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Social Security Issues
- Archives 2006 -
Also see our site on Private
Pension Issues
, Trade Unions and Pension Issues
and World Pension Issues
Gov. Creates Panel to Study Pension Costs
(December 29, 2006)
Californian Governor Schwarzenegger created a commission to study “runaway pension costs.” He is responding to the government’s inability to keep its promise to provide at least $100 billion in cash payments and health benefits to its government workers. The commission will have one year to investigate this matter and offer possible solutions. The State cannot reduce the benefits it promised to the government workers but any extra spending on retirement costs can threaten the state’s financial stability. However, this problem is not news.
Will Bush Bargain to Save Social Security?
(November 22, 2006)
Analysts say that Social Security issues gave the Democrats a winning edge in the Fall 2006 elections. Bush’s insistence on establishing a privatized Social Security system has
proved to be unpopular. With the legislative branch in the Democrats’
control, Bush may have to reconsider his strategies. Even though the White House publicly states that the Bush Administration will not take the private account proposal off the table, there are speculations that the Administration wants to negotiate in private. Because Bush stated that Social Security was an issue he wanted to deal with during his second term, will he change his approach on Social Security?
Workers Oppose Pension Reform (November 21, 2006)
New Jersey’s pension and health care systems currently face a $38 million deficit. A legislative committee has proposed certain changes that may impact thousands of public employees. Some of these recommendations include an increase in retirement age for new workers from 55 to 62 years, an 8% decrease in the state's annual pension contribution for workers, and an increase in health insurance premiums. These proposals immediately sparked the State’s unions to call for mass protests
when lawmakers take up the legislation in December.
Once Safe, Public Pensions Are Now Facing Cuts
(November 6, 2006)
“It was guaranteed, written in stone— when I retire, I make this much and they’re not going to be able to touch that,” a police officer stated.
For decades, working for the US government translated into guaranteed and secure pensions. Although New York City underwent a financial crisis 30 years ago, yet City Hall did not touch the pension fund. However, time's a ’changin’ – several states and cities are cutting pensions.
The laws that supposedly prevent that from happening are not as secure as we thought. In some states, there are loopholes in the law. In others, there are laws that contradict each other. Writer Mary Williams Walsh examines how states and cities are dealing with the pension-cut dilemma in different ways. But one thing they all have in common is that cuts
public pension are real– and it is happening.
Can
You Afford to Retire? Baby Boomers are Heading for a Shock as they Hit
Retirement: Vanishing Pensions and Inadequate 401(k) Savings. What Can Be
Done? (November 2006)
PBS network/FRONTLINE recently aired a TV program on retirement.
Experts candidly discuss what US citizens need to know about pensions,
401(k)s and how much to save in a changing world of retirement. This
program provides an update on the 2006 pension law, plus analysis,
advice and articles on what's gone wrong and what lies ahead. Also, it
features US employees directly affected by these changes and stories on pensions lost
to bankruptcy. Refer to this site to watch the full program online.
300 Million and Counting
(October 2006)
A recent US demographic milestone of 300 million inhabitants raises the question of aging globally. What is the first thing that comes to mind when talking about China and India’s population?
Overpopulated. In response to the overpopulation crisis, China passed a law allowing only one child per family. As a result, China is currently undergoing population shrinkage. Demographic studies show population shrinkage on a global level. A combination of increase in life expectancy and lower
birth rates moves us toward a world where there will be a larger percentage of older people than younger people. This will undoubtedly affect social security and
pensions. This article explores the demographic dynamics and how that will eventually affect aging populations in different countries around the world.
Income of the Aged Chartbook 2004 (October 2006)
Since 1941, the Social Security
Administration (SSA) has periodically surveyed the aged to determine their economic status. Statistics
are based on income sources such as retirement benefits, social security
and pensions. The 2004 sample
represented 10,930,000 couples and 15,935,000 single units. This unit of
analysis allows one to measure the economic status of the entire
non-institutionalized aged population, separately from that of the family
or household in which the unit may live. For the most updated collection
of data, please refer to the Social Security Administration’s report.
Social Security Checks rise by 3.3% (October 18, 2006)
Due to rising inflation Social Security checks for nearly 49 million Americans will increase by 3.3 percent next year.
Recipients will receive an average of $33 more per month. The typical retired worker’s check will go from $1,011 to $1,044 next year. Since nearly one-third of retirees rely on Social Security for most of their income, advocates for the elderly believe that the cost of living adjustment is a critical safety net. Those who receive SSI and SSDI benefits can expect increases in their monthly checks as well. The government also announced that 11 million taxpayers will pay higher taxes next year. Medicare premiums may increase as well.
Democrats Want to Revive
Social Security Issue (October 2, 2006)
As midterm elections approaches, Democrats are trying to revive the Social
Security issue in order to secure the senior vote.
While President Bush wants
to convert Social Security to private
accounts, many labor and senior groups strongly oppose this approach that
would compromise Social Security’s stability.
In fact, Americans
United, a labor-backed group against Social Security privatization, plans
to follow politicians who favor private accounts and to dress up as
gorillas carrying the message, "Don't monkey with our SS."
Meeting
Social Security’s Long-Range Shortfall (September 5, 2006)
Former Social Security Commissioner Robert M. Ball recently released an
issue brief entitled Meeting Social Security’s Long-Range Shortfall.
Mr. Ball addresses the program’s increasing costs over the long-term due
to the aging of the baby boomer generation. Mr. Ball suggests gradually
raising the cap on earnings covered by Social Security, dedicating future
proceeds of a revised estate tax to the program and improving the return on
funds by investing part of them in equities.
Through these adjustments, Mr. Ball anticipates the elimination of a
projected shortfall in the next 75 years.
Retiring Insecurity (August 18, 2006)
The new pension legislation signed by President Bush represents a huge step to offer financial security to gay and lesbian couples. However, the new law does not have striking impact on most people, because fewer companies provide pensions to their employees today. Even if they do, in many cases it is a 401(k) plan with the financial responsibility resting on individuals’ saving. In spite of mixed views, many experts agree that the new law fails to protect employees' guaranteed benefits, actually putting pension plans at larger “risk of being cut or dumped entirely” and shifting the retirement burden to employees.
Pension Bill Nears Congressional Approval (July 20, 2006)
After working several years to revitalize the under-funded single-employer pension system, Congress finally is near an agreement on legislation meant to ensure retirement benefits for 44 million people with employer-based pension plans. Aides warn that several loose ends remain. Main goals include preventing companies from defaulting to the government’s Pension Benefit Guaranty Corporation (PBGC), which runs a large deficit, as well as saving troubled airlines and restricting deferred-compensation payouts to executives. GOP leaders are also pressuring negotiators to include an estate tax cut, applicable up to $40 million.
New Jersey Set to Alter Pension Plan (July 20, 2006)
To deal with New Jersey’s troubled financial situation, Governor Jon Corzine and the state treasurer have set out to move the state to private control of pension investments, even though private management will cost $200 million per year in fees. Focusing on diversified investments, New Jersey will become one of the most financially aggressive states in
the nation by taking this action. Some experts worry that the proposed change will be too abrupt. Others, fearing high risk and loss of control of the pension funds, have filed lawsuits demanding that the legislature be involved in the decision.
Fiction on the Social Security Trust Fund (June 16, 2006)
As the most popular government program, Social Security currently serves more than 50 million people. The program provides basic retirement income with low administration costs, less than 1/20 the price of managing a private system. Rhetoric and reports of looming collapse invoke fear among citizens, promoting support for privatization. With two trillion dollars, the Social Security trust fund created in 1983 does indeed have resources to accommodate the baby boom generation. However, wealthy people endorsing privatization have one trillion dollars to gain; since Social Security is regressive it takes a high progressive income tax to compensate. “Defaulting on the trust fund would transfer more than $1 trillion from the bottom 95 percent of the income distribution to the richest 5 percent.”
Three Retirement Scenarios for Couple to Consider (June 11, 2006)
If you are about to retire and wonder if you will have enough resources to keep up with your expenses once you retire, you may have already drawn a few retirement plans.
Taking the example of an “average American couple,” this article develops three different possible scenarios for the two of them to retire. Given that they “have $3,300 in a checking account, $14,000 in a money market, $4,000 in certificates of deposit, $44,000 in IRAs and $4,000 in a 403(b) plan,” the article takes into consideration as many parameters as possible to build the safest, the fastest, the wiser retirement plan.
Retirement Tip: Four Reasons to Wait (June 5, 2006)
Are you are worried your portfolio won't last your entire retirement? There are major incentives to work just a few years more. This article takes a stand in favor of later retirement, giving “powerful reasons” to work more years. First, working a few more years helps build a stronger portfolio that will sustain the reduced retirement years. Then, working longer guarantees a bigger social security or pension check. And finally, it “helps with the doctor bills,” the article explains. These down-to-earth answers have already convinced thousands of Americans to retire at a later age.
Immigrants Needed to Sustain Aging Population
(May 29, 2006)
(Article in French)
The USA needs more immigrants
as baby-boomers retire. Almost 60 million foreign workers are needed over
the next 20 years to finance the retirement of US workers. The hard line
taken by Congress and by the Senate against immigration will only worsen
an already difficult situation. If the United States
does not admit more immigrants the ratio of working age people to retirees
will drop from 4,7:1 to 2,6 in 2030.
The End of Retirement (May 2006)
This article offers an excellent summary of the current debate about the US pension system. The author gives an interesting point of view on the current trends in politics regarding retirement. “The loss of traditional pensions has not generated a national crisis or a political backlash because of an ambiguity about whether this is such a bad thing,” she explains. She adds that the “the assumed pro-work culture” in the US has helped spread the idea that elderly could, or should, work too. The article explains the current changes in pension programs, the shift from defined benefit to defined contribution plans, and its implication for workers.
Social Security, Medicare Trust Funds Sink (May 1, 2006)
On Monday, the trustees for Social Security and Medicare estimated that both programs will deplete in 2040 and 2018, respectively. Social Security and Medicare are not "sustainable under current financing arrangements,” the trustees added. In fact, the situation will deteriorate really fast as the baby boomer generation reaches retirement. To counter the predicted bankruptcy and raise the cash needed to meet financial obligations, the government can either borrow more money from the public, cut spending from different programs, or raise taxes. If
President Bush’s request to make a tax cut permanent is approved by the Congress, it “would represent a cumulative revenue shortfall equal to 2 percent of the total economy over a 75-year period,” said Senator Jack Reed.
Feds Could "Gut" Social Security Disability Rolls (April 28, 2006)
The Social Security Administration has found a place to cut corners: postponing benefits by two years for several categories of disability-benefit recipients, no matter how much hardship the delay might cause. Many critics, including lawyers who represent claimants, are asking for the proposal to be withdrawn. Philadelphia's Community Legal Services, an organization providing representation to low-income people, says that the proposal is trying to reduce federal spending "by defining disability in an even more restrictive manner than currently."
Commissioner Barnhart Unveils New Social Security Disability Determination Process (March 31, 2006)
Jo Anne Barnhart, Commissioner of Social Security, recently released new plans to speed up the application and decision process of those who are applying for disability. Commissioner Barnhart wants to use electronic procedures to streamline the sometimes long and confusing application process. Additional changes include phasing out the Appeals Council and switching to a Decision Review Board and appointing a Federal
Reviewing Official to review state determinations decisions. Hopefully, these changes will reform the disability determinations process and as Barnhart says, “greatly improve the quality of service that Social Security provides to millions of disabled workers.” Will the new electronic processes be accessible to persons with disabilities?
Understanding Social Insurance: Fairness, Affordability, and the 'Modernization' Of Social Security and Medicare (March 21, 2006)
A recent report from Health Affairs, The Policy Journal of the Health Sphere, took aim at the problem of disinformation in the Social Security and Medicare debate. The report provides information on how US Representatives are misinterpreting and even in some cases misrepresenting information to advance their specific reform agenda.. The report contends that this misinformation causes public confusion on a vitally important national issue. Legislators act under the assumption that such research is correct. In many cases it turns out to be false, simply
propaganda.
Social Security Reform Rejected (March 20, 2006)
Sen. Jim DeMint, R-SC, attached an amendment to a budget bill earlier this week. The amendment would create a reserve fund protected under budget rules to save the Social Security surplus from financing other federal agencies’ excess spending. Democrats objected to the amendment because they saw it as a step towards private security accounts, a step they say is in the wrong direction. The amendment went down in a narrow defeat.
Pay Off Student Loans or Lose Social Security Pay (March 6, 2006)
In December 2005, the US Supreme Court unanimously voted that they would deduct Social Security benefits to pay off old student loans. This is detrimental to those who rely on Social Security checks as their only source of income. Many citizens have criticized the US government for failing to develop an effective plan to pay off unpaid student loans which cost taxpayers billions every year. Now the Supreme Court has ruled that the former students’ Social Security will be sacrificed for payment. Many worry that this opens Social Security benefits for plunder from outstanding debts of a lifetime. What’s fair?
Bush's Social Security Slight of Hand (February 8, 2006)
To everyone's surprise, President Bush has put a Social Security privatization plan in the federal budget proposal which was sent to Congress on Monday. The proposal would allow for private accounts starting the year 2010 and divert more than $700 billion of Social Security tax revenues to pay for it over a span of seven years. Along with the privatization, Bush wants to change to progressive indexing as a way to calculate Social Security benefits. Many argue that in this case, Social Security would get stigmatized as "welfare" than as a right for all citizens.
Center on Budget and Policy Priorities' Report
African Americans and Social Security: The Implication of Reform Proposal (January 19, 2006)
In this report William Springs and Jason Furman show how critically important Social Security is for African Americans. This group benefits more from the system, as they get a higher rate of return than whites do. Half of the African American beneficiaries are retired workers, whose major source of income is their Social Security check. African Americans earn less money than whites, are not able to have substantial savings and are more likely to become disabled or die at a younger age. The 85% of retired income that Social Security represents for older African Americans is thus crucial. The current proposals to reform Social Security, including incorporating private accounts, will affect the progressive nature of the benefit structure system. Privatizations plans will negatively impact African Americans, especially the elderly.
Insecurities of Social Security (January 19, 2006)
In the US, two-thirds of elderly and the disabled rely on Social Security as their main benefit source. Social Security represents the single source of income for the remaining third. Yet, the Supreme Court ruled that Social Security benefits may be cut. Although it is not final yet, the Supreme Court is discussing using Social Security monies to pay off student loans that have been in deficit for 10 years. Many disappointed and outraged elderly oppose any reduction in Social Security. Surely there's another way to collect from irresponsible debtors.
Social Security: Rule Changes are Security Driven (January 9, 2006)
There have been a few changes in obtaining a Social Security card. To show proof of citizenship, only certain documents with your name or identifying information about you and a recent photo will be accepted. There will also be a limit to three replacement cards per year and ten in a lifetime. These new precautions are intended to ensure better security and prevent identity theft. For other questions, please contact Oscar Garcia at
oscare.h.garcia@ssa.gov.
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