Politics

House GOP Forcing 2016 Debate on Social Security’s Finances

Published

10 years ago

January 7, 2015

House Speaker John Boehner of Ohio administers a ceremonial re-enactment of the oath-of-office to Rep. Tom Reed, D-N.Y., accompanied by his wife Jean Reed and other family members, Tuesday, Jan. 6, 2015, on Capitol Hill in Washington. (AP Photo/Cliff Owen)

STEPHEN OHLEMACHER, Associated Press

WASHINGTON (AP) — House Republicans want Congress to address the troubled finances of Social Security’s disability program, setting the stage for a contentious debate that could affect 11 million people in the middle of the next presidential campaign.

The House has adopted a rule that could force lawmakers to tackle the issue by the end of 2016, when the program is projected to run out of reserves, triggering automatic benefit cuts.

An easy fix was available. Congress could have redirected payroll tax revenue from Social Security’s much larger retirement program, as lawmaker have done before.

But Tuesday’s new rule blocks such a move, unless as part of a larger plan to improve Social Security’s finances, by either cutting benefits or raising taxes.

Tinkering with Social Security never has been easy, and factoring in election-year politics makes finding votes even harder for those alternatives.

Rep. Tom Reed, R-N.Y., said he sponsored the provision to prevent Congress from “raiding” the retirement fund to prop up the disability program.

Reed said lawmakers are working on proposals to bolster the disability program’s finances, but that taking tax money from the retirement program is “a short-term Band-Aid.”

“We need to do better than that,” Reed said.

Added the chairman of the House Ways and Means Committee, Rep. Paul Ryan, R-Wis.: “We just want to make sure we improve the integrity of the Social Security trust fund all across the board.”

Advocates for older Americans say the rule could be used to help push through benefit cuts, especially because House Republicans have opposed raising taxes.

“This is a blatant attempt on the first day members take office to sneak a rule into the process that virtually guarantees devastating cuts for beneficiaries of the Social Security disability system,” said J. David Cox, president of the American Federation of Government Employees.

David Certner of AARP said it would be a mistake to eliminate the option of redirecting money from the retirement fund.

“Otherwise, we could be facing a deadline, and certainly over the last couple of years, we’ve seen Congress seemingly unable to pass bills, even with deadlines in front of them,” Certner said.

New House rules will govern the chamber for the next two years. The 36-page set of rules passed by a vote of 234-172, with all Democrats opposed and almost every Republican in favor.

On page 32 is a provision that allows any representative to raise a point of order if the House tries to pass a bill redirecting tax revenue from Social Security’s retirement fund to the disability fund. The House could vote to overcome the objection, but that could be difficult, with almost every Republican supporting the rules package.

The number of workers, spouses and children receiving Social Security disability benefits has ballooned over the past decade. Members of Congress from both political parties say fraud has played a part, too.

About 11 million people get disability benefits, nearly 40 percent more than a decade ago. By comparison, about 48 million people get Social Security retirement or survivor benefits.

Unless Congress acts, the trust fund that supports the disability program will run dry sometime during the last three months of 2016, according to projections by the trustees who oversee Social Security. At that point, the program will collect only enough payroll taxes to pay 81 percent of benefits.

That would trigger an automatic 19 percent cut in benefit payments. The average monthly payment for a disabled worker is $1,146, or a little less than $14,000 a year.

Social Security is supported by a 12.4 percent tax on wages up to $118,500. Half is paid by workers and half by employers.

Most of the payroll tax — 10.6 percent of wages — goes to the retirement fund. The remaining 1.8 percent of wages goes to the disability fund.

Social Security’s retirement trust fund is projected to run dry in 2034. At that point, it would only collect enough payroll taxes to pay about 75 percent of benefits.

Social Security has more than $2.7 trillion in reserves, but the retirement program has been paying out more in benefits than it collects in payroll taxes since 2010.

The disability program has been paying out more than it collects since 2005.

If the retirement fund and the disability fund were combined, they would have enough money to pay full benefits until 2033, giving lawmakers more time to address their long-term finances.

___

Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

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Oakland Post: Week of December 25 – 31, 2024

The printed Weekly Edition of the Oakland Post: Week of December 25 – 31, 2024

Published

1 day ago

December 26, 2024

Oakland Post

To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.

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Alameda County

Last City Council Meeting of the Year Ends on Sour Note with Big Budget Cuts

In a five to one vote, with Councilmembers Carroll Fife and Janani Ramachandran excused, the council passed a plan aimed at balancing the $130 million deficit the city is facing. Noel Gallo voted against the plan, previously citing concerns over public safety cuts, while Nikki Fortunato-Bas, Treva Reid, Rebecca Kaplan, Kevin Jenkins, and Dan Kalb voted in agreement with the plan.

Published

3 days ago

December 24, 2024

Oakland Post

Oakland City Council voted on a plan to balance the $130 million deficit at their last regular meeting of 2024. The plan reduces police spending by $25 million, temporarily closes two fire stations, and guts the cultural arts programs. iStock photo.

By Magaly Muñoz

In the last lengthy Tuesday meeting of the Oakland City Council for 2024, residents expressed strong opposition to the much needed budget cuts before a change in leadership was finalized with the certification of election results.

Oakland police and fire departments, the ambassador program, and city arts and culture will all see significant cuts over the course of two phases.

Phase 1 will eliminate two police academies, brown out two fire stations, eliminate the ambassador program, and reduce police overtime by nearly $25 million. These, with several other cuts across departments, aim to save the city $60 million. In addition, the council simultaneously approved to transfer restricted funds into its general purpose fund, amounting to over $40 million.

Phase 2 includes additional fire station brownouts and the elimination of 91 jobs, aiming to recover almost $16 million in order to balance the rest of the budget.

Several organizations and residents spoke out at the meeting in hopes of swaying the council to not make cuts to their programs.

East Oakland Senior Center volunteers and members, and homeless advocates, filled the plaza just outside of City Hall with rallies to show their disapproval of the new budget plan. Senior residents told the council to “remember that you’ll get old too” and that disturbing their resources will only bring problems for an already struggling community.

While city staff announced that there would not be complete cuts to senior center facilities, there would be significant reductions to staff and possibly inter-program services down the line.

Exiting council member and interim mayor Bas told the public that she is still hopeful that the one-time $125 million Coliseum sale deal will proceed in the near future so that the city would not have to continue with drastic cuts. The deal was intended to save the city for fiscal year 2024-25, but a hold up at the county level has paused any progress and therefore millions of dollars in funds Oakland desperately needs.

The Coliseum sale has been a contentious one. Residents and city leaders were originally against using the deal as a way to balance the budget, citing doubts about the sellers, the African American Sports and Entertainment Group’s (AASEG), ability to complete the deal. Council members Reid, Ramachandran, and Gallo have called several emergency meetings to understand where the first installments of the sale are, with little to no answers.

Bas added that as the new Alameda County Supervisor for D5, a position she starts in a few weeks, she will do everything in her power to push the Coliseum sale along.

The city is also considering a sales tax measure to put on the special election ballot on April 15, 2025, which will also serve as an election to fill the now vacant D2 and mayor positions. The tax increase would raise approximately $29 million annually for Oakland, allowing the city to gain much-needed revenue for the next two-year budget.

The council will discuss the possible sales tax measure on January 9.

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Protesters Gather in Oakland, Other City Halls, to Halt Encampment Sweeps

The coordinated protests on Tuesday in San Francisco, Oakland, Vallejo, Fresno, Los Angeles and Seattle, were hosted by Poor Magazine and Wood Street Commons, calling on cities to halt the sweeps and focus instead on building more housing.

Published

3 days ago

December 24, 2024

Oakland Post

The California Poor People’s Campaign’s Victoria King erected encampments for unhoused Oaklanders. Victoria King and her committee erected these emergency tents to symbolize the needs of unhoused Oaklanders. Photos by Post Staff.

By Post Staff

Houseless rights advocates gathered in Oakland, San Francisco, Los Angeles, and other city halls across California and Washington state this week protesting increased sweeps that followed a U.S. Supreme Court decision over the summer.

“What we’re dealing with right now is a way to criminalize people who are dealing with poverty, who are not able to afford rent,” said rights advocate Junebug Kealoh, outside San Francisco City Hall.

“When someone is constantly swept, they are just shuffled and things get taken — it’s hard to stay on top of anything,” said Kealoh.

Local houseless advocates include Victoria King, who is a member of the coordinating committee of the California Poor People’s Campaign. She and Dr. Monica Cross co-chair the Laney Poor People’s Campaign.

The demonstrations came after a June Supreme Court ruling expanded local governments’ authority to fine and jail people for sleeping outside, even if no shelter is available. Gov. Gavin Newsom in California followed up with an order directing state agencies to crack down on encampments and urging local governments to do the same.

Fresno, Berkeley and a host of other cities implemented new rules, making it easier for local governments to clear sidewalk camps. In other cities, such as San Francisco, officials more aggressively enforced anti-camping laws already on the books.