“Expanding Social Security”: The Fiscal Scolds Driving The Cut-Social-Security Orthodoxy Have Deservedly Lost Credibility
For many years there has been one overwhelming rule for people who wanted to be considered serious inside the Beltway. It was this: You must declare your willingness to cut Social Security in the name of “entitlement reform.” It wasn’t really about the numbers, which never supported the notion that Social Security faced an acute crisis. It was instead a sort of declaration of identity, a way to show that you were an establishment guy, willing to impose pain (on other people, as usual) in the name of fiscal responsibility.
But a funny thing has happened in the past year or so. Suddenly, we’re hearing open discussion of the idea that Social Security should be expanded, not cut. Talk of Social Security expansion has even reached the Senate, with Tom Harkin introducing legislation that would increase benefits. A few days ago Senator Elizabeth Warren gave a stirring floor speech making the case for expanded benefits.
Where is this coming from? One answer is that the fiscal scolds driving the cut-Social-Security orthodoxy have, deservedly, lost a lot of credibility over the past few years. (Giving the ludicrous Paul Ryan an award for fiscal responsibility? And where’s my debt crisis?) Beyond that, America’s overall retirement system is in big trouble. There’s just one part of that system that’s working well: Social Security. And this suggests that we should make that program stronger, not weaker.
Before I get there, however, let me briefly take on two bad arguments for cutting Social Security that you still hear a lot.
One is that we should raise the retirement age — currently 66, and scheduled to rise to 67 — because people are living longer. This sounds plausible until you look at exactly who is living longer. The rise in life expectancy, it turns out, is overwhelmingly a story about affluent, well-educated Americans. Those with lower incomes and less education have, at best, seen hardly any rise in life expectancy at age 65; in fact, those with less education have seen their life expectancy decline.
So this common argument amounts, in effect, to the notion that we can’t let janitors retire because lawyers are living longer. And lower-income Americans, in case you haven’t noticed, are the people who need Social Security most.
The other argument is that seniors are doing just fine. Hey, their poverty rate is only 9 percent.
There are two big problems here. First, there are well-known flaws with the official poverty measure, and these flaws almost surely lead to serious understatement of elderly poverty. In an attempt to provide a more realistic picture, the Census Bureau now regularly releases a supplemental measure that most experts consider superior — and this measure puts senior poverty at 14.8 percent, close to the rate for younger adults.
Furthermore, the elderly poverty rate is highly likely to rise sharply in the future, as the failure of America’s private pension system takes its toll.
When you look at today’s older Americans, you are in large part looking at the legacy of an economy that is no more. Many workers used to have defined-benefit retirement plans, plans in which their employers guaranteed a steady income after retirement. And a fair number of seniors (like my father, until he passed away a few months ago) are still collecting benefits from such plans.
Today, however, workers who have any retirement plan at all generally have defined-contribution plans — basically, 401(k)’s — in which employers put money into a tax-sheltered account that’s supposed to end up big enough to retire on. The trouble is that at this point it’s clear that the shift to 401(k)’s was a gigantic failure. Employers took advantage of the switch to surreptitiously cut benefits; investment returns have been far lower than workers were told to expect; and, to be fair, many people haven’t managed their money wisely.
As a result, we’re looking at a looming retirement crisis, with tens of millions of Americans facing a sharp decline in living standards at the end of their working lives. For many, the only thing protecting them from abject penury will be Social Security. Aren’t you glad we didn’t privatize the program?
So there’s a strong case for expanding, not contracting, Social Security. Yes, this would cost money, and it would require additional taxes — a suggestion that will horrify the fiscal scolds, who have been insisting that if we raise taxes at all, the proceeds must go to deficit reduction, not to making our lives better. But the fiscal scolds have been wrong about everything, and it’s time to start thinking outside their box.
Realistically, Social Security expansion won’t happen anytime soon. But it’s an idea that deserves to be on the table — and it’s a very good sign that it finally is.
By: Paul Krugman, Op-Ed Columnist, The New York Times, November 22, 2013
“Medicaid Matters”: Where Is The Outrage Over GOP Governors Cutting Off Lower-Income Americans From Access To Medicaid
E.J. Dionne Jr. raises an argument in his column this morning that’s been getting short shrift by too much of the political world lately: Medicaid expansion matters, and far too many state Republican policymakers are blocking it for no reason.
“President Obama apologized last week after all the criticisms of what’s happening in the individual insurance market,” Dionne explained. “But where is the outrage over governors and legislators flatly cutting off so many lower-income Americans from access to Medicaid? The Urban Institute estimates that 6 million to 7 million people will be deprived of coverage in states that are refusing to accept the expansion.”
The recent disruption in the health care marketplace certainly matters, and the Obama administration has a lot of work to do to put things right. But if we’re going to talk about policymakers who need to apologize and show some semblance of regret, can we at least start to have a conversation about those keeping millions of struggling Americans from having access to coverage, largely out of partisan spite?
Jonathan Cohn published a good piece on this earlier:
Today it’s a few hundred thousand people. By next year, it will be at least a few million. Their health insurance status is changing dramatically: What they have in 2014 and beyond will look nothing like what they had in 2013 and before. For many of these people, the difference will be hundreds or even thousands of dollars a year. In a few cases, it may be the difference between life and death.
You probably think I’m talking about the people getting cancellation notices about their private insurance policies. I’m not. I’m talking about the people getting Medicaid. Both stories are consequences of the Affordable Care Act. But one is getting way, way more attention than the other.
There’s been an obvious preoccupation – on Capitol Hill, with Beltway media, etc. – with website dysfunction and cancelation notices, while Medicaid expansion, which arguably affects a larger group of people, has been routinely overlooked.
Maybe it’s because Washington is “wired” for Republicans and it’s the right’s complaints that have been driving the recent conversation. Perhaps it’s the result of Medicaid beneficiaries lacking the kind of political capital that keeps their plight on the political world’s front-burner. Maybe it’s a matter of timeliness, with implementation disruption seeming “new” in ways Medicaid is not. Perhaps it’s a combination of things.
Regardless, by my standards, this is a genuine scandal. The administration’s missteps are real, but they’re not deliberate. “Red” states rejecting Medicaid expansion because of some misguided contempt for “Obamacare” are leaving struggling families behind on purpose. The callousness is outrageous.
Cohn concluded, “”Should the president have been more candid about the impact his plan would have on people buying their own coverage? Yes. Should we pay attention to those people, particularly when they must now pay more for equivalent coverage? Definitely. Should this put extra pressure on the administration and some states to fix their websites? You bet. But that’s not the only Obamacare news right now. The law is making life better for a great many people – and would help even more if only Republican lawmakers would relent.”
By: Steve Benen, The Maddow Blog, November 11, 2013
“What Really Matters”: Don’t Knock Obamacare Until You Try It
There has been a steady drumbeat of news stories about health insurance companies informing customers that their policies will be dropped or that they will face steep rate increases due to requirements of the Affordable Care Act.
This has opened the door to fair criticisms that President Obama wrongly stated that people would be able to keep their current insurance policies if they are happy with them, as this isn’t necessarily the case. However, the real question for individuals facing rate hikes or dropped coverage is whether there are insurance options provided through the exchanges, mandated by the new law, that these people would actual prefer, thanks to some combination of lower prices and more generous benefits. Obamacare might cause some to lose their current policy, but it also might provide them with options they would prefer. That is what really matters.
People should remember that the program provides subsidies for lower income individuals and families. At least in states that have accepted the very generous federal contribution, Obamacare also expands access to Medicaid. For many people who currently lack insurance, a group of people who tend to be poorer, Obamacare insurance policies will be free or relatively cheap.
The initial implementation of Obamacare has not gone smoothly. The key problem is website difficulties faced by people who are attempting to see just how much a plan will cost them, and whose attempts to actually sign up for a policy have been thwarted. We will see if these problems are fixed in a timely fashion, and whether other serious problems crop up.
But the program, as designed, is intended to lower prices for the vast majority of people on the individual insurance market, as well as to open it up to people who previously have been denied affordable coverage because of pre-existing medical conditions. Optimistically, increased competition could even lower prices for employer-based health plans.
Admittedly, such optimistic predictions might not come to pass. Over the next several months we will get a better idea of how many people manage to enroll, whether their coverage is adequate, and whether their overall medical costs, including premiums and out of pocket costs, fall. We might ultimately declare Obamacare a failure, and if that happens we should figure out a better way to expand access to affordable health insurance and care.
Despite the rhetoric from many conservatives, Obamacare isn’t the way most self-described liberals would reform our health care system. It is needlessly complicated, not guaranteed to reduce overall medical costs significantly and its subsidies, while significant, are too stingy. People with lower middle class incomes will still likely find the premiums to be a budgetary strain. At the very least, liberals would have included a government run “public option,” a Medicare-like program that would have competed with the private insurance.
But problems aside, people who are currently navigating the private insurance market –both those without health insurance currently and those who might be receiving scary policy and price change letters from their current insurance companies — should make sure to see just what their Obamacare options are. They might be pleasantly surprised.
By: Duncan Black, USA Today, November 5, 2013
“The Republicans’ Food Stamp Fraud”: Telling Poor Children The Fourth Box Of Macaroni And Cheese Is Excessive Is Indecent
What’s the single worst thing the Obama-era Republicans have done? Tough one, I know.
But spare me a moment here—plus a thousand words down the page—and I think maybe you’ll agree with me that the single worst thing the Obama-era Republicans have done is try to push through a $40 billion cut to the food-stamps program. It’s just unspeakably cruel. They usually say publicly that it’s about saving money. But sometimes someone—one congressman in particular—lets slip the real reason: They want to punish poor people. The farm bill, which includes the food-stamp program, goes to conference committee next week. That’s where, the cliché has it, the two sides are supposed to “iron out their differences.” The only thing the Democrats on this committee should do with an iron is run it across the Republicans’ scowling faces.
The basic facts on the program. Its size fluctuates with the economy—when more people are working, the number of those on food stamps goes down. This, of course, isn’t one of those times. So right now the SNAP program, as it’s called, is serving nearly 48 million people in 23 million households. The average monthly individual benefit is $133, or about $4.50 a day. In 2011, 45 percent of recipients were children. Forty-one percent live in households where at least one person works. More than 900,000 are veterans. Large numbers are elderly or disabled or both.
It’s costing about $80 billion a year. Senate Democrats proposed a cut to the program. A small cut, but a cut all the same: $4 billion over 10 years. The Republicans in the House sought a cut of $20.5 billion over 10 years. But then the farm bill failed to pass. Remember that? When John Boehner didn’t have enough votes to pass his own bill? After that debacle, the House took the farm bill and split it into two parts—the subsidies for the large growers of rice and cotton and so forth, and the food-stamp program. Two separate bills. And this time, Eric Cantor doubled the cut: $40 billion over 10 years. This number, if it became law, would boot 3.8 million people—presumably, nearly half of them children—off the program in 2014, according to the Congressional Budget Office.
These would come on top of cuts to the program that kick in Nov. 1. The 2009 stimulus bill included extra food-stamp money because unemployment was so high after the financial meltdown that legislators knew more people would be applying for SNAP assistance. So there was a “stimulus bump” in food-stamp spending, but that is now ending. A family of four would see a $46 cut each month.
The proposed GOP cut is such a piddling amount of money, in terms of the whole federal budget and especially when spread out over 10 years. But nearly half of it is quite literally taking food out of the mouths of children. What’s the point? The point really is that Tea Party Republicans think these people don’t deserve the help. That’s some fascinating logic. The economy melts down because of something a bunch of crooked bankers do. The people at the bottom quarter of the economy, who’ve been getting jobbed for 30 years anyway and who always suffer the most in a downturn, start getting laid off in huge numbers. They have children to feed. Probably with no small amount of shame, they go in and sign up for food stamps.
And what do they get? Lectures about being lazy. You may have seen the now-infamous video of Tennessee Congressman Steve Fincher, who told a crowd over the summer that “the Bible says ‘If you don’t work, you don’t eat.’” This while Fincher, a cotton farmer, has enjoyed $3.5 million in federal farm subsidies. This year’s House bill ends “direct payments” to farmers whether they grow any crops or not—except for one kind: cotton farmers.
Religious bloggers have noted that Fincher got his theology wrong and that the relevant passage, from Paul’s Second Epistle to the Thessalonians, wasn’t remotely about punishing people too lazy to work. It was about punishing people who’d stopped working because they thought Jesus was returning any day now. So: mean bastard, hypocrite, and Scripture-mangling idiot to boot. Nice trifecta.
The other argument one sometimes hears concerns the dreadful curse of food-stamp fraud. The actual rate of food-stamp fraud—people selling their coupons for cash—is 1.3 percent, but this of course doesn’t prevent the right from finding a couple of garish anecdotes and making it seem as if they’re the norm. Voter fraud, Medicaid fraud, food-stamp fraud…Somehow, in Republican America, only poor people and blacks commit fraud.
This cut is the fraud, because it’s not really about fraud or austerity. It’s entirely about punishing the alleged 47 percent. The bottom half or third of the alleged 47 percent. It’s absolutely appalling. These folks have done a lot of miserable things in the past four years. But this—the morality of this is so repulsively backward, the indecency so operatically and ostentatiously broadcast, I think it takes the gold going away.
The conference process starts next Wednesday and is going to take maybe a few months. Michigan Senator Debbie Stabenow has taken the lead on this issue and has been terrific. Ditto Pat Leahy. Max Baucus, I’m told, is a good get to go a little wobbly (surprise). But this is one where the Democrats have to say this won’t stand. It’s one thing to shut down the government for two weeks and take quixotic stabs at Obamacare. Telling poor children that that fourth box of macaroni and cheese is excessive is something very different.
By: Michael Tomasky, The Daily Beast, October 26, 2013
“Tyranny Over The Most Vulnerable”: Women Are Bearing The Brunt Of The GOP Shutdown Fallout
The “non-essential” programs that are currently unfunded due to the shutdown are in fact essential for many women and children.
The GOP likes to say the war on women is a myth. But the government shutdown, now in its 11th day, is just the latest evidence that it is indeed alive and well. It should be no surprise that women are among those hurt most by the closure, which, predictably, is in part a reaction to the benefits that the Affordable Care Act, President Obama’s signature achievement, guarantees women, as we wrote last week.
From the nation’s elite institutions to the oft-neglected rural areas of this country, women and their families are caught in the middle of a political impasse that has furloughed an estimated 800,000 government workers, threatens to upend the global economy, and has left critical government programs and services scrambling to secure emergency funds in order to serve America’s most vulnerable populations.
The shutdown threatens a number of programs and funding streams, including domestic violence shelters and service centers; Temporary Assistance for Needy Families (TANF); the Woman, Infants, and Children Program (WIC); School Lunch; Head Start; and Title IX investigations of sexual assault on college campuses. This will have a serious impact on the health, physical safety, food security, and economic stability of women and their families.
Physical Safety
As Bryce Covert wrote last week, funds for domestic violence programs designated under the Violence Against Women Act (VAWA) have been suspended since October 4. (It should be no surprise that many of the House members leading the shutdown also voted against VAWA itself earlier this year.)
Small centers without access to independent funding – those that serve women with the fewest options – will only be able to weather the storm for so long. In the wake of the 2008 financial crisis and the ensuing economic downturn, violence against women has been on the rise, with eight out of 10 shelters reporting increases in the number of women seeking help, and 74 percent of domestic violence victims staying in unsafe situations because of economic insecurity. Demand for these services is increasing, while funding is being cut from every source. Nearly four out of five of domestic violence service providers have reported decreases in government funding over the past five years, and since October 1, many have closed their doors completely or limited their services.
The shutdown is also affecting the safety of women on college and university campuses across the country. An increasing number of institutions are under investigation for ineffective handling of sexual assault cases adjudicated under Title IX.
And with the shutdown, the Department of Education’s Office of Civil Rights has suspended investigations into alleged violations and has halted campus visits necessary for holding institutions accountable.
Food Security
The shutdown threatens the food assistance on which millions of America’s most vulnerable women and children rely. At this point, federal funding for TANF, WIC, and school lunches has been suspended. State and USDA reserve funds are being reallocated so that states can continue to provide these essential services, but they will only be able to function with these limited resources for a short time.
States are shouldering the burden to keep TANF running while the government is shuttered, but last week, 5,200 eligible families in Arizona did not receive their monthly check. Thus far Arizona has been the only state to deny this important benefit for families in need, but every day the program is more strained.
WIC, the federal program that most crucially provides formula and breastfeeding assistance for mothers in need, has also been left in the lurch. On Tuesday, officials announced that no additional WIC vouchers would be issued in the state of North Carolina, where approximately 264,000 women rely on the program. In Utah, the WIC program shut its doors and only reopened four days later because the USDA provided a $2.5 million emergency grant. Other centers are sure to face the same challenges so long as workers are furloughed and grants are on hold.
Economic Security
Head Start programs that provide childcare and education for 7,200 low-income children ages 0-5 did not receive grants due on October 1. Thousands of low-income women are able to go to work every day because their children participate in Head Start programs. Without them, women already struggling in low-wage jobs and lacking benefits are forced to miss work, because no one else is able to care for their children. For women, secure employment is contingent on secure childcare and education for their families. The New York Times reported that programs in six states had closed due to the shutdown and then reopened temporarily thanks to a $10 million gift from a couple in Texas. Head Start will continue as a result of this short-term rescue, but private philanthropy will not be able to do the job of the government over the long term.
In sum, what some define as non-essential government services are, in fact, essential to the economic and physical well-being of America’s most vulnerable women and their families. It’s just another variation on the old adage that one man’s public interest may be another’s tyranny – in this instance, largely tyranny over women and children.
By: Andrea Flynn and Nataya Friedan, The National Memo, October 13, 2013
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