– Nel tentativo di un accordo bipartisan sul bilancio federale, il presidente Obama ha proposto un rallentamento degli aumenti dei sussidi legati all’inflazione, dal 2015 circa 0,3% l’anno meno dell’indice di inflazione corrente, che sanerebbe circa il 20% del deficit del programma attuale, ma
o che colpirebbe i più anziani, spesso donne single,
o molte delle quali probabilmente senza altri risparmi,
o che devono far fronte a maggiori costi per la sanità,
o scarsa speranza di riavere un lavoro,
o e spesso prive del sostegno di un compagno.
– A questo occorre aggiungere che ce la Previdenza sociale non contribuisce al deficit del bilancio federale, che si autofinanzia con le imposte sui salari (6,2% sui primi $113 700 del salario).
– Secondo l’ultimo rapporto annuale dell’Amministrazione della Previdenza sociale, le sue riserve si esauriranno nel 2033, dopo di che le imposte raccolte sui salari basteranno a pagare circa il 75% dei sussidi fino al 2086.
– Come funzionerebbe il rallentamento proposto:
o -3,7% dopo 10 anni di pensione per i lavoratori andati in pensione a 65 anni;
o -6,5% dopo 20 anni;
o -9,2% dopo 30 anni.
o A 76 anni e poi a 95 anni (!!!), proposto +5% sulla pensione media da raggiungere in 10 anni, pari a $800/anno;
– Es. degli effetti concreti:
o una donna pensionata a $1 100/mese ($13 200/anno), equivalente alla pensione media delle donne ultra 65enni, a 75 anni avrebbe una pensione inferiore di $41/mese, -$500/anno;
o sarebbe pari al valore dell’alimentazione di 5 giorni;
o a 76 anni la donna pensionata avrebbe il primo scatto di $6,70/mese ma ottenuti completamente in 10 anni, cioè a 86 anni.
o A 85 anni avrebbe in ogni caso perso, anche con lo scatto, circa $6000 in $ al valore attuale;
o a 94 anni la perdita cumulativa sarebbe di oltre $8300. Solo se vivesse fino a 104 anni la pensione mensile tornerebbe ai livelli previsti dalla legge attuale, ma avrebbe perso circa $10 200.
– Il piano pensionistico “a tre gambe”, cioè pensioni, risparmi e previdenza sociale, è già nei fatti “a due gambe”, dato che le pensioni stanno da anni sparendo,
– e la Previdenza sociale fornisce la maggior parte dei sussidi per molti pensionati, circa il 4£% dei single e il 22% delle coppie sposate dipendono per oltre il 90% del loro reddito dalla previdenza sociale;
– oltre la metà delle coppie e il 73% dei single ne traggono oltre la metà.
Se anziché diminuire la progressione delle pensioni legata all’inflazione, l’eliminazione del tetto salariale tassabile ($113 700) eliminerebbe l’88% del deficit attuale.
The New York Times
April 19, 2013
§ President Obama has put Social Security on the table in an attempt to reach a bipartisan agreement on the federal budget deficit, a move that would hit the program’s beneficiaries when they are at their most vulnerable.
§ The president has proposed slowing the rate at which benefits increase over time, a change that would ultimately hit the oldest of the old, often single women, many of whom have probably exhausted any other savings.
o Many members of this group also face higher health costs, have little hope of working again and often live without the support of a life partner.
§ But advocates for retirees say that what is perhaps the most frustrating about all of this is that Social Security, which is self-financed through payroll taxes, does not contribute to the deficit. Yet it is being lassoed into the broader debate.
§ “With people facing an increasingly insecure retirement, this is no time to say, ‘Let’s cut Social Security,’ ” said Joan Entmacher, vice president for family economic security at the National Women’s Law Center. “It’s even more disturbing to be having a discussion about how much to cut benefits for people who already struggle to make ends meet — while some lawmakers insist that we can’t ask the wealthiest Americans and large corporations to pay a penny more in taxes.”
– The Obama administration proposes to water down one of Social Security’s strongest features: the inflation adjustment, which enables retirees to maintain their purchasing power over long periods.
– Starting in 2015, the program would switch to a measure of inflation that has risen more slowly than the current index — on the order of about 0.3 percentage point less each year.
§ That does not sound like much. Nor would it lead to a big benefit cut right away. Moreover, President Obama did include a measure to soften the impact of the change, which we will dissect below. But the rate of slower growth would still compound over time and would ultimately cost many older people thousands of dollars over the course of their retirement.
§ “When you look at the retirement system, people don’t have anything else,” said Alicia H. Munnell, director of the Center for Retirement Research at Boston College. “And to have the only statement about Social Security solvency being a suggestion that what we need to do is reduce the indexing is not a useful conversation.”
§ It has been widely reported that if no changes are made to Social Security, its reserves will be exhausted in 2033, according to the latest annual report from the Social Security Administration’s trustees. After that, the payroll taxes collected would be enough to pay about 75 percent of benefits through 2086.
§ The switch to a different measure of inflation — known as the “chained C.P.I.-U” — would resolve about 20 percent of the program’s current shortfall, according to Social Security’s actuaries. (C.P.I.-U stands for the Consumer Price Index for All Urban Consumers.)
§ But here is how it would initially hit retirees’ pocketbooks: Workers who retired at age 65 would receive 3.7 percent less in benefits after 10 years than they would under the current system; after 20 years, 6.5 percent less; and after three decades, 9.2 percent less, according to calculations by the Social Security Administration.
§ The administration has said it will only make a deal that includes some protections, and it incorporated two small benefit “bump-ups” — each equivalent to 5 percent of the average retiree’s benefit check, or about $800 annually in today’s dollars — as part of its proposal. The bumps would be phased in over 10 years, beginning at ages 76 and 95.
§ So take a woman with an initial benefit of $1,100 a month, or $13,200 a year, which is the median benefit of single women 65 and older, according to the National Women’s Law Center. (This benefit represents about 73 percent of this group’s total income, which is about $18,000.)
§ By the time she is 75, her benefits would be $41 less a month, or nearly $500 a year less, than under the current program.
§ “That doesn’t sound like so much,” Ms. Entmacher said. “Well, it’s equal to five days’ worth of food. So if you have your monthly Social Security check and you are trying to figure out how to get to the doctor, how to pay your rent and how you pay your out-of-pocket medical expenses, every dollar counts. So are you going to skip a meal for 15 days, each month, to save five days’ worth of food? Or are you going to cut your pills in half?”
§ At 76, the woman in the example would receive her first bump-up, starting at about $6.70 a month. But it would take a decade to claim the full bump of $67 a month or about $800 a year (she would receive 10 percent of the full bump a year), according to the center.
§ By the time she was 85, even with the bump-up, she would have a cumulative loss in benefits of almost $6,000 in today’s dollars. And by 94, the cumulative loss would be more than $8,300, according to the center’s calculations.
§ But if she lived until 95, she would get the privilege of the second increase, also equivalent to 5 percent of the average benefit check. Her monthly check would climb back to the levels under the current law if she lived until 104, but by then, she would have lost about $10,200 in total income.
§ Of course, since the bump-up is a flat amount, some people with lower benefits might receive a bigger increase than they would under the current system, a senior administration official from the White House explained. Conversely, the bump-up offsets a smaller portion of the cut when benefits are higher.
§ This is not a popular move. According to a recent ABC News/Washington Post poll, 51 percent of respondents opposed changing the way Social Security benefits are calculated so that benefits increase at a slower rate, while 37 percent supported such a change (11 percent had no opinion). The survey said there were no partisan differences, but among people 65 and older opposition was 64 percent.
§ The “three-legged stool” of retirement — that is, pensions, savings and Social Security — has already become more of a lopsided two-legged stool, because pensions have been waning for years.
§ And the Social Security leg is providing most of the support for many retirees:
o about 43 percent of single people and 22 percent of married couples rely on the benefits for more than 90 percent of their income, the Social Security Administration says.
o More than half of couples and 73 percent of singles draw more than half their income from the program.
§ The new measure of inflation would alter the way their benefits increase. Right now, Social Security is pegged to the C.P.I.-W, which tracks the typical purchases of a sample of urban wage and clerical workers, but does not include retirees. (Social Security uses this index because it was the only one that existed when the benefits were first adjusted for inflation.) The chained C.P.I.-U includes some retirees.
§ The chained C.P.I. would more broadly account for how people change their buying habits when prices rise, substituting cheaper items for more expensive ones. When the price of Porterhouse steak increases, the current index considers that a consumer can switch to a cheaper cut, as explained in an AARP paper. But the chained index would account for substitution between category types. So instead of buying cheaper beef, the consumer might switch to chicken.
§ But critics argue that the elderly and disabled do not have the ability to substitute as much as other consumers. “When so much of their budget goes toward health care expenses,” said Cristina Martin Firvida, director of financial security at AARP, “you are not going to choose to replace a hip treatment with another treatment just because it is cheaper. There is a limit for substitution with older people. We already account for a great deal of it in the current calculation.”
§ Many opponents say that neither inflation index accounts for the higher out-of-pocket health care expenses that older people have.
§ The fate of the president’s proposal is still unclear. But on Thursday afternoon, Representative David Cicilline, a Democrat from Rhode Island, submitted a “concurrent resolution,” which, “if passed by both chambers, would officially express the sense of the House and Senate that we should not use the chained C.P.I. to calculate Social Security” cost of living adjustments, a spokesman said. The measure had 81 co-sponsors when it was introduced, he added.
§ Social Security advocates say there are a variety of other ways to strengthen the program that would not be as burdensome to retirees.
§ Currently, employees and employers each pay 6.2 percent on the first $113,700 of earnings (self-employed people must pay the entire 12.4 percent). Eliminating the cap on which earnings are taxed would eliminate about 88 percent of the current shortfall, according to the Social Security Administration.
§ “What we want Congress to do is follow the will of the people,” said Nancy Altman, co-director of Social Security Works, an advocacy group. “They don’t want to see benefits cut. As a wealthy country, we can afford this.”
§ And at the very least, we can afford to have a separate debate on how best to bolster the program.