Five Republican Myths Employed at Recent Social Security Hearings

Authored by Nancy Altman, President, Social Security Works

Representative John Larson (D-CT), Chairman of the Social Security Subcommittee of the House Ways and Means Committee, is holding historic hearings on expanding Social Security. These are the first such hearings in nearly half a century. At the hearings, Republican members of Congress are cloaking their desire to cut Social Security in dulcet tones of bipartisanship. In doing so, they are spreading damaging myths about Social Security. Here is the truth regarding the following five claims pushed by Congressional Republicans in these hearings:

  1. Claim that to be bipartisan, Democrats must agree to Social Security benefit cuts –though even the Republican base rejects cuts and wants benefits expanded

Two comprehensive legislative Social Security proposals have been introduced in the current Congress so far. The Social Security 2100 Act, sponsored by Representative John Larson (D-CT), has over 200 cosponsors; the Social Security Expansion Act, sponsored by Senator Bernie Sanders (I-VT), is cosponsored by a who’s who of leading contenders for the Democratic presidential nomination, including Senators Elizabeth Warren (D-MA), Cory Booker (D-NJ), Kirsten Gillibrand (D-NY) and Kamala Harris (D-CA). Both bills, which have companions in the other chamber, increase benefits for every current and future Social Security beneficiary. They also restore Social Security to long-range actuarial balance: the first, for three-quarters of a century; the second, for half a century.

Senator Bernie Sanders (left), D-Vermont, and Rep. John Larson (right), D-Conn. have each introduced legislation to protect and expand Social Security. (Sanders photo by Phil Roeder via Flickr Creative Commons, https://flic.kr/p/yT4bRv, Larson photo via Wikimedia Commons)

Neither bill has a single Republican cosponsor. Nevertheless, what the Democrats are proposing is fully bipartisan. It is bipartisan in the way that matters. An overwhelming majority of Republican voters, according to poll after poll, support what the Democrats are proposing.

Just a few weeks ago, on March 21, the Pew Research Center released a poll showing that 68% of those identified as Republican/Lean Republican believe that Congress should make no cuts to Social Security whatsoever. A year ago, in the lead-up to the 2018 midterm elections, Public Policy Polling found that 56% of those who voted for Donald Trump and 55% of those who identify as Republican would be more likely to vote for a candidate who “supported expanding and increasing Social Security.”

Furthermore, a 2014 National Academy of Social Insurance survey found that 80% of Republicans believe that Social Security is more important than ever; 72% of Republicans responded that they “don’t/didn’t mind paying Social Security taxes;” and 65% of Republicans agreed that “we should consider increasing Social Security benefits.”

Perhaps most striking, the same National Academy poll found that 69% of Republicans supported “increasing the Social Security taxes paid by working Americans,” if needed to “preserve Social Security benefits for future generations.” That percentage increased to 71% when the question was whether “top earners” should pay more.

Talk of bipartisanship by Republican politicians simply cloaks their desire for cuts. Representative Larson called out the hypocrisy in an early hearing: “Gee, you know, funny thing, we introduced [the Social Security 2100 Act] 6 years ago, and we couldn’t even get a public hearing on it for 6 years. And so the ‑‑ let’s say the spirit of bipartisanship was a little waning.”

Continued on Forbes.com »

The Republican proposal for paid family leave is a sham that would wreck your retirement

Sen. Joni Ernst, R-Iowa, has a plan to let you raid your Social Security to pay for parental leave. Don’t buy it.

Republican Sens. Joni Ernst of Iowa and Mike Lee of Utah have been beating the drums for their “Cradle Act,” a proposal to institute up to 12 weeks of paid leave for new parents.

They’ve been draping their proposal in all sorts of uplifting words about the virtues of family leave — the bonding of mothers, fathers and offspring, the long-term benefits for children and so on.

But they’ve concealed the chief drawbacks of their plan, which are the same features that make it palatable to a GOP constituency: It would undermine Social Security, force seniors to work longer, and carry hidden costs that wouldn’t be evident until it’s too late.

We analyzed this plan last April, when it was being pushed by Ivanka Trump and Sen. Marco Rubio, R-Fla., while Ernst and Lee were standing by in the wings. It was a dumb, even dangerous idea then, and that hasn’t changed. It’s a poisoned chalice, and you shouldn’t drink from it.

The GOP plan contrasts sharply with a Democratic plan offered by Rep. Rosa DeLauro of Connecticut and Sen. Kirsten Gillibrand of New York. Their Family and Medical Leave Act would extend benefits not only to new parents but to workers facing serious medical conditions or the necessity of caring for a family member. It would be funded by payroll contributions of .4 percent of wages — two cents per $10 of wages — split between employers and employees.

Moreover, it evades the question of why Social Security needs to be dragged into a program of this sort at all.

Full story: LA Times

GOP lawmakers offer paid parental leave legislation — funded by your Social Security benefits

Photo: 401(K) 2012 via Flickr Creative Commons: https://flic.kr/p/ayZi8V

The latest Republican plan for paid family leave is basically this: spend some of your Social Security benefits when you have a child — then, when your Social Security benefits aren’t sufficient for retirement, you can just move in with your (now adult) kid.

It’s politically tone-deaf and utterly lacks any connection to the daily lives of working people — but Republicans actually do have one part of this right: the Social Security Administration is a great place to set up a national paid family leave program — overhead is very low, staff and infrastructure are already in place, etc.

But the way to pay for it is…wait for it…to actually pay for it instead of making workers borrow from their future benefits — like Kirsten Gillibrand, Democrat of New York, proposes. People shouldn’t have to choose between paid leave and receiving Social Security when they retire.

Full story: The Hill

On Social Security, Democrats Have The Courage Of Their Convictions. Republicans? Not So Much

Rep. John Larson (D-CT) is opening up a true public dialogue on the future of Social Security. (Image: DonkeyHotey via Flickr Creative Commons, https://flic.kr/p/dKmSQx)

This week, Rep. John Larson (D-CT), chair of the Social Security Subcommittee of the House Ways and Means Committee, held two historic hearings on expanding Social Security benefits. These were the first hearings on Social Security expansion in nearly half a century.

These hearings represent a return to transparency and regular order, an important development for anyone who cares about the future of the American people’s pension, Social Security.

In addition to holding hearings, Representative Larson recently introduced the Social Security 2100 Act along with over 200 of his fellow Democrats. This wise legislation expands Social Security’s modest benefits while ensuring that all promised benefits will be paid in full and on time through the year 2100 and beyond.

Under Larson’s leadership, Democrats are holding public hearings and, presumably, plan to record their votes on the issue in the Ways and Means Committee and the House floor. This presents a sharp contrast to the infamous Bowles Simpson Commission, the so-called Super Committee and other closed door, fast track efforts that attempted to cut Social Security’s modest benefits in secret so that the American people would have no way to hold their elected leaders accountable.

It also is a stark contrast to the House Republicans when they were in the majority. For years, Larson, as ranking Democratic member of the Social Security subcommittee, requested the kind of hearings that he held this week. But as long as Republicans held the House majority, they refused.

Now that Larson has the gavel, his Republican colleagues emphasize the so-called need for “bipartisanship” on Social Security. What they really seem to be saying, from their performance at the recent hearings, is that they want Democrats to give them political cover to cut benefits so that they are free from accountability at the ballot box.

Read more – full story at Forbes.com

Inequalities in workplace retirement plan access and eligibility driving persistent retirement savings gap for Latinos

A recent report finds that inequalities in access and eligibility for employer-sponsored retirement plans are contributing to persistent retirement savings gaps for Latinos. As a result, Latinos are falling even further behind in preparing for retirement. Only 31 percent of all working age Latinos participate in workplace retirement plans, resulting in a median retirement account balance equal to $0.

Download full report here.

These findings are contained in new research, Latinos’ Retirement Insecurity in the United States, from the National Institute on Retirement Security (NIRS) and UnidosUS. Download the full report here.

“Most Americans are far off-track when it comes to preparing for retirement, and this report offers an even grimmer outlook for Latinos. The retirement divide can begin to close if more Latinos have access to retirement plans and are eligible to participate,” said Diane Oakley, NIRS executive director. “State-sponsored retirement plans that are taking hold across the nation also can play a big role in improving the retirement outlook for Latinos. Such plans target working Americans who lack access to employer-sponsored retirement plans, and less than half of Latino employees in the private sector have access to such plans,” Oakley added.

The research finds that:

  • Access and eligibility to an employer-sponsored retirement remains the largest hurdle to Latino retirement security.
  • The retirement plan participation rate for Latino workers (30.9%) is about 22 percentage points lower than participation rate of White workers (53%).
  • When a Latino has access and is eligible to participate in a plan, they show slightly higher take-up rates when compared to others races and ethnicities.
  • For working Latinos who are saving, their average savings in a retirement account is less than one-third of the average retirement savings of White workers. Overall, less than one percent of Latinos have retirement accounts equal to or greater than their annual income.

The report indicates that policy options that would greatly benefit Latinos are as follows:

  • Expand Plan Eligibility for Part-Time Workers. Given that top reason that Latinos did not have retirement savings was that they worked part-time. Allowing part-time workers the ability to participate in employer-sponsored retirement plans would greatly increase the number of Latinos that could save in a retirement plan.
  • Promote the Saver’s Credit. The Saver’s Credit is a non-refundable income tax credit for taxpayers with adjusted gross incomes of less than $31,500 for single filers and $63,000 for joint filers. Given that the median household income for Latinos was $46,882 in 2016, a large number of Latino households would qualify for the Federal Saver’s credit if they saved for retirement. By further promoting the credit, many more Latino households could be rewarded for saving for retirement.
  • Promote and Further Develop State Retirement Savings Plans. In 2014, an estimated 103 million Americans between 21 and 64 did not have access to an employer-sponsored retirement account. In response to this gap, a number of states have enacted state-sponsored retirement savings programs that automatically enroll individuals into a plan if they are not covered by an employer-sponsored plan. For Latinos, these plans are especially important. State retirement savings plan can assist with providing low-cost retirement products to working Latinos who are not covered by a workplace retirement plan, helping to alleviate the current retirement savings crisis that Latinos face.

Latinos lead population growth in United States, accounting for 17.8 percent of the total U.S. population and numbering over 57.5 million. As the largest minority group in the U.S workforce, Latinos comprised 16.8 percent of the labor force in 2016.The U.S. Census Bureau estimates that by 2060, the Latino population will number 119 million and will account for approximately 28.6 percent of the nation’s population. Additionally, the U.S. Administration on Aging predicts the Latino population that is age 65 and older will number 21.5 million and will comprise 21.5 percent of the population by 2060.


We can restore long-term balance to Social Security

Image: mob rob via Flickr Creative Commons, https://flic.kr/p/6A1sdu

The Washington Post recently penned a wolf-in-sheep’s-clothing editorial purporting to “fix” Social Security by means-testing benefits. The Post calls it “progressive price indexing” but it amounts to the same thing — and two Letters to the Editor call them out on it.

The first is from Nancy Altman, president of Social Security Works and chair of the Strengthen Social Security Coalition:

Despite the headline, the Feb. 22 editorial “Social Security is not broken” endorsed a proposal that would radically transform Social Security. So-called progressive price indexing would gradually but inexorably change Social Security from an insurance program that replaces wages in the event of disability, death or old age to a subsistence-level benefit largely unrelated to prior earnings.

Republican presidential nominee Alf Landon and his party proposed universal subsistence-level benefits as an alternative to Social Security in 1936. He lost in a landslide. Rep. Carl Curtis (R-Neb.) and the U.S. Chamber of Commerce tried to persuade President Dwight D. Eisenhower to champion the radical change. Eisenhower rejected it and instead successfully proposed expanding Social Security. President George W. Bush proposed it as part of his effort to privatize Social Security. A Republican-led Congress refused to even hold a vote.

Social Security can be restored to long-range actuarial balance while addressing the nation’s looming retirement income crisis with the Democratic Party’s plan to expand — not cut — Social Security.

The second letter is from Max Richmon, president and chief executive of the National Committee to Preserve Social Security and Medicare and former staff director of the U.S. Senate Special Committee on Aging:

The Feb. 22 editorial on Social Security hewed dangerously close to the rhetoric of Social Security’s opponents by attempting to pit one generation of Americans against the other. The argument that we cannot afford to take care of the nation’s children and boost Social Security benefits for seniors sets up a false choice.

More than 4 million children benefit from Social Security through benefits for survivors and families, including at one time former House speaker Paul D. Ryan (R-Wis.). With the average Social Security benefit around a meager $18,000 per year and about two-thirds of seniors relying on the program for more than half of their income, this is no time to cut benefits.

That’s why we support the bill from Rep. John B. Larson (D-Conn.) that would provide all beneficiaries a modest boost. We’re a long way from “tapping the rich” simply by asking the wealthy to pay into Social Security at the same rate as everyone else.

Meanwhile, the Trump/GOP tax cuts robbed the federal government of nearly $2 trillion in revenue that could have been put toward domestic priorities, including children. In a just and equitable United States, we don’t have to choose between a modest increase for Social Security recipients and funding programs for children. We can do both.

Your Social Security benefits were cut – here’s why you didn’t notice

Cutting Social Security benefits is widely (and rightly!) seen as a third rail of American politics. But Dean Baker of the Center for Economic and Policy Research points out that two relatively recent administrative changes have done just that. How?

[The first reduction] takes the form of an increase in the age at which workers can receive their full benefits. This had been age 65 for workers who reached age 62 before 2003.

The age for full benefits then rose gradually to age 66 for workers who reached age 62 after 2008. It remained at this age until 2017, at which point it again began to increase, reaching 67 for workers who turn 62 after 2022. This increase in the age for full benefits amounts to roughly a 12 percent reduction in the value of a worker’s Social Security.

The next reduction is the result of changes to how inflation was measured by the Consumer Price Index (CPI), lowering it by roughly half a percentage point each year:

This means that if the old CPI would show a 2.5 percent rate of inflation this year, the new CPI would show a 2.0 percent rate of inflation. Accordingly, retirees’ benefits will go up a 0.5 percentage point less this year because of the differences in the CPI.

While this may seem trivial, it adds up over time. If a typical person can expect 20 years of retirement, by the end of this period, their benefits will be roughly 10 percent lower because of the changes in the CPI.

Baker notes that changing the basic formula for calculating benefits — which would involve minimal administration work — would help make up for these cuts, and improve economic security for millions of people who earn (or once earned) moderate wages:

As it stands, workers get 90 percent of the first $10,700 of their average pay. They get 32 percent of the next $50,100, and 15 percent of their average wage above this amount up to the maximum. If the formula were changed to give workers 100 percent of the first $10,700 of their average pay it would amount to an 11 percent increase in benefits for workers whose lifetime earnings put them at or below this threshold.

There are other changes to Social Security that we should be considering, such as increasing the benefit for surviving spouses. We should also look to build on the actions of more progressive states in developing government-sponsored pension plans that avoid the high fees that the financial industry charges 401(k) and IRA accounts. But, changing the payback formula for moderate wage earners is an important first step that Congress should be debating.

Full story: Center for Economic and Policy Research