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Women to Obama: Hands Off Social Security

In Legislation Today, Political world on September 28, 2010 at 11:37 am

By Susan Feiner

WeNews commentator

Monday, September 27, 2010 [Cross-posted at http://www.womensenews.org/story/retirement/100924/women-obama-hands-social-security]

Obama’s discussion of the economy on CNBC last week included what Susan Feiner sees as an alarming reference to Social Security as an “entitlement.” In fact, it’s a self-funded insurance program that women can’t afford to lose.

(WOMENSENEWS)–Anyone who watched President Barak Obama defend his handling of the economy in the televised town-hall discussion last week might have come away remembering the exchange with the hedge-fund manager. He had the nerve to ask when Obama would stop giving Wall Street “the treatment.”

The president’s answer: “If you’re making a billion dollars a year after a very bad financial crisis where 8 million people lost their jobs and small businesses can’t get loans, then you shouldn’t feel put upon.”

Obama’s retort drew warm applause, and rightly so. But minutes earlier the president made a remark that should terrify the majority of Americans–especially women.

In responding to a question about closing the federal deficit he said that after you set aside “security spending”–whatever that may mean–the biggest part of the national budget is “entitlements.”

Ominously, he specified Social Security as one of those “entitlements,” along with Medicare.

Stop right there Mr. President.

Women Should be Horrified

Women in this country should be horrified by your comment for the following reasons:

  • Women still earn less than men, so their opportunity to save for retirement is more limited.
  • Only 13 percent of women aged 65 or older currently receive a pension.
  • Social Security provides 90 percent of the income for 42 percent of women, but only 28 percent of men rely on Social Security for 90 percent of their income.
  • Women are more likely than men to be single, widowed or divorced in retirement.

Adding up these facts leads to one conclusion: The health and dignity of women over age 65 depends on their continued receipt of monthly Social Security checks.

Moreover, Social Security is not an entitlement program as it’s paid for entirely by payroll taxes. It is an insurance program, not an entitlement. Not one penny of anyone’s Social Security comes out of the federal government’s general fund.

Social Security is, by law, wholly self-financing. It has no legal authority to borrow, so it never has.

If this incredibly successful and direly needed program hasn’t ever borrowed a dime, why is the president and his hand-picked commissioners putting Social Security cuts (and/or increases in the retirement age) in the same sentence as deficit reduction?

Fully Paid Until 2037

Social Security insurance is fully paid until 2037.

The program began in 1935 and is considered the greatest achievement of Frances Perkins, labor secretary under President Franklin Delano Roosevelt and the first woman to hold a cabinet level position in the U.S. government.

In every decade of its existence, lawmakers have adjusted its funding formula to ensure its solvency.

President Ronald Reagan, for instance, in the mid-1980s appointed the “Greenspan Commission” (Greenspan later became the chairman of the Federal Reserve, the nation’s central bank), which recommended significant increases in Social Security payroll taxes to ensure the build up of a trust fund to finance baby boomers’ retirements.

The Greenspan Commission was honest; it looked at Social Security and figured out how much was needed to pay future retirees’ benefits. The necessary changes were made, the needed dollars flowed in and the trust fund grew. The fix engineered by the Greenspan Commission worked: the Social Security ‘trust fund’ is valued at $2.54 trillion today. By 2024 its projected value will be $4.2 trillion.

Nothing in the accounting future of the program warrants any major changes.

Enemies of Social Security have juicy private pensions, but few women enjoy this perk.

Social Security is as essential to older Americans today as it was 75 years ago when it was founded. Leave it alone.

Susan F. Feiner is a professor of women’s studies and economics at the University of Southern Maine. She is co-author of the 2004 book, “Liberating Economics: Feminist Perspectives on Families, Work and Globalization.” She is also a board member of the Frances Perkins Center.

For more information:

Older Women’s League: http://www.owl-national.org/Welcome.html

Frances Perkins Center: http://www.francesperkinscenter.org

Cross-posted at http://www.womensenews.org/story/retirement/100924/women-obama-hands-social-security

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What issues would Frances Perkins be tackling today?

In Economics, New Deal Legislation on September 21, 2010 at 9:20 am

I’ll lead off with this stunning chart from Matthew Iglesias’s blog on ThinkProgress. Note that red line.

povertytrends

You see a lot of different things happening here. One is poverty among seniors declining thanks to Great Society expansion of retirement support programs. The other is a jump in poverty for non-seniors during the 1978-82 period that persisted throughout the Reagan-Bush years. This was in part driven by an increase in the proportion of female-headed households without husbands, but the same pattern appears within that subset. We then had a giant reduction in poverty among this group in the 1990s which was a combination of strong economic performance, “welfare reform,” and also the fact that the Clinton administration really wanted to make welfare reform work so threw lots of stuff—EITC expansion, SCHIP, etc.—at making it work. Then we saw a slow, steady erosion of that progress.

———————————————————

Then I want to quote the author of the new book, Were You Born on the Wrong Continent: How the European Model Can Help You Get a Life by Thomas Geoghegan. This is an excerpt from an interview with Geoghegan that appeared in Salon in late August:

How did Germany become such a great place to work in the first place?

The Allies did it. This whole European model came, to some extent, from the New Deal. Our real history and tradition is what we created in Europe. Occupying Germany after WWII, the 1945 European constitutions, the UN Charter of Human Rights all came from Eleanor Roosevelt and the New Dealers. All of it got worked into the constitutions of Europe and helped shape their social democracies. It came from us. The papal encyclicals on labor, it came from the Americans.

As the Salon introduction notes, in Germany “they have six weeks of federally mandated vacation, free university tuition, nursing care, and childcare.” And, while a six week vacation would surely be welcomed by single mothers and their families, it’s the last three items that really make the difference. Affordable higher education, accessible preventive health care, and affordable quality childcare — those are the big pieces missing in the United States today. And without them, single mothers face a very difficult uphill battle.

While Geoghegan credits Eleanor Roosevelt, certainly Frances Perkins was right in there, also. We know that Perkins was engaged in the drafting and dissemination of FDR’s Second Bill of Rights. And what a different society we would be living in today if that agenda had been carried forward in the U.S. as it was in Germany and the other countries of the E.U.

Here is that Second Bill of Rights (1944):

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

For unless there is security here at home there cannot be lasting peace in the world.

Good news, bad news

In Legislation Today on September 9, 2010 at 1:01 pm

We often ask ourselves, “What would Frances Perkins do?” as we watch the news from Washington. Here are two stories that bring up that question. You can easily guess what her response to each would be.

The good news first: President Obama is starting to speak out on the economy and jobs:

Mr. Obama’s newest proposals to help the flagging recovery, like his earlier proposal for a small-business bill, include ideas that typically have strong Republican and business backing. The new proposals, which the administration had previewed in the days before his speech on Wednesday, would increase and make permanent a tax credit for businesses’ research expenses, allow businesses to write off the full costs of equipment purchased through 2011, and provide $50 billion more for infrastructure construction projects. [from the NY Times]

It’s not a sweeping proposal on the scale of the WPA, but it’s a move in the right direction.

Unfortunately, behind closed doors, secret negotiations are taking place that may ultimately weaken and diminish one of the most effect economic programs the U.S. has, Social Security. According to Richard Eskow in the blog of the Campaign for America’s Future, back-channel sources say that:

the Deficit Commission is finalizing a deal that would increase Social Security benefits slightly for low-income recipients while cutting them for everyone else. The Commissioners apparently believe that putting this “progressive” gloss on a package of unneeded cuts would allow them to move forward with their predetermined anti-Social Security agenda. This new proposal would pit middle-class seniors against the elderly poor, forcing them to compete for a stripped-down pool of dollars. The end result would be the one that many Commission members have pursued for years: to cut the most stable and successful program in the Federal government’s history.

Here are a few reasons why this idea is such a bad one:

First and foremost: Social Security and the deficit don’t belong in the same sentence. The fact that this group is fiddling with Social Security is a travesty. Social Security BY LAW cannot run a deficit; therefore, it can’t contribute to the federal deficit.

Second: How does the president’s commission get off tinkering in secret with a program that touches every single working person in the United States? Any proposals changing the way Social Security is run should be made in the blazing sunlight. Its millions of participants need to know what is going on. In fact, we know how voters feel about Social Security — they don’t want to cut it. Eskow quotes some recent poll results.

Third: Social Security’s financial condition is monitored very closely. Every year, the trustees issue a report on its health. This year, the trustees stated that the system could pay full benefits for the next quarter century or so with no changes to the current system. There is no need to panic; there’s plenty of time to act prudently and cautiously. In addition, if new revenue is desired, the easiest change would be to lift the cap on contributions. Right now, if you make more than $106,800, you don’t pay Social Security tax on that additional income. Lifting the cap would be easy from an administrative standpoint and would provide enough income to take us well beyond the next quarter century.

Finally, I really like this point that Eskow makes:

If this were a public debate and not a secret one, this latest move could be used to start the debate we should be having: Why don’t we strengthen and increase Social Security, rather than cut it?

Building a firewall for Social Security in Congress

In Legislation Today on September 3, 2010 at 9:05 am

Members of the Congressional Progressive Caucus are asking their colleagues to join them in signing a letter telling President Obama that they will not approve any report coming out of the Deficit Commission that advocates cuts to Social Security.

More than 50 million Americans are represented by advocacy groups that belong to the Strengthen Social Security Coalition. Many of these groups will be encouraging their members to contact their congressional representatives to sign on.

Here is the letter:

Dear Mr. President,

We write today to express our strong support for Social Security and our view that it should be strengthened. We oppose any cuts to Social Security benefits, including raising the retirement age. We also oppose any effort to privatize Social Security, in whole or in part.

You have charged the National Commission on Fiscal Responsibility and Reform with proposing recommendations that improve the long-term fiscal outlook and address the growth of entitlement spending. It is our view that Social Security–which is prohibited by law from adding to the national budget deficit–does not belong as part of those recommendations.

By 2023, Social Security will have built up a $4.3 trillion surplus, and, without any action, can pay at least 75 percent of all benefits thereafter. Because Social Security is funded separately from the general treasury and has no borrowing authority, it has not contributed to the federal deficit. Despite these facts, some Commission members have repeatedly alleged the need to cut Social Security for budgetary reasons.

For 75 years, Social Security has been a promise to the American people that if they work hard and pay their fair share, they will have a financially secure retirement. In communities across this country, Social Security benefits are often the only source of income helping families maintain a decent standard of living. Social Security’s benefits are modest, averaging less than $13,000 a year, but they are vital to the vast majority of Americans who receive them.

Cutting Social Security benefits further than they are already being cut by raising the retirement age from 65 to 67 would create needless hardship for millions of vulnerable Americans. This is especially true in the face of an economic downturn that has wiped out trillions of dollars that Americans were relying on for their retirement security and the increased dismantlement of the private and public pension systems.

If any of the Commission’s recommendations cut or diminish Social Security in any way, we will stand firmly against them. We urge you to join us in protecting and strengthening Social Security rather than letting it fall victim to a misguided attempt to reduce budget deficits on the backs of working families.

Sincerely,

The letter’s original cosigners are caucus co-chairs Juan Grijalva (AZ) and Lynn Woolsey (CA), John Conyers (MI), Dan Maffei (NY), Mary Jo Kilroy (OH), and Chellie Pingree (ME).

[Department of full disclosure: Congresswoman Pingree is on the Frances Perkins Center’s Advisory Council.]