The History, Threats, and Keys to Strengthening Our Essential Retirement Security Programs Grassroots Ambassadors Training * Seattle * June 2-4 th 2013

 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.

Source: Kaiser Family Foundation, “A State-by-State Snapshot of Poverty Among Seniors”

A Strong Program That Should Be Strengthened, Not Cut!

 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.

 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.

 Only covered about one half of workers  Domestic workers, agricultural workers, and public employees were excluded

 Dependent Benefits were added for the spouses and minor children of retired workers  Survivor Benefits added for surviving spouses and minor children of covered workers  Coverage broadened to include agriculture, domestic workers and public employees s  Benefits added for workers who become disabled before retirement age

 Early retirement for women at age 62 with reduced benefits  Early retirement for men at age 62 with reduced benefits  SSI program created  Annual increases based on inflation

 Decrease from 90 to 82% of all wages covered by payroll tax due to increasing income inequality– undermines solvency over long-term.  Increases in retirement age from 65 to 67 (in 2027)  Decrease in survivor benefits Ronald Reagan gives a televised address from the Oval Office, outlining his plan for Tax Reduction Legislation in July 1981.

Beneficiaries and average benefit, April 2013 Beneficiaries (millions) Average amount MonthlyAnnually Retired workers37.2$1,267$15,202 Disabled workers8.9$1,130$13,560 Aged widow(er)s3.9$1,220$14,640 Source: Social Security Administration, Beneficiary Data

 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

 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

 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

 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

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 Reality: It's not just wrong -- it's impossible!

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 Reality: This is a red-herring to trick you into agreeing to benefit cuts.

 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.’

 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 (D- IA), 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.

 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.

 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  Raise benefits for all beneficiaries  Equal Benefits for same-sex married couples and partners

Photo Credit: Think Progress

 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.

 Part A: Hospitals and Nursing Homes  Part B: Doctor Visits and Outpatient Services  Part C: Medicare Advantage  Part D: Prescription Drugs

 Proposals to Cut Medicare ◦ Move to private insurance companies ◦ Individual, capped vouchers  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

 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.

 Mandatory/Federal Guidelines ◦ Hospital care, physician services ◦ Nursing home and other long term care services and supports ◦ Laboratory and x-ray services  Optional Services/Varies by State ◦ Prescription drugs, dental care, vision services ◦ Hearing aids and personal care services ◦ Amount, duration, and scope of services

 Potential to cover up to 17 million more low- income 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

Source: Centers for Medicare and Medicaid Services