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Political Extremism in Congress is Stifling Efforts to Improve Social Security and Medicare

2013-08-15_shaheen_social_securityYesterday, about 60 people gathered in the Dover Public Library to celebrate the 78th anniversary of Social Security.

Special guests included NH Senator Jeanne Shaheen and Max Richtman, President of the National Committee to Preserve Social Security and Medicare.

Both speakers emphasized the need to take Social Security out of the federal budget debate.  “Social Security has a $2.7 trillion surplus,” Richtman observed.  “It is not contributing to the federal deficit.”

Shaheen was frank about the situation in Washington right now, describing the political polarization and its effects.  She explained how a minority of extremists has kept the Senate from appointing members to a conference committee on the federal budget – essentially blocking Congress from passing a bill that would fund the federal government during the fiscal year that starts in six weeks.  She said Florida Sen. Marco Rubio, who is expected to run for President in 2016, had single-handedly blocked the appointment of conference committee members on the last day before the Senate left for its August recess.

2013-08-15_shaheen_social_security3Shaheen said she understands that many seniors have a hard time making ends meet on their Social Security benefits, and said she supports raising benefits “in principle”.  “We need to have that conversation in Washington,” she said.  “But that’s not going to happen unless the partisan environment changes.”

Both speakers supported the idea of a special commission to look at the long-term future of the Social Security program, similar to the “Bipartisan Commission” that was appointed by President Ronald Reagan. “Back in the 1980s, there were only four months of solvency left,” Richtman recalled.  “Now, even without any changes, Social Security will remain solvent at least through 2033 – possibly longer, if the economy improves.”

Both speakers also endorsed the idea of raising the cap on earnings that are subject to the Social Security tax.  Right now, only the first $113,700 of an individual’s earnings are subject to Social Security taxes.

Richtman described how increased economic inequality has affected program revenues.  Historically, between 91% and 92% of all wages paid in the United States had been subject to the Social Security tax; but now, only about 81% of wages are covered by the tax.  As the middle class has lost ground, Social Security has lost revenues.

Both speakers also discussed a bill sponsored by Sen. Shaheen, which would allow the Medicare program to negotiate with pharmaceutical companies regarding drug prices.

When Medicare Part D was enacted in 2003, Congress specifically prohibited Medicare from negotiating with drug manufacturers for group discounts.  “I wonder who was in the room when that piece of the bill was drafted?” Richtman asked, and the audience laughed.

Economists have estimated that Medicare could save between $50 billion and $100 billion a year in prescription drug costs by negotiating prices.  The Veterans Administration, which does negotiate drug costs, pays an average of 58% less than Medicare providers for the most-commonly prescribed medications.

In the current partisan environment, GovTrack.us gives the bill a zero percent chance of passage.

Yesterday’s “birthday celebration” was sponsored by the New Hampshire Alliance for Retired Americans, the Granite State Organizing Project, New Hampshire Citizens Alliance and the National Committee to Preserve Social Security and Medicare.

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About Liz Iacobucci

Liz Iacobucci is the former Public Information Officer for the State Employees’ Association of New Hampshire, SEIU Local 1984. Over the past three decades, she has served in government at the federal, state and municipal levels; and she has worked for both Democratic and Republican politicians.
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