Entitled to Know

Just when you think conservatives might have run out of new ways to destroy Social Security, columnist Robert Novak joins the discussion today urging Presidential candidate John McCain to cut the payroll tax. How ironic that just two days after all the political posturing by the administration and conservatives on the Hill about the need to reform entitlements to “save” Social Security, Novak now reports that one McCain advisor says it’s “not a big deal” to cut the very revenue needed to fund benefits for millions of retirees.

Senator McCain has already supported taking money out of Social Security to fund private accounts, which endanger the program enough, now conservatives want even more...to starve Social Security until it finally succumbs. Novak says: “

Cutting the payroll tax, which funds Social Security, would not be easy but would offer a rich economic prize in this lean Republican year.”

Really? A rich economic prize for whom? Certainly not the 34 million retirees and their families who need Social Security and will see the program starved in this never-ending quest for fiscally irresponsible tax cuts.

Social Security is fully funded for 33 years and Medicare is solvent for another decade. But don't be surprised if those details are buried in any coverage you might read about this year's Trustees Report. It just doesn't fit with this administration's "entitlement crisis" calls.

This year’s trustees report confirmed what we already know about the health of Social Security and Medicare...Social Security will continue to have a surplus for more than three decades while a nationwide healthcare crisis continues to escalate costs for seniors in Medicare. Here’s reaction from our President/CEO Barbara Kennelly:

“This trustees report shows that Social Security is on track to pay full benefits for more than 3 decades. But the challenges of skyrocketing healthcare costs are threatening not just seniors in Medicare but Americans nationwide. No doubt, this annual report will have the sky-is-falling crowd calling for ‘entitlement reform’ again while they continue to ignore America’s healthcare crisis and fight to protect billions in insurance industry subsidies which steal years of solvency from the Medicare program”

Social Security isn’t bankrupt. Unfortunately, too many in our national media just don’t seem to understand that basic truth.

We’ve written about this before so won’t rehash it again (not too much, anyway). But the latest oversimplified, sky-is-falling and propaganda-laden coverage from Debra Saunders in the San Francisco Chronicle just can’t be ignored. And we’re not the only ones who think so. End of the Echo blog has a nice response and so did our President, Barbara Kennelly. Here is her Letter to the Chronicle, since you probably won’t ever see it published.

Dear Editor,

If Debra Saunders really wants to have an honest discussion about our nation’s current fiscal mess (Everyman’s Mortgage Crisis, 3/11/08), let’s start with the facts. Comments like “Washington has promised benefits...without funding them” and “Washington continues to authorize...benefits without putting aside money for them” are certainly provocative but the problem is those statements just aren’t true. American workers (not Washington) have contributed $2 trillion dollars to the Social Security trust fund in the past two decades leading to a $187 billion surplus. Those contributions will continue to build the surplus to $4.2 trillion over the next decade.

Washington does face a crisis; however, it’s a budget crisis not an entitlement crisis. President Bush inherited a budget surplus and a Social Security trust fund built-up in preparation for baby boomers’ retirements. Now, after billions of dollars in tax cuts, an underfunded war in Iraq and six years of a Republican-led Congress following the President’s “borrow and spend” lead, we face record debt and budget deficits. These deficits are now being used as the primary argument for cutting programs like Social Security and Medicare, while tax cuts for the wealthy continue and billions in subsidies to the drug and insurance industry are protected.

Washington will have to make difficult choices to repair the fiscal damage done by this administration. But serious health care reform and strengthening Social Security for the long term should be the priorities rather than destroying the very programs so critically needed by millions of Americans.

Sincerely,

Barbara B. Kennelly, former Member of Congress
President and CEO of the National Committee to Preserve Social Security and Medicare

Mark Weisbrot is co-director of the Center for Economic and Policy Research and he’s also written a wonderful piece on Media accountability, false information and its affect on political progress.

That appears to be the continuing strategy for Senator Jim DeMint and other congressional privatizers intent on passing Social Security private accounts, whether the American people support them or not. You have to wonder, if privatization is such a great idea why do supporters go to such lengths to hide their true goals?

The latest privatization ploy comes under the guise of "stopping the raid" on the Social Security trust fund. Senator DeMint says he’ll "force a vote" on his amendment creating a "reserve fund" in Social Security. What he doesn’t mention in his news release is that this newly created "reserve fund", actually just diverts money from the existing Social Security trust fund to a new fund to create private accounts. Senator Demint's amendment is really just a privatization sleight of hand. Rather than "stopping the raid" as promised, this legislation allows the trust fund to be raided for a different purpose...the creation of private accounts.

The truth is the DeMint amendment is just a rework of the failed Bush privatization plan. It would divert money out of Social Security to fund private accounts, increasing federal outlays and requiring significant cuts in Social Security’s guaranteed benefits to foot the bill. All of this, so that future retirees can take their stable Social Security benefits on a risky Wall Street roller coaster ride.

Our letter to Congress has more details about what this amendment really includes and our analysis on the same amendment when it was introduced three years ago is linked here.

Congress provided even more evidence of just how flawed the 2003 Medicare Modernization Act is this week when the leadership was legally required to introduce legislation, which experts agree, is doomed to fail.

As we’ve reported here before, there’s no economic or budgetary reason for the arbitrary 45% trigger provision, which will require massive budget cuts in Medicare. This trigger really is nothing more than a political device designed to convince Americans we “can’t afford” Medicare while also distracting attention away from the real crises; our national debt and skyrocketing healthcare costs. Kaiser has provided a good roundup of news coverage on this trigger legislation.

On Monday, House Majority leader Steny Hoyer, as required by law, introduced the trigger legislation, in spite of its certain death in Congress. He told Congress Daily, lawmakers can’t ignore the growth in Medicare and Medicaid costs but:

"Unfortunately, the Medicare trigger is ill-suited to such a process”, he said. "I am very skeptical that we can deal with the issue of entitlements in a bipartisan manner in the current environment, especially since the current administration has made it clear that it is not willing to discuss all options."

Let’s review those options not up for discussion. The administration still refuses to consider allowing Medicare to to negotiate for lower drug prices as the VA currently does. Why? It will cut into drug makers’ profits. But that provision could save Medicare an estimated $600 billion dollars over 7 years. The administration also refuses to consider eliminating the $149 billion dollar subsidies provided to private insurers offering Medicare Advantage plans. Why? It would cut into insurers’ profits. But that provision could save almost $150 billion dollars and add two years of solvency for Medicare.

See the common theme here? Triggers and cuts that hurt seniors and the programs that protect them in order to preserve profits and new privatized markets that help industry prosper.

Is it any wonder then that seniors are anxious to pull their own trigger come November?

For years now, we’ve been encouraged to worship at the altar of “ownership”. Whether it’s sub-prime mortgages we can’t afford or risky Social Security private accounts riding the Wall Street roller coaster, Americans have been promised great things from an “ownership” society. As Providence Journal’s Froma Harrop wrote in a column this week:

How interesting that the buildup to the mortgage meltdown employed many of the same sales tactics as the Social Security privatization scheme. Resentment, fear, flattery and hype — plus scant details on fees and other costs — all went into the pitch.

And that’s really the point, isn’t it? Social Security is reliable and guaranteed. It’s not supposed to make us rich; it’s designed to prevent us or our families from slipping into poverty during old age, disability or premature death.

Boring? Maybe. But it’s certainly better than the privatization myth peddled to American taxpayers by an administration determined to dismantle Social Security.

So now what? The Internal Revenue Service will deliver rebate checks to those who qualify, starting in May. For the vast majority of Americans, they just need to file their usual 2007 tax return. But it could be a little trickier for some Social Security recipients and disabled veterans who wouldn’t normally file a tax return. They’ll need to file this year, even if they don’t owe any tax, to ensure they hit IRS’s radar. According to the IRS:

The IRS and Treasury will be working closely with the Department of Veterans Affairs and Social Security Administration along with beneficiary organizations to ensure that all eligible individuals know what to do to receive a stimulus payment.

The stimulus legislation also provided $31 million in addition funding to the Social Security Administration to provide staff and training to help seniors navigate the stimulus process.

The CCH group is a tax analysis firm which has provided a detailed description of the stimulus rebate and how the checks will be calculated. The Treasury Department also has a Fact Sheet describing the distribution formulas.

Unfortunately, scammers have already found a way to try and take advantage of seniors through a phone and email scam using the rebate at bait. The IRS never sends unsolicited emails and isn’t offering check “advances” so the IRS warns seniors to beware.

by Barbara B. Kennelly, NCPSSM President/CEO

Many a cynic said it couldn’t be done. But last night the House and Senate compromised on an economic stimulus package that improved with time. Thanks to the foresight and hard-fought efforts of Senate Finance Committee Chairman Max Baucus, Senator John Kerry and others who took up the cause, more than 20 million seniors who otherwise would have been excluded will now receive stimulus checks.

When the talk of an economic stimulus plan first began, it was clear that once again seniors would be ignored in any Washington efforts to jump-start the economy. The same had happened in 2001 and 2003, so this administration’s blind spot to seniors really wasn’t a surprise.

But this year was clearly different. American seniors are sick and tired of policies that have left them with dwindling COLA’s, skyrocketing healthcare costs and massive budget cuts in programs they desperately need. They’re feeling the pinch of this economy as much as anyone so the suggestion that a retired person living on $3,000 of Social Security doesn’t need or deserve an economic boost as much as someone earning $70,000 was the proverbial last straw.

Congress heard from America’s retirees on this one because the fundamental unfairness of ignoring more than 20 million seniors in a stimulus plan, which was supposed to be “timely, targeted, and temporary”, could not be ignored. National Committee members visited, emailed and called their Congressional representatives. In all, there were more than 3,000 contacts to Capitol Hill made by NCPSSM members and supporters in a just a couple of weeks.

Grassroots efforts still work. Individual voices raised together can get Washington’s attention. Something we should all remember during this election year...you can be sure your members of Congress do.

The spin cycle is in overdrive this morning as the Senate tries to find a way to do the right thing in a stimulus package. Most Senate Republicans, pushed hard by the White House, refused to budge in last night’s vote by allowing seniors to be included in any stimulus plan .

Today’s Roll Call summed it up this way:

“’I think it’s decided. I think the Senate will just pick up the House plan,” said Sen. Mary Landrieu (D-La.), who ripped the GOP. 'They don’t blink to spend an extra dollar in Iraq, but if you ask them to spend an extra dollar in America they all cave.’ Sen. Debbie Stabenow (D-Mich.), whose home state has been hard hit by unemployment, blamed last-minute pressure from the White House for the defeat. ‘The White House put incredible pressure on them,' she said. Stabenow said it would be 'very difficult to come up with a new package this week given the need for unanimous consent to avoid restarting time-consuming procedural maneuvers.’”

Reviewing the Administration’s FY 2009 budget was deja vu all over again...but for seniors this budget is even worse than in previous years...and that's hard to believe. Here's our analysis from National Committee to Preserve Social Security and Medicare’s President and CEO Barbara B. Kennelly.

“While health care costs soar, millions of Americans remain uninsured and baby boomers approach retirement, the last thing this nation needs is more of the same from the Bush administration. Proposing $178 billion in Medicare cuts which will directly impact healthcare access for millions of seniors, while at the same time preserving $150 billion in insurance industry giveaways, is outrageous and indefensible.”... Barbara B. Kennelly, President/CEO

Once again, the President’s priorities are clear. This FY 2009 budget proposes draconian cuts in healthcare programs, which would touch the lives of millions of seniors, the disabled, and poor while allowing billions of dollars in insurance industry subsidies to continue. This budget proposes:

Massive Cuts to Mandatory Spending Programs of $16 billion in 2009, $208 billion over the next five years, and $619 billion over 10 years.

Medicare Cuts Beyond Reason. In response to the arbitrary 45% cap created in the flawed Medicare Modernization Act, the President’s budget proposes legislation to reduce Medicare spending by $556 billion over the next 10 years and more than $10 trillion over the next 75 years.

More Budget Deficits and Record Federal Debt. This budget proposes making tax cuts to the wealthiest Americans permanent. Both debt held by the public and gross federal debt are estimated to reach all-time highs in FY 2009, totaling $5.856 trillion and $10.413 trillion, respectively.

Protecting Insurance Industry Profits. Once again, private insurers in Medicare will collect $150 billion over ten years in taxpayer-supported subsidies while also reporting record profits due to the privatization of Medicare.

Privatizing Social Security. The President’s budget proposes spending $30 billion in FY 2009 and $647 billion over the next 10 years to create Social Security private accounts.

America faces a Budget crisis not a Social Security crisis. Without the Social Security surpluses, the federal government would be running larger deficits. Based on OMB estimates, $204 billion dollars of Social Security surpluses will be used to mask the true size of the federal deficit in FY 2009. OMB expects the FY 2009 deficit will reach $407 billion. However, without the Social Security surpluses the FY 2009 would be approximately $611 billion.

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.”

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.

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:

“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

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

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.

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.

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:

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?