Will Democrats Try Cutting Social Security and Medicare After a Disastrous Midterms?

Link: https://jacobin.com/2022/06/austerity-entitlement-reform-social-security-democrats-gop

Excerpt:

Days after Obama lamented Democrats’ 2010 electoral “shellacking,” his commission released a plan to slash Social Security benefits and raise the program’s eligibility age. Economist Paul Krugman noted at the time that the commission also suggested using newly gained revenue to finance “sharp reductions in both the top marginal tax rate and in the corporate tax rate.”

The plan ultimately did not receive the fourteen commission votes it needed to move forward, and a few years later in 2012, the House voted down a version of the proposal. That didn’t stop the Obama-Biden administration’s push: right after winning reelection — and after cementing much of the George W. Bush tax cuts — they tried to limit cost-of-living increases for Social Security, to the applause of Republican lawmakers.

…..

Like Obama, Biden campaigned on a promise to protect Medicare and Social Security. But as we have reported, Biden is already affirming big Medicare premium increases and accelerating the privatization of that health care program. Biden also has not pushed to fulfill his promise to expand Social Security, even though there is new Democratic legislation that would do so.

And now with Graham’s comments, Republicans are banking on him becoming the old Joe Biden on Social Security if they win in November.

It’s not an insane political bet. After all, Biden for decades proposed cuts and freezes to Social Security and publicly boasted about it. Indeed, Biden spent most of his career depicting himself as an allegedly rare and courageous Democrat who was willing to push off his party’s base and tout austerity.

Author(s): David Sirota

Publication Date: 16 Jun 2022

Publication Site: Jacobin

Action on Social Security 2100 Bill Coming ‘Very Soon’: Rep. Larson

Link: https://www.thinkadvisor.com/2022/05/23/action-on-social-security-2100-bill-coming-very-soon-rep-larson/

Excerpt:

The House Ways and Means Social Security Subcommittee plans to debate his Social Security 2100: A Sacred Trust bill soon, Rep. John Larson, D-Conn., chairman of the House Ways and Means Social Security Subcommittee, told ThinkAdvisor in a recent email.

The legislation adopts the consumer price index for the elderly as the basis of the annual cost-of-living adjustment (COLA) and applies the payroll tax to annual wages above $400,000.

“We are in the process of working toward markup, which will be held hopefully very soon,” Larson said in the email.

Author(s): Melanie Waddell

Publication Date: 23 May 2022

Publication Site: Think Advisor

9 Ways to Strengthen Social Security

Link: https://www.aarp.org/retirement/social-security/info-2022/benefits-current-status-future-stability.html

Graphic:

Excerpt:

How did we get here? ​​As long predicted, demographics explain a good deal: In a decade, the entirety of the boomer generation — some 70 million Americans born between 1946 and 1964 — will have hit retirement age. As a result, the number of people receiving Social Security benefits come 2034 will be more than double the beneficiaries in 1985. ​​

But what wasn’t known as accurately was how much longer those boomers would live. “From 1940 to 2019, life expectancies at age 65 have increased by about 6.5 years,” says Amy Kemp, chair of the Social Security Committee of the American Academy of Actuaries.

The impact: Many workers will be receiving benefits for a longer period of time. And those with higher incomes, which are generally those who receive higher benefit amounts, tend to live longer on average. ​

Author(s): John Waggoner

Publication Date: 1 March 2022

Publication Site: AARP

Pennsylvania lawmakers mull pension reforms as PSERS remains under scrutiny

Link: https://www.timesleader.com/wire/state-wire/1535867/pennsylvania-lawmakers-mull-pension-reforms-as-psers-remains-under-scrutiny

Excerpt:

State lawmakers met with officials of Pennsylvania’s public pension funds Thursday to vet reform measures that have been introduced to increase transparency and oversight of the pension system.

The measures are working their way through the legislative process and could be considered for passage this year. Thursday’s hearing offered participants a chance to voice concerns or probe for costs and conflicts that could derail the measures.

….

Among the proposals reviewed by pension officials and legislators was a bill that would force the funds to more closely track more than $1 billion of annual investment manager fees, and profit-sharing and other money-management costs. The measure would also require video copies of hours-long board meetings to be made publicly available — online for three years, and then by request.

Author(s): Joseph N. DiStefano

Publication Date: 21 Jan 2022

Publication Site: Times Leader

Spain inches ahead with pension reform

Link: https://www.thelocal.com/20210718/spain-inches-ahead-with-pension-reform/

Excerpt:

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Spain will pay workers to postpone retirement as part of a pensions reform strategy that analysts warn does not go far enough to cut a huge deficit in the system.

With nearly 30 billion euros ($36 billion) of annual losses in 2020 and rising, Spain’s social security budget is one of the biggest contributors to the country’s ballooning public deficit.

The European Commission has long demanded that Spain reform its pension system and has made it a condition for accessing European Union economic recovery funds.

Under a planned reform unveiled earlier this month that aims to get more people to work longer, Spain will give cheques worth up to 12,000 euros ($14,000) per year to retirement-age workers who postpone their retirement.

….

The 2013 reform also gradually increased the legal retirement age to reach 67 in 2027 from around 65 years currently.

….

Jordi Fabregat of the Esade business school said part of the problem is that Spain offers generous public pensions, with monthly payments amounting to 80 percent of a worker’s final salary compared with an average of 55 percent for all of Europe.

Publication Date: 18 July 2021

Publication Site: The Local

These States Lead the Way on Pension Reform

Link: https://www.wsj.com/articles/these-states-lead-the-way-on-pension-reform-11624038916

Excerpt:

Arizona and Michigan have enacted more than a dozen substantive pension reform bills over the past five years. Credit-rating agencies and national retirement experts have cited Arizona’s public-safety pension reforms. Moody’s Investors Service gave Michigan’s teacher retirement reform a “credit positive” review because the state and participating local governments “will no longer carry the entire burden of investment performance risk for new employee pensions.”

Pension reform need not be partisan. After gaining input and buy-in from unions for police officers, firefighters and other public employees, New Mexico Gov. Michelle Lujan Grisham, a Democrat, overhauled her state’s public-employee pension plan for workers who aren’t teachers. “We must make changes now—the alternative is to saddle New Mexicans with unacceptable risk,” Ms. Grisham said, urging fellow Democrats to pass reforms. In 2018, Colorado legislators bridged their differences in a divided government to pass comprehensive reforms that increased employee and employer contributions, reduced cost-of-living adjustments, raised the retirement age, and expanded the use of defined-contribution plans for future employees to address the chronic structural underfunding of the state’s main public pension system.

Author(s): Leonard Gilroy, Steven Gassenberger

Publication Date: 18 June 2021

Publication Site: WSJ

Op-ed: Illinois pension reform: Arizona provides a model worth another look

Link: https://www.chicagotribune.com/opinion/commentary/ct-opinion-illinois-pension-reform-arizona-20210525-eb5z573ajbfdlhemyj25yij22i-story.html

Excerpt:

Which is why every politician and every voter in Illinois ought to know how Arizona managed its 2016 reform of the 48% funded Public Safety Personnel Retirement System, which had a cost-of-living adjustment calculation that everyone agreed was broken, including the unions themselves. But Arizona shares with Illinois a constitutional protection against pension changes, specifically stating that “public retirement systems shall not be diminished or impaired.”

So how did they implement this change? In a two-step process, the legislature passed reform legislation and then placed on the ballot a constitutional amendment which inserted a new clause into the state constitution: “Public retirement systems shall not be diminished or impaired, except that certain adjustments to the public safety personnel retirement system may be made as provided in Senate Bill 1428, as enacted by the fifty-second legislature, second regular session.”

This meant that the citizens of Arizona could vote on this pension change without having to worry about whether they were authorizing any unknown future changes to pensions that they might not have wanted.

Author(s): Elizabeth Bauer

Publication Date: 25 May 2021

Publication Site: Chicago Tribune

Pension plan conversion a hot topic at the end of the ND Legislative session

Link: https://news.prairiepublic.org/post/pension-plan-conversion-hot-topic-end-nd-legislative-session

Excerpt:

A bill to change the pension plan for public employees will be one of the last measures the Legislature will consider.

It would affect people hired after January first, 2023.

Right now it’s a “defined benefit” plan. The bill would make it a “defined contribution” plan.

The current system has an unfunded liability of $1.4 billion. And the proposal would put money toward the current plan over several years to pay that down. Supporters say people who are on the defined benefit plan would have an option to convert to a defined contribution plan, but that would not be mandated.

Author(s): Dave Thompson

Publication Date: 25 April 2021

Publication Site: Prairie Public News

Editorial: Don’t further punish Florida state, local government retirees

Link: https://www.palmbeachpost.com/story/opinion/editorials/2021/04/25/editorial-dont-further-punish-florida-state-local-government-retirees/7331804002/

Excerpt:

A closer look at the FRS shows that there is no problem to be fixed, leaving SB 84 little more than a vehicle to divert millions that would appreciate over time into alternative — and riskier — investment funds managed by Wall Street firms friendly to Republican politicians.

The Senate’s consternation over Florida’s retirement program might surprise people who actually know something about it. The state’s pension program still has a AAA credit rating and a very manageable liability relative to the size of Florida’s economy. Its funded ratio sits among the nation’s best. Its sizeable returns on investment pay the bulk of retirement benefits.

“I would say overall that we’re in a reasonably good place, and we’re heading in the right direction,” said Ash Williams, executive director and chief investment officer for the State Board of Administration, the body responsible for managing the state’s defined contribution program.

Author(s): Editorial board

Publication Date: 25 April 2021

Publication Site: Palm Beach Post

Chile’s Pinera counters opposition pensions withdrawal bill with own initiative

Link: https://www.nasdaq.com/articles/chiles-pinera-counters-opposition-pensions-withdrawal-bill-with-own-initiative-2021-04-25

Excerpt:

Chilean President Sebastian Pinera on Sunday announced the government will launch its own bill to allow citizens to draw more from their private pensions in a last-ditch attempt to kill off a similar move led by the opposition.

Pinera said his proposed rival bill would be subject to means-tested taxation and would allow for the withdrawn funds to be gradually repaid through state and employer contributions.

The president said his initiative was a better option than the opposition’s bill, which the government says would leave millions of future pensioners with little to no savings.

Author(s): Aislinn Laing

Publication Date: 25 April 2021

Publication Site: NASDAQ

China’s young and old rail against raising retirement age

Link: https://asia.nikkei.com/Spotlight/Society/China-s-young-and-old-rail-against-raising-retirement-age

Excerpt:

The retirement age for employees in the public sector and at state-owned enterprises is set at 60 for men, 55 for female office workers and 50 for female blue-collar workers. This has remained unchanged since around the time of the founding of the People’s Republic of China in 1949, even as life expectancy has risen to more than 80 in urban areas.

The government work report presented to the National People’s Congress in March stated that “the statutory retirement age will be raised in a phased manner” as part of the new five-year plan for 2021 through 2025.

Beijing sees this as necessary to alleviate pressure on the social safety net and head off a labor shortage that could set it back in its power struggle with Washington. But resistance is strong from young graduates concerned about the impact on their career prospects as well as from grandparents expected to care for grand children after retirement. 

Author(s): Iori Kawate

Publication Date: 4 April 2021

Publication Site: Nikkei Asia

Bill Reintroduced to Shore Up Social Security, Medicare

Link: https://www.thinkadvisor.com/2021/04/15/bill-reintroduced-to-shore-up-social-security-medicare/

Excerpt:

A bipartisan group of lawmakers reintroduced Thursday legislation to shore up the Social Security and Medicare Trust Funds.

The Time to Rescue United States Trusts, or TRUST Act, would establish bipartisan, bicameral commissions to address the long-term solvency of major trust funds.

….

The Congressional Budget Office projects the Highway Trust Fund will be insolvent by 2022, the Medicare Hospital Insurance Trust Fund in 2026, the Social Security retirement fund in 2032, and Social Security Disability Insurance in 2035.

Author(s): Melanie Waddell

Publication Date: 15 April 2021

Publication Site: Think Advisor