 50 years. The Sacred Trust Act also would bring new revenue into Social Security amid projections that the trust fund will run dry in 2034 if Congress doesn’t take action,” says Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare.

“To those who claim that no one in Washington has the courage to address Social Security’s challenges, or that the only solution is to cut benefits for future generations, Congressman Larson’s bill is a stunning refutation,” states Richtman, noting that he understands that beneficiaries need an increase in monthly checks to meet skyrocketing living expenses. “He knows that the fairest way to strengthen Social Security’s finances is for the wealthy to begin paying their fair share of payroll contributions. For years, seniors and their advocates have demanded these improvements,” adds Richtman.

“There is good news for everyone in this bill, which is only fitting, since Social Security touches almost every American’s life. Beneficiaries have waited long enough for these vital improvements. Congressman Larson now has nearly 200 cosponsorsin the House. After seven long years, seniors and their advocates can finally see the finish line, says Richtman.

With the Democrats controlling the White House, seniors have a good chance of seeing the expansion and strengthening of Social Security. The proposal has many of President Biden’s promises made during his campaign. But, like Larson’s previous Social Security Bill, the latest version has no Republican cosigners.

Over the years, poll after poll has shown that the American public strongly supports Social Security, across party and demographic lines. Larson’s legislative proposal has the support in the House, but will it pass in the upper chamber with Senate Democrats holding a slim majority? Will voter support influence Republican lawmakers to work across the aisle with Democrats to hammer out an acceptable bipartisan proposal, as the 2022 mid-term elections get closer? We’ll just have to wait and see.

A call to Congress to strengthen, expand Social Security & Medicare

Published in Rhode Island News Today on September 6, 2021

The 2021 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance (OASI)) and the Social Security Disability trust fund (SSDI), released last week, gives Congress this stark warning: the Social Security Trust fund is heading toward insolvency in 13 years while SSDI will see its reserve funds depleted in 2057, eight years sooner than last year’s estimate. As a whole, combined, the two Social Security trust fund reserves will be depleted in 2034, a year earlier than estimated made in last year’s Trustee report.

However, there is good news. This year’s report notes that there is more than enough time for lawmakers to make up shortfalls by immediately shoring up the ailing Social Security Old-Age and Survivors Insurance (OASI) trust fund and the Social Security Disability trust fund (SSDI) by Congress increasing revenues or cutting costs to these programs.

“The theoretical combined trust funds will exhaust their reserves by 2034, when today’s 54-year-olds reach the full retirement age and today’s youngest retirees turn 75. Upon insolvency, all beneficiaries will face a 22% across-the-board benefit cut,” says a detailed analysis released by the Washington, DC-based Committee for a Responsible Federal Budget (CRFB), a non-partisan, nonprofit organization committee that addresses federal budget and fiscal issues.

According to this year’s Medicare Trustee’s report, there was no change from last year’s projections that noted Medicare Hospital Insurance trust funds would be deleted in 2026. If this occurs, physicians, acute care facilities and nursing homes would not receive their full compensation of the program (only 91% of scheduled payments), pushing the uncompensated costs on the patients to pay.

Total Medicare expenditures are projected to increase in the future at a faster pace than both total workers’ earnings and the overall economy, says the newly released Medicare Trustee report.

In light of the projected insolvency of Social Security, this year’s Trustee’s report notes that beneficiaries may receive an estimated 3.1% cost-of-living adjustment (COLA) for benefits in 2021, the highest COLA in a decade. This large increase was triggered by higher inflation rates caused by the ongoing pandemic.

Beltway Insiders Respond

“The Trustees’ projections in this year’s report include the best estimates of the effects of the COVID-19 pandemic on the Social Security program,” said Kilolo Kijakazi, Acting Commissioner of Social Security. “The pandemic and its economic impact have had an effect on Social Security’s Trust Funds, and the future course of the pandemic is still uncertain. Yet, Social Security will continue to play a critical role in the lives of 65 million beneficiaries and 176 million workers and their families during 2021.”

“The Trustees Report confirms that Social Security’s financing is strong in the near-term yet underscores why it is so important that Congress take action now to prevent 22% in cuts across the board on all benefits in 2034,” says House Ways and Means Social Security Subcommittee Chairman John B. Larson (D-CT) in a released statement. “With the loss of traditional pensions, rising health care costs, and many people unable to save enough for retirement, there is a growing retirement crisis. 65 million Americans currently rely on Social Security benefits, yet millions are suffering and can’t make ends meet, adds Larson.

Furthermore, the Trustees Report shows that this year the cost of paying out benefits will exceed the income from the Federal Insurance Contribution Act (FICA) payments,” states Larson.

The released 2021Trustee reports on the financial solvency of Medicare and Social Security trust funds once again identify unsustainable benefit promises in Medicare and Social Security programs, stated senator Mike Crapo (R-Idaho) said in a released statement.

“The Hospital Insurance trust fund [Medicare] is projected to be exhausted around 2026; there are $60 trillion of unfunded liabilities in Social Security programs; and unfunded liabilities increased by trillions of dollars over the last year alone,” adds Crapo.

Crapo urges Congress and the White House to “work closely together with a sense of urgency to address the challenges detailed in the Social Security and Medicare Trustees Reports. However, “most Democrats want only to expand benefit promises further without generating sustainable trust fund solvency,” he said.

Seniors Depend on Social Security on Most of Their Income

“There is no need to sound the alarm, but now is the time to address Social Security’s long-term solvency – and provide an overdue boost in benefits. Phone calls and emails to Congress are definitely warranted at this critical juncture,” says Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare, responding to the Social Security Trustee Report released August 31.

According to Richtman, Social Security has never missed a benefit payment in its 86-year history, but remains strong. Even if no Congressional action is taken and the Trust fund becomes deleted, Social Security could still pay 79% of the benefits with revenue coming from regular worker’s payroll contributions. “But that poses a huge financial risk for the millions of retirees who depend on Social Security for most if not all of their income. It also raises a serious political risk for members of Congress who fail to boost the program’s finances so that the trust fund remains solvent beyond 2034,” he says.

Living on an average monthly benefit of $1,540 is tough to do, says Richtman, as retirement savings dwindle, pensions disappear and the soaring cost of senior housing and medical care.

Nancy Altman, President of Social Security Works (SSW) and chair of the Strengthen Social Security Coalition, agrees with Richtman’s assessment of Social Security’s fiscal solvency and impact on the retiree’s income. “Today’s report shows that Social Security remains strong and continues to work well, despite the once-in-a-century pandemic. That this year’s projections are so similar to last year’s proves once again that our Social Security system is built to withstand times of crisis, providing a source of certainty in uncertain times,” she says.

“We don’t have a Social Security crisis, but we do have a retirement income crisis — made worse by the pandemic, which, among other economic impacts, forced millions of workers to retire earlier than planned. The solution is to expand Social Security, as President Joe Biden has promised to do,” suggests Altman.

According to SSW, “about one out of two married senior beneficiaries and seven out of 10 unmarried senior beneficiaries and almost one out of tow unmarried beneficiaries rely on Social Security for virtually all their income.”

Mustering the Political Will

Richtman calls for Congress to closely look at Congressman John Larson (D-CT) legislation to fix and expand the nation’s ailing Social Security program. “For over six years, Congressman John Larson has been driving efforts to strengthen Social Security by adjusting the payroll wage cap so that high income earners begin paying their fair share,” he notes.

Larson has also proposed an across-the-board boost for all retirees, enhanced benefits for the most vulnerable seniors, and a more accurate formula for calculating annual cost-of-living adjustments (COLAs) so that benefits truly keep pace with inflation, says Richtman, noting that the Connecticut Congressman’s proposals also align with President Biden’s initiatives to strengthen and expand Social Security.

“Of course, the default response from conservatives will be to suggest, indirectly or otherwise that Social Security benefits must be cut to address the program’s funding shortfall,” states Richtman said. “Some will insist that Social Security be privatized, which would gamble workers’ hard-earned retirement benefits on Wall Street. Meanwhile, conservatives likely will oppose common sense revenue-side measures that would actually boost benefits, including Rep. Larson’s proposed adjustment of the payroll wage cap.” For Congress to act to advance legislation to strengthen and expand Social Security, voters must put political pressure on their elected officials “to muster the political will to get it done,” says Richtman.

A Final Note…

It’s better to make changes to ensure Social Security’s solvency now, rather than waiting, suggests CRFB, a delay only adds more costs to fixing trust fund shortfalls in a timely fashion.“ Acting now allows more policy options, lets policymakers phase in changes more gradually, and provides more time for workers to adjust their work and savings, if necessary,” the fiscal advocacy group says.

The clock is ticking. There are almost 4,500 days until the project insolvency of the Social Security trust fund. It is now time for Congress to find viable, bipartisan solutions to fixing Social Security and Medicare, once and for all.

The 276-page 2021 Social Security Trust Fund report is available by going to https://www.ssa.gov/oact/TR/2021/tr2021.pdf.

Seniors would benefit in President Biden’s $6 trillion budget

Published in RINewsToday on June 14, 2021

On May 28, with the release of a $6 trillion budget for fiscal year (FY) 2022, President Joe Biden outlined his values and vision as to how he proposes to revive the nation’s sputtering economic engine as it emerges from the devastating impact of the COVID-19 pandemic. The 72-page budget document, “Budget of the United States,” (with more than a 1,400-page appendix) details his spending priorities that begin next Oct. 1. Biden’s generous budget depends on increasing taxes on America’s corporations (from 21 to 28 percent) and high earners, who received significant tax breaks from the President Trump/GOP tax cuts of 2017.

With the FY 2022 Budget pushing federal debt to the highest levels since World War 1I, Republican lawmakers quickly called the proposal “dead on arrival” in Congress. However, Cecilia Rouse, chair of President Biden’s Council of Economic Advisors says the Biden Administration is willing to live with a budget deficit to invest in the economy now, especially with low interest rates to borrow; deficits can be reduced later.

President Biden’s new spending under the just released proposed FY 2022 budget, recognizing his Administration’s priorities, reflects the major proposals already outlined under the administration’s $2.3 trillion American Jobs Plan and $1.8 trillion American Families Plan. Provisions in these two proposals would overhaul the nation’s aging infrastructure and invest in education, childcare, paid family and medical leave, fight climate change.

President Biden’s spending plan also recognizes priorities outlined in the American Rescue Plan passed earlier this year as well as the Administration’s “skinny” discretionary budget request released in April. Most importantly, it reflects a commitment from the president to safeguard Medicare, Medicaid and Social Security.

Loving It or Hating It Depends on Where You Sit

In remarks delivered Thursday in Cleveland, President Biden made the case for his budget request and what he describes as an investment in the country’s future. “Now is the time to build [on] the foundation that we’ve laid to make bold investments in our families and our communities and our nation,” he said. “We know from history that these kinds of investments raise both the floor and the ceiling over the economy for everybody.”

In the FY 2020 Budget proposal’s “Message from the President”, Biden says, “The Budget invests directly in the American People and will strengthen the nation’s economy and improve our long run fiscal health. It reforms our broken tax code to reward work instead of wealth while fully paying for the American Jobs and American Family Plans over a 15- year period. It will help us build a recovery that is broad-based, inclusive, sustained, and strong,”

Of course, response to Biden’s Spending plan depends on which side of the aisle you are sitting.

House Speaker Nancy Pelosi (D-CA) released a statement strongly endorsing Biden’s fiscal blueprint. “Congressional Democrats look forward to working with the Biden-Harris Administration to enact this visionary budget, which will pave the path to opportunity and prosperity for our nation. The Biden Budget is a budget for the people,” she said.

On the other hand, Senate Minority Leader Mitch McConnell strongly opposing Biden’s Budget proposal. “Americans are already hurting from far-left economics that ignores reality,” said McConnell, in a statement. “The Administration’s counterproductive ‘COVID relief bill’ has slowed rehiring. Families are facing painful inflation, just as experts warned the Democrats’ plans might cause. And the Administration wants to triple down on the same mistakes?” said the six-term Republican Kentucky Senator.

With the Democrats holding the slim majorities in the House and Senate and controlling the White House, Biden’s FY 2022 Budget proposal will have more weight than if the Republicans were in the majority, says Dan Adcock, Government Relations and Policy Director at the Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM).

According to Adcock, Biden’s funding numbers will change as his FY 2022 budget proposal goes through the appropriation process in the upcoming months. With its release, Congress can now begin negotiating funding levels and spending bills. Competition for a finite amount of funding will ultimately result in funding level ultimately allotted to programs and agencies by each of the 12 appropriations under their jurisdiction. Funding for most programs important to older Americans is under the jurisdiction of the Subcommittee on Labor, Health and Human Services and Education.

“With 10,000 Baby Boomers turning 65 every day – and the number of seniors projected to double by 2050 – it’s clear that President Biden understands the need to safeguard the older Americans he calls ‘pillars of every community – now and into the future.” Says Max Richtman, NCPSSM’s President and CEO.

Slashing Drug Costs to Pay for Expanding Medicare Coverage

Richtman says that Biden’s fiscal blueprint calls on Congress to allow Medicare to negotiate prices for certain high-cost, life-saving drugs that many seniors currently cannot afford and to require manufacturers to pay rebates when drug prices rise faster than inflation. These reforms could yield over half a trillion in federal savings over 10 years, which could help pay for coverage expansions and improvements, including access to dental, hearing, and vision coverage in Medicare,” he notes. Today, traditional Medicare does not cover routine care like dental checkups or hearing aids.

According to Richtman, President Biden’s budget also includes more than $400 billion in new spending over ten years to expand Home and Community-based Services (HCBS) for low-income seniors and people with disabilities who prefer to receive skilled care in the comfort of their homes and communities, even moreso after the devastation COVID wrought on nursing homes.

In states that have not taken advantage of Affordable Care Act (ACA) opportunities to expand Medicaid, the budget proposes providing premium-free, Medicaid-like coverage through a federal public option, along with incentives for states to maintain their existing expansions.

Biden’s FY 2022 budget also urges Congress to improve customer service for Social Security beneficiaries to prescription drug pricing reform to expanded HCBS, adds Richtman. It also proposes a $1.3 billion (or 9.7%) funding increase for the Social Security Administration. The increase seeks to improve customer service, including services at SSA’s field offices, state disability determination services, and teleservice centers.

The Older Americans Act (OAA) provides funding for a wide range of home and community-based services, such as meals-on-wheels and other nutrition programs, in-home services, transportation, legal services, elder abuse prevention and caregivers’ support. These programs help seniors stay as independent as possible in their homes and communities.

For details about Biden’s FY 2022 Budget proposal and OAA funding levels, made available from the Washington, DC-based National Association of Area Agencies on Aging, go to: https://www.n4a.org//Files/FY22%20PresBudget%20and%20historical%20Labor-HHS%20Appropriations%20Chart.pdf

Stay Tuned

The House continues its work on hammering out appropriation bills through subcommittees in June and in the full House in July. The Senate’s work is expected to begin in mid-Summer and to continue well into September. If the appropriate bills are not passed and signed into law by Oct. 1, Congress will need to pass a continuing resolution to fund the federal government into the first months of FY 2022.

Like most Budget proposals, especially in a partisan Congress, Biden’s spending plan will need to be rewritten to win support from lawmakers on both sides of the aisle. However, it will serve as a roadmap for a Democratic controlled Congress in crafting 12 appropriation spending bills. Partisan bickering during the appropriations process may well force passage of a continuing resolution before Oct. 1 to block a government shutdown.