Friday, 19 October 2012
Social Security, the 2013 COLA and the Campaign
In Wednesday's presidential debate there was no discussion of Social Security. Nothing. Zero. Nada.
Both candidates and the moderator, who selected the questions from the audience, ignored the program that provides 90 percent of total income to more than one-third of Social Security beneficiaries, a program that is under constant threat from one of our two major political parties.
Apparently, we elders – who are the most reliable and largest voting demographic in the land - are of no interest to our presidential candidates. And because the next debate is entirely focused on foreign affairs, it is unlikely we will hear a major statement from either man about Social Security before election day.
On the morning of debate day, Tuesday 16 October, the 2013 cost-of-living (COLA) increase was announced by the Social Security Administration. It is of crucial importance to elders battered by increased food and energy costs along with relentlessly rising health care costs that far outpace inflation.
The COLA came in at 1.7 percent which amounts to a rise of about $21 per month for the average Social Security benefit of around $1261 per month. Don't spend it all in one place.
(You can find out other facts and figures about Social Security for 2013 here.)
Although Mitt Romney slithers hither and thither on what he would do with Social Security if elected, with his choice of Paul Ryan as running mate he is legitimately tethered to the Ryan economic plan which seeks to privatize Social Security - as Republicans have never stopped trying to do since President Franklin Roosevelt signed the legislation in 1935.
The most recent version of Ryan's plan would allow younger workers to invest a third of their Social Security withholding in private investment accounts - which begs the question, does Ryan not know what happened to the stock market in 2008?
Of course he does, but never mind that. The Ryan goal in privatizing Social Security is the same as it has always been with Republicans: to turn over billions of dollars in fees to already-rich Wall Street bankers.
As disastrous an idea as that is, there may be a more immediate danger to Social Security than the election of Romney/Ryan.
Whoever wins on 6 November, President Obama and Congress will be dealing with the “fiscal cliff” before the new year.
It's probably not as dire as a real cliff, but it refers to a whole bunch of tax cuts expiring at the end of December along with cuts to many federal programs all of which Congress enacted a year ago to avoid such a cliff then.
The election campaign is sucking up so much oxygen in the country that there is little talk of what Congress will or won't do about the cliff and whether it involves another possible “grand bargain” - remember that?
Although President Obama has repeated that he will never “slash” Social Security benefits, he has waffled around less drastic measures with the program including changing the method by which COLAs are calculated to the “chained CPI.”
Listen to Social Security's best, most fierce advocate in Washington, Vermont Independent Senator Bernie Sanders, on the subject of the chained CPI:
"Let's be clear: for millions of senior citizens and disabled veterans living on fixed incomes, the chained CPI is not the minor ‘tweak' that some say it is. It is a significant benefit cut that will make it harder for the elderly and veterans to make ends meet."
Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM) made reference to the chained CPI when he commented on the tiny 2013 COLA increase:
”...the truth is replacing the current COLA formula with the chained CPI will mean the typical 65 year-old, who filed for benefits at 62, would lose about $130 per year in benefits. By the time that senior reaches 95, the annual benefit cut will be almost $1,400, which is a 9.2 percent cut.”
Both Senator Sanders and the NCPSSM (not to mention moi) support another method of calculating cost of living increases: the CPI-E which more accurately takes into account the different spending habits of elders and the greater percentage of income elders spend on health care than younger people do.
Whether changes to Social Security are tackled by Congress and the president in connection with the fiscal cliff at the end of this year or next year after the inauguration, I know I'd rather fight against the chained CPI than go through a privatization battle again as we did in 2005 with President George W. Bush.
Because it is always a good idea to be reminded of the actual workings and fiscal health of Social Security, take a look at this excellent video about the program from the folks at Strengthen Social Security.
At The Elder Storytelling Place today, Deb Greant: Off to Buy Vitamins