Posts Tagged ‘Social Security’

The 2016 Election and Social Security

Friday, May 8th, 2015

By Nancy Altman

In the wee hours of a morning in early April, when most people were sleeping, the Senate took a vote that has momentous implications.

Just before recessing until April 13, the Senate passed a budget resolution. Prior to final passage, it voted on three separate Social Security amendments. Sen. Bernie Sanders (I-Vermont) offered an amendment protecting all Americans against cuts in their Social Security earned benefits. Sen. Orrin Hatch (R-Utah) offered an amendment only protecting current beneficiaries from cuts. And around 2:30 a.m., Sen. Elizabeth Warren (D-Massachusetts) offered an amendment advocating the expansion of Social Security.

The results were revealing and important. Every Democratic senator who was present but two voted to expand Social Security. Every Democratic senator but one voted against cutting Social Security’s modest benefits.

In sharp contrast, no Republican voted to expand Social Security. Every Republican but a mere six voted to keep open the option of cutting the earned Social Security benefits of every American except for those fortunate enough to already be receiving those benefits. (Sorry, those of you who are a month away from retiring or have a disabling or deadly illness or accident in your future. The Republicans refused to vote to protect you.)

The distinction between the Democrats and Republicans couldn’t be clearer. The Democratic Party which created Social Security — now in its 80th year — as of this vote has once again become the strong champion of the program. The Republican Party, which in 1935 voted nearly unanimously to kill the legislation in the House of Representatives, is unmistakably on record for favoring scaling back working Americans’ modest earned Social Security benefits.

The Democrats are finally back in line with the American people on Social Security. The vast majority of Americans are overwhelmingly united in support of Social Security. Poll after poll indicates that, notwithstanding, ideology, race, gender, income level, or age, Americans believe that Social Security is more important than ever. They overwhelmingly support increasing, not cutting, its modest benefits.

And this is the right policy. At a time that the nation faces a looming retirement income crisis, a strangling financial squeeze on families, and a perilous and growing upward redistribution of income and wealth, expanding Social Security is a solution. Social Security is the most universal, secure, efficient, and fair source of retirement income. It is generally the most important life insurance that families have. It is the only form of long-term disability insurance that most Americans have. But its benefits are woefully inadequate by virtually any measure. Increasing those benefits and adding new benefits like paid family leave is profoundly wise policy.

Despite this winning policy and politics, too many Democrats over the last few decades have waffled in their support. Too many flirted with trading away these modest but vital benefits in an ill-conceived “Grand Bargain.” Thanks to the recent vote, the Democratic caucus in the Senate should now be with us.

In 2016, it appears that finally the American people may have a clearly articulated choice about Social Security, a choice about their economic security. Social Security is not just the most important program for seniors, providing two-thirds of senior beneficiary households with half or more of their income, it is also the nation’s largest children’s program. It lifts more than 20 million Americans — including more than 1 million children — out of poverty each year. And it lessens the depth of poverty for millions more. It provides a floor of economic protection under our nation’s workers and their families.

For too long, though, Americans did not have a clearly articulated choice about what is at stake. Too many politicians, Democrats and Republicans alike, spoke in vague terms about “saving” or “strengthening” Social Security. Now they know. Some policymakers stand for expanding, not cutting, Social Security. Others want to “save” Social Security by dismantling it brick by brick.

Former Maryland Gov. Martin O’Malley, who seems poised to seek the Democratic nomination for president, is clearly for expanding, not cutting, Social Security. Sen. Sanders, who is reportedly considering a run as well, also strongly supports expanding, not cutting, Social Security. We now know where Ted Cruz, Rand Paul, and Marco Rubio stand, thanks to their votes last night. They are for cutting, not expanding, Social Security.

What is not known yet is where Hillary Clinton stands on expanding, not cutting, this program that currently provides benefits to about one in four households. If the Democrats are to retain the White House and take back the Senate, the answer to that question could be decisive.

Nancy Altman is the Founding CoDirector of Social Security Works, and the Co-author (with Eric Kingson) of Social Security Works!: Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All (The New Press, 2015).

2043 and the Social Security

Tuesday, April 7th, 2015

By Bob Shimabukuro, member of the PSARA Executive Board and Associate Editor

“Your daddy was so happy,” Zenwa Uncle said. “He said, ‘All the kids doing fine. Roy was doing good in school. Ned going Punahou. Everybody doing well.’ …We were eating. He told a joke, everybody laughed. Him too. But he pulled his head back, laughed and died.”

Two thousand forty three (2043): US Census Bureau projection of when the United States will become “majority minority,” that is, whites will comprise less than 50% of the U.S, population.

In 1980, a few months after Mom retired at 65, she traveled across the country to visit all of her seven kids and (then) two grandchildren for a few days, going through San Francisco, to the East Coast, then circling back to Seattle and Portland, Oregon, where I was living, before heading back to Honolulu. That was the plan. But the reality: A week and a half in intensive care, two surgeries, the eruption of Mt. St. Helens with layers of volcanic dust all around us, rehab and exercises to boost her memory, extended Mom’s stay in Portland about a month.

My siblings alternated visiting about 1-2 weeks to help me during those difficult days with Mom recuperating in the hospital and at my home so that she could travel home. One of our tasks was to ask her questions such as “what day of the week is it?” and “what’s your name,” or “who’s the President of the United States.“

We decided to also ask her about her history. Stuff we didn’t know about. We learned a lot, like: her parents spoke mostly Uchinanguchi (Okinawan language) at home and she learned Japanese at Japanese School, which signaled to me that she was tri-lingual. After a third day of “testing her memory,” she abruptly waved us off with her hands and said, “Enough. I can remember. No more questioning.”

But I did have some more conversations with Mom as my daughter and I accompanied Mom home. An important one was about a nice Social Security man (shortly after Dad died in 1962) “who came and advised me to get a job. “

‘Any kind of job. Just get a job,’ he said. ‘Because you will only get Social Security benefits for yourself until your kids finish college. After that you have to wait until you turn 65,’ he said.“ Not only did he inform Mom about the payments, he also told her about the necessity of having an account of her own.

I’ve thought about her words often, especially ever since I first filed for Social Security: “…came and advised me.” Was Social Security doing outreach then?

What a different era that must have been. Five years ago, when I first signed up for SSA, I was told that if the lines at the office were too long (which they were: 45 minutes minimum), I could set up an appointment by phone. Well, the wait time on my first phone call to set up the appointment was 20 minutes, which ended by a broken phone connection. After a 15-minute wait on the second call, I did manage to make an appointment for the following week.

A couple of years ago in order to verify my son had a bank account to receive his own SSA funds directly, the procedure took only 10 minutes, but the wait in line was over an hour.

More recently, last year, in July, I waited for 2 hours in a line to get inside the SSA office and then, once inside the office, I had to wait another hour and 45 minutes before spending a mere 5 minutes to resolve the problem.

When I told the SSA agent about the wait, she was horrified and said that I was the first person at the office she was serving that day, and that “the phone kept ringing the moment I hung up, so I had no time to work at the window.”

In just a five-year period, the service had gone from bad to worse. But judging from the agent’s description of her day and the service I actually received once getting past the line, the real problem was there simply weren’t enough workers to carry the load.

“Is it like this every day? “ I asked the security guard. “If you come before we open,” he answered with a very straight face, “there is no line.“

“Wow,” I thought, “this really sucks.” But I decided to push my luck at getting answers. “I’m a reporter. I’m thinking of writing about this experience.”

He paused, didn’t answer immediately. I think he was wondering if I was secretly recording him. He answered, “It’s crowded every day. Not like this all the time. This is the beginning of the month. It’s more crowded then. But it’s always crowded. Like I said, ‘if you get here early enough, there’s no line.‘ “

This scene was taking place in the Kent SSA office. My SSA office. Where people sit patiently for 3, 4, 5 hours waiting for their number to flash on the screen because they have no other choice available. Some come with someone to translate for them. Some play games on their smart phone. Different languages can be heard. A very mixed crowd. Definitely a 2043 crowd. A “majority minority” crowd.

For over four years community activists have been working with Social Security Works Washington coalition in fighting (1) to keep the SSA offices in the International District and in the Central Area and, once SSA went through with the move to the Jackson Federal Building, (2) to open a different, user-friendly office for our communities.

About two years ago, I wrote about the Jackson Federal Building: “Many of us know JFB. Intimidating. Even more so when there’s some demonstration going on there. It’s on a hill (a killer for grandma or granddad, and me too). No more free bus transportation to and from. Only expensive parking available.”

The SSA’s own data shows big drops in the numbers of field office visits— 24% after the neighborhood offices were closed. Projected over a year, that’s 17,000 less visits per year.

And what was SSA response to our report? SSA cut off our access to the data. What happened between the era that Mom received some extremely important advice and the SSA of today which doesn’t listen to us, or even worse, denies us access to what is really ours?

Is this because we’re a 2043 crowd they’re dealing with? A population not even worth thinking about? That has no political power? After more than three years, we’re still being stonewalled by SSA. Their only answer has been, “We have to cut services now or there won’t be any SSA in the future.”

Of course, this isn’t true. But the “1%” that now governs us has become very mean and greedy over the last few decades, and we’ve got a national media corps that is asleep and passes on the message of the “1%” without doing their own research. There are numerous plans being offered that could, in fact, provide revenue streams to successfully expand SSA, but the easiest way and most efficient way is to SCRAP the CAP.

All employees pay Social Security taxes, up until a ceiling, known as the “cap,” which is currently set at $118,500. What this means is that a person making $118,500 a year pays 6.2% taxes for SS. A person making $1,000,000/year pays only 0.68%, significantly less than one per cent. If everyone paid the same 6.2%, the SS system would be in good shape for future retirees.

Let’s demand an expansion of SS programs. There are a lot more people now who need the kind of help that Mom got back in 1962. There are a lot more people who need the kind of help Mom got when she was in a coma in the hospital in Portland. And most of all, there’s going to be a lot more people who will need the kind of help Mom got while she lived out her life in a nursing home in Seattle. All of us “99%” should be working to stop the plans of the 1%. If they get their way, the world will be a very bleak world by 2043.

“Strengthen Social Security, SCRAP THE CAP!”

The President’s Budget and Social Security

Monday, March 2nd, 2015

By Steve Kofahl

The President’s Budget released February 2, for the fiscal year that begins on October 1, 2015, would amend the Defense of Marriage Act to require the Social Security Administration and other agencies that administer programs in which marriage is a factor, to consider an individual as married if the marriage is valid in the state where that marriage occurred.

If Congress passes this provision, many more gay and lesbian spouses and survivors will finally be afforded their equal protection rights under the U.S. Constitution’s Fifth Amendment. Soon after the Supreme Court’s June 26, 2013, decision in Windsor vs. United States, SSA began paying benefits to some gay and lesbian spouses, based on guidance from the Department of Justice. However, many benefit applications were held and not processed while the Agency sought further guidance. The amendment to DOMA would allow these claims to be processed. We wish that the President had acted more quickly, but now we must put the heat on Congress.

The proposed Budget also provides for reallocation of reserves from the Old Age and Survivors Insurance Trust Fund to the Disability Insurance Trust Fund to balance the funds and allow full payment of benefits through 2033. This counters the action of the House of Representatives to block reallocation for the first time in history, which would cut benefits for disabled individuals and their children by 20% as soon as next year.

The President’s request also would boost total budget authority to administer SSA programs by $732 million, while adding 1506 work years (staffing and equivalent overtime hours). That would allow the Agency to reduce the record 1 million + pending disability claim hearing requests, cut telephone and field office visit waiting times, and hopefully keep SSA from closing more offices.

These are positive developments. On the “we better keep vigilant side”, the President has staked out a position of no “drastic” cuts to Social Security benefits. “Drastic”, as we know, is in the eyes of the beholder.

The President was proposing a “grand compromise” in the past. The Chained CPI or raising the retirement age may not be considered drastic in beltway mentality. We have to stay vigilant. For now, the President has made his proposal. We will see what the Congress has in mind within the next few months. At that time, we will know what kind of a fight we will have to wage.

Steve Kofahl is President of AFGE 3937 and a member of the PSARA Executive Board.

The 1% Off the Hook, “Fixing” Social Security, and Other Challenges

Monday, March 2nd, 2015

By Robby Stern

A Tax Holiday for the 1%

February 10 marked the date when the top 1% in the country no longer paid into the Social Security system. The lower level earners among the 1% hit the $118,500 cap on that date. Of course, a large proportion of the 1% hit the cap after their first or second week of earnings in 2015.

We know that if the cap were eliminated and everyone paid at the same rate regardless of income, Social Security would not only be able to pay full benefits for the remainder of this century, but we could actually increase benefits and make other needed changes to the program. We could consider improvements such as increasing benefits, particularly for low income earners; adopting a more accurate cost of living index, the CPI-E; adopting a care-giver credit for family care-givers who temporarily leave the paid work force to care for a child or an ill family member; and other reforms that would advance Social Security as a 21st century social insurance program.

It is not as if the top 1% (or top 5% for that matter) actually needs the tax holiday they are awarded by the cap. Given the composition of the Congress, the cap will not go away in the next two years. But, we will “keep on pushing.” Another chance will come in 2016. The cap will be an issue in the 2016 election.

The 80th anniversary of Social Security in August of this year provides an opportunity to promote the campaign to make Social Security a better program for our children and grandchildren. Maybe by the 85th anniversary we will be able to make the cap a piece of history that has been replaced by a more equitable policy.

Congress to Create a Commission to “Fix” Social Security

Meanwhile, the “Congress critters” (to quote Jim Hightower) are once again coming after Social Security. Reps. Tom Cole (R-OK) and John Delaney (D-MD) are planning to introduce a bill this Congress to establish another commission to propose changes to Social Security.

We know what to expect, and it will not be Scrapping the Cap. The changes they will propose are likely to include cuts like raising the retirement age, reducing benefits for some individuals, adopting the chained CPI, and introducing means testing for beneficiaries.

Advocates for Social Security believe this legislation is likely to make it through Congress. We already know that, in the past, the President was looking for the “grand compromise”. Stay tuned and get ready to become active to stop this renewed attack.

President Obama’s Budget

President Obama’s Fiscal Year 2016 budget proposal offers a mixed bag for seniors. The budget contains several changes to Medicare, including higher deductibles, new home health co-pays, and increased means testing.

On the positive side, the budget calls for Medicare rebates for prescription drugs, saving approximately $116 billion in Medicare payments to drug companies for medications prescribed for low-income patients. The proposed budget also would close the prescription drug donut hole in 2017, three years earlier than was adopted under the Affordable Care Act.

The budget also includes a reallocation of payroll tax revenue from Social Security’s old-age and survivors’ trust fund to the disability trust fund. This would keep the Social Security Disability Fund solvent past 2016. The Republican Congressional leadership has made clear that they intend to try and pit Social Security beneficiaries against those who receive Social Security disability by requiring cuts to Social Security in order to transfer dollars to the Social Security Trust Fund. We will oppose the effort to create a wedge. Scrapping the cap is a viable alternative.

July 30, 50th Anniversary

Planning has begun for a joint celebration of the 50th anniversary of Medicare and the 80th anniversary of Social Security. The anniversaries offer the opportunity to also discuss improvements to the Medicare program.

Some of the reforms could include lowering the age (not raising the age!) of eligibility for Medicare; allowing the Secretary of Health and Human Services to negotiate the price of prescription drugs with pharmaceutical companies; offering a prescription drug benefit in traditional Medicare similar to what is allowed in the Medicare Advantage program; and stopping Medicare Advantage programs from receiving higher reimbursement rates than are paid for comparable beneficiaries in traditional Medicare.

Medicare also needs to address the problem of long-term care. Right now, the cost of extended hospitalizations are a major cost driver. It would be a cost savings to create a Medicare longterm care benefit and would take an enormous weight off the shoulders of families trying to care for loved ones. More information will be provided on the celebration as plans develop.

PSARA Members Support Health Care as a Human Right

PSARA members for whom we have emails were asked in the early part of February to contact Sen. Randi Becker, the chair of the Senate Health Care Committee. She was asked to hold a hearing on Senate Bill 5305 that would create a goal of providing health care coverage for all Washington residents by the year 2020. We received the report that the Senator’s office was surprised by the number of phone calls and emails they received. Lobbyists for the Health Care is a Human Right Coalition were asked which organization generated so many calls to the Senator. PSARA was not alone in requesting action, but I heard from a number of PSARA members that they either made the call or sent an email. Obviously, a large number of PSARA members care deeply about the issue of health care being a basic human right. THANK YOU!

Social Security: Why It’s Not Broke & How We Can Expand It

Monday, March 2nd, 2015

By Tom Barry

Several years ago I was talking with one of my students, Siri, from Norway. She was taking her first US Government class at the time and was surprised to learn that few of her classmates thought Social Security would be around when they retired and, even more surprising, few seemed to care.

Siri had pointed out in an earlier conversation that we Americans spend a lot of our resources on things that might happen, but which we hope we don’t need. We buy health insurance and hope we don’t get sick. We buy car insurance and hope to avoid an accident. We get life insurance policies and pray our families won’t be cashing them out prematurely. “So why aren’t you concerned about what happens to you when you retire, something you know will happen and you know you’ll need?” she asked. It was a good question, and one for which I didn’t have a great answer.

So this week I was excited to attend a PSARA sponsored panel called “Social Security: Why It’s Not Broke & How We Can Expand It,” and I came away with a much better answer to Siri’s question than whatever I bumbled out a few years ago. The answer is simply that many of us – myself included – simply don’t understand Social Security, so we assume it’s broken. But it’s not.

Among the long list of things I was ignorant about before I attended the session was the realization that Social Security isn’t just about retirement; it’s a safety net for all of society. It’s not an example of bureaucratic waste; it’s an example of bureaucratic efficiency. And it’s not bankrupt, but not everyone is paying their fair share either.

As one of the panelists pointed out in response to a question about defending Social Security benefits, “the problem with defensive politics is that you only need to lose once to lose it all.” If we want Social Security to be around for our generation, we will need to be just as aggressive about its expansion as those who would like to see it dismantled.

Tom Barry is a PSARA member.

Social Security and Medicare: Facts and Figures

Monday, February 2nd, 2015

By Robby Stern, adapted from the Alliance for Retired Americans

Social Security

Nearly 168 million workers contribute to Social Security through payroll taxes.  Nearly 59 million people receive monthly benefits including:

  • 41.9 million – retirement benefits
  • 6.1 million – survivors’ benefits
  • 10.9 million – disability benefits

Average 2015 monthly Social Security Benefit:

  • A retired worker – $1306
  • A retired couple – $2140
  • Disabled worker – $1146
  • Widow or widower – $1253
  • Young widow or widower with two children – $2635
  • Maximum monthly Social Security Benefit – $2663 (worker at full retirement age)

Social Security Cost of Living Adjustment for 2015 – 1.7%

Cap in 2015 – $118,500. Workers and employers each pay 6.2% up to when the worker reaches the cap.

Medicare contribution – 1.45% for worker and employer

2015 Social Security Eligibility :

  • Full retirement – age 66
  • Early retirement – age 62 (Early retirement can reduce Soc. Sec. benefits up to 30%.)

Applying for Social Security: You should apply for Social Security three months before the date you want your benefits to start. You can apply by:

  • Visiting your local Social Security office.
  • Calling Social Security at 1-800-772- 1213. If deaf or hard of hearing, you can call Social Security at TTY 1-800-325- 0778.
  • Go online: https://secure.ssa.gov/ iClaim/rib

Medicare

Nearly 168 million workers contribute to Medicare through the payroll tax. Approximately 53.6 million receive Medicare benefits including:

  • 44.6 million individuals 65 and older
  • 8.9 million disabled people 2015 Medicare Part A (Hospital Coverage)
  • Deductible – $1260 (first 60 days of Medicare-covered inpatient hospital care).
  • Coinsurance – $0 (Days 1 – 60), $315 per day (Days 61 – 90)

2015 Medicare Part D (Prescription Drug Coverage)

Monthly Premium: Varies by plan (higher income consumers may pay more).

  • Deductible: Varies by plan, $320 maximum.
  • Doughnut Hole: $2960 – $6680. Beneficiaries in the doughnut hole pay 47.5% of their plan’s costs for covered brand name drugs and 72% of the price for generics.
  • Cap on out-of-pocket costs: $4700 (prior to catastrophic and excluding premium for plan).

Applying for Medicare

Generally, Medicare is available for people 65 and older, younger people with disabilities, and people with end-stage Renal Disease. If you already receive Social Security, you are automatically enrolled in Medicare Parts A and B, provided you are 65. To apply for Medicare, you can call 1-800-772- 1213 or visit their website, http://www. socialsecurity.gov/medicareonly. Thanks to the Alliance for Retired Americans for providing this helpful information!

Key websites:

https://secure.ssa.gov/iClaim/rib

http://www.socialsecurity.gov/medicareonly

http://www.psara.org http://www.retiredamericans.org

Watch Out Social Security – Here They Come Again!

Monday, February 2nd, 2015

By Steve Kofahl, President of AFGE 3937 and member of PSARA’s Executive Board

The most successful family insurance program in U.S. history is once again under attack. It’s been that way for 80 years. Our enemies hate this wildly-popular government program because of its success. It has demonstrated that we can take care of ourselves and each other collectively, and be protected from the loss of earnings that result from the retirement, disability, or death of a worker. Social Security’s continued existence threatens their Darwinian world view, by which only the “fittest,” the rich and powerful, deserve to prosper and feel safe.

On the very first day of business this year, the House of Representatives passed House Resolution 5, establishing their rules for the 114th Congress. One of the rules prohibits transfer of surplus funds from the Old Age and Survivors Insurance (OASI) Trust Fund to the Disability Insurance (DI) Trust Fund unless accompanied by changes that improve the long-term finances of the Social Security system overall. It artificially creates a crisis, because the DI Trust Fund surplus is due to run out next year, while the OASI surplus lasts until 2034. Because the OASI Trust Fund is so much larger than the DI Trust Fund, reallocation would keep both in surplus until 2033.

Congress could scrap the cap on earnings subject to payroll taxes in order to raise revenue, but that is not going to happen this year or next. That leaves benefit cuts as the only option. Cost of living adjustments could be cut by instituting the Chained CPI, the full retirement age could be raised once more, and/or benefits could be meanstested so that those with the most political power would no longer have a stake in Social Security and would press for privatization.

Congress has shifted surpluses from one Trust Fund to the other (in both directions) 11 times, 4 times when Reagan was President, and most recently in 1994. For the first time, Social Security is being held hostage to force benefit cuts. It is particularly ugly to pit retirees and survivors against 11 million disabled beneficiaries and 2 million of their dependent children, who would see 20% cuts in payments if nothing is done to balance the Trust Funds. That is exactly what our elected leaders are up to, the old “divide and conquer” approach.

Social Security Administration Chief Actuary, Stephen Goss, says that although reallocation is blocked, there could be limited borrowing of OASI Trust Fund reserves that may get us through another year, but that action must be taken in 2017 at the latest. Interesting, don’t you think, that 2017 just happens to be a Presidential election year? I can imagine certain candidates railing against the President and his party for refusing to “reform” Social Security, and for allowing this “crisis” to come to a head.

Fortunately, we can take action now to discourage the Senate leadership from adopting a similar rule. Five Senators, including Patty Murray, have launched a petition drive online. Just go to www.nosocialsecurityhostages. com. Ask your family and friends to do the same.

What Does the Fed Have to Do with Social Security? Plenty!

Monday, February 2nd, 2015

By Dean Baker, reprinted from Reader Supported News

Most of the people who closely follow the Federal Reserve Board’s decisions on monetary policy are investors trying to get a jump on any moves that will affect financial markets. Very few of the people involved in the debate over the future of Social Security pay much attention to the Fed. That’s unfortunate because the connections are much more direct than is generally recognized.

The basic story of Social Security’s finances is that, while the program is entirely sound for the near future, the program is projected to face a shortfall in the decade of the thirties. Under current law, at that point it would be necessary to reduce benefits from their scheduled level, unless additional revenue can be raised.

Of course the answer from those on the right is to cut benefits, and the sooner the better. Progressives, along with most of the public, would like to see the current benefit level maintained and possibly increased. Most workers are approaching retirement with little other than Social Security to support them, which means that cuts from currently scheduled benefit levels will mean serious hardship for many.

The Fed figures in this picture both directly and indirectly. The Fed is not always able to provide as much of a boost to the economy as it might like. Following the Great Recession of 2008 the Fed wanted to promote growth and employment. It did so by lowering short-term interest rates to zero and initiating its quantitative-easing policy of buying long-term bonds.

These policies helped stimulate demand by making it easier for people to buy homes or refinance mortgages and for businesses to invest. But by themselves, they did not come close to restoring the economy to full employment.

Although the Fed cannot always boost the economy as much as it would like, there is little doubt that it can slow the economy. Higher interest rates would dampen the housing market and discourage other forms of consumption. They would also slow investment. By raising interest rates, the Fed can slow the rate of growt, thereby keeping people from getting jobs and propping up the unemployment rate higher than it would otherwise be.

If fewer people are employed, fewer people are paying into the Social Security system. This trend, therefore, directly weakens its finances. (The system will pay out less in benefits, but this result will not be close to offsetting.) In addition, lower rates of unemployment strengthen workers’ bargaining position. At low rates of unemployment, workers at the middle and bottom of the wage distribution have the bargaining power to secure themselves a share of the gains from economic growth.

This affects Social Security directly, since one of the main reasons that the program is now projected to face a shortfall in the decades of the thirties is that so much wage income has been redistributed above the cap on the Social Security tax, which currently stands at $118,500. Back in 1983, the last time major changes to the system were instituted, only 10 percent of wage income was above the cap. Because of the massive upward redistribution of the last three decades, 18 percent of wage income is now above the cap.

If the Fed allowed the unemployment rate to fall back to the levels of the late 1990s (@4.0 percent to 5.0 percent) and stay there, the share of wage income going to workers earning above the cap would fall, increasing the revenue going to Social Security.

In addition to direct Fed policy affecting Social Security’s finances, there is also an important indirect channel. Over the long-term it will likely be necessary to raise tax rates to maintain scheduled benefit levels. Any substantial increase in taxes would impose a hardship on low- and moderate-income workers in the current context of stagnant wages. However if wages were rising in step with productivity, workers would be able to pay a somewhat higher tax rate and still have higher after-tax wages.

According to the most recent projections from the Social Security trustees, average hourly compensation in 30 years will be more than 60 percent higher (after adjusting for inflation) than it is today. If the tax rate were increased by one to two percentage points in order to prevent cuts to scheduled benefits, workers would still pocket close to 60 percent more for each hour of work in 2044 than they do today, assuming the gains from growth are evenly shared.

Whether most workers share in the gains from economic growth or we continue to see the massive upward redistribution of income of the last three decades will depend largely on the policies of the Fed. If the Fed allows the unemployment rate to fall back to the levels we saw in the late 1990s, then workers could anticipate substantial wage gains in the decades ahead. Covering the cost of Social Security will pose little problem.

On the other hand, if those pushing for higher interest rates now get their way, then most workers will not see their wages rise by much. In that case, paying for Social Security through the current payroll tax could be a problem.

People who are concerned about the future of Social Security should be paying a great deal of attention to what the Fed does. Raising interest rates will not only affect the economy today, but it will also affect Social Security tomorrow.

Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and as an assistant professor at Bucknell University.

Forum on Expanding Social Security February 23

Monday, January 5th, 2015

Nancy Altman will be one of the featured speakers in a forum on Monday, February 23 in Seattle entitled “Social Security – Why It’s Not Broke and How We Can Expand It.” Joining Ms. Altman on the program will be Seattle City Council member Kshama Sawant and Washington State Labor Council President, Jeff Johnson.

Social Security Works! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All, is the recently released book by Ms. Altman and her co-author, Eric Kingson. Ms. Altman has a thirty-five year background in the areas of Social Security and private pensions. She is co-director of Social Security Works and co-chair of the Strengthen Social Security coalition and campaign. She previously authored The Battle for Social Security: From FDR’s Vision to Bush’s Gamble (John Wiley & Sons, 2005).

The Seattle forum is part of a campaign to expand the growing chorus of voices in Congress and elsewhere calling for the expansion of our Social Security system. We know that Social Security is not “going broke” and also does not add a penny to the national debt. We are fighting against the three-decade-long, billionaire-funded campaign to make us believe that Social Security is destined to collapse.

With the decline in defined benefit pensions and the total inadequacy of 401(k)s, there is a looming retirement crisis that will affect more than two-thirds of today’s workers. Social Security is a powerful program that can help stop the collapse of the middle class, lessen the pressure squeezing families from all directions, and help end the upward redistribution of wealth that has resulted in perilous levels of inequality.

All Americans deserve to have dignified retirement years as well as an umbrella to protect them and their families in the event of disability or premature death. At stake are our values and the kind of country we want for ourselves and for those that follow. From the Silent Generation to Baby Boomers, from Generation X to Millennials and Generation Z, all of us have a stake in understanding the real story about Social Security.

Nancy Altman is the Chair of the Board of Directors of the Pension Rights Center, a nonprofit organization dedicated to the protection of beneficiary rights. She is also on the Board of Directors of the National Academy of Social Insurance, a membership organization of over 800 of the nation’s leading experts on social insurance.

From 1983 to 1989, Ms. Altman was on the faculty of Harvard University’s Kennedy School of Government and taught courses on private pensions and Social Security at the Harvard Law School. In 1982, she was Alan Greenspan’s assistant in his position as chairman of the bipartisan commission that developed the 1983 Social Security amendments.

Please plan to attend this exciting forum on Monday, Feb. 23, from 7:00-8:30 p.m. at Joe Crump Hall, UFCW 21, 5030 First Avenue S., Seattle.

Accessing Seattle’s Social Security Office

Wednesday, December 3rd, 2014

By Steve Kofahl, President of AFGE Local 3937, representing SSA workers and a member of PSARA’s Executive Board

On October 30, PSARA learned that a memo had been sent to building tenants at the Jackson Federal Building stating: “The Department of Homeland Security has established the Real ID Act. Effective January 19, 2015, the Washington State Driver License will no longer be an acceptable form of identification for entrance to government buildings. The Jackson Federal Building and the Federal Office Building, which are level 4 buildings, will require visitors to show a passport or a Washington State Enhanced Driver License to enter the buildings.”

The cost for a passport ($135) or enhanced drivers license ($107) is beyond the means of many of those who need service, and the time taken to secure such ID could create additional hardships.

American Federation of Government Employees, Local 3937, representing Social Security Employees at the JFB, immediately placed this urgent issue on the agenda for a quarterly AFGE/SSA labor-management meeting scheduled for November 6. SSA Regional officials initially assured us that, based on their discussions with the JFB Building Security Committee, the Federal Protective Service (FPS), and SSA Headquarters officials, there would be no change in ID requirements or accessibility.

We were told there were limitations to the new rules that apply to SSA at the JFB and that other documents would be accepted because they have been accepted in the past, and because access for Social Security Administration services is an exception to those rules.

The SSA Administrators also claimed that they were unaware that the Real ID Act of 2005 requirements could create service barriers when they signed the Occupancy Agreement with the General Services Administration. Since the Passport Agency vacated the JFB space now occupied by SSA, we asked whether the Passport Agency left the building because of Real ID Act access concerns, and SSA said that they had never heard that was the reason.

We had done our research before the meeting, finding “REAL ID Enforcement in Brief” at http://www.dhs.gov/real-id-enforcement-brief. The “Limitations” section states that “The Act does not require individuals to present identification where it is not currently required to access a Federal facility (such as to enter the public areas of the Smithsonian) nor does it prohibit an agency from accepting other forms of identity documents other than documents from non-compliant states (such as a U.S. passport or passport card).” This section also states that “For example, the Act does not apply to voting, registering to vote, or for applying for or receiving Federal benefits.”

Since Washington is a non-compliant state, we questioned whether the first limitation applies. And, because visitors come to SSA for many other services in addition to filing for and receiving benefits, we questioned whether the second limitation applied. By the end of the discussion, SSA Regional officials stopped using the term “assurance”, and instead used “expectation.” We asked for something in writing, and were told that it would be supplied to our AFGE National Council President.

That written response stated that SSA “anticipates” no changes based on discussions with FPS and the broad interpretation of the exceptions by FPS, and that the Agency will continue to work with FPS on the matter.

We are uncertain whether additional access problems will arise in January, or some time after that date. With our concerned elected representatives and community partners, we will continue to press for restoration of accessible, equitable service for everyone who seeks SSA services, and assurance that things will not get worse next year.