Saturday, February 14, 2015

Senators and Reps Launch Twitter Storm to Save Social Security from GOP Cuts

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Social Security’s defenders on Capitol Hill launched a social media storm on Wednesday, sending out flurry of tweets as the Senate Budget Committee held a morning hearing on closing a projected shortfall in Social Security’s disability program. The program has come under attack by the GOP because it needs to be replenished by 2016.

“The average disability insurance benefit is under $1200/mo - and for 30% of beneficiaries it's their entire income. #SocialSecurity [3],” tweeted Sen. Bernie Sanders [4], I-VT, who on Tuesday led a Senate briefing [5] on how to fund an overall expansion of all Social Security programs—from retirement to helping children who lose a parent.

“Be wary of a GOP sneak attack on Social Security. I’ve fought my entire career to protect it and will continue to,” tweeted Sen. Harry Reid [6], D-NV and minority leader[7].

Previously, any shortfall in the Social Security disability program has been covered by transferring funds from the much larger retirement account. But when Congress convened last month, the House’s new Republican majority adopted rules that prevented that fix—saying there was waste and fraud in the disability program. That pushed Social Security advocates to rush to the defense of the most popular federal government program, from standing up for disabled Americans who need that monthly assistance, to launching a counter campaign to expand longterm funding for the retirement program.

 “#SocialSecurity [3] is critical for millions of retirees, veterans & those with disabilities. Playing politics with its funds is not an option,” tweeted Sen. Ron Wyden [8], D-OR.

As these tweets and others were flying on Wednesday morning, the Senate Budget Committee heard from Carolyn Colvin, Acting Commisioner of the Social Security Administration, who did not mince words when asked by Sen. Jeff Merkley, D-OR, what a 20 percent cut in monthly disability benefits would mean to recipients.

“I don’t want to be dramatic, but I’ve worked with this population my whole career. I think we give them a death sentence,” Colvin said [9]. “You’re barely surviving. If you get a cut there, you’re not going to be able to survive.”

But Colvin's words did not appear to move Republican senators, who appeared to be reading from the same script where they protested that transferring funds from the retirement account to help the disabled before 2016 was "robbing Peter to pay Paul" or "kicking the can down the road," reported [9] The Hill, a Washington insider publication.

Exchanges like these, where real needs fall on Republican deaf ears, are why progressives in the Senate and House are not just pushing to fix the short-term funding gap in the disability program, but to make expanding Social Security as part of the solution to growing economic inequality in the country.  

“Expanding #SocialSecurity [3] must be a central component of fighting #inequality [10] http://bit.ly/16QyT1J  [11] via @SSWorks [12],” tweeted Rep. Alan Lowenthal [13], D-CA, referring to the larger and more long-term campaign to solidify all Social Secrity programs.

After 2033, retirement portion of the program will have to cut benefits—now averaging $1,290 a month—by about one-fourth unless more of the public's savings are set aside and held in trust by the government. That is because the populous Baby Boom generation is living longer that Social Security’s actuaries predicted decades ago. Unlike any other federal program, Social Security budgets on a 75-year timeline. That enables long-term funding adjustments to be made, but it also gives rise to Republican hyperbole that the program is going broke when in fact it’s not, and when there are fair options to fortify it.

“If the 1% paid the same rate as the rest of the US, Social Security would have $1.1 Trillion more today. #ScrapTheCap [14],” tweeted Sen. Sherrod Brown [15], D-OH, referring to the easiest way to solve the Social Security funding question.

Social Security is funded by a payroll tax on the the first $118,500 of one’s income. That is not widely known, as Nicole Woo, of the Center for Economic and Policy Research wrote in a very clear piece [16] for The Hill. In fact, the 1 percent of U.S. earners stopped paying their 2015 Social Security taxes today—February 11—Woo explained, showing the funding problem’s source and its solution:

“On Feb. 11, the top 1 percent of American workers finish paying their Social Security payroll taxes for the year. That’s because the maximum amount of annual earnings subject to the tax is capped at $118,500 (this level is adjusted for inflation each year). Yet most Americans don't know that there is a Social Security payroll tax cap, because most don’t make enough money to ever hit it.

“What this means, though, is that those who make twice the cap — $237,000 per year — pay the tax on only half of their earnings, and those who make over $1.2 million pay the tax on only one-tenth. In other words, those who are lucky enough to make more than $118,500 per year pay a lower Social Security tax rate than the rest of us.”

This fiscal reality is expressed in the slogan, “Scrap the Cap,” as the solution to the near- and long-term fiscal issues faced by Social Security. That’s why Rep. Jan Schakowsky [17], Di-IL, tweeted, “If richest paid the same rate as the rest of us, #SocialSecurity [3] would have $1.1T more today http://ampr.gs/1KFdxU6  [18] via@amprog [19] #ScraptheCap [20].”

The backdrop to this fight is the fact that America faces a retirement security crisis, where tens of millions of Americans—especially women and people of color—will rely on Social Security for 90 percent of their retirement income. Right now, the average monthly Social Security retirement payment, $1,290, is equal to a job paying $8.06 an hour. Nobody can pay all their bills and live without tremendous hardship at that level, which is why shoring up the program—and expanding benefits—is an inequality issue.

“Expanding #SocialSecurity [3] must be a central component of fighting #inequality [10],” tweeted Rep. Matt Cartwright [21], D-PA, reflecting that sentiment.

“Expanding #SocialSecurity [3] = fighting #inequality [10]. Let's make it happen,” tweeted Rep. Jared Huffman, D-CA.

To expand the current benefits through 2088, payroll taxes—without scrapping the cap—would have to be raised by 2.88 percent, which is split between employers and employees. That’s a payroll check deduction of $2.12 a day for the average American income, $53,891 in 2014 [22], with the same employer contribution. (The 2.88 percent figure comes from Falling Short: The Retirement Security Crisis and What To Do About It, a new book [23] by Charles Ellis, Alicia Munnell and Andrew Eschtruth.) 

In other words, there are many low-impact options to not only deal with short-term cash flow issues, but to extend the current level of support for another 50-plus years—by a slight increase in payroll taxes; and then to increase monthly benefits—by scrapping the payroll tax cap.

As Sen. Sanders tweeted, “Raise taxes on the wealthy to expand #SocialSecurity [3] says @SenSanders [24]: http://bit.ly/16QGQ79  [25] #ScraptheCap [20] #inequality

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