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Obama commission eyeing Social Security cuts
Deficit reduction or theft from retirees?
Stern: elected officials need to sign on to protect Social Security.
When Carol Hannum’s husband died, her children were 16 and 14. She ran a small accounting business at the time that allowed her to stay home, but she earned less than $25,000 a year. If it hadn’t been for Social Security, she says, things would have been very rough.
Her children were entitled to survivors’ benefits from Social Security. And when she turned 60, she was able to draw widow’s benefits, making it possible for her to keep the Seattle home she bought with her husband back in 1967.
Social Security is the prime reason most seniors don’t live in poverty in their old age, she says. But what many people forget, says Hannum, a member of Seattle’s Older Women’s League, is that about one third of its recipients aren’t retirees at all, but the surviving children and widows of breadwinners who paid into the system or disabled people who cannot work at all, including many thousands of homeless across the nation.
It’s something to keep in mind, Hannum and others say, in what’s shaping up to be a new fight to save Social Security.
In February, President Obama appointed a bipartisan commission to look for ways to reduce the national deficit – a measure he promised deficit hawks in order to pass health care reform. But the commission’s 18 members include a number of longtime Social Security foes, says Robby Stern, president of the Puget Sound Alliance for Retired Americans.
Among them are Alan Simpson, a former Republican Senator from Wyoming who openly berates Social Security recipients and is no friend to the program, Stern says. Simpson is co-chairing the commission with Erskine Bowles, the Clinton chief of staff who failed to negotiate health care reform in the ’90s.
Former budget director Alice Rivlin, another Clinton appointee on the panel, has said that Social Security cuts are on the table. One idea under discussion, Stern says, is raising the retirement age from 67 to 70. It’s also possible the commission could look at cutting benefits for current retirees. Stern and others call both ideas ludicrous bows to conservative propaganda that Social Security is somehow “broken” when, in fact, it’s pre-funded to cover the retirement of baby boomers.
“What is crazy about this is that the Social Security Trust Fund has a $2.7 billion surplus and, without anything being done, Social Security would be able to pay benefits at the present level until 2039,” Stern says.
“All they need for the next 100 years,” he says, “is to eliminate the income cap on Social Security wages.”
Right now, he says, Social Security taxes are collected on incomes up to $106,800. If that cap were raised – to $200,000, say – the program could not only keep running, he says, but provide better benefits, particularly for those who collect the least, such as those who worked for lower wages and women, who often take time off during their working years to care for children.
Since 1983, says Steve Kofahl, a 37-year Social Security employee who speaks for Local 3937 of the American Federation of Government Employees and 1,700 Social Security employees in the region, workers have been paying extra Social Security taxes to account for the “bulge” of baby boomers.
People sometimes say Social Security is “broke” because the government has borrowed against the trust fund to finance its other operations, says Kofahl. But it did so, he says, by putting money in securities similar to savings bonds that are backed and payable by the government.
“It’s ludicrous,” says Marilyn Watkins, policy director of Seattle’s Economic Opportunity Institute, “to include Social Security as one of the possibilities for reducing the deficit when the deficit has been so demonstrably caused by reducing taxes on the very wealthy and going [into] two wars without any funding of those two wars and the recession.”
Recommendations from the commission, formally known as the National Commission on Fiscal Responsibility and Reform, are due in December. If 14 of the panel’s 18 members agree on a slate of deficit-reduction measures, Stern says, the House and Senate have agreed to take an up-or-down vote without any modifications.
To fight any cuts or an increase in the retirement age, the Puget Sound Alliance for Retired Americans is leading a coalition called Social Security Works Washington that is currently asking candidates and elected officials to sign a pledge not to make any cuts to Social Security. The group is also planning an event on Aug. 16 at the Greenwood Senior Center with U.S. Sen. Patty Murray to call attention to the 75th anniversary of Social Security.
“We’re hearing about the deficit trouble, but we’re not hearing the rest of the story – how healthy Social Security is compared to any other government program,” Kofahl says. “This is an effort to steal money from people who’ve socked it away their whole lives, and we’re not going to allow that to happen without a hell of a fight.”
Comments
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This whole thing has been a problem for some time. It would help if we could have an intelligent dialog about it. Social security has also been tapped into for many other projects then the original use that it was intended for.
Why doesn’t the government just cap the Social Security taxes to $200,000, we’d be safe in knowing our Social Security is there for our seniors, who’ve paid into the system all their lives. Don’t take money away from seniors (or children or widows), deduct Social Security taxes from ANYONE that makes $200,000 or more! THERE is our answer to the deficit.
The deficits were caused by the financial crisis, which was caused by the deregulation, which was sought and gained by wall st, which is the neo-conservative ideology (government bad, deregulate and tax cuts at all costs). So, since the corporate ideology caused this mess, then they should pay for it. Tax the hell out of wall st.!
By the way, these are the same people who are now setting on 1.8 trillion dollars of cash. They sould be called out for being “un-american” for not hiring since this would fix much of the problem. How much did they get in bail out money and, many of them are not only not hiring;they are shipping jobs to Chin and India!
Worked for 35 years and paid into SS and MC when it entered the picture. Saved a few dollars in annuties which togeather with SS will allow me to retire with a reasonable life style. Also sold my larger home and paid cash for a smaller retirement home I have live in for 3 years. Basically, I have done all the prudent things including paying for my own health insurance for the last thirty years. Never have collected un-employment or any other form of a goverment subsdie. Never have understood the goverment stimulas checks I have received a couple of times and doubt they do any good. What I do know is we as a groupe have a 2.5 tril reserve fund we have loaned to the general fund. I also honestly believe we need to preserve SS for future generations, and that will require some raises in the deduction cap. We basically need to keep SS solvent for us and our grandkids, (Working Americans just can’t save enough for retirement). Also, the Feds, especially the so-called debt commission needs to keep it’s gruby hands off our money. While I send a few dollars to an organization that lobbys for what I believe in, I doubt it is enough. I say we need to March on Washington to let the administration know we will not allow them to steal our money!!
A very no-violent statement is what I propose! If we sit back and do nothing there is an excellent chanch they will steal our retirement money. Make No Mistake, reducing SS Benefits would be STEALING!!!
R J Tanner
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