Want to Get Involved? Saving Social Security Is a Cause We Should All Embrace

We just got back from the Women’s March in Washington.  The outpouring of people throughout the world was awesome, but it will not mean much unless we take our newfound energy and find a way to channel our hope and fear into actions that will contain the damage that President Trump and the Republican Congress could do.  All of us need to do something—whether it is calling our Representatives and Senators on a regular basis, joining local activist groups or anything else. 

Looking for something you can do?  One critical place to put your energy is joining efforts to save Social Security.  Social Security has not been on the radar, and Candidate Trump promised not to touch it or Medicare.  Yet consider that Mr. Trump often does not remember the promises he made when it is convenient to him, and the Speaker of the House, Paul Ryan, is an implacable foe of Social Security and Medicare and has been waiting for years for the opportunity to take them down.

Consider this scenario.  Congress passes tax reform bills that substantially lower the top rates on individuals and the rates on businesses.  The tax cuts lead directly and inevitably to a ballooning federal deficit, which Congress and President Trump blame on Social Security and Medicare among the primary causes.  Dismantling the Social Security Trust Fund will put billions of dollars back into the treasury, which could go to cover the budget gap produced by tax cuts. 

We have been hearing for years that Social Security and Medicare are going to drain the federal budget or go bust, and so the people currently paying payroll taxes will got nothing back in the future. Many people believe it is true and that has eroded support for Social Security.

But it is a lie that opponents of Social Security have been repeating for years. Social Security is not about to go bust.  I’ll talk about Medicare at a later date, but here are the facts about Social Security.

The Facts About Social Security

Social Security, as you all know, is funded by payroll taxes.  Workers currently pay 6.2% of their salary into Social Security and their employers pay another 6.2%.  And as Judy did for many years, people who are self-employed pay 12.4% of income.  People pay the Social Security tax on income up to $118,000/year.  Everything above $118,000 is not taxed for Social Security.

Social Security was established in 1935 as a pay as you go system.  That is, current workers in 1935 paid the tax and retired persons began receiving payments.  So unlike a pension or IRA where you pay into a fund and that money belongs to you, Social Security has never worked that way.  It is, instead, a compact between generations that today’s workers will support today’s elders. 

That system worked well for a long time because there were lots of working age people paying into Social Security and relatively few retired people receiving benefits.  That population balance is changing and that’s why economists and everyone else has gotten worried.  As recently as 1970, there were approximately 4 workers for every retiree.  As the birthrate has decreased and people are also living longer, there are fewer workers for every retiree.  The current ratio is approximately 3 workers for every retiree.  The ratio is expected to drop to 2.2 workers to each retiree in 2030 and 2 per retiree in 2050.

What does that mean for Social Security?  Remember Al Gore’s lock box?   That’s the Social Security Trust Fund, which has a surplus.  That is, more money has been collected over the years than Social Security has paid out and the fund currently still runs a surplus. As the number of retirees increases in future years, Social Security will be able to use its surplus to pay them.  If we do nothing now, Social Security will begin running a deficit somewhere around 2023, and the surplus in the Trust Fund will run out in 2034 (although some estimates place the date a decade later).

But that does not mean that retirees in 2034 will get nothing.  If we do nothing to re-adjust Social Security now, payments by workers to Social Security in 2034 will still be able to cover 75% of retirees’ Social Security income.  In other words, Social Security will not go broke.  It will just pay out smaller amounts.

Furthermore, it could be fixed so that retirees continue to receive most or all of the money due them.  Here are some options.  Each has its advantages and disadvantage but a compromise that spreads the cost across some or all of these options would assure a better retirement for everyone without overburdening today’s workers.

1.     Increase the Social Security Tax:  A small increase in the payroll tax would assure higher payments to recipients in the future.  There has been support among the public in the past for a small increase, but this is a regressive tax that falls hardest on poor and middle-income people.

2.     Increase the Ceiling on the Amount of Income Taxed:  This has been discussed for years, but there has been no action on it.  Given the increased wealth held by the wealthiest people in our country, increasing the ceiling  of income that is taxed for Social Security from the current $118,000 to a higher amount could cover the shortfall.  Some advocates argue increasing the cap to around $215,000, which means about 90% of the population will be taxed on all their income.  The last Social Security reform in 1983 actually intended to extend the tax to the 90% level, but that has not happened due to technical reasons for how the cap on the tax is computed.  Maybe the cap could even go a bit higher.

3.     Invest a Portion of Social Security Funds in Stock Funds or Other Income Funds.  This has been a popular option on the political right.  It was also the choice of the students Steve taught in recent years.  The experience of other countries that have adopted this option is that it works great when the market goes up and poorly when the market goes down.  Retirees in the US with the lowest income (the bottom 20%) depend almost entirely on Social Security for income.  For them, this would be a precarious option.

4.     Decrease in Benefits.  A small decrease in benefits today will extend the life of the Trust Fund.

5.     Increase the Age for Full Social Security Benefits to 70.  Many people currently work to 70 and beyond.  People who work in physically strenuous jobs, however, would be disadvantaged by this option.

6.     Reduce the Annual Cost of Living Increase.  This annual increase is set based on inflation.  In recent years, increases have been small or non-existent. 

There are other fixes as well.  The point is that Social Security is not a cause of budget deficits, and that it could be fixed in ways that future retirees get most or all of benefits that would be due them.

There is one other fix that is not talked about much.  We currently have 11 million illegal aliens in our country.  Some are probably paying Social Security taxes already, but if we legalize their work status, we bring many young people with many working years ahead of them into the system. This will offset the bulge of Baby Boomers collecting benefits over the next 20-30 years.  Instead of building a wall, we would be better off with a planful workers program for immigrants.

So get involved! Here are a couple of organizations devoted to saving Social Security and Medicare.  I don’t know these groups, but it is a place to start.  Or start a local group that bombards your local representatives and senators on the issue.

National Committee to Preserve Social Security and Medicare

http://www.ncpssm.org/PublicPolicy/SocialSecurity/Documents/ArticleID/14/The-Truth-About-Social-Security-and-Privatization

Americans United for Change

http://americansunitedforchange.org/page/content/privatization/

Resources:

A discussion of options for Social Security from the American Association for Retired Persons

http://www.aarp.org/work/social-security/info-05-2012/future-of-social-security-proposals.html

Put together a proposal yourself by using the tool created by the Committee for a Responsible Federal Budget

http://crfb.org/socialsecurityreformer/

Keeping Engaged

The Pennsylvania 7th Congressional District

I’m back to the blog after a hiatus.  The holidays were a busy time and I had a bit of the post-election blues.

I want to comment today on one of the most frequent concerns that people have about retirement—what will they do to keep busy?

I had some plans—visit the grandkids, lots of foreign travel, organize and scan my old photos, but I knew that would not be enough.  Judy and I talked a lot about getting involved in community activities, but nothing jumped out at us.

Then the election happened and in the aftermath, it seemed more important than ever to get involved.  In December, we went to a meeting to hear someone from Fair Districts PA explain about the negative effects of gerrymandering. Fair Districts was formed by the League of Women Voters and Common Cause.  Gerrymandering, in case you not familiar with the term, is the result of drawing the lines of electoral districts to assure a majority for one party in as many districts as possible while diluting the influence of voters who support the other party by splitting them up.  Districts get drawn in bizarre and distorted shapes, breaking up communities with shared interests. In the photo above, you can see the 7th PA Congressional District outside of Philadelphia, perhaps the most extreme example of gerrymandering in the country.  As a result of gerrymandering, many Congressional seats in the country are no longer competitive, and so Representatives have no reason to compromise.  Pennsylvania, it turns out, is rated among the three worst states in terms of distorted electoral districts (along with North Carolina and Wisconsin). 

I spoke up during the meeting, trying to help the group get organized, and the result was I was selected as the overall coordinator for Centre County.  I certainly hadn’t planned on or wanted that role, but I’m glad to have taken it on.  I’m working with talented people in the leadership team and there seems to be a lot of interest among people in the community—we already have 85 people on our mailing list.  And I am learning new things about how the political process works at the local level, and from other members of Fair Districts PA Centre County and the state group, Fair Districts PA, about how to organize, frame issues and build support. 

It was scary at times to think about what I would do when I was retired, and I knew my plan was not well developed.  I was able to remain open to possibilities.  Opportunities that are right for you will show up, and you just need to be ready.   I had looked into some other organizations, but they had not seemed right for me.  Fair Districts PA Centre County did.  

A plus of working with Fair Districts is that instead of feeling helpless in the wake of this very upsetting election, I now believe I am making a small contribution to improve the political situation here and I am learning skills that will help in the future in electing better candidates at the state and federal levels.  If you are looking to get involved political, you might want to take a look at Indivisible, a guide written by Democratic staffers in Congress about how to be effective in influencing local politics and issues.  Here is a link:  https://www.indivisibleguide.com/web/  It provides a plan of how to counter the negative and scary trends in the country.

To find out more about gerrymandering, you can go to the Facebook page for Fair Districts PA Centre County, or to the Fair Districts PA webpage, which has extensive information on why gerrymandering is bad for democracy in America and what can be done to counter it:  http://www.fairdistrictspa.com.  You could also read this op ed on redistricting -- http://www.centredaily.com/opinion/article125100324.html

I am listed as the author, but I had lots of help with it.

If you are wondering where the term “gerrymandering” comes from, it turns out there was a governor of Massachusetts name Elbridge Gerry who in 1812 created a congressional district that was shaped like a salamander.  Presto—the word “gerrymandering” was coined.

Judy: Processing Grief

Mike Weston, January 1998

I'm dedicating this post to my son, Mike Weston, who died in a helicopter crash in Afghanistan in 2009.  It's about him, but it's also about what has happened to this country.  I chose this picture, which was taken when he was a marine reservist on a mission called Operation Baltic Challenge, a NATO mission in Lithuania.  We was still young and idealistic, and he still believed in the American experiment in democracy.  

For those of you who knew Mike or knew of him, he was, first and foremost, a challenging personality.  As a family, we remember him as the organizer of play activities, although even as a youngster, there was often a political or media-driven theme to the play.  He started reading early, and read voraciously choosing to immerse himself in writings on all sides of the political spectrum.  In high school he participated in the Model U.N., went to the Governor's School in International Affairs, took courses at Penn State in Political Science, Economics, and Japanese, and was mentored by the father of one of his classmates, a neoconservative Poli-Sci professor whose claim to fame was consulting with Republican presidents.  Mike went on to Stanford, where he majored in Computer Science and Economics, and then to Harvard Law School.  The week after he got to Harvard, he called me and said, "This is just about helping rich people hold onto their money."  He was right, of course, and I told him he didn't have to continue.  He said he always finished what he started, but he didn't see the point of sitting in classes, so he just read on his own and took exams and graduated cum laude.  

The Spring of his first year in law school, Mike flew out to Los Angeles at Spring Break to interview for a summer internship.  He had been observing the blue collar population around him in Boston, just as he did in Palo Alto when he'd been an undergraduate.  He would roam around Boston, and there were times he felt afraid because he didn't know if he could defend himself.  He was also acutely aware of how class differences dictate opportunities in life.  While he himself was quite fortunate, he identified with those who were not.  After his interview and a visit to his father, a successful attorney himself, Mike flew back to Boston.  He was seated next to a group of young men who were very clean cut, but kind of rowdy.  He always said he thought they were Mormons because of the way they were dressed, but they were actually Marines.  By the time he touched ground at Logan, he had decided to go into the reserves.  

Mike was in the military either active-duty or reserve from 1995 until his death.  He signed up for every kind of challenging training available, and rose to the rank of Major.  Even after he became a DEA agent, he continued to be a Marine Reserve.  What he was known for among his friends were his values, and his continuous search for a purpose in life.  Over the course of his military service he went to Norway, Panama, Morocco, Lithuania, and Kuwait, and he had three missions in Iraq.  Before each trip he immersed himself in the history and politics of the region, which allowed him to understand what he was seeing in a unique way.  He called home from Kuwait in 2003, where he was handling the logistics for setting up prisoner of war camps in advance of the invasion.  He could see that the whole operation was wrong-headed, based on what he had read and what he saw when he got there.  It was already clear to him that while we could easily prevail with our military might, an area as primitive as Iraq only worked with an autocratic leader like Sadam Hussein, that if we eliminated that kind of strong leadership, the region would devolve into civil war and chaos.  

Mike's deployments to the Middle East and his work for the DEA in inner-city Richmond, Virginia, changed him in many ways, but one of them was to make him much more pessimistic about the future of our country.  He felt that Americans didn't appreciate what they had, the freedoms our Constitution have given them.  He observed the calcification of our political parties, and the rigid bureaucracies that had sprung up around government employment.  He even at times would say to me that perhaps the "great American experiment in democracy" has run it's course and that we will devolve into something else.  He wasn't optimistic that Barack Obama would be elected, and he was fearful that if he was, racism in our country would only intensify.  Mike always identified with the vulnerable, the disadvantaged, those who had no voice in their own lives and futures.  Wherever he traveled, he sought these people out and listened to them.  At a very deep level, he believed that democracy was the only hope for the world, but he wasn't sure that human nature would allow it to continue in this country.  As a side note, he also believed that the media was the most serious threat to our form of government because, unlike doctors or lawyers or other professionals, they have no form of self-policing and regulation.  If a journalist propagates false information, there is no professional mechanism for challenging it.  With the advent of the internet, it is no longer possible to prevent totally false claims from being widely disseminated and ultimately believed by those who do not seek verification of information.

So here we are today, a country reeling from the most divisive presidential campaign in recent history, and trying to make sense of the half of the electorate that voted for the most seriously unstable and unqualified candidate ever.  As you can see, Mike predicted most of it, although he'd probably be somewhat surprised that the candidate is who he is.  Or maybe he wouldn't.  When he was a teenager, he was fascinated with the rise of the tel-evangelists, which prompted him to start his own (pretend) church, which he dubbed, "The Church of Appalling Greed."  Not really so very different from where we are now.

This week has been very, very painful personally.  For me personally, it brought a grief that I haven't felt since Mike died.  I'm mourning my own loss of optimism about my country and what it will stand for in the next few years.  I'm mourning the loss of safety that persons of color have in this country now.  I'm mourning the inevitable increase in income inequality that will result from the president-elect's economic policies, and the economic pain that will inflict on the poorest and weakest among us.  I'm mourning the giant step backwards we have taken in our valuing of women, not only by rejecting the first woman candidate in our history, but by selecting a sexual predator instead.  I'm mourning for the damage to the environment that will result from his choosing a "climate denier" to oversee the appointments to the EPA, and this one will affect ALL of our children and grandchildren.  

I'm going to echo what many thoughtful individuals have said:  the most important thing we can do is to resist accepting what is happening as the "new normal."  For me, that means that I am seeking out organizations that will fight for the disenfranchised, minorities, refugees, immigrants, women, children, and the environment.  I will support them first, financially, and second, with any political action possible, whether that is to call government representatives, sign petitions, or show up to help where it is needed.  It has been too easy to let other people do the heavy lifting, and to benefit from the normal ebb and flow of politics in this country.  I will be going to the Women's March on Washington on January 21 so that the president-elect can see that women, individuals of color, immigrants, the rainbow coalition, and others who have been marginalized, are not going away and that we will hold him accountable.  

I am very, very sad that this is where we find ourselves in this country today.  I will leave it to others to figure out and understand how this happened.  The only thing that lifts me out of my grief is to make and execute a plan of action, so that at the very least I can feel that I am part of the solution.  

More on Staying at Home – Adult Day Services as a Valuable Option

One of the most critical, yet least used services to help older people stay at home is adult day services.  For many people, adult day services can make the difference between staying at home and going into a nursing home or assisted living.

I have written before about adult day services, but I just got back from attending a board meeting of the National Adult Day Services Association (NADSA) and made some observations that I think are worth recounting. 

Perhaps what has stood out for me most during this meeting and during past board meetings and the annual NADSA conference is the idealism of the people involved in running adult day services programs.  They genuinely care about the people they serve and about doing the best possible job.  During the board meeting this past week, we were talking about new directions and goals for the association and for individual programs.  One board member, who was trained as a CPA and who has been in the business for a while stood up to talk.  You might think someone with his background would talk about money.  Instead, he passionately argued that the main focus has to be on the quality of life of the people adult day programs serve.  In my time on the board, I have never heard a discussion of how to increase profits, but only how programs can reach more people and improve how they serve them.

I also heard about some innovative adult day service programs.  One of the biggest problems that adult day service programs face is an initial reluctance of families to enroll a parent or spouse.  People see these programs as nothing more than baby-sitting for elders, with meaningless activities.  But good programs provide a rich program of activities that provide cognitive, social and physical stimulation.  When done well, these activities may help keep people active longer.

A program in Indianapolis has overcome this initial reluctance to use an adult day services program.   Along with regular activities, the program provides physical and occupational therapy for individuals who need it.  For everyone else, there is a regular walking program as well as other activities.  According to the director, families are not reluctant to use the program, because it offers therapy.  Ongoing or intermittent PT and OT may also lead to gains in functioning or at least prevent or slow decline.  In its “penny-wise-pound-foolish” way regarding anything except medical tests and procedures, Medicare does not see the benefit of this type of maintenance. 

Why don’t more adult day service programs do something like this?  Here the answer is money.  Most programs would have trouble covering the cost.  Medicare will pay for OT and PT for a limited time following a hospitalization or other new problem.  OT and PT can be offered on an outpatient basis, including in an adult day program that meets Medicare regulations.  Indeed, it would be a cost-effective way of doing so compared to a nursing home or rehabilitation hospital, since the participant would be living at home.  But once Medicare coverage runs out, the adult day program would have to charge the full Medicare rate for participants to continue, whether or not they are able to pay.  Medicare does not allow different rates for different people or sliding fee scales.  The Indianapolis program, which is a religious-sponsored non-profit, covers costs not by billing Medicare but by raising donations, and they have been successful in doing so for 20 years. 

But the bottom line is that, with or without PT and OT, adult day services can provide meaningful activities that support cognitive, social and physical functioning.  Participants can engage in enjoyable activities, whereas at home, they are more likely to be inactive.  Furthermore, there is an increasing emphasis among adult day service programs to offer person-centered programming, that is, activities that are tailored to each person’s preferences.  And their family caregiver will get time away from caregiving.  Finally, the program is likely to be run by energetic and committed people, who, like the NADSA board members, place quality of life as the central goal.

If your goal is to stay at home no matter what, a good adult day services program can do this.  A couple of program directors talked about how they are able to maintain people until near the end of life, when they are discharged from adult day services directly to hospice, usually at home.  People are able to live and die how they want, not in the sterile and often demeaning nursing home environment.

As a postscript, let me explain Medicare’s reasoning.  They provide support for OT and PT for only a limited time, because they view it as a specific treatment response to an acute problem, such as a fall or a stroke.  They believe that after a certain amount of time, all the potential gain that could be made, has been made.  How was this determined?  Not by empirical evidence.  At some point in the past, a physician who may or may not have been a rehabilitation expert may have stated a number of days after which no further benefits would occur.  Or even worse, a health economist may have concluded that the cost-benefit of additional days of OT and PT was not worth it.  Medicare would also argue is also no evidence that treatment such as done at the Indianapolis adult day services program helps maintain functioning over time. But does it work?  As far as I know, evidence is limited although a recent article suggested that OT in the home along with other services led to improved functioning.

About the photo:  The NADSA Board Meeting and Annual Conference was held at the Crown Plaza Union Station Hotel in Indianapolis.  The hotel is built into the old railway station.  I stayed in one of about 24 rooms that are located in renovated train coaches.  It was very cool and quite comfortable.