The History, Threats, and Keys to
Strengthening Our Essential Retirement
Security Programs
Grassroots Ambassadors Training * Seattle * June 2-4th 2013
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Establish a common understanding of the
major Retirement Security policy agenda and
current federal budget politics.
Understand the major efforts and arguments
to cut these program and to strengthen and
protect these programs.
Share personal experiences and state and
local context on Social Security, Medicare,
and Medicaid.
Official poverty measure
30%
25%
20%
15%
Official poverty
10%
measure
5%
0%
Below 100% of
Below 200% of
poverty
poverty
Source: Kaiser Family Foundation, “A State-by-State Snapshot of Poverty Among Seniors”
Official poverty measure
35%
30%
25%
20%
15%
10%
5%
0%
Official poverty
measure
Below 100% Below 200%
of poverty
of poverty
Source: Kaiser Family Foundation, “A State-by-State Snapshot of Poverty Among Seniors”
Official poverty measure
50%
40%
30%
Official poverty
20%
measure
10%
0%
Below 100% Below 200%
of poverty
of poverty
Source: Kaiser Family Foundation, “A State-by-State Snapshot of Poverty Among Seniors”
A Strong Program That Should
Be Strengthened, Not Cut!
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In 1935 the Social Security Act created the Social
Security retirement program. Its purpose was two fold:
◦ Provide retirement security/reduce poverty among the
aged
◦ Create incentive for older workers to leave the labor
market during the depression when so many were
unemployed.
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Program designed to work like
an insurance program - does
not create individual accounts
in which each worker’s money
is held separately from others
“Premiums” paid by workers
and employers and then
benefits paid under certain
conditions
Some people may collect far
more than they contributed,
others may collect much less
Everyone gets a reasonable
payment based in part on their
contribution to the system.
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Only covered about
one half of workers
Domestic workers,
agricultural
workers, and
public employees
were excluded
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Dependent Benefits were added for the spouses
and minor children of retired workers - 1939
Survivor Benefits added for surviving spouses
and minor children of covered workers - 1939
Coverage broadened to include agriculture,
domestic workers and public employees 1950s
Benefits added for workers who become
disabled before retirement age - 1956
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Early retirement for women at age 62 with
reduced benefits - 1956
Early retirement for men at age 62 with
reduced benefits - 1961
SSI program created - 1972
Annual increases based on inflation - 1975
Ronald Reagan gives a televised address from the Oval Office,
outlining his plan for Tax Reduction Legislation in July 1981.
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Decrease from 90 to 82% of all wages covered by
payroll tax due to increasing income inequality–
undermines solvency over long-term.
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Increases in retirement age from 65 to 67 (in 2027)
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Decrease in survivor benefits
Beneficiaries and average benefit, April 2013
Beneficiaries
(millions)
Average amount
Monthly
Annually
Retired workers
37.2
$1,267
$15,202
Disabled workers
8.9
$1,130
$13,560
Aged widow(er)s
3.9
$1,220
$14,640
Source: Social Security Administration, Beneficiary Data
Composition of Social Security
Beneficiaries (April 2013)
Source: Social Security Administration, Beneficiary Data
Disabled
workers &
dependents
19%
Survivors
11%
Retired
workers &
dependents
70%
Social Security lifted 21.4 million
people – of all ages – out of
poverty in 2012
% in poverty, March 2012
50%
40%
30%
20%
10%
0%
Children Adults Ages Elderly Age Total, All
Under 18
18-64 65 and Over
Ages
Excluding Social Security
Including Social Security
Source: Current Population Survey, March 2012 Supplement
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Social Security is virtually the only source of
income for one in four women 65 and older -
Social Security provides disability and life
insurance benefits that are especially
important to women, particularly women of
color and their families
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Payroll taxes have been
increased periodically, now
6.2% of wages up to cap
paid by both workers and
employers
Cap is currently $113,700
per year, indexed to
increases in average wages
This means that about 84%
of all wages paid are
subject to tax
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Taxes collected until this past year were greater than
benefit paid so that a surplus of about $3 trillion has
accumulated in the Trust Fund
These funds are invested in US Treasury Bonds, one
of the safest investments in the word
Goal has been to make sure that combination of
current taxes and Trust Fund will safely cover
projected benefits for next 75 years
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The aging of the Boomer generation isn’t a crisis,
we saw it coming and planned for it! There is
currently about $3 trillion saved up in the Trust
Fund, enough to pay all benefits through 2033
After that, money coming in through current
payroll taxes will cover about ¾ of scheduled
benefits indefinitely
Scrapping the cap on taxable earnings would more
than cover the full cost of benefits far into the
future
Taxes on unearned income – dividends, interest, or
inheritances – could also be used to help pay
Reality: It's not just wrong -- it's
impossible!
By law, Social Security funds are separate from
the budget, and it must pay its own way. Social
Security can’t borrow, it can only pay out what
it takes in through payroll taxes and the
savings it has built up in the Trust Fund. That
means that Social Security can't add anything to
the debt.
Source: Move On Political Action
www.moveon.org/ssmyths/
Reality: This is a red-herring to
trick you into agreeing to benefit
cuts.
Retirees are living about the same amount of
time as they were in the 1930s. The reason
average life expectancy is higher is mostly
because many fewer people die as children than
did 70 years ago.3
Source: Move On Political
Action
www.moveon.org/ssmyths/
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Reducing cost-of-living-adjustments (COLA)
◦ Instead of using the standard Consumer Price
Index (CPI) to calculate COLAs, the chained
CPI would be used.
◦ This reduces COLAs by an estimated 0.3% per
year. That’s a benefit cut for every single
person receiving Social Security, disguised as
a ‘tweak.’
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If we scrap the cap on taxable earnings (now
$113,700) we can strengthen Social Security,
not cut it!
Sens. Bernie Sanders (I-VT), Tom Harkin (DIA), Mark Begich (D-AK) and Reps. Theodore
Deutch (FL-21), Peter DeFazio (OR-4), and
Gwen Moore (WI-4) have proposals to lift the
cap and strengthen Social Security.
Few Americans would be affected by this
change to the Social Security payroll tax cap.
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Despite Social Security, older women remain
at greater risk of poverty and economic
insecurity than older men
This year the average Social Security benefit
for women 65 and older is about $13,217 per
year, compared to nearly $17,699 for men 65
and older.
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Caregiver credit to recognize the reduced earnings of those who
provide care for children, disabled/aged family members
Use the CPI-E to calculate cost of living adjustments
Restore Dependent /Survivor Benefits for children age 19 to 24
who are in school
Create a real minimum benefit of at least 125% of the poverty
level
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Raise benefits for all beneficiaries
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Equal Benefits for same-sex married couples and partners
Photo Credit: Think Progress
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Medicare was created by Congress in 1965 to help Seniors
and those with long –term disabilities get the medical
treatment they need at a price they can afford.
There are now about 41 million Seniors age 65 and older who
are covered and another 9 million who are covered because
they receive Social Security Disability Benefits.
Among all beneficiaries, over one half had annual income
under $23,000, and over half have savings of about $50,000
or less.
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Part A: Hospitals and Nursing Homes
Part B: Doctor Visits and Outpatient
Services
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Part C: Medicare Advantage
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Part D: Prescription Drugs
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Proposals to Cut Medicare
◦ Move to private insurance companies
◦ Individual, capped vouchers
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Strengthening Medicare
◦ Medicare Drug Savings Act of 2013
 Gives government a better deal on prescription drug
prices instead of big pharmaceutical companies which
continue to make record profits.
Photo Credit: Caring Across
Generations
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Created by Congress in 1965, Medicaid is a
public insurance program that provides
health coverage to low income families and
individuals.
Each state operates its own Medicaid program
within federal guidelines.
In 2012, Medicaid provided health coverage
for 67 million low-income Americans over the
course of the year.
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Mandatory/Federal Guidelines
◦ Hospital care, physician services
◦ Nursing home and other long term care services
and supports
◦ Laboratory and x-ray services
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Optional Services/Varies by State
◦ Prescription drugs, dental care, vision services
◦ Hearing aids and personal care services
◦ Amount, duration, and scope of services
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Potential to cover up to
17 million more lowincome people.
Medicaid expansion is
a good deal for states.
Ensures access to
health and long-term
care that would
otherwise be out of
reach.
Photo Credit: Take Action Minnesota
% of total pop. enrolled
25%
20%
15%
10%
5%
Medicaid
0%
Medicare
Washing
United
ton
States
Medicaid
14%
18%
Medicare
18%
20%
2%
3%
Both
Source: Centers for Medicare and Medicaid Services
Both
% of total pop. enrolled
25%
20%
15%
10%
5%
Medicaid
0%
Medicare
Montana
United
States
Medicaid
11%
18%
Medicare
17%
20%
2%
3%
Both
Source: Centers for Medicare and Medicaid Services
Both
% of total pop. enrolled
25%
20%
15%
10%
5%
Medicaid
0%
Medicare
Minneso
United
ta
States
Medicaid
15%
18%
Medicare
15%
20%
3%
3%
Both
Source: Centers for Medicare and Medicaid Services
Both