Moore (D-WI) and Senator Tammy
Baldwin (D-WI) are taking concrete action to reduce the number of Social
Security field office closures around the country. They have introduced legislation
to make it harder for the Social Security Administration (SSA) to summarily
shutter these crucial customer service centers without Congressional oversight
and input from local communities.
SSA has closed more than 60 field offices since 2011, inflicting hardship on lower income claimants who can’t easily access the nearest alternate locations. These closings have taken place largely – but not exclusively – in urban areas with minority populations. When an office in Congresswoman Moore’s Milwaukee district serving poor and mostly Hispanic residents was summarily shut down in 2017, she and Senator Baldwin said enough is enough.
“Social Security Administration (SSA) office closures do nothing but
create hardship for seniors and other beneficiaries who may struggle to travel
long distances or have medical, work, and childcare obligations that make long
wait times and overcrowding prohibitive.” – Rep. Gwen Moore (D-WI)
The “Maintain Access to Vital Social Security Services Act,” which Moore originally introduced in the previous Congress and is now paired with Baldwin’s Senate bill, calls for stricter oversight of SSA in the realm of field office closures.
“Chained CPI” might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.
Donald Trump’s recent budget proposal included billions of dollars in Social Security cuts. The proposed cuts were a huge betrayal of his campaign promise to protect our Social Security system. Fortunately for Social Security’s current and future beneficiaries, he has little chance of getting these cuts past the House of Representatives, which is controlled by Democrats.
So Trump and his budget director/chief of staff Mick Mulvaney, who has long been hostile to Social Security, are trying another tactic to cut our earned benefits. They are pursuing a long game to reach their goal. In a divide-and-conquer move, the focus is not Social Security. At least, not yet.
Last week, the Trump administration revealed that it is planning to employ the so-called chained Consumer Price Index (CPI) in a way that does not need congressional approval. “Chained CPI” might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.
Trump plans to switch to the chained CPI to index the federal definition of poverty. If he succeeds, the impact will be that over time, fewer people will meet the government’s definition of poverty—even though in reality, they will not be any less poor. The definition is crucial to qualify for a variety of federal benefits, including Medicaid, as well as food and housing assistance. The announcement was written blandly about considering a variety of different measures, but anyone who knows the issue well can easily read the writing on the wall.
So, what does this have to do with Social Security? Like the poverty level, Social Security’s modest benefits are automatically adjusted to keep pace with inflation. If not adjusted, those benefits will erode, slowly but inexorably losing their purchasing power over time. These annual adjustments are already too low, but they are better than no adjustment at all. The chained CPI would make these adjustments even less adequate.
Got any relatives or friends who are freaking out about Social Security? Send them this short and informative video titled…you guessed it: “Stop Freaking Out About Social Security” from At What Cost, Bloomberg’s Facebook Live Show.
According to a new estimate based on the recent Social Security Trustees report, the Cost of Living Adjustment (COLA) for 2020 will be a scant 1.2%. That’s an increase of about $17.50 in monthly benefits for the average claimant. The same projection says that the Medicare Part B premium will likely rise by $8.80 per month next year. If both estimates prove accurate, the average beneficiary will only receive a net increase of $8.70 per month, which doesn’t buy much these days. As Bernice Napach reports in ThinkAdvisor:
“For recipients collecting $735 or less in benefits, the Medicare Part B premium increase would wipe out their entire COLA. They would have no additional funds to pay for rising costs for health care, housing or other necessities, which is an issue for a growing number of retirees.” – ThinkAdvisor, 5/1/19
If the 2020 COLA is, in fact, 1.2%, it would be the smallest benefit increase since 2017. (At 2.8%, the 2019 COLA was one of the highest of the past ten years.) For three of those years, the COLA was zero.
Of course, the COLA is supposed to cover the cost of inflation from year to year. But under the current formula, the CPI-W (or Consumer Price Index for Wage earners), it usually doesn’t. That’s because the CPI-W does not accurately reflect the inflation rate for the goods and services that seniors spend money on. For example, seniors spend roughly twice as much on medical care as younger adults, but the CPI-W does not take that into consideration. On the other hand, retirees don’t drive as much as working-age people, but the CPI-W fluctuates with the cost of gasoline. If the price at the pump falls, so do seniors’ COLAs.
The National Committee believes it’s time to adopt a better formula for calculating cost-of-living adjustments for retirees: the CPI-E, or Consumer Price Index for the Elderly. The CPI-E is based on retirees’ actual spending habits rather than those of the general population. Costs like food and transportation are de-emphasized, while inflation in housing and medical costs is given greater weight.
Three pieces of legislation have been introduced in the 116th Congress that would implement the CPI-E for calculating Social Security COLAs:
A 2019 study released by the federal General Accounting Office (GAO) found that if COLAs had been based on the CPI-E during the years 2003–2033, by the end of that 30-year period a beneficiary who earned the average national wage would receive $100 (or more) in additional monthly benefits. An extra $100 doesn’t sound like a lot, but think of the expenses it could help cover for seniors living on fixed incomes, including:
Telephone and internet service
A more accurate COLA formula would increasingly benefit retirees over time: the larger the benefit this year, the higher it will be the next year when the percentage increase in the COLA is applied. (This is known as a ‘compounding effect.’) Conversely, inadequate cost-of-living adjustments – especially when offset by increases in Medicare premiums – erode seniors’ buying power over time. There is no question: the CPI-E represents a superior alternative for seniors, especially the 50% of retirees who depend on Social Security for all or most of their income.
This Mother’s Day, let’s celebrate the remarkable Mothers of Social
Security. Without them, this essential program may never have been born. It
certainly would be much less successful and effective.
The Mothers of Social Security pushed for an expansive, ambitious program.
When necessary, they fiercely resisted men too cautious to embrace their bold
vision. All of us benefit immensely from their work—particularly women, for
whom Social Security’s modest benefits are especially important.
Best known of Social Security’s many mothers is Frances Perkins, the first
female member of a presidential Cabinet in the history of the country. When
President Franklin D. Roosevelt first asked Perkins to become Secretary of
Labor, she told
him that she would only accept his history-making offer if he agreed to
fully support her fight for Social Security, as well as other significant
measures to increase all of our economic security. He did. True to her
principles and values, she was a driving force behind the healthy start of
Social Security, from the system’s conception to its birth and its early
A less-known pathbreaker was Dr. Barbara Nachtrieb Armstrong, the first
tenured female law professor in the country. A Ph.D. economist, she
taught both law and economics at Berkeley and authored a landmark treatise, Insuring
the Essentials, an exhaustive study of social insurance and minimum wage programs
around the world.
Armstrong chaired the
Roosevelt administration working group that invented Social Security. Other
policymakers, concerned about the constitutionality of Social Security, argued
that it should be a state-based program. Armstrong successfully convinced them
that only a federal program was workable. When those who oversaw her work
contemplated dropping Social Security because they feared it was too big a
lift, she leaked their plan to friendly journalists whose exposés got Social Security
back on track.
Without Armstrong’s bold leadership and keen intellect, Social Security
might not even exist at all today. If that sounds hyperbolic, those same
policymakers whom Armstrong outwitted later decided to not propose national,
guaranteed health insurance. Cautiously, they decided it was better left for
the future. Today, we are still fighting for improved and expanded Medicare for
It is one of the most important retirement documents you will ever receive – but fewer Americans are reviewing their Social Security benefit statement nowadays due to cost-cutting and a government push to online services that is falling short.
Until about a decade ago, all workers eligible for Social Security received a paper statement in the mail that provided useful projections of their benefits at various ages, along with reminders on the availability of disability benefits and Medicare enrollment information.
But the Social Security Administration (SSA) decided in 2010 to save money by eliminating most mailings of benefit statements. Instead, we would all be encouraged to obtain this information online.
It is now abundantly clear that this is not working out.
The number of workers accessing their statements online has been just a fraction of those who once were reached by paper statements. And the cost-benefit tradeoff is poor.
Forty-two million Americans have created online accounts with the SSA since they were first offered seven years ago, the agency says, compared with the 155 million paper statements that were mailed in 2010, before the cost-cutting began. Meanwhile, the number of online account-holders who accessed their statements fell dramatically in fiscal 2018, from 96 percent to 43 percent, according to a report issued in February by the SSA’s Office of the Inspector General (OIG).
The report does not speculate on reasons for the fall-off, and the SSA declined to offer its own analysis. “We’ll leave the hypothesizing to others,” said Mark Hinkle, acting press officer.
If you have an online account with the SSA, you will receive an email message three months before your birthday reminding you to review your statement. But the process of logging on can be challenging, partly due to security protections aimed at preventing identity theft and fraud. The security is necessary, but the setup process requires users to go through multiple layers of authentication to prove identity.
Meanwhile, the level of comfort with online technology among older people lags the general population, according to a 2017 study by the Pew Research Center. For example, 51 percent of adults aged 65 or older have home broadband, compared with 73 percent of all adults. “We’ve seen the gaps close somewhat, but for the most part the differences haven’t changed much over the past five or six years,” said Monica Anderson, a senior researcher with Pew.
The SSA’s shift to online accounts is part of a broader agency strategy to handle most of its business with the public online by 2025. Yet the statement adoption rates underscore the problem with that strategy. Social Security is a near-universal program, and that means the agency serves many people who are less tech-savvy.
In recent years, the purveyors of intergenerational-warfare scenarios have repeatedly claimed that retirement security was not possible without throwing young workers under their grandparents’ bus. They urge us to abandon or significantly reduce our nation’s Social Security commitment for future generations because we simply can’t afford it. Unconscionably, too many progressives buy into this zero-sum perspective. Narrowing the frame to focus solely on justice for seniors fails to mobilize constituencies that, if united, would be an unstoppable force capable of returning Social Security to untouchable third-rail status.
Under former Speaker Paul Ryan’s leadership, attempts to dismantle Social Security were touted as reform. But when the new Congress convened in January, at the top of the agenda was the Social Security 2100 Act (H.R. 860), introduced by Representative John Larson (D-CT), which now has more than 200 co-sponsors in the House. The bill would increase minimum benefits, and an annual cost-of-living adjustment formula will result in increased benefits for all recipients.
Larson’s bill gives lie to doomsayers’ predictions. Social Security’s path to long-term economic stability is based on two simple changes. First, a 2.4 percent increase in the payroll tax, gradually phased in one-tenth of a percentage point a year, reaching a combined employee-employer tax of 14.8 percent by 2043—with the impact on low- and middle-income earners somewhat offset by reducing the income tax on Social Security earnings. Second, applying the payroll tax to income above $400,000 so that wealthy workers would pay tax on income up to the current cap of $132,900 and on their income above $400,000.
Reforming Social Security’s finances shouldn’t be limited to these steps, but it’s a great strategy to take this win and build on it in future years. The hurdle to get over? Winning requires millennials.
The only way to engage young people is by being brutally honest: They will rely more on Social Security for their retirement security than their parents or grandparents have. Millennials are significantly disadvantaged by major structural changes in the economy. These changes, which happened on their grandparents’ and parents’ watch, include wage stagnation, job instability, unprecedented levels of student debt, and rising housing costs. Taken together, these factors make it exceedingly difficult to save for retirement, and traditional pensions are rare. Furthermore, millennials are expected to live longer, thus increasing their reliance on Social Security for disability coverage during their working years and retirement benefits at older ages.
Millennials are a very entrepreneurial generation—they’ve had to be to adapt to sea changes in our economy. The hurdle to engaging them on Social Security is getting them to believe that their parents and grandparents will join forces with them to achieve real long-term stability—and not settle for short-term solutions that ensure security solely for the current elder generation.
Young people are right to be cynical. Conservatives promote specious intergenerational-warfare arguments, and too often the media uncritically reports these messages. The Republican leadership promises to protect seniors from cuts, while they insist on the necessity of reducing benefits for future generations. Advocacy groups, too, all too often settle for protecting today’s seniors, ignoring the plight of tomorrow’s.
Intergenerational justice can change this equation. People identify with their age cohort, but loyalty to their families also runs deep. Acknowledging the serious economic challenges faced by young people and elevating them to the fore of the Social Security debate are the first steps in encouraging millennials not to fall prey to the intergenerational-warfare pundits. Getting Grandma, Mom and Dad, and their 20-, 30-, and 40-something children on the same page about their economic security is a progressive family policy and a winning political strategy.
Although Social Security has been the most successful social-insurance and anti-poverty program in the nation’s history, escalating conservative attacks have undermined confidence in its future, particularly among a generation that has come of age facing major economic challenges. Only an intergenerational-justice alliance between boomers and millennials—based on truth-telling about each generation’s stake and about race and gender—will have sufficient political power to enhance the program and ensure its long-term political and financial viability. That’s a subject for family reunions as we approach the next election.
Beaudry and Arno go on to note that the political constituency for Social Security shouldn’t stop with young people, and propose three other strategies for building an unstoppable coalition. Worth reading!