The Impact of Social Security Reform Should Be Required Reading for the Supercommittee

Co-authored by Nancy Altman and Eric Kingson

No surprise, this Tuesday, the Joint Select Committee on Deficit Reduction (a.k.a., the "Supercommittee") is listening to all the normal Washington insiders talk about why Social Security, Medicare, Medicaid and a host of programs critically important to the American people must be sacrificed on the altar of deficit-reduction. What we have here is the one percent speaking to the one percent, recommending sacrifices from the ninety-nine percent

Yes, only the so-called "adults" have been invited to tell the Supercommittee why it's imperative that Congress cut Social Security, even though it adds not one penny to the deficit -- and these other vitally important programs to show the rate-setting agencies, the bond markets and Wall Street that Congress can enact unpopular reforms.

It is not surprising that Congress's approval rating is, for the first time, in single digits. The views of the American people who -- across party lines and all demographics -- consistently say "do not cut Social Security," "Do not cut Medicare" lack standing in this policy discussion. The views the majority of Americans who say that income and wealth inequality is running amuck are also virtually ignored. Neither is the potential and disproportionate harm that proposed cuts will inflict on people of color, on women, on low-income and moderate income families discussed.

If the members of the Supercommittee really want to understand the implications of what they are considering for the "other 99 percent," especially for persons of color, they should start by reading "Plan for a New Future: The Impact of Social Security Reform on People of Color," the Report of the Commission to Modernize Social Security. The report, the work of 19 experts knowledgeable about and representing racial and ethnic communities of color, presents a plan for "strengthening Social Security in light of the unique socioeconomic and cultural circumstances facing communities of color."

The report highlights how the cuts under discussion in Congress would hurt African American, Asian American and Pacific Islander, Latino, and Native American communities. Among the report's many important findings are that:

• Social Security's annual cost of living adjustment is particularly important to Latinos and Asian Americans who have longer life expectancies than the general population.
• Social Security's early retirement option is particularly important to African Americans and Native Americans who have shorter life expectancies than the general population.
• Social Security's life insurance and disability insurance are particularly important to people of color who are disproportionately in physically challenging jobs, and consequently have disproportionately higher incidences of severe disability and premature death. The provision of Social Security benefits to children of deceased and disabled workers are particularly important to children of color.
• Because people of color are less likely to be in jobs covered by private pensions, they are more likely to have Social Security as their only or predominant source of retirement income.

Social Security's benefits are already extremely modest, averaging just $13,000. Its retirement age is already increasing under current law. That two year increase, from age 65 to age 67 amounts to a 13 percent benefit cut even for workers who do not claim benefits until age 70 or beyond. Its annual cost of living adjustment already under-measures the living costs of older Americans and people with disabilities who have substantially higher medical costs, on average, than the general population. Consequently, those benefits lose purchasing power every year -- one of the reasons those over age 85, primarily women, have disproportionately higher rates of poverty.

To cut these benefits further, either through a further increase in the retirement age, a less-generous COLA, a reduction in the level of initial benefits, or any other way, will hurt the economic security of all Americans, but particularly people of color, and especially today's young adults and children of color.

A quick read through this report should give policymakers pause about the assumptions and processes driving the efforts of many to dramatically cut Social Security. Our nation today has a majority of whites. By 2042, it is projected that the majority of the nation will be people of color. That means that the Supercommittee and today's Congress, both overwhelmingly white men, might cut the Social Security benefits of tomorrow's retired, disabled and surviving beneficiaries -- who in time will be largely people of color -- with no opportunity of those groups to be heard. What an outrage that would be.

With the growing wealth inequality in this country, the right answer is what every poll indicates the American people want -- require the wealthiest Americans among us to pay somewhat more for Social Security, so today's benefits can be maintained -- and even increased -- for all of today's children.

Nancy Altman, author of The Battle for Social Security, and Eric Kingson, professor of social work at Syracuse University, are co-directors of Social Security Works (www.socialsecurity-works.org ) and co-chair the Strengthen Social Security Campaign (www.strengthensocialsecurity.org)

 

Follow Nancy Altman on Twitter: www.twitter.com/NoSocSecCuts

Comments

[Independent66]

01:10 PM on 11/13/2011

Everything needs to be on the table, but each item needs to be addresed to preserve the benefit, and deal with the costs. My preference for SS is to means test it once a person receives what they put in, currently a bit over 7 years. This preserves it for future generations. What the politicians want is to increase taxes so they can continue to spend the excess payments. This needs to stop.
Medicare, Medicaid and Obamacare are much bigger and more difficult to fix. The projected unfunded costs for these programs, under current laws, is $70-100T over the next 20 years. The rules and laws will certainly need to change since these costs cannot be funded by simple changes.
Everyone will feel some significant pain from the need changes. What is worth discussing is how that pain will be allocated. The rest of the budget is running about $1.5T more than is collected from all other taxes and fees excluding payroll taxes. Most of the real discussion needs to focus on this current problem. That is 10% of GDP, more than any other ECU country currently. You are seeing where that gets a country.

[Chris Wundrow]

02:33 PM on 11/01/2011

The GOP wants to KILL Social Security, period! They can't do it outright (though they'd love to!) because they'd have a for-sure revolution on their hands if they did. So they're going about it the sneaky way--behind our backs, as it were, with all these cuts and eligibility changes. Wake up, people, before it's too late!!!!

[Joshd25]

02:06 PM on 11/01/2011

It's simply amazing. The average max payout for SS, is 600 dollars. Most do not even get that, around 100-300 a month and they need every penny. How can we slash the amount of Benoit's people are getting in a time when our economy is so bad? The American dream should be there for everyone, not just who who can afford it. Each day seems to get more depressing then the next. Instead of actually not to take money for those who need it most old, disabled and sick. We should look to other way to boost the income. It's a very sad day when the people who get hit hardest at the ones at the bottom of the ladder. The difference from taxing the super rich and poor. Poor already been tapped out, and the super rich won't lose their homes or home or go hungry over a small percentage tax hike. I seriously hope that no effects to medicare/medicaid go into place.

Their are already an uprising from occupy movement an even stronger backlash if you cut benefit's from people who have already barely anything to lose. Turning honest folk's into criminal's just to be able to provide and put food on the table.

[Lindytindy]

12:34 PM on 11/01/2011

The only 'reform' Social Security needs is to make it a trust again that politicians can't rob at will. Also Medicare should be the medical plan for all, including Congress. Congress's retirement plan should be Social Security, then watch how it would prosper. They are trying to rob us instead of dealing with the real problem, war spending, taxing the rich and breaking up and regulating the banks properly. They can't do those things because the oligarchs don't want it to happen, so they pick on the most defenseless among us. OWS is just the beginning, if we don't right this ship it's going to sink us all.

[marcopolitic]

11:57 AM on 11/01/2011

So Simple Why dont they Stop spending money on wars and overseas and use that money for Social Security and Medicare I think Ron Paul said that but i guess you guys dont listen..And they wonder why millions support Paul in 2012

[cam1002]

02:39 PM on 11/01/2011

Almost but not quite. Ron Paul does want to stop spending money on wars and overseas however he also wants to stop Social Security and Medicare and Medicaid. So, no thanks Mr. Paul, I'm not buying.

[Robert McGehee]

09:42 AM on 11/01/2011

Well, I'm just confused! The above says, in one place, "evern though it {SS} adds not one penny to the deficit", and in another article in HP today, I read that SS is a major drain on the budget. So, tell me, if SS is completely paid for from the SS tax and trust fund, how is it a drain on the budget? If it is paid for out of general revenues, where the hell is that tax money going? Who is not telling the truth? What is the truth? Or, is it just too complicated for the likes of me?

[Lindytindy]

12:36 PM on 11/01/2011

Its' all lies designed to disguise the fact that Congress has been robbing Social Security for pork programs for a long time. It used to be a trust but Johnson fixed that by taking it out of the trust and putting it in the general fund so they could rob it. It's that simple. The 1% want to destroy Social Security and Medicare because they want to use that money for corporate welfare and war. It's that simple.

[debblack]

12:57 PM on 11/01/2011

It is not too complicated. There is a line item on the paycheck, for everyone who works and collects a paycheck, for social security, also for medicare. These programs are separate from federal income taxes. Funding is not meant to come out of tax revenue for Social Security or Medicare. Social Security is actually fine for the next 30 years, if we make adjustments for cost of living, and protect that money from being spent, or borrowed against, for any other reason. Medicare is going over cost because of the for profit healthcare system, whose focus is profit and paying more in stock dividends each quarter, than in the last. This causes the cost of healthcare to escaltate for no other reason than profit. Same with the private insurance corporations, it is all about increasing profit and dividends each quarter, not about how much it costs to provide healthcare. If we had Medicare for all, non profit single payer, it would put an end to the ever escalating cost of profit for our healthcare system. We would focus on how to provide the best medical care, not on how to make the most profit, and with everyone paying in; but not using as much care as retired or disabled people, the costs would come way down. Makes too much sense for the 99% and the 1% won't allow it.

[Terry T]

04:41 PM on 11/01/2011

Actually your remarks are not correct. When outflows exceed inflows to SS, SS redeems the Treasury IOUs in the trust fund. Treasury then has to come up with the cash to pay SS so SS can then pay beneficiaries. Where does the cash come from? Right now, we're running at an annual deficit of about $60 billion. Here's how the CBO put it in 2010:
"The balances credited to the trust funds are a measure of the government’s legal authority to pay Social Security benefits, but the resources to redeem government bonds in the trust funds and thereby pay for benefits in some future year will have to be generated from taxes, other government income, or government borrowing in that year."

And even AARP said the same thing:
"Any surplus payroll taxes not used for current benefits are used to purchase special-issue, interest-paying Treasury bonds. In other words, the surplus in the Social Security trust fund has been loaned to the federal government for its general use — the reserve of $2.6 trillion is not a heap of cash sitting in a vault. These bonds are backed by the full faith and credit of the federal government, just as they are for other Treasury bondholders. However, Treasury will soon need to pay back these bonds. This will put pressure on the federal budget, according to Social Security's board of trustees."
http://www.aarp.org/work/social-security/info-05-2011/social-security-fears.2.html

[Robert McGehee]

04:45 PM on 11/01/2011

Thank you for your reply. What I'm really p*ssed about is the continuous lying, the complicity of the public media, and the fact that it is almost impossible to arrive at the real picture of what is happening. When Johnson decided to "borrow' from the Trust Fund, I knew that was a bad deal, and said so loud and long. But, to be honest, if he hadn't done it someone would have. Too big a cherry waiting to be plucked from the tree. For what it's worth, I do agree with you on the whole medical care thing. From the info I get back from Medicare and my supplemental insurance on my personal medical cost, I can't believe there are any doctors or clinics, or hospitals that will still fool with Medicare patients. Of course, another way to look it is that medical costs are so inflated that when a provider is willing to accept pennies on the dollar in payment they are still making money. I harrass my Congressman and Senator continuously and get only platitudes in response. I won't vote for any of the incumbents again. However, my Congressman has figured that out and is not standing for re-election. He's made his killing.

[nothingchanges]

09:30 AM on 11/01/2011

We live in a throw away society.

If something no longer works well, if it's not as efficient as a newer model, or in some cases if it's just plain too "old".................. it goes in the trash can.

We have become so accustomed to this, that we now extend the policy to our neighbors.

Old, infirm, can't keep up...........................throw them away, we don't want to be "bothered".

An interesting concept to justify come judgement day (assuming there is one).

"If a free society cannot help the many who are poor, it cannot save the few who are rich."
John F. Kennedy..................personally, I hope he is proved right.

[Lindytindy]

12:52 PM on 11/01/2011

Absolutely right on. They want to kill us baby boomers off because we had the nerve to retire, or were forced to retire, don't forget when you hit 50 you will be the first to be laid off. And try finding a job at 50. And they want to destroy the working and middle classes because they are no longer useful, having found cheaper labor overseas. If not overseas then they are bringing it here with the h1 visa series. They mean to make us all obsolete, a poverty stricken underclass. And watch what comes next, a big war, the draft, so they can kill more of us off more quickly.

[madrediterra]

06:28 AM on 11/01/2011

Try this equation. If you cut them, we cut you.

[PaulArt]

05:09 AM on 11/01/2011

One of the major impacts of Social Security and Medicare has been to convert most of the beneficiaries to Republicans. Give them a check in the mail every month and almost free socialistic healthcare and they all get the 'Free Market' fever and 'earned my entitlements' disease. Go stand near a Church in your free time and check out how many Seniors get in there - do you think most of these people are gilt edged gold plated entrepreneurs? Nope. A lot of them are middle class plodders like we are today. The only difference is, they got their pensions, Social Security and Medicare when the going was good whereas we are going to get NADA inour 401Ks and Zero Medicare when we get to their age because they continually vote for the 'Free Market' for everyone else excepting themselves. The entitlements have divided the Senior vote in a very detrimental way. The younger generation especially needs to start hollering for entitlements to be cut starting NOW if that is what the GOP and the Democrats want - lets cut them 20% now. Entitlements are not entitlements - they are insurance schemes backed by the faith of the Government and if the Government wants to renege on their promises then let them renege on us equally and not screw only the younger generation.

[leonardo5]

04:37 AM on 11/01/2011

Unless the means of funding Social Security have radically changed, SS does not receive any financial support from the General operating funds of the US government. It is self funded by payroll taxes on wages paid of 7.5 percent by worker, and matched by employer. It has had great trust fund balances forever, Medicare premiums are taken from SS checks each month. The "job creators" say that medicare, social security and any other social programs keep US businesses from being competitive internationaly. If all these programs were government run, as all other industrial countries, then the businesses could better compete.

[Mary Ellen Mayo]

12:05 AM on 11/01/2011

Well, at least I know where I'll be buried. I'm a 50 year old on SSDI and Medicare. I hope that the government will at least pay for me to be taken off all meds with the exception of pain meds, withdraw insulin, put me in hospice, and stand with arms folded and watch me die, and then be able to explain to my parents why they had to bury me before they died. Do you suppose asking the government to pay my funeral expenses would totally bankrupt them?
How do people justify taxing people for Social Security and Medicare their entire working lives, and then talk baldly about taking it away like this when people are dependent on it to stay alive?
The least they could do if they do take it away from us is to provide places where we can be humanely put to sleep, like our animals are. But of course the so-called "pro-lifers" would have a fit...God forbid you should be as kind to your fellow men and women as you are to your animals!

You folks can discuss the end of Social Security till you're blue in the face, and then go out and have a happy, carefree day tomorrow, but it's scary as hell if you are going to end up being one of the ones who die....

[luapmi2]

04:02 AM on 11/01/2011

Tell me why you think it is the government's responsibility to pay anything

[gmikejake]

04:39 AM on 11/01/2011

We could, but having tried before, I've decided, personally, that it is a waste of time. When one has achieved THE TRUTH, apparently there is no need for any further information.

[A Dub]

07:37 AM on 11/01/2011

What makes you think the government pays for it?

[Dana1982]

11:48 AM on 11/01/2011

Yes the government does pay for your funeral. Currently social security will kick in $255 to plant you.

[cam1002]

02:43 PM on 11/01/2011

And that's not much when funerals cost about 7 grand these days.

[BillZBubb]

11:19 PM on 10/31/2011

The problem is that although a big majority of people support maintaining Social Security and Medicare, it is not a big majority of VOTERS. Or at least for a majority of voters these are not decisive issues. Otherwise, no republican could get elected.

[AskandThink]

12:14 AM on 11/01/2011

"...not a big majority of voters".... YET!

Time to start kickin up the votes... Thank you OWS!

Easiest revolution in the world....... VOTE THEM ALL OUT !!!

WE the people NEED to remind the government…. WE put you in… WE take you OUT!

ZERO INCUMBENTS!

[gmikejake]

04:41 AM on 11/01/2011

Not everyone is in favor of demolishing Social Security, Medicare, and Medicaid. And, besides, just look at what happened in 2010 when a bunch of "amateurs" were sent to DC to "represent" us.

[cam1002]

02:49 PM on 11/01/2011

That's throwing away the baby with the bathwater and wrong thinking. We NEED people like Bernie Sanders, Barney Frank, Al Franken, Kirsten Gillibrand, Barbara Boxer and many more. Throwing out all incumbents would be suicide. The answer is to find out what the politician has actually voted for and what they stand for and vote intelligently, not just for the party; however, I have yet to find a republican these days that want to support Social Security, Medicare and Medicaid. Look at the Progressive movement and the People's Budget and see what you think. Operative word here, think.

[ScreenName05]

10:08 PM on 10/31/2011

They should start listening, I cannot imagine a single Representative or Senator who votes to cut SS or Medicare getting reelected.

I am pretty sure that those in Congress know this is an unforgivable crime, and that they will end their careers if they allow any changes to go through.

[unfoxworthy]

09:51 PM on 10/31/2011

insightful
thanks
"the 1% speaking to the 1%" (so truel)
this is what Democracy LOOKED like (...until now)

[jteschke]

09:45 PM on 10/31/2011

It shows the dysfunctionality of the US system that an unconstitutional handpicked politburo has been tasked to do what they know can't be achieved democratically: the major reduction of the one thing the government has guaranteed to people: social security benefits they have paid for. This is a direct attack by the US political system on the US people.