Reductions in Social Security benefits
Nov. 18th, 2010 07:54 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
bemused_leftistAbout Obama's Cat-Food Commission's plan. Much more detail at the site.
http://www.cbpp.org/cms/index.cfm?fa=view&id=3325
[ It ] threatens benefits and services for millions of Americans who have very modest incomes and would experience significant hardship.
For instance, while the proposed changes in Social Security would produce benefit increases for many among the poorest fifth of Social Security beneficiaries — a praiseworthy accomplishment — the changes would cut benefits for those in the next-to-the-bottom fifth and the middle fifth of beneficiaries. Social Security Administration data show that in 2008, the median income for elderly Social Security beneficiaries (including any income they get from other sources, as well as their spouses’ income) was only $14,100 for those in the next-to-the-bottom fifth and $20,600 for those in the middle fifth.
Indeed, the plan would cut Social Security benefits for a medium earner (one whose earnings are in the middle of the wage distribution) by 15 percent below the currently scheduled amount in 2050 and 22 percent by 2080. Yet a lifelong medium earner who retires at age 65 in 2010 receives a benefit of just $1,397 a month, or $16,764 a year — which is only about 55 percent above the poverty line — and generally does not have significant income from other sources.
The plan’s cuts in Medicaid and Medicare would pose further problems for millions of people of modest means. The plan calls for increasing the amounts that elderly and disabled Medicare beneficiaries must pay for health care services (presumably through higher co-payments) under both Medicare and the Medigap policies that supplement Medicare coverage. The plan lacks details on how these changes would work, and they might well be reasonable parts of a balanced deficit-reduction plan — if they were not being extracted from the same modest-income seniors and people with disabilities whose Social Security benefits were being cut at the same time. As Drew Altman, the highly respected president of the Kaiser Family Foundation, recently explained, many of these modest-income Social Security and Medicare beneficiaries
have low incomes and already pay a significant share of their incomes for health care today. It will be difficult if not impossible to ask the majority of beneficiaries to pay more or make do with less. This has been the missing element in the entitlement/deficit reduction debate: Warren Buffet is not the typical Medicare beneficiary. Instead the prototype is an older woman with multiple chronic illnesses living on an income of less than $25,000 who spends more than 15 percent of her income on health care. It is the people on these programs and the realities of their lives that have been left out of the discussion.[2]
Another health-care element of the plan poses still greater risks for the nation’s most vulnerable people by threatening severe cuts over time in Medicaid, Medicare, and the subsidies to help modest-income people purchase coverage in the new insurance exchanges that the health reform law will establish. The plan proposes to contain growth after 2020 in federal health expenditures for these programs and the tax exclusion for employer-sponsored insurance to no more than 1 percent more per year than the rate of growth in GDP.
http://www.cbpp.org/cms/index.cfm?fa=view&id=3325
[ It ] threatens benefits and services for millions of Americans who have very modest incomes and would experience significant hardship.
For instance, while the proposed changes in Social Security would produce benefit increases for many among the poorest fifth of Social Security beneficiaries — a praiseworthy accomplishment — the changes would cut benefits for those in the next-to-the-bottom fifth and the middle fifth of beneficiaries. Social Security Administration data show that in 2008, the median income for elderly Social Security beneficiaries (including any income they get from other sources, as well as their spouses’ income) was only $14,100 for those in the next-to-the-bottom fifth and $20,600 for those in the middle fifth.
Indeed, the plan would cut Social Security benefits for a medium earner (one whose earnings are in the middle of the wage distribution) by 15 percent below the currently scheduled amount in 2050 and 22 percent by 2080. Yet a lifelong medium earner who retires at age 65 in 2010 receives a benefit of just $1,397 a month, or $16,764 a year — which is only about 55 percent above the poverty line — and generally does not have significant income from other sources.
The plan’s cuts in Medicaid and Medicare would pose further problems for millions of people of modest means. The plan calls for increasing the amounts that elderly and disabled Medicare beneficiaries must pay for health care services (presumably through higher co-payments) under both Medicare and the Medigap policies that supplement Medicare coverage. The plan lacks details on how these changes would work, and they might well be reasonable parts of a balanced deficit-reduction plan — if they were not being extracted from the same modest-income seniors and people with disabilities whose Social Security benefits were being cut at the same time. As Drew Altman, the highly respected president of the Kaiser Family Foundation, recently explained, many of these modest-income Social Security and Medicare beneficiaries
have low incomes and already pay a significant share of their incomes for health care today. It will be difficult if not impossible to ask the majority of beneficiaries to pay more or make do with less. This has been the missing element in the entitlement/deficit reduction debate: Warren Buffet is not the typical Medicare beneficiary. Instead the prototype is an older woman with multiple chronic illnesses living on an income of less than $25,000 who spends more than 15 percent of her income on health care. It is the people on these programs and the realities of their lives that have been left out of the discussion.[2]
Another health-care element of the plan poses still greater risks for the nation’s most vulnerable people by threatening severe cuts over time in Medicaid, Medicare, and the subsidies to help modest-income people purchase coverage in the new insurance exchanges that the health reform law will establish. The plan proposes to contain growth after 2020 in federal health expenditures for these programs and the tax exclusion for employer-sponsored insurance to no more than 1 percent more per year than the rate of growth in GDP.
