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Social Security

Social Security. A Strong Program That Should Be Strengthened, Not Cut!. Social Security was Created as Part of The New Deal under FDR. Social Security was Created as Part of The New Deal under FDR.

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Social Security

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  1. Social Security A Strong Program That Should Be Strengthened, Not Cut!

  2. Social Security was Created as Part of The New Deal under FDR March 2013

  3. Social Security was Created as Part of The New Deal under FDR • In 1935 the Social Security Act created the Social Security retirement program (as well as Unemployment Insurance and Aid to Dependent Children, later AFDC, now TANF) • Purpose was twofold: • provide retirement security/reduce poverty among the aged • create incentive for older workers to leave the labor market during the depression when so many were unemployed March 2013

  4. Limits of the Original Program Originally, the program: • Only covered about one half of all workers. • Excluded domestic workers, agricultural workers and public employees - disproportionately black and women workers. March 2013

  5. Improvements Over the Years • Dependent & Survivor Benefits for spouses and minor children • Coverage broadened to include agriculture, domestic workers and public employees • Disability benefits • Early Retirement with reduced benefit February 2012

  6. Social Security: A Promise We Make To Each Other • The main goal is to cut the risks of poverty in old age and when living with disabilities. • Program was designed to work as an insurance program – it does not create individual accounts • Everyone gets a reasonable payment based in part on their contribution to the system. • Some people may collect more than they contributed while others may collect less. • We are greater together than we are on our own ; We have an obligation to ourselves and each other to look out for each other. March 2013

  7. Who Receives Social Security? • 56.9 Million people receive Social Security each month, as: • Retirement insurance • Disability insurance, or • Survivor insurance • 1 in 6 Americans gets Social Security benefits. • About 1 in 4 households receives income from Social Security. Source:Source: Bethell, Reno, and Tucker, 2012 ("Strengthening Social Security" What Do Americans Want?"

  8. WhoReceives Social Security? • 36.97 Million retired workers • 8.8 Million disabled workers • 4.3 Million widows and widowers • 2.27 Million spouses • 1 Million adults disabled since childhood • 3.4 Million children Source: Source: SSA, Monthly Statistical Snapshot, January 2013 http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/index.html?number

  9. WhoReceives Social Security? Almost One-Quarter of Social Security Beneficiaries Receive Disability or Young Survivors Benefits Source: Social Security Administration, June 2010 data Center on Budget and Policy Priorities - cbpp.org

  10. Social Security: Prevents Extreme Poverty For Seniors • 90% of people 65 and older get Social Security. • Nearly 2 in 3 get half or more of their income from Social Security. • About 1 in 3 get almost all of their income from Social Security. Source: SSA, 2010a: Table 9.A1.

  11. People of Color and Social Security • Social Security is an important program for workers and families of color. They are least likely to have wealth, as a result of racial discrimination in American life and policies. • For older minorities, Social Security is the primary source of retirement income. Source: Plan for A New Future: The Impact of Social Security on People of Color Oct 2011

  12. Social Security Benefits Broken Down By Race • Percent of beneficiaries age 65 and older who receive half or more of their income from Social Security: • 64.5% of Whites • 73.6% of Blacks • 64.5% of Asians • 77.1% of Hispanics • Percent of beneficiaries age 65 and older who receive 90% or moreof their income from Social Security: • 34.7% of Whites • 49.4% of Blacks • 41.7% of Asians • 55.1% of Hispanics SSA: Source: SSA, Percentage distribution of beneficiary units, by race, Hispanic origin, and marital status, 2010, Table 9.3 A tp://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a3

  13. Social Security Funding Social Security

  14. Why Do We Fund Social Security? In exchange for modest payroll contributions, U.S. workers have been able to gain insurance that provides economic benefits for themselves and their families in the event of retirement, disability or early death; events that in previous generations would have led to impoverishment for workers and their families. Source: Plan for A New Future: The Impact of Social Security on People of Color Oct 2011

  15. How Do We Fund Social Security? • Most Americans pay Social Security on all their income. • Both workers and employers pay 6.2% of wages toward Social Security. • Exceptions for 5% of Americans. • When a worker’s salary reaches a cap of $113,700 per year, he or she does not pay Social Security on the salary above the cap. • People do not pay Social Security on unearned income, such as investment income. March 2013 Source: Bethell, Reno, and Tucker, 2012 ("Strengthening Social Security" What Do Americans Want?" )

  16. Social Security Trust Fund • Payments into Social Security by workers and employers is put into a Trust Fund – until this past year Social Security taxes were greater than benefits paid creating a surplus • Currently the Social Security Trust Fund has a balance of $2.7 Trillion. • The funds are invested in US Treasury Bonds, one of the safest investments in the world. February 2013

  17. Social Security Under Attack Since the Reagan years there have been some serious cuts to Social Security • A decrease from 90 to 82% of wages covered by payroll tax – undermines solvency over long-term • Increases in retirement age from 65 to 67 (in 2027) • Decrease in survivor benefits (for widowers and dependent children)

  18. Social Security Under Attack: Out of Touch Elites • There are several groups and well known spokespeople who have proposed cuts to Social Security • The two big proposals are • Increase the Retirement Age • Lower cost of living adjustments • Unfortunately this includes leaders from both major political parties February 2013

  19. Myth vs. Facts FACT: It's not just wrong -- it's impossible! Myth 2: We have to raise the retirement age because people are living longer Myth 1: Social Security adds to the deficit FACT: There is a large class & race divide around life expectancy, most everyday Americans are living only a year or two more than 70 years ago March 2013

  20. Social Security is not in Trouble ! • There is no deficit for Social Security benefits: there is currently $2.7 trillion in the Trust Fund– enough to pay all benefits through 2033! • After that, money coming in through current payroll taxes will cover about ¾ of scheduled benefits. • “Scrapping the cap” so that everyone pays their fair share on taxable earnings would more than cover the full cost of the benefits. • Taxes on unearned income – dividends, interest, or inheritances – could also be used to help pay for the program March 2013

  21. Attempts to Privatize Social Security • In 2005, President Bush proposed privatizing Social Security, and Representative Paul Ryan co-sponsored legislation in Congress to privatize Social Security. • Although President Bush’s attempt to privatize Social Security failed, Representative Paul Ryan revived the Republican’s efforts to partially privatize Social Security in the 2010 Republican budget plan, which he authored. • Although Representative Ryan dropped his proposal to partially privatize Social Security in his 2014 budget, he did propose to make further changes to our Social Security program through an unaccountable legislative fast track process. March 2013

  22. Attempts to Privatize Social Security • Proposals to privatize Social Security would divert $1 trillion from the financially stable Social Security Trust Fund to Wall Street. • Experience has shown us that Wall Street is not a responsible guardian of our money. March 2013

  23. Social Security Not Only Can We Can Keep Social Security Strong We Can Make It Better !

  24. People Across The Country Organized! • We stopped an increase in retirement age • We stopped an increase in Medicare eligibility age • So far we have also stopped cuts to the Cost of Living adjustments • We built momentum to increase the payroll cap – so that higher earners pay the same as most Americans • We have started to build energy for a credit for hard working caregivers

  25. We Can Make Social Security Better • Make FICA Fair – Wealthy Americans Should Pay Into FICA on all income • Count Hard Work At Home – Provide Credits For Caregiving • Increase Benefits & Cost of Living Adjustments Other important improvements: • Restoring survivor benefits for college-age students • Raising the Special Minimum Benefit • Including benefits for same-sex couples March 2013

  26. Make FICA Fair – Ask Wealthy Americans to Pay the Same Rate As Every Day Americans Raise the FICA cap. In 2013, workers pay into the system only on earnings under $113,700. Applying Social Security taxes to all earnings – as with Medicare – would help to protect Social Security over the long term. • This would provide all the funds we need to pay all benefits for the next 75 years! • Few Americans would be affected by this change to the Social Security payroll tax cap. • Just 1.2% of workers had earnings over $250,000 in 2009, including 0.4% of women, 0.3% of African American workers and 0.3% of Latino workers. March 2013

  27. Make Hard Work Count: Create A Care Giver Credit In Social Security Unpaid caregivers who work in the home earn zero Social Security credits during the time they are doing this hard and labor intensive job. We Can Do Better Our proposal is to provide at least 5 years of credit when a worker had no or reduced earnings because she/he was caring for a young child, senior or disabled family member. March 2013

  28. Increase Benefits & Cost Of Living Adjustments • We should increase our social security benefits to ensure that our families can pay for their basic items they need to get by. • One proposal is to change how cost of living adjustments are calculated so that we take into greater consideration the spending patterns of older consumers – like prescription drugs, helping to address the quickly escalating cost of medical care. This change is called the CPI-E ( consumer price index for the elderly) • Another proposal is to increase benefits for the lowest income earners. March 2013

  29. Now Is The Time To Act • Income Inequality is a hot topic so we have an opening to win an increase in the FICA Cap • Paul Ryan’s unabated attacks on Social Security and Medicare have made seniors a swing group - Let’s make Congress fight for votes • Social Security will be restructured soon, so now is the time to put our ideas on the table March 2013

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