Call Today: Hands Off Social Security!

It's not too late to call. Call today while this issue has your senators' attention.
Don’t want your mom’s Social Security benefits cut next year, or your son’s retirement age raised? Join the big call-in today, promoted by a host of organizations from unions to retiree groups to women’s organizations. Call Congress toll-free at 866-529-7630 to say: Hands Off Social Security!

Today is the last day before President Obama’s Fiscal Commission unveils its proposals, which will include cuts to Social Security. Congress and the White House need to hear the same groundswell of opposition that stopped talk of privatizing Social Security under both Bill Clinton and George Bush.

You do have to say one thing for the millionaires and their friends in government who are campaigning to cut Social Security—they plan ahead. An early proposal from the Fiscal Commission co-chairs would raise the retirement age for full benefits to 69—in 2075. No matter how many advances medicine makes by then, something tells me that physically demanding jobs will still wear a body down.

But there are cuts in the proposal that would affect everyone alive today. Social Security benefits would be cut in two more ways: the cost-of-living formula would be made stingier, and the formula for calculating benefits would be tightened. See below for how much money a worker will lose over a lifetime, if co-chairs Alan Simpson and Erskine Bowles can convince Congress.

The way Social Security is structured now, the more you pay in, the higher your benefit when you become old, are disabled, or die and leave behind dependent loved ones. One part of the co-chairs’ plan is to change the benefit formula so that the difference between high earners’ benefits and low earners’ benefits is not so great. Those who paid in more would get less than they do under the current program.

On one hand, that sounds good. Why should people who’ve probably saved lots of money, maybe even have a pension, also get a big Social Security check? Shouldn’t the poor get more?

But there are two catches:

(1) Under the Bowles-Simpson plan, benefits would be cut not just for the rich but for everyone earning over about $20,000. Those earning more—$40,000, $60,000—would be cut proportionately more.

(2) The second catch is where the long-term thinking comes in. One of the good things about Social Security now is that it’s for everyone; it’s a unifier. That makes Social Security almost universally popular. Just about no regular person—Democrat, Republican, Tea Partyer—is anti-Social Security. When Sharron Angle, the Tea Party candidate for Senate in Nevada, bad-mouthed Social Security, she had to backtrack—and she lost.

But if the Social Security formula is changed so it looks like the poor are benefiting most and the middle class and above are not getting their fair share, that opens the door to resentment—and more cuts down the road.

Remember the bitterness so many people seemed to feel toward welfare mothers, supposedly living high off the hog at the taxpayers’ expense? Bill Clinton and Congress used that anger to “end welfare as we know it.”

That’s just what years of cynical (and phony) talk about Social Security’s “bankruptcy” has been designed to do, whip up fear and resentment among younger workers who see FICA taxes taken out of their checks and hear TV pundits say they can’t count on any benefits being there for them.

If Social Security comes to be seen that way—something for other people, not for me—that would suit Bowles and Simpson just fine. Their successors would lead the charge for slashing even deeper.

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The Strengthen Social Security coalition, which is organizing today’s call-in to 866-529-7630, says the American people should proclaim the B-S proposal dead on arrival.

Here are their 10 reasons why:

The Fiscal Commission Co-Chairs’ Social Security proposals are an equal opportunity disaster. So soon after an angry electorate has expressed its frustration with a Washington political class that does not appear to be listening, it totally ignores the will of the people. Poll after poll has shown that Democrats, Republicans, and Independents reject the punitive cuts in America’s economic security that the co-chairs have proposed. Their proposal:

1. Deeply cuts the benefits of middle-class families. The proposal would cut retirement benefits by as much as 36% for young people entering the workforce today. Today’s 20-year old workers who retire at age 65 would see their benefits cut by 17% if their wages average $43,000 over their working lives, by 30% if their wages average $69,000 over their working lives, and by 36% if their wages average $107,000 over their working lives, according to the Social Security Chief Actuary.1 The proposed cuts would apply to retirees, disabled workers and their families, children who have lost parents, and widows and widowers.

2. Closes Social Security’s long-range funding gap primarily by cutting already low benefits, rather than by raising taxes on those who can most afford to pay. Ninety-two percent of Social Security’s projected funding gap is closed by cutting promised benefits, according to the proposal. The benefit formula change eliminates 45% of the projected shortfall, raising the retirement age eliminates 21%, and reducing the COLA eliminates 26%.2 Social Security's benefits are already inadequate – just $13,000 a year on average3 – and should not be cut further. Instead, Social Security’s long-range funding gap could be closed, as most Americans want, by requiring those employees (and their employers) who make more than $107,000 a year to pay Social Security taxes on all their wages, as the rest of us do who earn less.4

3. Raises the retirement age to 69. This is a 13% benefit cut on top of the 13% cut already made when the retirement age was increased from 65 to 67, according to the Social Security Administration.5

4. Raises the early retirement age to 64. Most Americans claim Social Security benefits at age 62 even though the benefits are currently reduced by 25%, when they do so.6 Millions take early retirement because they work in physically demanding jobs, have health problems, or can no longer find work. Raising the early retirement age will shut them out of the system when they are most vulnerable, potentially forcing them to seek disability benefits or welfare.

5. Discriminates against lower-wage workers by raising the retirement age. Over the last quarter century, life expectancy of lower-income men increased by one year compared to five years for upper-income men. Lower-income women have experienced declines in longevity.7 Yet, the higher retirement age applies to rich and poor, healthy and sick, alike. In effect, the proposal says to lower-wage workers that they must work longer because the rich are living longer!

6. Reduces the annual Cost of Living Adjustment (COLA) for Social Security beneficiaries. The “chained CPI” proposal would reduce benefits by 0.3% a year on average.8 This will result in a 3.7% cut in benefits after 10 years in retirement beginning at age 65 and a 6.5% cut after 20 years, according to the Social Security Chief Actuary.9 If anything, the COLA should be increased because it does not adequately take account of skyrocketing medical costs, which hit seniors and people with disabilities hardest.

7. Hurts current retirees, contrary to promises made by the Co-Chairs. The change in the COLA calculation would begin in 2011 and affect all beneficiaries, not just retirees.

8. Breaks faith with our nation’s veterans and service members. Social Security benefits are veterans’ benefits – 43% of veterans receive Social Security.10 Our men and women in uniform (and their families) will see their Social Security disability benefits cut deeply if they are seriously injured in combat. If they die in combat, their survivors’ benefits will also be cut substantially. And veterans’ retirement benefits will be cut significantly just like for all other Americans.

9. Harms our grandchildren the most. In the name of helping our grandchildren, the proposal cuts their benefits the most. The younger a person is, the deeper the cuts because of the increase in the retirement age and the changes in the benefit formula.11

10. Breaks Social Security’s promise with hard-working Americans. Social Security belongs to the people who have worked hard all their lives and contributed to the program. It is based on a promise that if you pay in, then you earn the right to guaranteed benefits. The Co-Chairs’ proposal would break that promise.


1- Social Security Administration (SSA), letter from Stephen C. Goss, Chief Actuary, to Fiscal Commission Staff,
“Fiscal Commission Plan 2a: Tax Light Plan,” pp. 4, 5, November 9, 2010. The wage amounts are in constant 2010
dollars.
2- Co-Chairs’ Proposal, “Restoring Social Security Solvency,” p. 48, Nov. 10, 2010. Available here.
3- Average monthly benefit amounts calculated by multiplying by twelve from SSA, “Fast Facts & Figures About
Social Security, 2010, ” p. 15. Available here.
4- Polling data available here.
5- Social Security Administration, “Effect of Early or Delayed Retirement on Retirement Benefits,” 2010. Available here. Each one-year increase represents a cut of 6% to 7%.
6- Social Security Administration, “Retirement Benefits by Year of Birth.” Available here. The 25% reduction applies to people who claim benefits at their 62nd birthday when the normal retirement age is 66. People accepting benefits later in their 62nd year have slightly lower reductions.
7- Harry C. Ballantyne, Lawrence Mishel and Monique Morrissey, “Briefing Paper #273: Social Security and the
Federal Deficit, Not Cause and Effect,” Economic Policy Institute, August 6, 2010, p. 8. Available here.
8- SSA letter to Fiscal Commission Staff, footnote 4, p. 4.
9- Social Security Administration, letter from Stephen C. Goss, Chief Actuary, to Rep. Earl Pomeroy, “Table 3.
Indexing Cost of Living Adjustments (COLA) to a Chained Version of CPI-W,” October 18, 2010. Available here.
Using this lower COLA would cut benefits by $108 billion over 10 years, according to the Congressional Budget
Office, “Budget Options: Volume 2,” August, 2009, p. 147. Available here.
10- Social Security Administration, “Military Veterans Paper Tables Updated CPS 2009,” 2009.
11- SSA letter to Fiscal Commission Staff, p. 4.
Jane Slaughter is a former editor of Labor Notes and co-author of Secrets of a Successful Organizer.

Comments

judywraight | 12/01/10

I called Senators Levin and Stabenow (Michigan). I gave out 30 notices and urged my co-workers to spread the word. Some will. The infuriating thing here is that Bob King (UAW President) sent out an e-mail today and perhaps yesterday, but this is an issue almost all agree on in the working class and yet there was no real organizing done.
This also would have been the way to reach out to the public of "we have no public support" fame. The unions COULD have mobilized everywhere with small handouts, free cookies. Whatever. (In other words, ORGANIZED.)
Not to mention the 400,000-plus UAW members. The precious thing about ORGANIZATION is that there is a list of phone #s and addresses, and with enough pre-notice, many could have been personally talked with. What's the point if the unions make a pitiful effort on something that is not controversial? Let alone the general strike that will probably be required for some meaningful pro-worker reforms.