Next year, the millions of Social Security recipients will see the smallest cost-of-living adjustment ever—just 1.5% or about $19 a month. If the politicians—and their billionaire friends who don’t want to pay the same taxes workers do—who are pressing hard for the “chained” CPI benefit cut had their way, the adjustment would be even smaller than 2014’s historic low.
Edward F. Coyle, executive director of the Alliance for Retired Americans, says, “I hope this news about next year’s Social Security COLA will cause politicians in Washington to reconsider their support for the ‘chained’ CPI.”
How can anyone look at an increase of around 1.5% and think ‘That’s too big?’ Clearly, these politicians need to spend more time talking to seniors who are struggling. Next year’s increase will be 1.5%. Imagine if it were even less. Then imagine if that smaller increase were to be compounded over time. That is the ‘chained’ CPI.
The “chained” CPI proposal would reduce cost-of-living adjustments for Social Security and prevent benefits from keeping up with inflation. At age 75, a senior’s benefits would be cut by about $650 per year (on average). At age 85, those benefits would be cut by about $1,150 per year, and at age 95, by about $1,600 per year. For more on what the “chained” CPI would do, go to the Alliance “chained” CPI fact sheet.
On the other hand, Sen. Tom Harkin (D-Iowa) and Rep. Linda Sánchez (D-Calif.) have introduced the Strengthening Social Security Act (S. 567 and H.R. 3118). The legislation would measure inflation not with the “chained” CPI, but with a more accurate measure of inflation for seniors (the CPI-E). It also would improve Social Security’s solvency by lifting the cap on earnings subject to the Social Security tax, so that all of America’s workers pay the same rate.
AFL-CIO Policy Director and Special Counsel Damon Silvers recently told Salon that the AFL-CIO opposes any benefit cuts to Social Security, Medicare and Medicaid.
The labor movement is going to fight to the death to stop cuts to Social Security and Medicare and Medicaid. Not ‘unreasonable cuts.’ Not ‘cuts without tax increases.’ Cuts period. We’re against all of them, we will fight them ferociously, and we will give no cover to any Democrat who supports them
But sometimes “cuts” hide in the form of other changes to earned benefits. Silvers gave the example of “Chained CPI,” which cuts Social Security by changing how benefits are calculated. “Chained CPI is the vampire of American politics,” Silvers told the Washington Post. “It keep being shot through the heart and it keeps reviving.”
Here’s another vampire idea that needs to die: raising the Medicare eligibility age to 67.
The argument typically goes like this: with modern medicine, people are living longer than they did when Medicare set the retirement age at 65, so why not raise the eligibility age to keep up with the times? After all, we need to save money!
This argument conveniently ignores what happens to the millions of 65 and 66 year olds who would no longer be able to access coverage through Medicare, which they have paid into throughout their entire lives.
Many of these seniors with low enough incomes will be pushed into Medicaid, shifting costs onto that other program. Some will have incomes high enough to be ineligible for Medicaid but low enough to qualify for subsidies to purchase insurance on the health exchanges on the Affordable Care Act.
But many more seniors will lose coverage altogether, according to the Center for Budget and Policy Priorities, because while their incomes make them ineligible for Medicaid or subsidies, health insurance companies will consider them to be extremely expensive. “Because exchange plans could charge the oldest workers three times as much as the youngest, unsubsidized premiums could reach $10,000 to $12,000 (in 2014 terms) for 65- and 66-year-old individuals and twice that for couples.” Even if every state implemented ACA completely, that’s about 200,000 more uninsured seniors, according to Matt Stoller of the Roosevelt Institute.
So for increased pressure on Medicaid and more seniors unable to buy coverage at all, how much money do we save? The Congressional Budget Office has updated numbers on that front: the net savings would amount to less than $3 billion a year, a paltry sum in the context of the federal budget.
Thursday, the CBO said the overall savings wouldn’t amount to as much as it had previously estimated. Instead of saving the federal government about $113 billion over a decade, CBO now figures it’s more like $19 billion over eight years starting in 2016.
It will keep people working longer, and that means it will cost their employers—and everyone with private insurance—more in insurance premiums to cover this older, sicker population. The thing is, people still need health care when they’re 65. There isn’t a magic two years between 65 and 67 when everyone is healthy and doesn’t need to go to the doctor.
If we are serious about raising revenue and dealing with our fiscal health, we ought to stop looking at seniors – who have earned Social Security and Medicare by paying into it through a lifetime of paychecks – and start looking at the complex web of tax avoidance schemes of the very billionaires and large corporations that are pushing these cuts to begin with.
The nation’s economy added 148,000 new jobs in September, compared to 169,000 jobs created in August. The 7.2% jobless rate is slightly down from August’s 7.3%, according to figures released this morning by the U.S. Bureau of Labor Statistics.
While today’s report reflects 42 straight months of job growth, the pace is weak, sluggish and just enough to absorb new entrants into the market and makes little dent in the jobs deficit.
Job creation is likely to slow even more after the 16-day House Republican government shutdown and their irresponsible vow to hold the raising of the nation’s debt ceiling hostage over Republicans’ demands to weaken the Affordable Care Act and for significant cuts in vital safety net programs.
With the shutdown over and budget talks set to get under way, working families are calling for the creation of jobs and raising hundreds of billions of dollars to invest in our future by ending all tax subsidies for outsourcing; repeal of the job-killing sequester; rejection of any benefit cuts to Social Security, Medicare or Medicaid and protection of food aid for the poor.
The number of long-term unemployed people (those who are jobless for 27 weeks or more) dropped slightly from 4.3 million to 4.1 million, accounting for 36.9% of the people without jobs. The number of long-term jobless people has dropped by 725,000 over the past 12 months.
Among the major worker groups, the unemployment rates for adult men (7.1%), adult women (6.2%) teenagers (21.4%), whites (6.3%), African Americans (12.9%) and Latinos (9%) showed little change in September.
The biggest job gains were in professional and business services (32,000), transportation and warehousing (23,000), construction (20,000), wholesale (15,000) and retail (9,000).
Employment in other major industries, including leisure and hospitality, health care, mining and logging, manufacturing, information and government, showed little change in September.
“Chained CPI is like the vampire of American politics,” Silvers said. “It keeps being shot through the heart and it keeps reviving. The reason it keeps coming back is because it has billionaires behind it.”
Naturally, the network’s anchors didn’t much like the sound of that. CNBC is one of Wall Street’s main TV mouthpieces, and it is in Wall Street’s interest that Social Security and Medicare are perceived as “entitlements” instead of the earned benefits of workers. After all, they want our politicians to balance the budget and “fix the debt” on our backs, not by raising taxes on their large incomes and investments.
The exchange Silvers had with CNBC anchor Simon Hobbs crystallized this clearly.
Damon Silvers: We’re being really clear. We’re not going to give cover to Democrats who think it’s a good idea to take away economic security from our most vulnerable citizens. We’re extremely clear about that and not embarrassed about it whatsoever. We want a really clear message out there. If you cut social security benefits or medicare benefits to our seniors, to our most vulnerable people in the country, you are going to get no support on it. It only treating them fairly there will be any progress going forward.
Simon Hobbs: Are you as clear on the reality that if you have don’t cut entitlement benefits this country may well go bankrupt?
Damon Silvers: That’s frankly not true. That’s a lie put forward by billionaires who don’t want to pay higher taxes. Social Security is the best funded aspect of our retirement system today and Medicare’s long-term issues are integrated with the long-term issues of our health care system. Neither program is overgenerous. In fact both programs are undergenerous. The only people who believe what you said are people not counting on those programs and who are worried their very large incomes will be taxed.
Detroit public workers have already made sacrifices to keep the city afloat, including a $160 million in annual savings from a 10 percent pay cut, health benefit reductions, and a 40 percent cut in future pension benefits, Orr is making public worker pension cuts a key part of Detroit’s restructuring.
Remember, Orr was appointed by Gov. Snyder to be “emergency financial manager,” a position that does not answer to voters yet can overrule any local elected official. Michigan repealed the governor’s ability to appoint such managers in 2012, but Snyder and the legislature simply passed the law again.
My name is Donald Smith and I worked for the city of Detroit for more than 29 years.
Over close to 3 decades of service to the city earned me a pension of about $800 a month. After taxes and health care expenses are taken out, I am left with very little money each month to pay my rent, buy groceries and to cover my medical prescriptions.
Because of your decision to force Detroit into bankruptcy, I am starting to wonder which of my basic I needs can live without. I did not bankrupt Detroit – in fact, I went to work every day to make it a better place to live. So I can’t understand why you would ask retirees like me to give up the pension benefits we earned.
If you believe that we can afford to make do with less, then you must not know us. That’s why I want to invite you to my home so you can get to know me and see what life is like for retired city employees. I hope you’ll join my family for dinner and hear what really matters to us in Detroit.
We are willing to work around your busy schedule. We look forward to sharing a meal and our perspective with you.
Smith gets $800 a month from his public pension and $1,000 a month in Social Security. “Sometimes I have to make up my mind between getting my medicine and food,” he told WXYZ.
The letter, signed by 51 Republican lawmakers, says that “Social Security provides us the best opportunity to begin solving our nation’s significant budget imbalances” and that “the ongoing fiscal discussions in Congress provide an opportunity to address entitlement program deficits…with our limited time frame to take action before we run up against fiscal deadlines.”
In other words, let’s use Social Security to reduce the deficit, and let’s use this manufactured budget crisis to get our way.
How do these 51 Republicans want to “change” Social Security to solve our budget imbalances? Their letter is not specific, but they point out that there are a “relatively few, well-known options” to do so.
Indeed there are. We have seen these well-known options trotted out by Republican members of Congress over and over again.
For example, the cover letter from Rep. Reid Ribble (R-Wis.) specifically identifies three “well-known options” to cut Social Security benefits:
Cutting Social Security benefits with a chained CPI cost-of-living formula;
Ribble spells out exactly how the upcoming “fiscal deadlines” can be used to get these Social Security proposals through Congress. First, you increase the debt ceiling for six weeks, then in the intervening six weeks you attach Social Security legislation to a longer-term increase in the debt ceiling.
Perhaps the most “well-known option” to reduce the deficit by “changing” Social Security is the “chained” CPI, which would cut Social Security benefits by reducing Social Security cost-of-living adjustments (COLAs).
In Ribble’s district in Wisconsin, there are more than 140,000 Social Security recipients whose benefits would be cut because of the “chained” CPI. The benefits of Ribble’s constituents would be cut $4 million in 2015 and $57 million in 2023.
It might be safe to assume that many of these constituents who would suffer the most from Republican hostage-taking are tea party Republicans.
Of course, cutting Social Security benefits is just one of the ransom demands made by Republicans in Congress. As AFL-CIO Policy Director Damon Silvers recently wrote:
That’s why people need to tell the president, ‘stand tall, we are with you. No negotiating with hostage-takers. Not about the Affordable Care Act, not about the Grand Bargain and certainly not about cuts to Social Security, Medicare or Medicaid, or more giveaways for big corporations that outsource jobs. You won the election. You must defend democracy and you must stand up for the 99%, and that means no more rewarding hostage-takers.’
While the country remains shut down because of irresponsible House Republican hostage-taking, progressive members of Congress and working families are looking ahead to fight against any proposed grand “bargain” that would include benefit cuts to Social Security, Medicaid or Medicare. Members of the Congressional Progressive Caucus (CPC) spoke Thursday before working families and allies, specifically rejecting any such cuts.
While some politicians and pundits are proposing the use of the so-called “chained” CPI to determine Social Security cost-of-living adjustments over time, progressives and working families realize that the “chained” CPI would actually cut the income of retirees and people with disabilities. Hostage-taking House Republicans keep changing their random demands to end the government shutdown, and their latest demand is for Democrats to agree to cut Social Security benefits or Republicans will keep hurting people through refusing to pass a clean continuing resolution.
Rep. Elijah Cummings (D-Md.) noted the problems with “chained” CPI: “The ‘chained’ CPI would result in very real and harmful cuts for seniors, the most vulnerable in our society. These cuts would only deepen over time while the cost of living goes up.”
Pointing out a better policy option, Rep. Mike Honda (D-Calif.) said: “Instead of talking about the ‘chained’ CPI or cutting benefits, my mom would say you just need to make the pie bigger, we’re just going to talk about one cut—and that’s cut the crap….Cut the crap, scrap the cap.” Currently, wealthy Americans don’t pay into Social Security on any income above $113,700. Scrapping that arbitrary cap would go a long way to shoring up Social Security’s future.
Rep. Alan Grayson (D-Fla.) made it clear where the CPC stands on these issues: “We will vote against any and every cut to Social Security, Medicare and Medicaid,” he said. “If it ain’t broke, don’t break it.”
On Sunday, House Majority Leader Eric Cantor (R-VA) said that Republicans would be open to restoring some of the funding lost in the job-killing sequester if new cuts to social safety net lifelines were put in place. In effect, Cantor is suggesting replacing one policy that hurts the economy and suppresses job growth with another policy that does the exact same thing.
“What we need to have happen is leadership on the part of this president and the White House to come to the table finally and say we’re going to fix the underlying problem that’s driving our deficit,” Cantor told Fox News’ Chris Wallace. “We know that is the entitlement programs and the unfunded liability that they are leaving on this generation and the next.”
Actually, Cantor is completely wrong about Social Security and Medicare causing the deficit. The current deficit is caused primarily by the Great Recession, but also by the Bush tax cuts and two wars that were never paid for. From the Economic Policy Institute:
The deficit is already more or less stabilized for the next decade. In future decades, projected deficits are driven almost entirely by health care costs, but this is a problem of both the private and public sectors. Medicare and Medicaid have lower costs than private insurance and have done a better jobs of controlling costs over the past 40 years.
Cantor offers a false choice that would do little to cut the deficit or boost the economy or job growth and would harm our most vulnerable citizens. Republicans are still focused on the wrong “crisis.” While the evidence is quite clear that what the U.S. needs most is more jobs and investment in infrastructure, Cantor and his fellow Republican “leaders” are focused on deficit reduction that economists have said isn’t necessary, and, in fact, is a drag on the economy and job creation.
It doesn’t take a rocket scientist to come up with a formula to strengthen Social Security, says rocket scientist Rush Holt. Holt, who is also a U.S. House member from New Jersey and a candidate for the U.S. Senate, says we don’t need to raise the retirement age or cut benefits, just lift the cap on the Social Security tax so millionaires and billionaires pay the same rate as working families. Take a look as he explains it in this video.
While many Republicans and conservatives have minimized the impact of the sequester and its effects on America’s working families, nearly 40% of people say it has hurt them personally. Here are 25 ways the sequester is affecting people’s lives, not just right now, but more and more over time.
25. Fewer Services at National Parks: As the sequester goes on, national parks will have fewer and fewer employees and will have to cut hours, maintenance and visitor center services.
24. Customs Wait Times: Long wait times at customs have exceeded four hours at some airports and passengers have missed flights because of the delays.
22. Loss of Weather Satellites: In order to save on-the-ground jobs, the National Oceanic and Atmospheric Administration is delaying the replacement of satellites that collect and transmit data that enhance weather forecasts and climate models.
21. Increasing the Deficit: With $50 billion being cut from enforcement activities by the Internal Revenue Service, less tax revenue will be recovered, with as much as $4.5 billion being lost and added to the deficit.
20. Loss of Work-Study Jobs: More than 33,000 college students will be dropped from the work-study program and will lose funding for school. Some of them won’t be able to afford to continue their education.
19. Weaker Public Safety: Massachusetts is cutting back on inspections of food plants, hospitals and air quality. This is after the state’s 2012 deadly outbreak of meningitis, which could have been prevented with improved inspections.
18. Failure to Make School Repairs: Districts like Heart Butte in Montana are forgoing necessary repairs, leaving students without hot water, with holes in building roofs and buses and playgrounds that are falling below regulations.
16. Loss of Unemployment Benefits: Already modest unemployment insurance payments will be cut or eliminated for millions of workers at a time when jobs are still scarce.
15. Teachers and Staff Laid Off: School districts like Window Rock in Arizona are laying of staff and teachers and may have to close schools if the sequestration continues.
14. Less Scientific Research: Funds for the National Institutes of Health are being cut, which will delay research that is critical for developing new treatments for diseases.
13. Loss of Counselors: Schools like those in the Hays/Lodge Pole District in Montana are unable to fill counseling jobs as youth suicides are on the rise.
12. Less Job Search Assistance: Workforce training and support programs are expected to see cuts up to 25% of their budget, and organizations like SuperJobs Center in Cincinnati will suspend all training for the thousands of job seekers it serves.
11. Elderly Adults Not Being Able to Eat: Cuts to the Meals on Wheels program mean that local deliveries are dropping by hundreds of meals a day in places like Contra Costa County in California and Lamar County in Texas. The programs are being frozen or reduced and some of those who have lost the meals have no other means of getting daily meals.
10. Decreased Law Enforcement Capability: The only crime gun tracing facility in the country has laid off 90 workers, hampering their ability to track down weapons like those used by suspected Boston Marathon bombers Tamerlan and Dzhokhar Tsarnaev.
8. Declining GDP Growth: The rate of economic growth in the United States declined in the first quarter of the year because of budget cuts.
7. Increasing Children’s Exposure to Lead: Programs designed to lower children’s risk of lead poisoning have faced cuts and could see more. Meanwhile lead poisoning is described by Think Progress as “one of the most important and overlooked national public health problems.”
6. Kids Kicked Out of Head Start: As many as 70,000 children will lose their chance of participating in Head Start this year because of the cuts.
5. Increased Homelessness: According to the Department of Housing and Urban Development, as many as 100,000 homeless and formerly homeless people will be removed from programs that have been proven to reduce homelessness.
4. More Air Pollution: Cuts have forced the Environmental Protection Agency to delay the implementation of new monitoring sites for dangerous air pollutants.
3. Fewer Public Defenders and Worse Representation: Offices are being closed in 20 states, cases are being delayed and defendants are being forced to be represented by Criminal Justice Act panel attorneys, which some studies have found to be less effective than public defenders.
2. Less Support for Domestic Violence Victims: Shelters for domestic violence victims like those run by the Rhode Island Coalition Against Domestic Violence are cutting back on beds and services for the first time in their history, increasing the chances that women and children in the state will be victims of violence.
1. Lost Homes: More than $2 billion in cuts to Section 8 and other housing programs to freeze or shrink their programs and people are starting to lose their homes as a result. It is projected that 140,000 fewer households will get assistance this year.
Learn much more about how the job-killing sequester is hurting communities around the country at Mapping the Sequester.
Working families are calling on Congress to protect Social Security, Medicare and Medicaid from benefit cuts (i.e., raising the retirement age and the “chained” CPI), repeal the sequester and close tax loopholes for corporations and the wealthiest 2%.