Don’t be fooled: increasing the retirement age is a benefit cut — unless you’re rich

[Washington Post] Poorer Americans are much less likely to survive into their 70s and 80s than rich Americans, a stark life-expectancy divide compounded by the nation’s growing disparities in wealth, according to a federal report.

Over three-quarters of the richest 50-somethings in 1991 were still alive in 2014, the report found. But among the poorest 20 percent of that cohort, the survival rate was less than 50 percent, according to the analysis by the Government Accountability Office, a nonpartisan congressional research agency.

The report finds that while average life expectancy increased over that period, it “has not increased uniformly across all income groups, and people who have lower incomes tend to have shorter lives than those with higher incomes.”

“Over time, the top fifth of the income distribution is really becoming a lot wealthier — and so much of the health and wealth gains in America are going toward the top,” said Harold Pollack, a health-care expert at the University of Chicago who was not involved in the creation of the report. “In these fundamental areas — life expectancy, health — there are these growing disparities that are really a failure of social policy.”

Full story: Washington Post »

Watch out, seniors: Trump just launched a stealth attack on Medicare

President Donald Trump signs an executive order about Medicare at the Sharon L. Morse Performing Arts Center, Thursday, Oct. 3, 2019, in The Villages, Fla. (AP Photo/Evan Vucci)

[Salon.com] This article was produced by Economy for All, a project of the Independent Media Institute.

Watch out, older Americans and people with disabilities! President Trump just announced a plan to give corporate health insurers more control over your health care. His new executive order calls for “market-based” pricing, which would drive up costs for everyone with Medicare, eviscerate traditional Medicare, and steer more people into for-profit “Medicare Advantage” plans.

Seema Verma, the Trump appointee who heads the Centers for Medicare and Medicaid Services (CMS), may not have warned Trump about the slew of government audits revealing that many Medicare Advantage plans pose “an imminent and serious risk to the health of… enrollees.” They also overcharge taxpayers to the tune of $10 billion a year.

In the last few years alone, CMS’ limited audits have highlighted major issues with Medicare Advantage plans. Reports from the Department of Health and Human Services Office of the Inspector General (OIG) and Government Accountability Office (GAO) have underscored these issues. They have recommended that CMS increase its oversight of Medicare Advantage plans and its enforcement efforts.

A Medicare Payment Advisory Commission report indicates that the problems with Medicare Advantage may be even more far-reaching than the government audits indicate. The Medicare Advantage plans have failed to turn over reliable and complete claims data, as required by law. Without this data, it’s not possible to know whether they are covering the health care services they are paid to provide or to oversee them to the extent necessary.

Last month, Senators Sherrod Brown, Amy Klobuchar, Chris Murphy, Richard Blumenthal, Bernie Sanders and Debbie Stabenow laid out several serious malfeasances by these corporate Medicare insurers — including UnitedHealth Group, Aetna, Cigna and Humana — in a detailed letter they sent to Verma.

The insurers’ wrongdoings are systematic. They are ongoing. They endanger the health and financial well-being of millions of people. They undermine the financial integrity of the Medicare program and harm the U.S. Treasury. Yet, to date, CMS has failed to develop, let alone execute, a plan to hold these insurers accountable for violating their legal obligations and to ensure their members get the health care to which they are entitled.

Read More »

Everyone should care about this report on Social Security

Writing for the Washington Post, Henry Aaron highlights a report recently released by the Social Security Administration which contains a comprehensive menu of actions that Congress can take to shore up the program’s finances and change benefits:

If you think that the best way to fix Social Security’s long-run financial shortfall is to cut benefits, the agency’s report shows ways Congress could do that. If you think that the way to close the long-term funding gap is to raise taxes while maintaining benefits, you will find a couple of dozen ways to do that, too. If you think that Social Security should give benefit credits to those who stay home to care for children, the elderly or people with disabilities, or that the very old should receive additional benefits because they suffer from higher poverty rates than the not-so-old, this is the place to go for a menu of ways to do those things and make a lot of other changes that you might not have thought of.

You’ll learn what those measures cost or save. You’ll be able to read brief and understandable explanations of each of them. The options come with color charts that show graphically how each change would affect Social Security’s finances. And, if you can’t tell the program without the players, you’ll be able to see which member of Congress or organization proposed them.

This is must-read material for anyone paying attention to the Democratic candidate debates now — or later, to the debates between the Republican and Democratic nominees. Understanding what the candidates propose to do about the nation’s No. 1 domestic program could help you decide which candidate you support.

Full column: Washington Post »

Republican senators compete for leadership of “Department of Bad Ideas” with new plans to cut Social Security to finance paid parental leave

[CBPP] At some point in their lives, most workers in the United States will experience a major life event or emergency requiring them to take time off work, such as a serious illness, the birth of a child, or caregiving responsibilities for an aging parent.[1] A national, comprehensive paid family leave policy that is responsibly financed would provide much-needed economic support to workers during these times and ensure equitable access to paid leave for low-income people and people of color, who often do not have significant paid leave from their employers.

However, two recent paid leave proposals — the New Parents Act from Senators Marco Rubio and Mitt Romney[2] and the CRADLE Act from Senators Joni Ernst and Mike Lee — fall short of this standard in important ways:

  • Unlike the paid leave programs of several pioneering states (and the federal Family and Medical Leave Act, which provides for unpaid leave), both bills would provide paid leave only to parents caring for newborn or newly adopted children, leaving out workers who need to care for their own serious health issues or those of a family member.
  • Instead of pooling risks and resources across the entire workforce, as the rest of Social Security and the state paid family and medical leave programs do, these bills would ask individual parents to bear the cost of their parental leave benefits by cutting the Social Security retirement benefits they would receive decades later. This would weaken Social Security’s near-universal social insurance protection by treating the program’s guaranteed benefits like a private account from which individuals could draw. Essentially, both bills ask parents to choose between their current caregiving needs and their future retirement security.

Using Social Security partly as a piggy bank rather than an insurance policy is central to the design of these proposals. Carrie Lukas, president of the Independent Women’s Forum — which first developed this approach — has written that getting workers to see Social Security as assets “to be used now or at retirement” is a first step toward partially privatizing Social Security.[3]

Moreover, under the two bills, parents opting for parental leave would face permanent cuts to their Social Security retirement benefits that would ultimately exceed their parental leave benefits. The cuts would amount to their parental leave benefits plus interest, as well as an additional reduction to cover the cost of the parental benefits provided to other parents who die or become disabled before they reach retirement and can’t repay their own leave benefits. Leave-taking parents with moderate incomes, for example, would receive about $5,300 in benefits for each three months of parental leave, on average — and then lose about $15,100 in lifetime retirement benefits for each three months of leave, after adjusting for inflation, according to the Urban Institute.[4] All told, this amounts to losing about 3 to 4 percent of lifetime Social Security retirement benefits for each three months of leave, meaning that parents who take three periods of parental leave (after three births or adoptions) would lose roughly one-tenth of their lifetime Social Security retirement benefits.

Under both bills, parental leave benefits would essentially be treated like loans that accrue interest. For a typical worker who has her first child at age 26 and claims Social Security retirement benefits at about 65, interest would accrue for about 40 years.[5] Over such a long period, the amount of interest would ultimately exceed the amount of the benefit; in fact, the Urban Institute estimates that leave-takers would eventually pay back nearly four times as much as they received in leave benefits, on average.[6] These cuts would weaken retirement security and impose the greatest hardship on women and workers of color, as they already face less secure retirement than others.

At a time when many workers face shaky finances in retirement, policymakers shouldn’t weaken Social Security, which is most workers’ only source of guaranteed retirement income. Policymakers can provide paid leave without asking parents to sacrifice some of their retirement security. In fact, that’s what every existing state program does, by financing benefits with modest payroll tax contributions. It’s also what the overwhelming majority of workers prefer: when polled about the best funding mechanism for a national paid family and medical leave policy, just 3 percent of voters preferred drawing from the Social Security trust funds.[7]

Future proposals should not force workers to choose between the paid leave they need and their hard-earned retirement security, but should instead finance a national paid family and medical leave program through modest payroll tax contributions or other sources of revenue. A broad-based financing mechanism would recognize that paid leave programs are an asset not only to those taking leave, but also to society at large.

Full analysis continues at CBPP.org »

How do the leading plans to expand and improve Social Security stack up?

Comparing three different plans to expand benefits and improve the system’s finances.

Sen. Elizabeth Warren (D-Mass.), Rep. John Larson (D-Conn.), and Sen. Bernie Sanders (I-Vt.) have each introduced plans to expand Social Security benefits and improve the system’s finances.

The Los Angeles Times’ Michael Hiltzik takes a look the just-released plan from Sen. Elizabeth Warren (D-Mass.) and how it differs from two proposals introduced in Congress, the Social Security 2100 Act, introduced by Rep. John B. Larson (D-Conn.), and the Social Security Expansion Act, filed by Sen. Bernie Sanders (I-Vt.) — one of Warren’s rivals for the presidential nomination — and Rep. Peter A. DeFazio (D-Ore).

Hiltzik correctly notes that “all three proposals take aim at some of the same issues, such as the chronic shortchanging of women who spend their career years caring for dependents at home and the need to extract more tax support from the wealthiest Americans, but offer somewhat different solutions.”

Even with their differences, all three plans are “a solid rebuff to Republicans and conservatives whose hand-wringing about Social Security leads to proposals to cut benefits. Warren’s entry into the lists as a presidential candidate ensures that the debate will take place in the public sphere — not, as Sen. Joni Ernst (R-Iowa) advocated recently, ‘behind closed doors.'”

Full story: Los Angeles Times

Republicans Are Pushing Myths About Social Security – To Justify Their Demands For Benefit Cuts

[Column by Nancy Altman, Forbes.com] Republican politicians want to cut Social Security. They never say so out loud, but their 2016 platform reveals the truth. In the section labeled, “Saving Social Security,” it proclaims, “As Republicans, we oppose tax increases…” Since Social Security cannot deficit spend and is projecting a shortfall in 2035 if Congress doesn’t act, that only leaves benefit cuts.

Representative John Larson (D-CT), the Chairman of the House of Representatives’ Subcommittee on Social Security, is trying to force his Republican colleagues into the open. Larson is the sponsor of the Social Security 2100 Act, which increases Social Security’s modest benefits. Additionally, it raises enough revenue to ensure that all benefits can be paid in full and on time through the year 2100 and beyond. Ninety percent of the Democrats in the House of Representatives are co-sponsors, but not a single Republican. Given their refusal to back his bill, Rep. Larson has urged Republicans to offer an alternative proposal — to no avail.

Non-action is not an option, unless your goal is to cut Social Security. The most recent Social Security Trustees’ Report projects that with no action, benefits will be automatically reduced by 20 percent in 2035. As Chairman Larson has plainly stated, “The hard truth of the matter is that Republicans want to cut Social Security, and doing nothing achieves their goal.”

Deflecting from their desire to cut Social Security, Republican politicians and their outside advocates have unleashed a barrage of misleading attacks about the 2100 Act and Social Security itself. A recent Heritage Foundation report, for example, attacked the 2100 Act and called for “significantly reducing” benefits of everyone but “those with the greatest need,” falsely claiming that doing so would “return Social Security to its goal of poverty prevention.” (Emphasis added.)

Since this focus on need is a common tactic in today’s debate, it is important to confront it with the truth. The Heritage Foundation is utterly wrong about Social Security’s original goal. What it’s actually describing is the program that Social Security’s conservative opponents have tried to repeal and replace it with from the beginning.

Social Security was designed as wage insurance. Its goal has always been much more expansive than the alleviation of poverty, or even its prevention. The system’s purpose is, and always has been, to replace wages so that people are able to maintain their standards of living in the event of retirement, disability or death.

Read full column: Forbes.com

Republicans’ rendezvous with reality — their plan is to cut Social Security

Senate Majority Leader Mitch McConnell (R-KY) has called for cuts to Social Security, Medicare and Medicaid.

[The Hill] Let’s be real. Social Security benefits will be cut by 20 percent in 2035 unless Congress acts, according to Social Security Chief Actuary Steve Goss. The Social Security 2100 Act, co-sponsored by 210 Members of the House of Representatives, not only prevents those devastating cuts but also expands benefits across the board, improves the cost-of-living adjustment (COLA) and cuts taxes for millions of workers.

Last week, House Ways and Means Committee ranking members Kevin Brady (R-Texas) and Tom Reed (R-N.Y.) criticized the Social Security 2100 Act, claiming it is too expensive. They also declared that they would like to work with Democrats on a long-term solution to Social Security. However, for the eight years the Republicans controlled both chambers of Congress, they did nothing to address the looming 20 percent across-the-board benefits cut in 2035. For those eight years, not only did they never work with us, but they would not even hold a hearing on legislative proposals to improve Social Security’s solvency. The hard truth of the matter is that Republicans want to cut Social Security, and doing nothing achieves their goal.

With 10,000 baby boomers becoming eligible for Social Security every day, we must act now. Rep. Tom Suozzi (D-N.Y.) laid it out very well during last week’s Ways and Means Committee hearing: To make Social Security sustainably solvent, we can either raise revenue (as the Social Security 2100 Act does gradually over time in a commonsense way) or cut benefits.

Read more: The Hill