GOP Poised To Gut Social Security For Millions Of Seniors

Social Security is one of the government programs that has worked as designed. It was to help keep American seniors out of poverty, and it lowered the poverty rate among seniors from 50% before Social Security was passed to a current level of about 10%.

And best of all, it did that without spending a dime of government money. It is wholly funded by a payroll tax taken out of worker wages throughout their working lives. It doesn't add a single penny to the deficit or the national debt.

The Republicans have never liked Social Security. They voted against it when it was proposed, and have been trying to get rid of it ever since. They understand that doing away with it would be very unpopular, since the program is viewed favorably by a huge percentage of the U.S. population. So they are trying to kill it bit by bit now, making the program unworkable so it will die.

The latest lies they are telling is that the program is going bankrupt, and won't be around when younger workers today need it in the future. That's not just a lie -- it's an outrageous and damnable lie!

The program does have some funding problems. While it will be able to send full benefits to recipients for about another 15-20 years, it will only be able to pay about 80% of full benefits after that. Some adjustments need to be made to make sure full benefits can be paid far into the future -- and that could easily be done by raising the cap on income subject to the FICA tax (the payroll tax that funds Social Security).

Currently, only the first $118,000 are taxed -- which means the rich pay a far smaller percentage of their income than working class people do (and even most of the middle class). Raising the cap to $200,000 or $250,000 would fully fund Social Security far into the future -- and it would do so without penalizing the working and middle classes.

But that would mean the wealthy would have to pay a little more in FICA taxes -- and the Republicans are horrified at the thought of taxing the rich eve a little bit. They would rather punish seniors than tax the rich. And that's exactly what they are now planning to do.

U.S. Rep. Sam Johnson (pictured), a Republican from the 3rd District of Texas, has quietly introduced a bill to gut Social Security. His bill would raise the retirement age to 69, which would not be bad for people like him, but would be disastrous for the millions who do physical labor most or all their lives. Those people are unable to work past 66, and cannot afford to wait another three years to get the benefits they paid for with their hard work all of their lives.

Johnson's bill would also cut the benefit paid to the half of Social Security recipients getting the largest monthly benefit. The average monthly benefit is about $1300 ($15,500 a year). Can you imagine cutting benefits for those making only slightly about $1300 a month? Those people are barely staying above the poverty level, and many would be shoved down into poverty.

But the Republicans don't care. They are perfectly willing to throw seniors under the bus (along with workers) to save the rich (their real constituency) from paying another penny in taxes.

The GOP Would Deny Income To Retirees By Raising The Age To Qualify For Social Security Benefits

These charts were made from information provided by the Gallup Poll between 2002 and 2014. The latest survey being done between April 3rd and 6th of 1,026 randomly chosen nationwide adults (and has a margin of error of 4 points). Previous years would be similar.

I found it interesting that the difference between expected retirement and actual retirement was significantly different. As a young or even middle aged person, we all expect to have a long work life & don't particularly expect or want to retire early. But life intervenes, and changes those expectations to realities.

Why do people retire earlier than they expect to? A few just meet their goals, and retire to enjoy the money they have made -- but they are a tiny minority. Others are forced into retirement because their employer just wants to replace them with a younger and cheaper employee. But the majority of early retirees must do so because of either illness or their bodies are just not capable of performing physical labor any more.

The Republicans in Congress have said for years now that the retirement age for receiving Social Security benefits should be raised to age 70. And a roundtable of corporate executives recently agreed with them. But they are not considering what happens to workers in the real world. Workers who spend their lives without doing any physical labor (politicians, bankers, corporate executives, hedge fund managers, Wall Street brokers, etc.) could probably work until age 70, because they have not had to put daily physical demands on their bodies.

But there are millions of Americans workers (miners, oil field workers, construction workers, farm workers, etc.) who must do hard physical labor every day of their working lives, and it is just not right to expect them to continue doing that kind of work until age 70. While most would love to continue working, their bodies will just not let them do that. Whether we want to admit it or not, a 55 or 60 year old just cannot do the same physical labor they could do at 25 or 30 years old. People who spend their lives doing hard physical labor will have to retire earlier than a person who has not.

And that is the main thing that's wrong with the GOP's desire to raise the retirement age. It would force many physical laborers who have to retire to go years without any income before they could apply for Social Security -- making them have to rely on family members for support, or forcing them into a homeless and penniless situation. And that's a terrible thing to happen to a person that worked hard for their entire lives (until their bodies could no longer do it).

It is just these type of people who the Social Security program was created for -- hard workers who, through no fault of their own, can no longer work. Raising the retirement age would throw these people into poverty (which Social Security was designed to prevent) -- and it's a heartless solution designed to keep the rich from having to pay the same percentage in FICA taxes that these workers pay all of their working lives.

There is no legitimate reason to raise the retirement age, or to cut any Social Security benefits. Any problems the Social Security system has (which will not show up for another 20 years) can easily be fixed by raising or eliminating the cap on income subject to FICA taxes. And personally, I don't see why the rich shouldn't be paying the same FICA tax percentage as middle class and poor workers have to pay.

Going To A Chained-CPI Would Be A Benefit Cut To S.S.

The House has just passed a budget and sent it to the Senate -- and it looks like Social Security recipients have dodged a bullet this time. This budget does not include any cuts to Social Security benefits. But the argument over cutting Social Security benefits is not over. This budget just funds the government through September, and this summer Congress will be discussing a budget for next year -- and you can be sure the Republicans will again be demanding those cuts.

The sneakiest way to cut those benefits, and one which President Obama has said he would consider, is to change the cost-of-living (COLA) raises for Social Security from being equal to the rise in the Consumer Price Index (CPI), which shows the real rise in the cost of goods (inflation). Instead, the Republicans want to fix the COLA raises to a stingier way to figure inflation called the Chained-CPI (which doesn't really reflect the true rate of inflation).

I went to the Labor Department website and got the figures for the last decade of both the CPI and the Chained-CPI. They are reflected in the top chart above. Note that in every year but one (2008), the Chained-CPI has been lower than the CPI, which means that going to a Chained-CPI would reduce the COLA raises that Social Security recipients would get.

The bottom chart illustrates the difference that would cause for recipients (with the green line representing the CPI and the red one representing the Chained-CPI). The chart shows what would have happened to a recipient receiving $1000 a month in 2003 in COLA raises through that decade. Note that the change would be small for the first few years, but as time passes the change becomes larger (and the lines on the chart grow farther apart, which means under the Chained-CPI the recipients would be losing buying power because of inflation -- which mirrors the green line).

We also need to remember that these figures were for a decade that included the recession and the poor economy following it. In a healthy economy, the inflation would grow at a larger rate -- and those lines on the chart would grow apart much faster, since there would be an even bigger difference between the CPI and Chained-CPI. And Social Security recipients would lose more buying power much faster if their COLA was based on the Chained-CPI instead of the CPI.

Now the difference between the two figures, at least for the first few years, probably seems like a negligible difference to Wall Street and many in Congress (whose salary is over 4 times the median salary of a U.S. worker, and much more the Social Security received by the elderly). But to someone who must exist solely on a Social Security check (which averages just slightly more than $1000 a month), every single dollar counts. They are already struggling to live on what they receive now, and they can't afford to lose any buying power at all to inflation.

Those who say that going to a Chained-CPI to figure COLA raises for Social Security recipients would not be a cut in benefits are lying to the American people. How can a growing loss in buying power not be considered a cut in benefits?

The Chained-CPI Would Be A Cut In Benefits

In most years, those receiving Social Security (and Veterans) benefits get a small cost-of-living-adjustment (COLA). This small raise is determined by the Consumer Price Index (CPI) that is determined by the Labor Department.

The Republicans have proposed changing the way this raise is determined. They want to stop using the CPI (which represents the inflation rate in the U.S.) and go to a figure called the Chained-CPI (in which the government makes various adjustments to the inflation figures). They claim the Chained-CPI is a more accurate figure. That is debatable. But what is not debatable is that using the Chained-CPI instead of the CPI would result in a lower COLA raise for recipients of Social Security (and Veterans) benefits.

I made the chart above using Labor Department figures for the last 11 years. It shows the CPI and the Chained-CPI figures for each of those years. Note that in 10 out of those 11 years the CPI has been slightly higher than the Chained-CPI.

The Republicans say this difference is insignificant. I disagree. The average Social Security check is only slightly above $1000 a month -- and if you are living on that (or even less), then every single dollar counts. But it gets worse. Over a period of several years this difference between the CPI and the Chained-CPI will amount to quite a bit as it adds up year after year -- and will result in recipients of Social Security (and Veterans) benefits receiving significantly less in their checks than the current COLA would have given them. To be blunt, those Living on Social Security (and Veterans) benefits would no longer be able to keep up with the real rate of inflation -- and they would become a little poorer with each passing year.

The Republicans claim this would not be a benefit cut. That is a lie. That's exactly what it would be -- a benefit cut. And over an extended period of time, it would represent a huge cut in benefits.

Sadly, the president and some blue dog Democrats have indicated a willingness to consider moving from the CPI to the Chained-CPI. This is unthinkable, and we need to let them know we will not tolerate their cutting Social Security (and Veterans) benefits -- just to appease the Republicans (who want to keep the rich from having to pay their fair share of taxes).

Social Security Raise Only 1.5% Next Year

According to the Associated Press, the cost-of-living-adjustment (COLA) for Social Security recipients will only be about 1.5% when it is raised next January. Since the average Social Security payment is about $1162.00 a month, the average raise seen by recipients will be only $17 a month. Historically, this is a very small COLA raise, and will no doubt be a disappointment for many receiving Social Security.

This will be only the seventh time since 1975 (about 38 years) that the raise will be less than 2%. The other raises of less than 2% were in 1986, 1998, 2002, and 2012 -- while no raises were granted in 2009 and 2010.

The 1.5% figure is not official yet, since the government shutdown has prevented the release of the official inflation figures for September by the Labor Department (on which the COLA is based). Official inflation for the year so far is around 1.4%, and most economists expected the September numbers to raise it to about 1.5%.

While the pitiful 1.5% raise is bad enough news for Social Security recipients, the congressional Republicans have once again raised their idea of changing the COLA to a "chained consumer price index" (which is lower than the official inflation rate). That would mean even lower raises for Social Security (and other government programs like veterans benefits). And unfortunately, President Obama has indicated his willingness to consider the change, which would amount to a cut in benefits for many of the most vulnerable Americans.

Here is what a change to the chained CPI would mean:

Enacting a chained CPI would cut Social Security benefits by over $120 billion over 10 years. The average Social Security recipient who retires at age 65 would get $658 less a year at age 75 and would get more than $1,000 less a year at age 85 than under current law.

A chained CPI also would make substantial cuts to benefits of more than 3 million disabled veterans.  The largest cuts would impact young, permanently disabled veterans who were seriously wounded in combat. It would also impact more than 350,000 survivors who receive service-connected death benefits.     Veterans who started receiving VA disability benefits at age 30 would have their benefits reduced by $1,425 at age 45, $2,341 at age 55 and $3,231 at age 65.

Under a chained CPI, the average retired federal employee over the next 25 years would lose $48,000; the average Social Security recipient would lose $23,000; and, the military retiree would lose $42,000.

This is nothing more than a backdoor effort to cut Social Security benefits, and cutting those benefits is opposed by a clear majority of Americans. Democrats need to stand firm, and let the Republicans (and the president) know they will not allow any kind of benefit cut to Social Security (or to veterans benefits).

A Sneaky Way To Cut Social Security

Social Security benefits are currently tied to inflation. That means if the cost of goods rises by 3% this year, then Social Security checks will be increased by that same percentage the following year. The idea is a good one, because it insures that inflation won't eat away a Social Security recipient's benefit year after year until it has significantly less buying power (thus sinking that recipient into or further into poverty).

To see the effect that inflation can have on income, all you have to do is look at the minimum wage (which is not tied to inflation). The current minimum wage is $7.25 an hour, but back in the late 60's the minimum wage had the buying power of about $10.50 (in today's dollars). Because the minimum wage was not tied to inflation, it has lost about 31% of its buying power.

Now Congress is talking about doing the same thing to Social Security. They want to change the way inflation is figured to something called a "chained-CPI". It is a way of figuring inflation that makes it look like inflation is less than it actually is. That would mean the rise in Social Security payments would be less than actual inflation. This wouldn't make a huge difference in any one year, but over the period several years it would make a significant difference in the buying power of Social Security recipients. Those recipients would not be able to buy as much in the future with their check as they can currently buy (because there checks are not keeping up with actual inflation).

Senator Sanders shows what that difference could mean to someone living on Social Security in the graphic above. After 10 years of a "chained-CPI", the average Social Security recipient would be getting $650 dollars a year less than if their checks had risen the same as inflation, and after a 20 year period they would be getting about $1000 less each year. That may not seem like much to a Wall Street banker or a congressman, but if your total income is from your Social Security check then that's a lot of money to be losing!

The average Social Security benefit is only about $1000 a month. For those who depend on Social Security alone, that means they are living on $12,000 a year. That means they are barely scraping by financially, and certainly couldn't afford to lose $650 or $1000 in buying power for the year.

The Republicans will tell you that going to the "chained-CPI" would not be a benefit cut in Social Security. That is an outrageous lie! While it would not cut the current benefit, it would certainly be a cut in all future benefits -- a cut that millions of elderly people simply could not afford. The GOP knows they couldn't get away with cutting current benefits, so they are attacking future benefits in this very sneaky way.

The argument for doing this is to control the budget, and lessen the budget deficit. But Social Security has not added a single penny to that deficit (since it is paid for by a dedicated payroll tax and does not come out of discretionary budget funds -- the funds that have a deficit). They will also tell you that Social Security is going broke, and going to the "chained-CPI" will save it from bankruptcy. That's another GOP lie!

Social Security has enough money to continue paying full benefits until at least 2038, and after that it could still pay 75% to 80% of benefits to all recipients. And simply raising the cap on the amount of income subject to payroll taxes (which would not affect most workers at all, but only the highest income workers -- making them pay the same percentage as other workers) would insure that Social Security could pay full benefits far into the future.

Social Security benefits should NOT be cut at all -- not current benefits or future benefits. It is not needed and most of those receiving Social Security cannot afford it. The GOP just wants to cut them so they don't have to pay back the money they borrowed (stole?) from the Social Security Trust Fund. They want to use that money to give the rich more unneeded tax cuts instead.

Employees Picket American Airlines

Yesterday, the American Airlines flight attendants union, the Association of Professional Flight Attendants (APFA), picketed the headquarters of American in Fort Worth. This kicked off a series of demonstrations that will take place in at least 15 airports. On Wednesday, the AA pilots will join in the demonstrations.

Why are they unhappy? It seems that they just found out that they are being screwed by American Airlines again. Four years ago, the rank-and-file employees of the airline agreed to a pay-cut to help save the financially-troubled airline. Now that the airline is back on is back on a firmer financial foundation, it is proposing to reward some of its employees.

But the financial rewards are not going to the employees that sacrificed to help save the airlines. The unions have recently learned that American Airlines is scheduled to give over $200 million to airline management next week. The head of American Airlines, Gerard Arpey, is scheduled to receive around $7 million.

This is a slap in the face to attendants, pilots and other employees who are still working for the reduced salaries agreed to in 2003. I don't blame them for picketing the airline! Why should they continue to work at reduced wages, while airline executives receive exorbitant bonuses?

Once again, an American corporation is shafting its workers while making its executives and management rich. This is just wrong!

Management should not receive a single dollar in bonuses until full wages have been restored to all employees. These bonuses have not been earned. They are coming straight out of the pockets of rank-and-file employees.

This is not a very smart move by American Airlines. I doubt if the unions can stop management from getting rich at their expense right now, but contract negotiations will begin next year for some of the airline's unions. You can bet the unions will not have forgotten how they were treated this year.

In their race to make themselves rich through bonuses this year, the American Airlines management have just made their next round of employee negotiations much more difficult. These unions will no longer be willing to make sacrifices just so the bosses can get richer.