Advocate PDF 2016

Pre 2012 Archives

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

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 Maybe by the 85th anniversary we will be able to make the cap a piece of history that has been replaced by a more equitable policy.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!

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