Retirement Security

April 05, 2011

Let the Disabled Wait

Greg Anrig

One sharp contrast between the budgets proposed by President Obama and the Republican leadership in the House of Representatives is the allocation for administering the Social Security program. Zeroing in on that seemingly mundane line item is instructive because it illustrates how stark the differences are between the conservative and progressive visions for the federal government’s role.

President Obama’s budget calls for a $1 billion increase for the Social Security Administration, to $12.5 billion in fiscal 2011. The House-passed H.R. 1 actually reduces the SSA spending level -- to $11.3 billion in 2011. What difference does substantially increasing versus cutting spending on administering Social Security mean to average citizens?

One of the most-labor intensive tasks of the SSA is determining whether individuals applying for the program’s disability benefits are actually eligible. The agency’s personnel  closely review medical and employment records to determine if each applicant’s condition is severe and would interfere with work-related activities, usually holding hearings to make those assessments. During periods of high unemployment, such as the one that continues to persist, applications for disability benefits invariably surge. In 2010, just under 3 million disability applications were submitted, compared to 2.2 million in 2007. Even though the agency has become more efficient in recent years as its funding has increased – average wait times for a hearing declined  from an all-time high of nearly 18 months in 2008 to one year -- the backlog of pending claims has risen to 774,000 due to the increased applications.

But cutting funding for the SSA now would inevitably escalate those backlogs and wait times. In Congressional testimony, Marty Ford, the Co-Chair of the Consortium for Citizens with Disabilities Task Force on Social Security, described particular examples of how prolonged waits for decisions on disability claims can devastate families:

Continue reading "Let the Disabled Wait " »

March 29, 2011

Cutting Tax Breaks for Wealthy Seniors is Entitlement Reform, Too

Harold Pollack

Austin Frakt, Don Taylor, and Ezra Klein have good pieces today on Social Security and Medicare reform. All three make the point that whatever changes should be made in these programs should be made soon. From both the perspective of the federal budget and the perspective of individual retirees, pushing this off is unwise. (One caveat: given the current extreme nature of the Republican House majority and this majority's allergy to sensible tax increases, the prospect for a truly bipartisan agreement to improve these programs seems dim right now.)

Another piece of the puzzle bears mention. Any reasonable solution should include a closer look at the tax breaks we give to affluent seniors.

Continue reading "Cutting Tax Breaks for Wealthy Seniors is Entitlement Reform, Too" »

December 03, 2010

Prosperity Not Austerity

The Century Foundation

On Dec. 1, The Century Foundation, The American Prospect, Demos, the Economic Policy Institute, the Center for Economic and Policy Research, and The Roosevelt Institute held an event in response to the  National Commission on Fiscal Responsibility and Reform final report. Nobel Laureate Joseph Stiglitz and other prominent experts discussed the merits and drawbacks of the commission’s plan, and recommend alternative paths to fiscal responsibility with sustained economic growth for all Americans. There are many paths to fiscal responsibility, but the immediate priority must be broadly shared economic growth and security. Will the fiscal commission’s proposals meet this goal? What alternatives would spur an early economic recovery?

View video of the event: 

Prosperity not Austerity: Discussion from Century Foundation on Vimeo.

Prosperity not Austerity: Q&A from Century Foundation on Vimeo.

December 01, 2010

Responding to the Fiscal Commission Report

The Century Foundation

The National Commission on Fiscal Responsibility and Reform will release its final report today. There are many paths to fiscal responsibility, but the immediate priority must be broadly shared economic growth and security. Will the fiscal commission’s proposals meet this goal? What alternatives would spur an early economic recovery?

From 1:00 to 3:00 PM EST, immediately following the report’s release, a panel of prominent economists and budget experts, including Nobel Laureate Joseph Stiglitz, will respond to the findings and recommend alternative paths to fiscal responsibility, with sustained economic growth for all Americans. Read Our Fiscal Security's blueprint.

View video of the event will be available this week.


 

October 25, 2010

Social Security is Not The Problem: Part MMDCXXVII

Greg Anrig

In an article in the New York Times Week in Review section on Britain’s new austerity measures, David Herszenhorn reinforces fallacies about Social Security and the U.S. budget that facts just can’t seem to kill. He writes that over the long-term, Social Security and Medicare will be “pushed to the edge of collapse,” that the nation’s long-term fiscal problems are “stemming from Medicare and Social Security,” and that “the real challenge for federal officials is dealing with the long-term solvency of Social Security and Medicare.”

So, to set the record straight yet again, the forecasts of high and rising federal debt into the 2020s and beyond is attributable entirely to expectations of rapidly rising health care costs. High medical inflation -- which has plagued both America’s private and public sector for decades -- in combination with the aging of the population, are the reasons why the Medicare and Medicaid programs are expected to make the nation’s long-term fiscal condition unmanageable absent change. That prospect was one of the central rationales for the newly enacted health care legislation, which includes numerous reforms that have the potential to significantly reduce Medicare’s rate of growth in the decades ahead.

Continue reading "Social Security is Not The Problem: Part MMDCXXVII" »

September 03, 2010

Labor Day, 2010

Richard C. Leone
Labor Day celebrates the American worker – and, for most workers, it provides a last day off at the tail of the summer. This year, there is liable to be a bitter undercurrent about all the “extra days off” millions of Americans are getting because of stubbornly high unemployment rates. This has turned out to be no ordinary downturn in the business cycle.

In some ways the most severe recession in seventy years, which technically ended with the recent resumption of tepid growth, shared many of the characteristics of previous economic meltdowns: inflated values, pyramiding debt, unreasonable speculation, etc. But some of the factors that made the latest decline so nasty and intractable are unusual. Understanding them required recognizing that the roots of this collapse go deep into the economic, political, and cultural history of the past 35 years.

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August 12, 2010

Happy Birthday

Richard C. Leone
This week Social Security, the most successful antipoverty program in America’s history, celebrates its 75h anniversary.

Maybe “celebrates” is the wrong word since there seems to be a cottage industry in Washington dedicated to the proposition that the Social Security program must be reduced or replaced. So-called deficit hawks keep swooping down on the main income support mechanism and the most successful antipoverty program, eager to tear off a slice of quite modest layers of financial support provided for those too old to find a job or too  old to work. It’s a curious spectacle at a time when nearly 10 percent of the workforce is unemployed and millions are facing permanent reductions in income.

There are many reasons why millions of Americans still endure poverty. For one thing, the support we provide for those without jobs, or in ill health, or simply too old to work is, by the standards of the most advanced nations, minimal. Yet in some circles, even our limited response to poverty is begrudged and seen as unaffordable and a disincentive to work. And though we are just about the least taxed among the wealthy nations, we have been unwilling to pay more for the social safety net, even if it means that while Americans don’t starve to death,  millions still go hungry. It’s certain that the consequences of our stinginess have been worsened by the current deep and long recession.

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August 05, 2010

No News Again in the Social Security Trustees Report

Greg Anrig
Every year when the Social Security Board of Trustees releases its annual report on the program’s financial and actuarial status, media stories convey warnings that the system is in trouble. Actually, though, this year’s report, like those released in the past, reaffirms that Social Security’s finances remain sound. That’s too boring a fact to inspire reporters, especially when plenty of sources can be found who are hostile to government and would love to cut the nation’s most successful program. But the United States has many, many far bigger worries than the condition of Social Security.

The new report shows that if nothing is done to change Social Security, the system will be able to continue to pay out promised benefits in full until 2037. At that point, the program’s trust funds will be depleted and payroll taxes will cover about three-fourths of payments owed. Previous reports, starting with last year, estimated the year of trust fund exhaustion to be 2037, 2041, 2041, 2040, 2041, 2042, 2042, 2041, 2038, 2037, 2034, 2032, and 2029. So 13 years ago, back in 1997, the forecast for Social Security was somewhat more pessimistic than it is now, even in the aftermath of the Great Recession.

Over the 75-year time horizon that the Trustees are obligated to consider, the estimated shortfall between dedicated revenues and promised benefits is now projected to be 1.92% of GDP. Previous reports, starting with last year, estimated that 75-year gap to be 2.00%, 1.70%, 1.95%, 2.02%, 1.92%, 1.89%, 1.92%, 1.87%, 1.86%, 1.89%, 2.07%, 2.19%, and 2.23%. Not much change there, either. Simply eliminating the cap on income subject to the Social Security payroll tax, currently $106,000, would eliminate the entire shortfall while affecting only the top 6 percent of workers. A combination of other modest changes would accomplish the same goal as well.

Once again, no news about Social Security is good news.           

July 26, 2010

A Cautionary Retirement Tale

Neil Bhatiya

When President George W. Bush introduced his proposed overhaul of the U.S. Social Security system, the cornerstone of which would have shifted a portion of workers’ payroll taxes into personal retirement accounts, he all but guaranteed that the available investment vehicles would be safe and provide a reliable source of income over the long-term . Based on the historic returns of U.S. stock indices for much of the latter half of the twentieth century, many conservatives argued that such a move would provide a safe source of growth. In light of the recession that began in 2007, resulting in a precipitous loss in value for most investments, Social Security privatization turned out to be a bullet that was fortuitously avoided.

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July 07, 2010

Remembering Bob Butler

Richard C. Leone
Robert Butler virtually created the modern field of geriatrics.  He changed the way we view aging and he shaped the National Institute on Aging as its first director. He also looked beyond the medical and scientific aspects of aging by leading discussions around the world on income and community support for older people. He founded the International Longevity Center and made it a place where journalists, policy students, and health professionals could come together and reach a greater understanding of the science, politics, and sociology of aging. He also edited a volume published by The Century Foundation titled Life In An Older America.

We at The Century Foundation were fortunate to work with him in some of these areas. Unfailingly we learned more than we brought to the discussions.

Bob Butler was also a warm and witty human being. He enriched the lives of those around him and his contributions no doubt aided many thousands who were unaware of his existence.

We shall miss him. And, we shall try to keep some of his ideas and ideals alive.

Below is a video from a discussion with Dr. Robert Butler about his book, The Longevity Revolution: The Benefits and Challenges of Living a Long Life at an event hosted by The Century Foundation and Demos.

Longevity Revolution: Highlights from Century Foundation on Vimeo.