Photo Credit: Image by Shutterstock, Copyright (c) Rayjunk
MORE on the campaign of fraud, lies, manipulation and deception by the 2016 repiglican presidential candidates on the state of the Social Security program and the need to expand benefits and raise the taxable income limit. jeb bush, chris christie, marco rubio and ted cruz all want to raise the retirement age, and they have plans for cutting benefits and or privatizing Social Security, destroying the tax funded program that is in the black now, for the foreseeable future and can afford to increase benefits. The income ceiling on Social Security taxes must be raised from $118,500 to at least $250,000, should be $500,000. Both hillary clinton and Sen Bernie Sanders
agree on the need raise the taxable ceiling and to expand benefits, BERNIE 2016 wants the expansion of benefits across the board, hillary would limit it. Bottom line is, the repiglicans want to take more from the poor, working class, middle class, the retired and disabled and give it to the 1%. Bernie Sanders plans to increase Social Security taxes on those who can afford it and and use the increased revenue, along with securing the Social Security trust fund from being pillaged by the federal government, to increase and expand benefits. Comfort or poverty, who you support and vote for will determine the economic state of your retirement. Your future really is in your hands. From +AlterNet ......
January 9, 2016
Photo Credit: Image by Shutterstock, Copyright (c) Rayjunk
“They’re telling people they have more money than they say they do,” said Alex Lawson, executive director of Social Security Works, which has documented and burgeoning retirement security crisis and advocates for increased benefits.
The latest example of this we-know-your-wallet-better-than-you ruse has been a series of commentaries in the Wall Street Journal, Washington Post and Forbes by Andrew Biggs, a “resident scholar” at the conservative American Enterprise Institute, who was a deputy commissioner of the Social Security Administration under President George W. Bush (who repeatedly tried but failed to privatize Social Security).
“One persistent feature of the conservative attack on Social Security, and especially on the emerging campaign to increase benefits, is the notion that the typical American will do just fine in retirement just as it is,” wrote Michael Hiltzik, the Los Angeles Times’ Pulitzer-Prize winning business writer, summarizing this dubious line of attack as exemplified by Bigg’s Wall Street Journal piece, “New Evidence on the Phony Retirement Security Crisis.”
Bigg relies on an old Washington trick—the introduction of a new economic metric by congressional researchers that support a predetermined conclusion that ignores the reality faced by tens of millions of Americans. In this instance, it’s a new formula for calculating what’s called the “replacement rate,” or what percentage of one’s pre-retirement income will be dispensed in Social Security benefits. Economists typically say about 70 percent of one’s income is needed, of which Social Security is supposed to be one source.
“A typical middle-income individual born in the 1960s and retiring in the 2020s will be eligible for a Social Security benefit equal to 56 percent of his late-in-life earnings,” Biggs cheerily declares in the Wall Street Journal. “The CBO’s [Congressional Budget Office] Social Security figures, taken together with rising individual retirement savings, undercut the often-voiced claim that Americans face a ‘retirement crisis’ that only an expanded Social Security program can fix.”
The facts, as economists and economics writers have pointed out, are not with Biggs.
“If we step back from replacement rates, we can ask a rhetorical question, is $19,000 a year a middle-class income?” blogged economist Dean Baker, Center for Economic and Policy Research co-director, in response to Biggs’ claims. “Odds are that most people would not consider $19,000 a reasonable income for a middle-class household, hence the basis for the claim about a retirement crisis.”
Baker punctured another assertion.
“Biggs does point to the record amount of retirement savings,” Baker said. “This is indeed good news for those who have these savings, but unfortunately most middle class households don’t fall into this category. According to the Federal Reserve Board’s 2013 Survey of Consumer Finance, the average net worth outside of housing equity for the middle quintile of households between the ages of 55 and 64 was less than $55,000. This includes all IRAs, 401(k)s and other retirement accounts. This will translate into roughly $3,000 a year in additional retirement income, bringing this middle income household’s income up to $22,000 a year.”
What’s happening is right-wingers in the think tank community in Washington, D.C., in the majority on Capital Hill and on the 2016 presidential campaign trail, are seeing that Democrats are making headway with voters about the need to increase social safety net benefits. As the LA Times’ Hiltzik noted, when Biggs argued in the Washington Post that Americans’ IRAs and 401(k) balances have grown by nearly 50 percent from 1996 to early 2015, he mistakenly “assumes that retirement assets are distributed among the population in the same proportion as working income.”
“Is that plausible?” Hiltzik continued. “Doubtful, because facts tell a different story. Wealth inequality is spreading through the economy, and the gap in retirement assets may be even wider. Enrollment in 401(k) plans and other retirement accounts rises sharply with income… The likelihood is that the shortfall in retirement assets is going to become grimmer with time.”
The New York Times’ editorial board amplified that same conclusion last Sunday, noting that “36 percent of retirees now rely on Social Security for 90 percent or more of their income… 65 percent of retirees rely on it for more than half of their income.” Average monthly benefits are about $1,300. As far as the purported growing savings plans of soon-to-be seniors, the Times said that fewer employees even have that option. Only 44 percent of workers “on the lower half of the income scale” had retirement plans at work in 2013, compared to 54 percent in 1995, they noted. When gender and race are factored in, women—especially women of color—are particularly vulnerable.
“In the Uberized ‘gig economy,’ fewer workers may even have an employer to offer them,” Hiltzik wrote. Meanwhile, the Economic Policy Institute’s Monique Morrissey and Ross Eisenbrey write that the U.S. has more people age 60 and older working than many European countries because they essentially can’t afford to stop working.
But back to the latest fuzzy math from odd government formulas used to frame the Social Security debate and determine what benefits will actually be. As anyone who is receiving Social Security benefits will tell you, this new CBO formula is not the first weird metric they’ve recently seen. Because of the unealistic way that the government calculates cost-of-living increases for Social Security, recipients in 2016 will not see any change in the monthly benefits from 2015. This is happening even as the prices of prescription drugs significantly increased last year, including generics which jumped 11 percent.
“Skyrocketing drug prices with no COLA [cost of living adjustment] is a huge benefit cut,” said Social Security Works’ Lawson.
Meanwhile, on the 2016 campaign trail, several Republican contenders—Jeb Bush, Chris Christie, Ted Cruz and Marco Rubio—want to increase the age when people can collect benefits to save money, even though that would hit lower-wage workers the hardest. All except for Rubio would reduce future cost-of-living adjustments, and Bush and Cruz would revive George W. Bush’s privatization scheme.
On the Democratic side, Hillary Clinton and Bernie Sanders would raise the income tax ceiling that’s currently taxed for Social Security—it now is the first $118,500 of payroll income—and raise benefits. Clinton said widows and caregivers should see the biggest increases. Sanders would raise them across the board.
But the newest twist in the ongoing fight about Social Security is the arrogant and plainly incorrect assertion by right-wingers that aging Americans have more money than they think they do—and thus there’s no need to increase government-managed retirement benefits, but, if anything, to cut them instead.
