Bernie Sanders vs. Hillary Clinton on Social Security

Last year 24% of the federal budget was spent on Social Security, but less that 2% of the last Democratic debate was spent on this subject. The democratic candidates spent a total of 3 minutes during a two hour debate on the subject of Social Security (2 minutes, if you exclude Hillary's remarks about college tuition when she tried to avoid the moderator's question.) And only two candidates spoke on the issue — Hillary Clinton and Bernie Sanders. Then Anderson Cooper interrupted and changed the subject to immigration. (See the short video below).

Since the dawn of mankind (actually, since FDR's New Deal) the Republicans have always been against Social Security. And today's "moderate" Democrats (Third Way Centrists) have shown a willingness to "compromise" with Republicans on cuts to Social Security.

Not too long ago, many "moderate" Democrats (like Obama) were saying we would be able to reduce Social Security cost-of-living adjustments (COLAs) by using chained-CPI, which rises more slowly than regular CPI. That's because, it accounts for the way our elderly and poor switches to pet food when the price of "people food" rises — like switching from steak to chicken — until chicken costs too much, and then switching to "people" tuna, before eventually switching to "cat" tuna.

Progressive senators such as Elizabeth Warren and Bernie Sanders were always against using chained-CPI for Social Security. Bernie Sanders said it would be immoral. Elizabeth Warren was shocked that Obama would even consider it. But would a self-proclaimed "moderate" like Hillary Clinton (as President) pass Republican-sponsored legislation to use chained-CPI in the next budget deal?

ABOUT COLAS: The Bureau of Labor Statistics: The “CPI for All Urban Consumers” (CPI-U) represents the spending habits of about 80 percent of the population of the United States. The “CPI for Urban Wage Earners and Clerical Workers” (CPI-W) is a subset of the CPI-U population, and represents about 32 percent of the total U.S. population. In addition to the official CPI's for the CPI-U and CPI-W populations, the CPI calculates an experimental price index for Americans 62 years of age or older. The Bureau of Labor Statistics also plans the periodic release of updated estimates of the “Experimental Price Index for the Elderly” (CPI-E). Read how the CPI-E compares to other measures of inflation. Also, from the Washington Post: Meet CPI-E, the progressive alternative to chained CPI. Whereas, chained-CPI" is an alternative measurement for the “Consumer Price Index” (CPI) that considers product substitutions made by consumers and other changes in their spending habits. The chain-weighted CPI is therefore considered to be a more accurate inflation gauge, rather than the traditional fixed-weighted CPI — because rather than merely measuring periodic changes in the price of a fixed basket of goods, it accounts for the fact that consumers’ purchasing decisions change along with changes in prices.

Both Elizabeth Warren and Bernie Sanders also have rock solid plans to expand Social Security with sensible and fair ways to preserve and pay for it. Hillary on the other hand (as a "centrist" Democrat), wants to keep things just as they are — and only obliquely mentions increasing benefits for widowed and single women, but without ever saying exactly "how" she could achieve this. That's because Hillary has never had any real plan; but Senators Elizabeth Warren and Bernie Sanders do.

Although Federal and State government workers are getting increases in their wages (COLAs) next year, Social Security recipients, federal retirees and veterans are not. Elizabeth Warren recently introduced legislation to give seniors an emergency boost with a new bill that would end taxpayer subsidies for CEO retirement plans and give the money to seniors. It's called the Seniors and Veterans Emergency (SAVE) Benefits Act (a one-time payment equivalent to a Social Security benefits increase of 3.9%).

From Elizabeth Warren’s website (A PDF fact sheet about the bill is available here, and the text of bill is available here)

"Today, United States Senators Elizabeth Warren (D-Mass.), Barbara Mikulski (D-Md.), Patty Murray (D-Wash.), Charles E. Schumer (D-N.Y.), Bill Nelson (D-Fla.), Debbie Stabenow (D-Mich.), Maria Cantwell (D-Wash.), Bernie Sanders (I-Vt.), Sherrod Brown (D-Ohio), Bob Casey (D-Pa.), Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Kirsten Gillibrand (D-N.Y.), Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Chris Murphy (D-Conn.), Mazie K. Hirono (D-Hawai'i), Tammy Baldwin (D-Wis.), and Edward J. Markey (D-Mass.) introduced legislation to boost Social Security and other critical benefits for seniors, veterans and other Americans following last month's announcement that there will be a zero cost-of-living adjustment in 2016." [Please sign this petition from Bold Progressives and this petition from MoveOn if you agree with this bill.]

The Nation Magazine reports on Senator Elizabeth Warren's proposed bill:

Social Security recipients aren’t getting a cost-of-living adjustment because there was actually a 0.4 percent decrease in the government’s calculation of the cost of living from the third quarter of 2014 to the third quarter of 2015. The government uses a formula called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate Social Security benefits, and that index revealed a slight decrease in the cost of living, primarily because gasoline prices fell sharply in the past year.

A drop in gasoline prices largely benefits younger Americans, while seniors, who already pay twice the medical costs as the average American, saw inflation in healthcare prices along with traditional outlays like food and housing. In other words, an elderly grandmother who no longer drives but has seen her prescription prices go up is effectively being told by the government her benefit check won’t get a cost-of-living bump because gasoline is cheaper.

Many economists and advocates have called on the government to use a different price index for Social Security benefits that more accurately measures the cost of living for elderly Americans — the Bureau of Labor Statistics actually already tabulates this, called the CPI-E.

In the meantime, Senator Elizabeth Warren and 16 Democratic colleagues have stepped into the breach proposed a bill on Thursday that would provide seniors with a one-time emergency payment of 3.9 percent of annual benefits, which would average out to a $581 payment. The Senators estimate that amount could cover up to a year of out-of-pocket pharmaceutical costs for seniors that have largely fallen victim to odd government accounting quirks.

Why 3.9 percent? It’s not tied to any price index, but rather is the exact amount that CEO compensation at the top 350 US firms increased last year. The top 100 CEOs have a combined $4.9 billion saved for retirement, which equals the cumulative retirement savings of 116 million Americans ... Those CEO retirement accounts are explicitly subsidized by US taxpayers; the government provides CEOs with special tax-deferred retirement options and unlimited corporate deductions for executive “performance pay.” Almost half of the retirement assets held by Fortune 500 executives are in these tax-deferred plans, which are not available to most of the executive’s employees.

On Hillary Clinton's website, this is what she says about Social Security: She opposes reducing annual cost-of-living adjustments (presumably, she means she is against using chained-CPI to calculate lower COLAs, and wants to keep to the current CPI calculation — but she doesn't say she's for expanding COLAs with CPI-E (which considers the rising costs of healthcare and prescription drugs for the elderly.)

Hillary also doesn't distinguish herself when she says she opposes the Republican's efforts to raise the retirement age — because Bernie Sanders and most Democrats are also against raising the retirement age. 

FYI: The GOP wants to raise the age to 70 — even though the rich are living longer, while uneducated middle-aged whites are dying sooner. A new study shows: "White, middle-aged Americans are dying at a rising rate, a startling reversal that suggests addiction and mental-health issues are setting back decades of gains in longevity. Suicide, alcohol abuse, drug overdoses and chronic liver diseases largely drove the rise, which occurred between 1999 and 2013. Economic stress may play a role in substance abuse by middle-aged white people". [Washington Post: "A group of middle-aged whites in the U.S. is dying at a startling rate." -- Wall Street Journal: "The Death Rate is rising for middle-aged whites."]

Hillary also says:

"The poverty rate for widowed women 65 or older is nearly 90 percent higher than for other seniors—in part because when a spouse dies, families can face a steep benefit cut. For a two-earner couple, those benefit cuts can be as much as 50 percent. Hillary believes that we have to change that by reducing how much Social Security benefits drop when a spouse dies, so that the loss of a spouse doesn’t mean financial hardship or falling into poverty."

Here, Hillary may (or may not) be referring to the "file and suspend" rule for Social Security. But if she is, that rule will soon end with the recent passing of the new budget deal. Some critics says this was a form of "double-dipping", and it was added in the new budget deal (with support from "moderate" Democrats) as part of a compromise with the GOP. Here are some recent articles on the subject of the "file and suspend" strategy:

Slate: People weren’t just using the "file and suspend" strategy out of greed. They were using it to boost what are often less than adequate income replacement levels in retirement. It came about as part of legislation designed to encourage people in their 60s to remain part of the paid workforce by eliminating caps on what seniors could earn and still claim Social Security. The "file and suspend" strategy allows one member of a married couple to file for his or her Social Security benefits on reaching the full retirement age but then suspend them. This allowed the lower-earning partner—usually the wife—to take her spousal benefits when she turned 66, while the other member of the marital team—usually the husband—continued to work. When the file-and-suspend spouse turned 70, he would once again claim his benefits, this time for good. At that point, the other partner forgoes Social Security’s spousal benefit in favor of her now-larger personal monthly stipend. [* The new budget deal now disallows this; and Slate says this may be bad news for divorced women who are heading toward retirement.]

TIME: The "file and suspend" strategy calls for the higher-earning spouse to file for Social Security benefits at his or her full retirement age, but then suspend that filing while the benefit grows, until as late as 70. The lower-earning spouse can then claim spousal benefits at his or her own full retirement age, and later shift to their own full benefit, if it is larger. (A spousal benefit is half of the primary earner’s benefit.) The Center for Retirement Research has estimated that file-and-suspend adds $9.5 billion in annual benefit costs to the program. The White House targeted it for elimination in the budget plan issued last year, calling it an “aggressive” move used by high-income households to “manipulate” benefits. The budget deal approved by the House this week would clamp down on the practice for anyone who turns age 62 after calendar year 2015.

Angry Bear: "File and suspend" allows someone to get Social Security benefits prior to retiring, while not having to accept the lower benefits one gets if one retires at 62 or 66. One can get the higher benefits later. This will now not be allowed, so one must accept the lower benefits if one starts getting benefits early. This has only been possible for married couples with this involving one getting spousal benefits and then their own through some semi-complicated maneuvers that have been allowed since 2001."

On Hillary Clinton's website, she says she wants to "expand Social Security for those who need it most" — meaning, mostly for women, who over the course of their lifetime, earn less (on average) than men do — and so therefore, they usually receive a lower Social Security benefit amount. This is a very noble idea, but then again, Hillary Clinton doesn't explain how she could raise their benefit without also increasing taxes on what she defines as "the middle-class".

Senators Elizabeth Warren and Bernie Sanders are "gender-neutral", and want to expand Social Security for EVERYONE. At the last debate, Hillary Clinton hesitated on expanding Social Security; whereas Bernie Sanders, by contrast, has introduced a bill that would expand Social Security across the board and increase its solvency by lifting the cap on earnings subject to Social Security payroll taxes.

Hillary's website also says she opposes closing the "long-term shortfall" of Social Security funding on the backs of the middle class, whether through benefit cuts or tax increases. It should be noted that stagnant wages over the past 40 years has greatly contributed to the long-term funding of the Social Security trust fund (Via Dean Baker at the Center for Economic Policy Research per the 2015 Social Security trustees report).

Hillary says she wants to preserve the Social Security trust funds by asking the wealthiest to contribute more, including options to tax some of their income above the current Social Security cap, and taxing some of their income not currently taken into account by the Social Security system. She isn't very specific, but maybe she was indicating that she might be open to taxing capital gains, such as income earned from stock investments, which is currently exempt. But that would literally take an act of Congress to achieve, because an executive order wouldn't pass constitutional mustard.

But to be fair, any proposal to raise taxes or alter Social Security's funding and distribution would require a majority in Congress, not just a sitting president (whether it's a Democrat or a Republican). Currently both chambers of Congress (the House and the Senate) are dominated by Republicans. Electing a Democrat in 2016 (at best) could only maintain the status quo, (if they don't "compromise with the Republicans), unless of course, there were enough votes to override a presidential veto.

So no matter what promises a Democratic presidential candidate may make, it can't happen with the current Republican Congress. However, with a Republican Congress, any promise a Republican presidential candidate makes can easily become a reality (such as raising the retirement age, cutting benefits, paying all recipients a "flat benefit", privatizing Social Security, lowering annual COLAs with chained-CPI, etc.)

And for added contrast, here is where else Senator Bernie Sanders and Hillary might disagree, because unlike Hillary, Bernie doesn't define people making $250,000 a year as "middle-class" — because people who earn that much are in the top 1%. On the issues (from Bernie Sanders' website) he has introduced legislation to lift the $118,500 cap on Social Security taxes [those in the top 5%] so that everyone who makes over $250,000 a year pays the same percentage of their income into Social Security as the middle class and working families — which is everyone who $118,500 or less, because they pay this tax on 100% of their earnings; whereas members of Congress (who earn $174,000 a year), do not.

Bernie Sanders says his bill would not only extend the solvency of Social Security for the next 50 years, but also bring in enough revenue to expand benefits by an average of $65 a month; and he would increase cost-of-living-adjustments and lift more seniors out of poverty by increasing the minimum benefits paid to low-income seniors (which naturally, would also include women). During the first Democratic debate, the CNN moderator (Dana Bash) had asked Hillary Clinton about Bernie Sanders' plan to expand Social Security and to make Medicare available to all Americans:

BASH: Is that something that you would support? And if not, why not?

CLINTON: Well, I fully support Social Security. And the most important fight we’re going to have is defending it against continuing Republican efforts to privatize it.

BASH: Do you want to expand it?

CLINTON: I want to enhance the benefits for the poorest recipients of Social Security. We have a lot of women on Social Security, particularly widowed and single women who didn’t make a lot of money during their careers, and they are impoverished, and they need more help from the Social Security system. And I will focus — I will focus on helping those people who need it the most. And of course I’m going to defend Social Security. I’m going to look for ways to try to make sure it’s solvent into the future. And we also need to talk about health care at some time, because we agree on the goals, we just disagree on the means.

[Note: Hillary never says "how" she would help widowed and single women, or "how" she would make Social Security solvent in the future. She just said she's going to "look for ways" — whereas Senators Elizabeth Warren and Bernie Sanders have already found a way. Afterwards, Bernie Sanders responds to Hillary and offers his own plan.]

SANDERS: When the Republicans in the Congress and some Democrats were talking about cutting Social Security and benefits for disabled veterans, for the so-called chained-CPI, I founded a caucus called the Defending Social Security Caucus. My view is that when you have millions of seniors in this country trying to get by — and I don’t know how they do on $11,000, $12,000, $13,000 a year — you don’t cut Social Security, you expand it. And the way you expand it is by lifting the cap on taxable incomes so that you do away with the absurdity of a millionaire paying the same amount into the system as somebody making $118,000. You do that, Social Security is solvent until 2061 and you can expand benefits.

[Note: Neither Dana Bash nor Anderson Cooper followed up by asking Hillary Clinton what her opinion was of Bernie Sanders' plan, and if she agreed or disagreed. One would think that with this program making up such a large part of the budget and economy, a few more minutes would have been spent on this subject. But instead, Anderson Cooper immediately changed the subject to immigration.]

Hillary Clinton has promised not to raise taxes on the middle-class — but she is attempting to make false comparisons with Bernie Sanders, who has supported lifting the Social Security "cap" for people with incomes of $118,500 a year (in the top 5% income bracket) to $250,000 a year (in the top 1% income bracket). Someone should tell Hillary: $250,000 a year is NOT "middle-class" — and that the "median wage" is $24,000 a year. Bernie Sanders has a bill pending in Congress (that would mandate employers provide paid family leave time after a child is born) that would be funded by an increase in payroll taxes. Clinton has also spoken out forcefully for the concept of paid family leave, but has not embraced the particular measure because it violates a campaign pledge not to raise taxes on families making less than $250,000. But Bernie's plan is estimated to cost the average worker about $1.39 week. (That's a heck-of-a-lot cheaper than a babysitter or day-care center!) Clinton has said she is "willing to consider" an idea (but has not committed to) scrapping the income cap for Social Security taxes, as REAL progressive activists advocate.

P.S. Please sign this petition and this petition to support Senator Elizabeth Warren's plan to increase benefits for seniors. Thanks You.