Millions face shrinking Social Security payments (Associated Press)
By STEPHEN OHLEMACHER
August 24, 2009
WASHINGTON (AP) -- Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise.
The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975.
By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
``I will promise you, they count on that COLA,'' said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. ``To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal.''
Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.
Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have suffered from declining home values and shrinking stock portfolios just as they are relying on those assets for income.
``For many elderly, they don't feel that inflation is low because their expenses are still going up,'' said David Certner, legislative policy director for AARP. ``Anyone who has savings and investments has seen some serious losses.''
About 50 million retired and disabled Americans receive Social Security benefits. The average monthly benefit for retirees is $1,153 this year. All beneficiaries received a 5.8 percent increase in January, the largest since 1982.
More than 32 million people are in the Medicare prescription drug program. Average monthly premiums are set to go from $28 this year to $30 next year, though they vary by plan. About 6 million people in the program have premiums deducted from their monthly Social Security payments, according to the Social Security Administration.
Millions of people with Medicare Part B coverage for doctors' visits also have their premiums deducted from Social Security payments. Part B premiums are expected to rise as well. But under the law, the increase cannot be larger than the increase in Social Security benefits for most recipients.
There is no such hold-harmless provision for drug premiums.
Kennelly's group wants Congress to increase Social Security benefits next year, even though the formula doesn't call for it. She would like to see either a 1 percent increase in monthly payments or a one-time payment of $150.
The cost of a one-time payment, a little less than $8 billion, could be covered by increasing the amount of income subjected to Social Security taxes, Kennelly said. Workers only pay Social Security taxes on the first $106,800 of income, a limit that rises each year with the average national wage.
But the limit only increases if monthly benefits increase.
Critics argue that Social Security recipients shouldn't get an increase when inflation is negative. They note that recipients got a big increase in January _ after energy prices had started to fall. They also note that Social Security recipients received one-time $250 payments in the spring as part of the government's economic stimulus package.
Consumer prices are down from 2008 levels, giving Social Security recipients more purchasing power, even if their benefits stay the same, said Andrew G. Biggs, a resident scholar at the American Enterprise Institute, a Washington think tank.
``Seniors may perceive that they are being hurt because there is no COLA, but they are in fact not getting hurt,'' Biggs said. ``Congress has to be able to tell people they are not getting everything they want.''
Social Security is also facing long-term financial problems. The retirement program is projected to start paying out more money than it receives in 2016. Without changes, the retirement fund will be depleted in 2037, according to the Social Security trustees' annual report this year.
President Barack Obama has said he would like to tackle Social Security next year, after Congress finishes work on health care, climate change and new financial regulations.
Lawmakers are preoccupied by health care, making it difficult to address other tough issues. Advocates for older people hope their efforts will get a boost in October, when the Social Security Administration officially announces that there will not be an increase in benefits next year.
``I think a lot of seniors do not know what's coming down the pike, and I believe that when they hear that, they're going to be upset,'' said Sen. Bernie Sanders, an independent from Vermont who is working on a proposal for one-time payments for Social Security recipients.
``It is my view that seniors are going to need help this year, and it would not be acceptable for Congress to simply turn its back,'' he said.
Wednesday, September 9, 2009
Monday, September 7, 2009
Cola no cost of living Increase
We also need an absolute commitment to social security -- more funding and yes, more generous benefits. This year, because of temporary deflation, Social Security recipients got no cost of living increase. But energy prices have been volatile. Health costs have risen. The costs of local services have gone up as city an state governments have had to raises fees sales taxes to plug budget holes... Living in 2009 really isn't cheaper than living in 2008 and the government knows it.
Thursday, October 16, 2008
WASHINGTON - Social Security benefits for 50 million people will go up 5.8 percent next year, the largest increase in more than a quarter century. The increase, which will start in January, was announced Thursday by the Social Security Administration. It will mean an additional $63 per month for the average retiree.
It's the largest increase since a 7.4 percent jump in 1982 and is more than double the 2.3 percent rise that retirees got in their monthly checks starting in January of this year.
The typical retiree's monthly check will go from $1,090 currently to $1,153.
The increase would have been even higher, but after racing ahead earlier in the year, energy costs fell in both August and September, helping to moderate the overall price gain.
The 5.8 percent rise in the cost of living adjustment is a sharp departure from recent years. The COLA increases have been below 3 percent for all but three of the past 15 years as the Federal Reserve waged a successful campaign to keep inflation under control.
Even with the big increase, the COLA is well below the gains of the late 1970s and early 1980s when the country was in the grips of a decade-long bout of high inflation. The biggest cost of living benefit on record was a 14.3 percent increase in 1980. Social Security benefits have been adjusted every year since 1975.
In one break for most retirees, the cost of living increase will not be eaten up by higher monthly premiums for the part of Medicare that pays for physician services. Because of gains in the Medicare Part B trust fund, that premium will hold steady at $96.40 a month, although higher-income people including couples making more than $170,000 annually will see their premiums increase.
Next year's cost of living increase will go to more than 55 million Americans. More than 50 million receive Social Security benefits while the rest get Supplemental Security Income payments for the poor.
The average couple, both getting Social Security benefits, will see their monthly check go up by $103 a month to $1,876.
The standard Supplemental Security Income payment for a couple will go from $956 per month to $1,011. The SSI payment for an individual will go from $637 per month to $674 per month.
The average monthly check for a disabled worker will go from $1,006 to $1,064
In addition to the cost of living adjustment, the government announced Thursday that the maximum amount of earnings subject to the Social Security tax will increase next year to $106,800, up from $102,000 this year.
It's the largest increase since a 7.4 percent jump in 1982 and is more than double the 2.3 percent rise that retirees got in their monthly checks starting in January of this year.
The typical retiree's monthly check will go from $1,090 currently to $1,153.
The increase would have been even higher, but after racing ahead earlier in the year, energy costs fell in both August and September, helping to moderate the overall price gain.
The 5.8 percent rise in the cost of living adjustment is a sharp departure from recent years. The COLA increases have been below 3 percent for all but three of the past 15 years as the Federal Reserve waged a successful campaign to keep inflation under control.
Even with the big increase, the COLA is well below the gains of the late 1970s and early 1980s when the country was in the grips of a decade-long bout of high inflation. The biggest cost of living benefit on record was a 14.3 percent increase in 1980. Social Security benefits have been adjusted every year since 1975.
In one break for most retirees, the cost of living increase will not be eaten up by higher monthly premiums for the part of Medicare that pays for physician services. Because of gains in the Medicare Part B trust fund, that premium will hold steady at $96.40 a month, although higher-income people including couples making more than $170,000 annually will see their premiums increase.
Next year's cost of living increase will go to more than 55 million Americans. More than 50 million receive Social Security benefits while the rest get Supplemental Security Income payments for the poor.
The average couple, both getting Social Security benefits, will see their monthly check go up by $103 a month to $1,876.
The standard Supplemental Security Income payment for a couple will go from $956 per month to $1,011. The SSI payment for an individual will go from $637 per month to $674 per month.
The average monthly check for a disabled worker will go from $1,006 to $1,064
In addition to the cost of living adjustment, the government announced Thursday that the maximum amount of earnings subject to the Social Security tax will increase next year to $106,800, up from $102,000 this year.
Saturday, October 4, 2008
KOHL-MCCASKILL BILL SPURS GOVERNMENT TO RESOLVE ISSUE OF ILLEGAL GARNISHMENT OF SS BENEFITS
KOHL-MCCASKILL BILL SPURS GOVERNMENT TO RESOLVE ISSUE OF ILLEGAL GARNISHMENT OF SS BENEFITS
Contact: Ashley Glacel - (202) 224-5364
Monday, April 14, 2008
WASHINGTON, D.C. – Today U.S. Senators Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, and Claire McCaskill (D-MO) introduced the Illegal Garnishment Prevention Act, a bill that would prevent the U.S. Department of Treasury from promoting the use of direct deposit for Social Security beneficiaries until they put a stop to the illegal garnishment of government benefits from the bank accounts of private citizens. With increasing frequency, financial institutions are garnishing or freezing funds on behalf of creditors from bank accounts into which Social Security, Supplemental Security Income (SSI), and Veterans benefits are electronically deposited, despite clear protections in federal law against the garnishment of such benefits.
“Millions of seniors rely on their Social Security benefits as their only source of income for basic needs like housing and food. When financial institutions and creditors illegally withhold these benefit checks, they are putting the lives of our most vulnerable segment of the population at risk. We need to know how wide-spread this practice has become and find a way to make it stop,” Kohl said.
“For many seniors and disabled Americans, social security checks keep them financially afloat from month to month. When banks garnish these funds, they are left with nothing. We need to be very careful to make sure proper safeguards are in place to protect seniors in this situation, and this bill will guarantee they are” McCaskill said.
In most cases, the protected funds are taken not only by the creditor, but also by the bank through the collection of additional fees levied for “processing” the garnishment. These can include overdraft charges or insufficient fund charges, which occur as the result of the garnishment. Some banks have also been found to dip into these protected funds to cover other debts owed to the bank, such as a car loan. Many older Americans rely on Social Security benefits to pay their rent, buy groceries, and afford prescription drugs. For twenty percent of seniors over 65 years old, Social Security is their only source of income and for two-thirds it is the major source of income.
In August 2007, Kohl, McCaskill, and Senator Max Baucus (D-MT) sent a letter to the Social Security Administration’s Inspector General asking him to investigate the increasingly frequent but prohibited method of collecting debt from senior citizens, veterans, and the disabled. The senators requested that the Social Security Administration's Inspector General report to them the degree to which large and small banks are engaged in these practices and the extent to which the resulting fees are eating up the safety net funds upon which seniors, veterans and the disabled rely. It is anticipated that the results of the SSA OIG’s investigation will be released in coming weeks.
“In recent months several newspapers have published articles describing how financial institutions have been freezing and assessing fees on accounts in which Social Security and Veterans' benefits are electronically deposited,” the letter read. “Sadly, the majority of the individuals to whom this is occurring are those who can least afford it.”
In November 2007, Senators Kohl, McCaskill, and Baucus were joined by Senators Chuck Grassley (R-IA), Gordon H. Smith (R-OR), Christopher Dodd (D-CT), Richard Shelby (R-AL), and John Kerry (D-MA) in urging the Director of the Office of Management and Budget, Jim Nussle, to play a role in resolving the matter. The letter requested that Director Nussle implore one or more of the five federal agencies with jurisdiction over America’s financial institutions to issue a necessary rule clarification.
# # #
A link to the August 2007 letter to the SSA OIG can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentssaoig.pdf
A link to the November 2007 letter to the OMB can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentomb.pdf
Contact: Ashley Glacel - (202) 224-5364
Monday, April 14, 2008
WASHINGTON, D.C. – Today U.S. Senators Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, and Claire McCaskill (D-MO) introduced the Illegal Garnishment Prevention Act, a bill that would prevent the U.S. Department of Treasury from promoting the use of direct deposit for Social Security beneficiaries until they put a stop to the illegal garnishment of government benefits from the bank accounts of private citizens. With increasing frequency, financial institutions are garnishing or freezing funds on behalf of creditors from bank accounts into which Social Security, Supplemental Security Income (SSI), and Veterans benefits are electronically deposited, despite clear protections in federal law against the garnishment of such benefits.
“Millions of seniors rely on their Social Security benefits as their only source of income for basic needs like housing and food. When financial institutions and creditors illegally withhold these benefit checks, they are putting the lives of our most vulnerable segment of the population at risk. We need to know how wide-spread this practice has become and find a way to make it stop,” Kohl said.
“For many seniors and disabled Americans, social security checks keep them financially afloat from month to month. When banks garnish these funds, they are left with nothing. We need to be very careful to make sure proper safeguards are in place to protect seniors in this situation, and this bill will guarantee they are” McCaskill said.
In most cases, the protected funds are taken not only by the creditor, but also by the bank through the collection of additional fees levied for “processing” the garnishment. These can include overdraft charges or insufficient fund charges, which occur as the result of the garnishment. Some banks have also been found to dip into these protected funds to cover other debts owed to the bank, such as a car loan. Many older Americans rely on Social Security benefits to pay their rent, buy groceries, and afford prescription drugs. For twenty percent of seniors over 65 years old, Social Security is their only source of income and for two-thirds it is the major source of income.
In August 2007, Kohl, McCaskill, and Senator Max Baucus (D-MT) sent a letter to the Social Security Administration’s Inspector General asking him to investigate the increasingly frequent but prohibited method of collecting debt from senior citizens, veterans, and the disabled. The senators requested that the Social Security Administration's Inspector General report to them the degree to which large and small banks are engaged in these practices and the extent to which the resulting fees are eating up the safety net funds upon which seniors, veterans and the disabled rely. It is anticipated that the results of the SSA OIG’s investigation will be released in coming weeks.
“In recent months several newspapers have published articles describing how financial institutions have been freezing and assessing fees on accounts in which Social Security and Veterans' benefits are electronically deposited,” the letter read. “Sadly, the majority of the individuals to whom this is occurring are those who can least afford it.”
In November 2007, Senators Kohl, McCaskill, and Baucus were joined by Senators Chuck Grassley (R-IA), Gordon H. Smith (R-OR), Christopher Dodd (D-CT), Richard Shelby (R-AL), and John Kerry (D-MA) in urging the Director of the Office of Management and Budget, Jim Nussle, to play a role in resolving the matter. The letter requested that Director Nussle implore one or more of the five federal agencies with jurisdiction over America’s financial institutions to issue a necessary rule clarification.
# # #
A link to the August 2007 letter to the SSA OIG can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentssaoig.pdf
A link to the November 2007 letter to the OMB can be found here:
http://www.aging.senate.gov/letters/ssgarnishmentomb.pdf
Unbanked Americans Prepaid Debit Cards
Comerica Bank Named as Card Issuer
Washington, D.C. - (Jan. 4, 2008) - The U.S. Department of the Treasury's Financial Management Service (FMS) has designated Comerica Bank as its financial agent in a new initiative to give millions of unbanked Americans the option of using a prepaid debit card for receiving Social Security and other federal benefit payments. The "Direct Express®" card provides a safer and more convenient alternative to paper checks. Comerica Bank was selected, in part, because of its experience as a prepaid card issuer for millions of benefit recipients, particularly for state government programs.
"Direct Express represents a significant step forward in the evolution of federal benefit payments," said FMS Commissioner Judy Tillman. "The explosive growth in the prepaid card industry offers an important opportunity for Treasury to give unbanked payment recipients secure, easy access to their funds, at low or no cost to the cardholder. We ultimately would like to see an all-electronic Treasury - with all the security, efficiency and cost savings that would entail. This card takes us closer to that goal by combining the best in payment innovation with sound public policy. If every unbanked federal check recipient signed up to use the card, it would save taxpayers about $44 million per year."
The Treasury estimates that four million Social Security and Supplemental Security Income (SSI) check recipients do not have bank accounts, placing them at greater risk of check delivery delays due to poor weather, national or local emergencies, and other check related problems, such as lost or stolen checks. In fact, nine times out of 10, problems with Social Security payments are linked to paper checks, not direct deposit.
Financial Flexibility and Security
The Direct Express card will be introduced in spring 2008 and will be phased into national distribution by the end of the summer. Direct Express card holders will benefit from improved financial flexibility and security as compared to paper check recipients.
Each month, payments will be automatically deposited on the Direct Express card account on the federal beneficiary's designated payment day - which means people will have faster access to their money than they would if they had to cash a paper check. Card holders will be able to access their money at ATMs and financial institutions nationwide. They will be able to use their card to get cash back and make purchases at retail locations, as well as pay bills and make purchases online. In addition, these accounts are PIN-protected, FDIC-insured, and subject to federal consumer protection regulations (Regulation E).
"Millions of federal beneficiaries remain outside the banking system, which means they don't have access to payment methods that most Americans take for granted, such as getting cash at an ATM or paying with a card at a store," said Nora Arpin, Director of Government Electronic Solutions for Comerica Bank. "The Direct Express card provides an opportunity for people outside of the banking system, either because of personal choice or perhaps their inability to obtain a bank account, to gain a foothold in the financial mainstream."
The Treasury has already experienced significant success in increasing electronic payments with its Go Direct campaign, which is aimed at motivating banked federal benefit recipients to switch from paper checks to direct deposit. To date, Go Direct has achieved more than 1.6 million direct deposit conversions.
"Direct Express" is a registered trademark of the U.S. Department of the Treasury, Financial Management Service.
Last Updated: Thursday January 03, 2008
Washington, D.C. - (Jan. 4, 2008) - The U.S. Department of the Treasury's Financial Management Service (FMS) has designated Comerica Bank as its financial agent in a new initiative to give millions of unbanked Americans the option of using a prepaid debit card for receiving Social Security and other federal benefit payments. The "Direct Express®" card provides a safer and more convenient alternative to paper checks. Comerica Bank was selected, in part, because of its experience as a prepaid card issuer for millions of benefit recipients, particularly for state government programs.
"Direct Express represents a significant step forward in the evolution of federal benefit payments," said FMS Commissioner Judy Tillman. "The explosive growth in the prepaid card industry offers an important opportunity for Treasury to give unbanked payment recipients secure, easy access to their funds, at low or no cost to the cardholder. We ultimately would like to see an all-electronic Treasury - with all the security, efficiency and cost savings that would entail. This card takes us closer to that goal by combining the best in payment innovation with sound public policy. If every unbanked federal check recipient signed up to use the card, it would save taxpayers about $44 million per year."
The Treasury estimates that four million Social Security and Supplemental Security Income (SSI) check recipients do not have bank accounts, placing them at greater risk of check delivery delays due to poor weather, national or local emergencies, and other check related problems, such as lost or stolen checks. In fact, nine times out of 10, problems with Social Security payments are linked to paper checks, not direct deposit.
Financial Flexibility and Security
The Direct Express card will be introduced in spring 2008 and will be phased into national distribution by the end of the summer. Direct Express card holders will benefit from improved financial flexibility and security as compared to paper check recipients.
Each month, payments will be automatically deposited on the Direct Express card account on the federal beneficiary's designated payment day - which means people will have faster access to their money than they would if they had to cash a paper check. Card holders will be able to access their money at ATMs and financial institutions nationwide. They will be able to use their card to get cash back and make purchases at retail locations, as well as pay bills and make purchases online. In addition, these accounts are PIN-protected, FDIC-insured, and subject to federal consumer protection regulations (Regulation E).
"Millions of federal beneficiaries remain outside the banking system, which means they don't have access to payment methods that most Americans take for granted, such as getting cash at an ATM or paying with a card at a store," said Nora Arpin, Director of Government Electronic Solutions for Comerica Bank. "The Direct Express card provides an opportunity for people outside of the banking system, either because of personal choice or perhaps their inability to obtain a bank account, to gain a foothold in the financial mainstream."
The Treasury has already experienced significant success in increasing electronic payments with its Go Direct campaign, which is aimed at motivating banked federal benefit recipients to switch from paper checks to direct deposit. To date, Go Direct has achieved more than 1.6 million direct deposit conversions.
"Direct Express" is a registered trademark of the U.S. Department of the Treasury, Financial Management Service.
Last Updated: Thursday January 03, 2008
Saturday, July 12, 2008
Social Security notch "babies"
"So near, and yet so far."
If Fred Astaire were still alive, he'd be singing that about our efforts to secure Social Security fairness for "Notch Babies" - those born between 1917 and 1926, whose Social Security benefits were cut in 1977, just as we were planning to retire.
For the past several sessions of Congress, Representative Ralph Hall of Texas has introduced legislation to right that wrong. This year he and his colleagues are closer than ever. Right now there are 124 co-sponsors of this legislation in Congress, more than we've ever had (you can see who they are here). And, there's now a Senate resolution calling for Notch Reform.
It'll be an uphill battle, but we've fought uphill battles before, haven't we? In fact, growing up during the Great Depression, coming of age during World War II, discovering a cure for Polio for our children, working to keep us ahead during the Cold War, you could say we're the generation that specializes in uphill battles!
Will you help our fight to bring this important legislation to an up-or-down vote in Congress? Please, sign our Notch Fairness Petition, if you haven't already, and contribute to our Notch Fairness Campaign to help keep this legislation on track.
This won't be easy, though, for two reasons:
First, Congress has a lot on its mind right now - mostly, how to get reelected in November, but also a weakening economy, rising energy costs, the war on terror, etc. We need to keep this basic issue of fairness in front of them every day.
Second, well, look around you, my friend. The ranks of "Notch Babies" are thinning. I think there are those cold-hearted number-crunchers who think that if they wait long enough, the "Notch Babies" will be too old and weak to be heard, and they can just forget about the issue.
Now is the time to act.
If your friends don't know what the Social Security Notch Problem is, let them know that, in 1977, with the first "looming crisis" in Social Security funding, Congress changed the rules and reduced benefits for those born between 1917 and 1926. According to our studies, the benefits that Notch Babies receive can be as much as $3,000 per year lower than other seniors born outside the Notch years.
Please, sign our petition now. Then, do two more things today:
First, please contribute, even just $10 or $15 if you can, to help us keep calling and visiting Capitol Hill to push forward this important piece of basic fairness.
Second, please send this email to your reunion buddies, your fellow parishioners, family and friends, and help us grow our list of petition signers until it becomes a chorus too loud for Congress to ignore. (The petition is open to all Americans, not just those born in the Notch Years. Your children, and their friends, can sign it too.)
I'll keep you posted on our efforts on Notch Reform and the battles we fight on other fronts to defend your earned benefits.
Daniel O'Connell,
Chairman, TSCL Board of Trustees
909 N. Washington St. #300, Alexandria, VA 22314
{0}
If Fred Astaire were still alive, he'd be singing that about our efforts to secure Social Security fairness for "Notch Babies" - those born between 1917 and 1926, whose Social Security benefits were cut in 1977, just as we were planning to retire.
For the past several sessions of Congress, Representative Ralph Hall of Texas has introduced legislation to right that wrong. This year he and his colleagues are closer than ever. Right now there are 124 co-sponsors of this legislation in Congress, more than we've ever had (you can see who they are here). And, there's now a Senate resolution calling for Notch Reform.
It'll be an uphill battle, but we've fought uphill battles before, haven't we? In fact, growing up during the Great Depression, coming of age during World War II, discovering a cure for Polio for our children, working to keep us ahead during the Cold War, you could say we're the generation that specializes in uphill battles!
Will you help our fight to bring this important legislation to an up-or-down vote in Congress? Please, sign our Notch Fairness Petition, if you haven't already, and contribute to our Notch Fairness Campaign to help keep this legislation on track.
This won't be easy, though, for two reasons:
First, Congress has a lot on its mind right now - mostly, how to get reelected in November, but also a weakening economy, rising energy costs, the war on terror, etc. We need to keep this basic issue of fairness in front of them every day.
Second, well, look around you, my friend. The ranks of "Notch Babies" are thinning. I think there are those cold-hearted number-crunchers who think that if they wait long enough, the "Notch Babies" will be too old and weak to be heard, and they can just forget about the issue.
Now is the time to act.
If your friends don't know what the Social Security Notch Problem is, let them know that, in 1977, with the first "looming crisis" in Social Security funding, Congress changed the rules and reduced benefits for those born between 1917 and 1926. According to our studies, the benefits that Notch Babies receive can be as much as $3,000 per year lower than other seniors born outside the Notch years.
Please, sign our petition now. Then, do two more things today:
First, please contribute, even just $10 or $15 if you can, to help us keep calling and visiting Capitol Hill to push forward this important piece of basic fairness.
Second, please send this email to your reunion buddies, your fellow parishioners, family and friends, and help us grow our list of petition signers until it becomes a chorus too loud for Congress to ignore. (The petition is open to all Americans, not just those born in the Notch Years. Your children, and their friends, can sign it too.)
I'll keep you posted on our efforts on Notch Reform and the battles we fight on other fronts to defend your earned benefits.
Daniel O'Connell,
Chairman, TSCL Board of Trustees
909 N. Washington St. #300, Alexandria, VA 22314
{0}
Wednesday, May 28, 2008
Social Security Trust Fund
Home Articles Social Security Trust Fund Sits In Government Filing Cabinet
Social Security Trust Fund Sits In Government Filing Cabinet | Print | E-mail
TSCL Calls On Congress to Enact Lock Box Legislation
There actually is a Social Security Trust Fund — of sorts. It lays nestled in the bottom drawer of an unremarkable filing cabinet in a government office building in West Virginia. It’s kept in a pair of loose-leaf notebooks holding plastic page covers, and each page resents a bond worth billions, according to a 2005 story from The Associated Press. Today, the total “assets” in the Social Security Trust Fund are worth more than $2.2 trillion.
The paper is “symbolic,” a spokesman for the U.S. Bureau of Public Debt says. According to The Associated Press, in 1994 Congress anticipated the current debate about Social Security’s solvency and whether the Trust Funds held anything more than I.O.U.s. Congress passed legislation requiring the Treasury to create a physical document “rather than an accounting entry.” Andy Jacobs, the former Indiana Congressman responsible for the law, said he wanted to rebut the “disingenuous assertions” that there was no trust fund, even though there was, in fact, no vault stuffed with cash to pay benefits.
Earlier this year the Congressional Budget Office (CBO) estimated that the Social Security Trust Fund ended 2007 with a rip roarin’ surplus of $187 billion, and this year the Trust Fund is projected to end with $197 billion. But almost all of that is “interest” earned on the IOUs. Just how much?
If the interest earned by the Social Security Trust Fund is excluded, and only real cash revenues counted, 2007 ended with a surplus of only $80 billion instead of $187 billion, and the Trust Fund is projected to end 2008 with a surplus of $79 billion instead of $197 billion, according to the 2008 Social Security Trustees Report. The Social Security Trustees further estimate that the program costs will begin to exceed cash revenues in 2017, or about nine years from now.
The Senior Citizens League (TSCL) believes that the first step to “saving” Social Security and Medicare is to stop the government from borrowing excess program revenues and to protect the extra funds for paying benefits. “If Congress is going to ‘save’ Medicare and Social Security, then lawmakers must stop using Medicare and Social Security Trust Fund monies as a piggybank for other government spending, ” states Daniel O’Connell, Chairman of TSCL. TSCL supports “The Social Security and Medicare Lock-Box Act” (H.R. 4338), introduced in the House by Representative Timothy Walberg (MI), and (S. 302), introduced in the Senate by Senator David Vitter (LA). The bill would establish a procedure to safeguard the surpluses of the Social Security and Medicare hospital insurance trust funds, and already has bi-partisan support.
Sources: “Social Security Trust Fund Sits In Drawer,” The Associated Press, February 28, 2005. “The Budget And Economic Outlook,” CBO, January 2008. 2008 Social Security and Medicare Trustees Reports, March 25, 2008.
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