Wednesday, January 30, 2008

A Social Security Icon Dies

Robert M. Ball died last night at the age of 93.

Washington is a town full of public servants and political appointees but Bob Ball was unique. Few in government invest their entire lives toward a single goal but that’s exactly what Bob did. From his youngest days as a Social Security field assistant, to ultimately becoming the Commissioner of Social Security under three Presidents, Ball worked for decades to strengthen America’s social insurance programs for our nation’s elderly, disabled, survivors and their families.

Even in “retirement” Ball served on commissions and advisory boards, including the 1983 Greenspan Commission. He wrote books and crafted proposals for new Social Security reforms, including a three-point plan many consider a good blueprint for the future. Just a few months ago he took the Washington Post to task in a Letter to Editor in October. You just have to love someone who was still so engaged in an issue that at 93 he felt compelled to rattle off a letter to the Post to correct one of their (all too common) Social Security mistakes.

Our President & CEO, Barbara Kennelly, served on the Ways and Means committee during the 1983 Greenspan Commission and has known Bob Ball for decades. Here are her thoughts:

“It is not an understatement to say that generations of Americans owe their retirement security and wellbeing to Bob Ball’s tireless ommitment to preserve, protect and strengthen Social Security. Not only did he serve as Commissioner of Social Security under three Presidents, he was actively involved in virtually every Social Security development over the past 60 years. His firm belief in social insurance programs, including Medicare, helped to ensure that seniors, the disabled and their families would continue to thrive in spite of health
challenges and financial constraints.

Bob understood the balance between policy and politics. He mentored, educated, and encouraged so many of us, inside and outside of government, to remain committed to strengthen Social Security for future generations. He was one of my personal heroes.

Bob Ball’s voice will be missed but his legacy will continue to motivate us to ensure America’s seniors, survivors and the disabled will not be forgotten in Washington.”

Monday, January 28, 2008

The Senate and Stimulus

by Barbara B. Kennelly, NCPSSM President/CEO
and Social Security Advisory Board Member

The rush to pass a stimulus package is not reason enough to ignore the millions of American seniors who can help make this stimulus effort a success. We congratulate the Senate Finance Committee for understanding this and working quickly to craft a package that considers all needy Americans, young and old alike. If timely, targeted and temporary really is the goal of this stimulus package, then seniors should not be left out. The Committee is scheduled to meet at 2:30 Wednesday to take up their version of a stimulus proposal.

Older Americans living on a fixed income feel the pressure of high prices and the slowing economy as acutely as anyone, yet the White House-negotiated stimulus package ignores almost half of our nation’s 65-plus population. Many of these seniors are in the direst need and most likely to spend any additional income on necessary resources such as medicine, utilities, food and clothing.

Even so, the Bush Administration acts as if including seniors in this package is a gift rather that what it really is, good economic sense and the perfect example of their stated goals (timely, targeted and temporary).

According to the Bureau of Economic Analysis, Americans over 65 are responsible for 14% of all consumer spending. Seniors are also among the demographic groups most likely to spend any stimulus benefit they receive. The most recent Consumer Expenditure Survey by the Bureau of Economic Analysis says the average household headed by someone over age 65 spent 92% of their annual income, which is higher than any other demographic group with the exception of those under age 25. Seniors spend what they earn, especially as prices continue to rise, because they live on a fixed income.

But it won’t be that simple, of course. The administration is already making it clear it does not want seniors included in this proposal. White House spokesman Tony Fratto called it "political gamesmanship) and we expect to hear more of the same in the President’s State of the Union address tonight.

So much for those 3 T’s.

Friday, January 25, 2008

A Champion in the Senate

Senator John Kerry (DMA) has sent a letter to his fellow Senate Finance Committee members urging they include seniors living on fixed incomes in the economic stimulus package negotiated in the House. Kerry says:

“As you develop the legislative language of the economic stimulus package, I urge you to structure the rebate so that we do not unfairly penalize millions of seniors who are faced with the same economic strains as young families, but do not have the ability to increase their incomes.” Senator John Kerry (D-MA)
Seniors owe Senator Kerry a debt of thanks for his willingness to try and reverse a Washington legacy of ignoring millions of American seniors when crafting economic recovery plans.

So, now the race to passage begins. The Senate has begun work on its version of the stimulus package and the full House hopes to vote next week. Why the rush? Even if this package stays on the fast-track most don’t expect any of this stimulus to make it to Americans before June. All the more reason, we say...Why leave out seniors, when they could receive their stimulus sooner and, studies show, they will spend it faster?

“The people who need a stimulus check the most will spend it the fastest. Why, then, is the Administration abandoning millions of seniors in an economic stimulus package? Senior households currently spend 92% of their income each year. Many retirees live check to check and would immediately spend any rebate they receive. This should be the first step in any plan to pump billions of dollars into the economy as quickly as possible.” Barbara B. Kennelly, President/CEO The National Commitee to Preserve Social Security and Medicare and Member of the Social Security Advisory Board

Stimulus, Seniors & Social Security

Here we go again...

Just as we saw in stimulus packages in 2001 and 2003, America’s seniors living on fixed incomes are once again the forgotten constituency. The stimulus plan negotiated in the House ignores millions of retired Americans who live on their savings, pensions and Social Security and feel the pressure of high prices and the slowing economy as acutely as anyone. These seniors are in the direst need and most likely to spend any additional income on necessary resources such as medicine, utilities, food and clothing. They are literally the demographic poster-child for the stated stimulus goals:

Timely - Social Security Commissioner Michael Astrue says checks could be delivered in 6 weeks, compared to the IRS’s 10-12

Targeted
- Social Security databases allow easy access to Social Security beneficiaries. Americans 65+ spend 92 percent of their annual income, which is more than any other demographic group with the exception of those under age 25.

Temporary
-One time checks would be issued to seniors (through Social Security) just as currently planned for workers (through the IRS).

Including retirees in any effort at economic recovery makes good sense yet the administration treats seniors as if they’re just asking for a handout. Consider Treasury Secretary Paulson’s answer to a reporter’s question about including Social Security beneficiaries. Clearly the Secretary believes stimulus for millions of seniors is merely a “gift”:

The Christmas season has come and gone. We're not trying to decorate a Christmas tree here”... Treasury Secretary Henry Paulson
The good news is Senate Democrats have made it clear they have some ideas of their own to strengthen this stimulus package. But seniors will have to make their case quickly as this package is moving on the fastest track we’ve seen on Capitol Hill in years.

Friday, January 18, 2008

Social Security and Stimulus for Seniors

While Congress and the President start work on legislation to stimulate our slowing economy, it appears America’s 23 million seniors will once again be overlooked. This, in spite of the undeniable truth that the economic downturn and rising prices have hit older Americans especially hard since many live on a fixed incomes with little ability to increase their earnings.

Once again, legislative proposals are focusing on tying stimulus to tax relief or rebates. However, millions of retirees do not earn enough to require filing a tax return and therefore are not eligible for a tax rebate, yet they are also not poor enough to qualify for low-income programs being considered for increases.

According to the Bureau of Economic Analysis, Americans over 65 are responsible for 14% of all consumer spending. Seniors are also among the demographic groups most likely to spend any stimulus benefit they receive.

The most recent Consumer Expenditure Survey by the Bureau of Economic Analysis says the average household headed by someone over age 65 spent 92% of their annual income, which is higher than any other demographic group with the exception of those under age 25. Seniors spend what they earn, especially as prices continue to rise, because they live on a fixed income. Why should America’s fastest growing demographic continually be ignored in these economic recovery measures?

We’ve sent a letter to Congress today, and will provide testimony to the Senate Finance Committee next week, urging Washington to use Social Security as the vehicle to distribute to American retirees the same stimulus checks being considered for younger Americans.

It’s a boost for seniors and our economic recovery.

Wednesday, January 16, 2008

What’s in Your Wallet? Social Security Tries Debit Cards

The new debit card program, “Direct Express”, is scheduled to debut this spring. In the next few months, applications will go to beneficiaries in Texas, Arkansas, Oklahoma, and Louisiana and ultimately, the Treasury department hopes a large percentage of Social Security’s 49.3 million beneficiaries and 7.4 million Supplement Security Income recipients will sign on.

The debit card is Treasury's latest attempt to convince recipients to get away from paper checks. A few years ago, the department started direct deposit. The feds say not only will going electronic save money...since each check costs about 89 cents to print, compared with 9 cents to load a payment onto a debit card...it also protects seniors from fraud and check theft.

Currently, four million beneficiaries do not have bank accounts and Treasury predicts that if each of them signed up for the debit card, the government would save $44 million a year. But of course, there is a flipside to this convenience. Depending on how and where beneficiaries use their cards they could be charged usage fees.

Cardholders who use one of 56,000 designated ATMs, including those at 7-11’s and PNC banks wouldn’t be charged a fee for their first withdrawal from each government payment. However, additional ATM withdrawals will cost 90 cents. Like other debit-card holders, users may also face surcharges at many ATMs.

Let’s hope the potential savings for the government won’t increase the financial drain on beneficiaries.

Friday, January 11, 2008

Medicare is healthcare...you can’t fix one without the other

The Kaiser Family Foundation has issued a new Medicare brief worth a read. It’s a comprehensive look at Medicare’s financing and long-term solvency issues, which thankfully goes way beyond the “we can’t afford entitlements” crisis calls so popular within the Bush administration.

Financing Medicare: An Issue Brief draws many of the same conclusions offered by the Congressional Budget Office and which we’ve offered here in the past. Kaiser researchers say:


“Tackling the challenge of slowing growth in overall health care costs will require changes throughout the health care system rather than in Medicare alone. The federal government could play a leadership role in addressing national health care spending trends through its obligations to finance health care for the elderly and disabled through Medicare.”

We’d take it a step further to say the word “could” really must be “should” because the next administration needs to tackle health care reform in a serious way, if we hope to be prepared for an increasing population of aging Americans.

Thursday, January 3, 2008

Iowa Caucuses & Seniors Issues

Presidential candidates are making their final push in Iowa today before heading to New Hampshire but do you know where they really stand on issues affecting seniors?

It can be hard to keep track. The National Committee surveyed each Presidential candidate with 14 questions on issues such as Social Security, Medicare, pensions, healthcare reform, long-term care, prescription drugs, and the federal budget.

Five Democratic presidential candidates provided detailed responses to our questionnaire; Senator Joe Biden, Senator Hillary Clinton, Senator Chris Dodd, John Edwards and Senator Barack Obama. Rudy Giuliani and Mike Huckabee declined to respond while the remaining candidates have not replied to date.

It certainly is discouraging that two candidates specifically declined to answer our questions about policies affecting millions of seniors and their families. Our President/CEO, Barbara Kennelly, says:

“The next President will need to lead Congress as they shape the policies that will impact the long term outlook for our retirement and health security. As the nation’s leading organization advocating on behalf of Social Security and Medicare we know we may not agree with every candidate’s position; however, our members deserve straight forward answers on these issues. Ultimately, we hope every presidential candidate will offer detailed responses to these key policy questions”

That’s really not too much to ask, right?

Wednesday, January 2, 2008

Wall Street Celebrates, Seniors Pay

Unlike many of us, Humana, a private Medicare Advantage insurer, doesn't have the post-holiday blues.

According to the Associated Press , one Wall Street analyst has upgraded shares of health insurer Humana Inc. today saying it will be at least three years until Congress can make any cuts in Medicare Advantage programs. Carl McDonald with CIBC World Markets predicts:

"There will be no Medicare Advantage cuts in 2009, and unless cutting Medicare is the first priority of the new administration, it will be difficult to enact any cuts in 2010, either," he said. "This will give Humana and the Medicare industry three more years of strong enrollment and earnings growth."


Ultimately, this is what last month’s Congressional Medicare debate really was about...protecting the private “Medicare industry’s” profits. But at what price? Seniors will continue to help foot the bill for massive Medicare subsidies to these private insurance companies, while companies like Humana report record annual profits.

MedPAC has estimated that every Medicare beneficiary pays $24 a year in higher Part B premiums just to fund these excess payments to private plans. Because subsidies are projected to continue rising, all Medicare beneficiaries can expect to pay dramatically higher premiums in the future, and can expect increasing portions of those premiums to be diverted to private plan subsidies.

According to CBO, paying private plans at the same rate as traditional Medicare would save $54 billion over the next five years and $149 billion over the next ten years. Not only would eliminating these large overpayments save billions of dollars, it would also add two years of solvency to Medicare's hospital insurance trust fund.

While Wall Street investors may be giddy with predictions of the status quo in Medicare Advantage, seniors and taxpayers aren’t likely to quietly or happily continue to foot this bill for three more years.