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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. - PowerPoint PPT Presentation
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Social Security
A Strong Program That Should Be Strengthened, Not Cut!
March 2013
Social Security was Created as Part of The New Deal under FDR
3
• 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 unemployedMarch 2013
Social Security was Created as Part of The New Deal under FDR
March 2013
Originally, the program: Only covered about one half
of all workers. Excluded domestic workers,
agricultural workers and public employees - disproportionately black and women workers.
Limits of the Original Program
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
Improvements Over the Years
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.
Social Security: A Promise We Make To Each Other
March 2013
7Source:Source: Bethell, Reno, and Tucker, 2012 ("Strengthening Social Security" What Do Americans Want?"
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.
Who Receives 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 children8
Source: Source: SSA, Monthly Statistical Snapshot, January 2013
http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/index.html?number
Who Receives Social Security?
Retired Workers, Dependents, and Aged Widows,
77%
Disabled Workers and Dependents,
19%
Young Survivors, 4%
Source: Social Security Administration, June 2010 data Center on Budget and Policy Priorities - cbpp.org
Almost One-Quarter of Social Security Beneficiaries Receive Disability or Young Survivors Benefits
Who Receives Social Security?
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.
10Source: SSA, 2010a: Table 9.A1.
Social Security: Prevents Extreme Poverty For Seniors
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
People of Color and Social Security
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
12SSA: 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
Percent of beneficiaries age 65 and older who receive 90% or more of their income from Social Security:
34.7% of Whites 49.4% of Blacks 41.7% of Asians 55.1% of Hispanics
Social Security BenefitsBroken Down By Race
Social Security
Funding 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
Why 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
How Do We Fund Social Security?
Source: Bethell, Reno, and Tucker, 2012 ("Strengthening Social Security" What Do Americans Want?" )
February 2013
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.
Social Security Trust Fund
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)
Social Security Under Attack
February 2013
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
FACT: It's not just wrong -- it's impossible!
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
Myth 1: Social Security adds to the deficit
Myth 2: We have to raise the retirement age because people are living longer
Myth vs. Facts
March 2013
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
Social Security is not in Trouble !
March 2013
• 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.
Attempts to Privatize Social Security
March 2013
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.
Attempts to Privatize Social Security
March 2013
Social Security
Not Only Can We Can Keep Social Security StrongWe Can Make It Better !
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
People Across The Country Organized!
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
March 2013
We Can Make Social Security Better
Other important improvements:
• Restoring survivor benefits for college-age students • Raising the Special Minimum Benefit• Including benefits for same-sex couples
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.
Make FICA Fair – Ask Wealthy Americans to Pay the Same Rate As Every Day Americans
March 2013
March 2013
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.
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
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
Now Is The Time To Act
March 2013