How to best strengthen/protect Social Security

As we battle to defeat the Republicans this fall, we should work with labor and other progressive groups to win pledges from Democrats to protect and strengthen Social Security. It is important that Democrats and the labor movement have made this a central election issue. Here is one way Social Security's long-term fiscal strength could be ensured without hurting retirees or other beneficiaries.

From the National Committee to Preserve Social Security and Medicare:

Raising the Social Security Tax Cap

According to the Social Security Trustees, the Social Security Trust Fund will be able to pay full benefits until 2037, and incoming payroll taxes will be sufficient to pay about 78 percent of benefits thereafter. Some are using this modest gap in long-term funding as a pretext to justify proposals for large cuts in Social Security benefits destined to reduce the federal deficit. Others have proposed closing the gap by increasing income received by the Trust Fund. One way to increase revenue is to raise the Social Security tax cap.

Social Security's Current Cap

Under current law, Social Security contributions and benefits are based on earnings that fall below an annual cap, which is $106,800 in 2010. In the past, the tax cap has been set at a level that covered about 90 percent of all earnings paid in covered employment. Currently, however, only about 83 percent of earnings are subject to the Social Security payroll tax. This erosion in covered earning largely stems from the fact that wages for the highest paid six percent of workers have been rising faster than wages for the vast majority of people who make less than the cap.

Restoring the Cap to 90 Percent

The extraordinary growth of income for those at the highest end of the wage scale was not anticipated by those who established the formulas that fund Social Security today. Wages for middle and lower income workers have remained stagnant for over a decade, despite the booming economy, while higher-wage workers have seen significant wage growth during that time. Restoring the tax cap to a level that would again cover 90 percent of earnings would reduce Social Security's long-term deficit over its 75 year solvency period by nearly one-third.

Eliminating the Cap

Some have suggested that the tax cap should be eliminated altogether. These options include proposals to provide reduced benefits to workers for their contributions above the new maximum, in addition to proposals which would provide no benefits at all for these additional contributions. While eliminating the cap without providing commensurate benefits to those making the additional contributions would eliminate Social Security's funding shortfall, it would also break the current link between a worker's contributions and the benefits received upon retirement. This would be a substantial departure from the contributory nature of the Social Security program and would undermine the broad public support Social Security has enjoyed for over 70 years.

Watch out for stimulus scams

Social Security Stimulus Money Targeted by Scam Artists
From Alliance for Retired Americans

Seniors waiting for their $250 Social Security stimulus money should be wary of scammers taking advantage of confusion over the benefit. Most Social Security and Supplemental Security Income beneficiaries will automatically receive the one-time stimulus the same way they receive their regular monthly payment, either by direct deposit or by debit card or paper check. The main exception is Social Security recipients who are also employed; they will instead see a reduction in paycheck withholding throughout the year. The first payments went out on May 7, and all should be distributed by June 4. The Pittsburgh Post-Gazette warns Social Security recipients not to respond to any emails or phone calls asking for their bank account number or other personal information to “verify” that the recipient qualifies for the payment. Other emails ask recipients to pay a fee to apply for the stimulus money. Suspected fraud should be reported to the Social Security Fraud hotline at 1-800-269-0271. If you do not receive an expected payment by June 4, call the Social Security Administration at 1-800-772-1213 after that date.

Obama Favors Increasing Cap to Protect Social Security

This snippet comes from the Alliance for Retired Americans:

In Arnold, Missouri on Wednesday, President Obama said that raising the payroll tax cap is the "best way" to secure the retirement program's future. While stating his preference for raising income levels over reducing benefits, Obama also rejected increasing the retirement age, noting it as a burden for older workers. Calling Social Security a "solvable problem" and refuting the idea that the system will go bankrupt, the President suggested he might hold another White House summit to deal with the issue. "After eight years of focus on a privatized Social Security tied to the roulette wheel of the stock market, it is refreshing to hear ideas that are truly aimed at protecting Social Security," said Ruben Burks, Secretary-Treasurer of the Alliance.

Social Security Strong as Ever

by Joel Wendland

John McCain and the Republicans like to say that Social Security needs to be privatized because its on its last legs. McCain even recently insisted that workers paying into the system to fund retirement benefits for seniors – how the system has worked for the last 73 years – is an "absolute disgrace" that has to be fixed.

But McCain either lied to his audience or he is confused about how Social Security works and how well it is working.

According to new data released by the Congressional Budget Office, Social Security Trust Fund surpluses will continue for the next 41 years, and at current economic growth rates, the ongoing revenues into the program will pay at least 81% of the existing retirement and disability benefits for 75 years. And the reason this projection isn't longer is because the CBO won't project farther into the future.

These projections are improvements over past projections.

The CBO report, “future Social Security beneficiaries will receive larger benefits in retirement … than current beneficiaries do, even after adjustments have been made for inflation.”

In other words, McCain's specific claim that Social Security won't be here for my generations' retirement is simply false (unless he or his survivors succeed in killing the program).

In addition to providing higher Social Security benefits than what are promised now, even with no changes to the program, according to a policy memo from the Economic Policy Institute, "The trust fund will cushion the large baby boom retirement, as it was designed to do, but most benefits will continue to be funded by direct transfers from workers to retirees, as they are now."

But if you're still worried about it, why not lift or end the income cap on contributions to the Social security system. Right now, people who earn more than roughly $100,000 do not pay Social Security payroll taxes on the income over that amount. But they get full benefits when they retire or pass the retirement age: like John McCain, who currently gets almost $2,000 a month.

Barack Obama is talking about raising this cap to help ensure the program's future financial stability.

Right now, the earnings cap is pegged to income averages and rises on its as earnings rise, which of course, means that George W. Bush and previous presidents have presided over tax increases since 1982. But is this system fair?

I say completely eliminate the cap to make the system fair. For once, let's have a "flat tax" on Social Security contributions.

John McCain Gives Working Families the Finger

By Joel Wendland

Yesterday John McCain held a town hall meeting at Worth & Co. in Bucks County, PA. The Pennsylvania Department of Labor and Industry has investigated that company for intentionally refusing to pay workers the minimum wage. Pennsylvania officials say the company underpaid workers by more than $140,000. There is no doubt that McCain's actions yesterday were a deliberate statement on how he feels about working people and their rights.

Here's a brief run-down on McCain's record on working-class issues – just in case you're still in the dark:

helped block minimum wage hike in 2005

voted to filibuster minimum wage hike in 2007

compared unions to monopolies

voted to block the Employee Free Choice Act in 2007, allowing workers to form unions

opposed the Ledbetter Fair Pay Act in 2008, which would have made it easier for women workers to sue for equal pay

McCain also failed to show up to vote last week on a measure that would have extended unemployment benefits for workers.

But McCain did pander to Big Oil on offshore drilling, and promised the most profitable companies in the country billions in new tax cuts.

By contrast, Obama backs the Fair Pay Act, for equal pay for women, would sign the Employee Free Choice Act, has proposed indexing the minimum wage to inflation, and would appoint NLRB members who would protect workers rights, wages, health and safety and so on.

John McCain favors free trade at all costs, especially to the rights of working people and the environment. He told Midwest workers that he has given up on bringing back manufacturing jobs and that more jobs would be lost under his administration.

Obama believes environmental protections and workers rights (to join unions, health and safety protections, and basic wage rights) should be central features of any international trade agreement. He voted against CAFTA and opposed the Colombia Free Trade Agreement for those reasons.

Trade is a key workers' rights issue, because if agreements prioritize trade over workers and the environment, those agreements will make it cheaper for companies to super-exploit workers and the environment in other countries, causing job losses here and the drive to bottom everywhere.

If workers are protected in all countries, however, companies have no reason to go.

On creating new jobs, McCain has offered contradictory and incoherent plans on the most important new areas staked out for job growth: green energy and green jobs.

While he is offering prizes to the biggest polluters and proposes to tie the economy forever to oil with new plans to drill offshore and in protected Arctic regions, Obama plans real investments in research and development of renewable energy alternatives, green infrastructure growth, and alternative energies.

Though John McCain has tried to lie about and hide his support for privatizing Social Security and his plans to slash Social Security and Medicare benefits, Obama opposes privatization and has offered plans to improve the financial security of the program by raising the income cap on the Social Security payroll tax to ensure that the very wealthiest Americans pay their fair share into the system.

The list on the clear and meaningful differences on working-class issues between McCain and Obama is much longer, but you get the idea.

Working people simply can't afford the risk of John McCain in the White House. In fact, we can't afford not spending every effort to work for his defeat, on ensuring an Obama victory, and on strengthening pro-worker Democratic majorities in both Houses of Congress.

John McCain was for Privatizing Social Security, then against it, now he's for it

Tell DHS: No No-match Letters for Immigration Enforcement

• Take Action: Tell DHS to Say No to No-Match

DHS is proposing using Social Security "no-match" letters for immigration enforcement. Every year, employers report their employees' Social Security numbers to the government as part of the process of paying their payroll taxes. The Social Security Administration (SSA) checks those numbers against their database; if they don't match, a so-called "no-match" letter is sent by SSA to the employer.

That works well enough when the issue is just checking the accuracy of Social Security's records. But now DHS is proposing to use this system for something far more critical -- identifying whether a worker is in this country legally. And the Social Security database just isn't accurate enough to be used reliably for that purpose.

Why isn't it? The Inspector General of the Social Security Administration estimates that there are more than 17 million errors in the database -- each of which would trigger a "no-match" letter. And more than 70% of those errors are in the records of legal, native-born American workers.

If you're one of those workers, when the "no-match" letter arrives, it's up to you and your employer -- not DHS or Social Security -- to resolve the "discrepancy". And if you can't get it resolved in time, your employer is required to fire you or risk significant penalties.

If DHS goes forward with this plan, it would cause thousands of people to be fired on an unverified hunch that an error in a database in Washington means that you're not a legal, authorized worker.

The Department of Homeland Security needs to hear from you that this is unacceptable. You can send a comment to them just by clicking this link:

• Take Action: Tell DHS to Say No to No-Match

Seniors Protest Medicare "Advantage" Rip-off

The labor-affiliated Alliance for Retired Americans is calling July 23rd a day of protest to demand an end to federal subsidies for insurance companies offering privatized “Medicare Advantage” plans.

The subsidies, seen by many senior advocates as a back-door attempt to privatize Medicare, end up costing taxpayers and Medicare beneficiaries more than traditional Medicare.

State insurance commissioners have complained that insurers who carry Medicare Advantage use highly aggressive sales tactics to pressure seniors to accept privatized plans.

Medicare Advantage enrollees have reported significant interruptions in their health care and unexpected medical bills.

In addition, Medicare Advantage plans often do not provide adequate emergency care coverage.

Earlier this week, health care activists in Washington State and Wisconsin drew public attention to the issue.

An analysis by Washington’s Community Action Now reveals that it costs $1,503 more per year for every Washingtonian enrolled in a Medicare Advantage plan than it would cost to provide care for that person in traditional Medicare.

A similar study in Wisconsin found that Medicare Advantage costs an extra $1,533 per year than traditional Medicare.

The studies also found that every Medicare recipient is forced to pay more out of pocket expenses to fund the privatized plans.

Will Parry, President of the Puget Sound Alliance for Retired Americans, linked the pressure on beneficiaries to accept Medicare Advantage plans to Bush's ongoing effort to privatize Social Security.

Parry said, "Medicare is headed down a similar path, and Congress needs to again take a stand to ensure that our public health care dollars go toward people’s health care, not into health industry CEOs’ wallets.”

--From Political Affairs Radio. Subscribe to this podcast in iTunes.