Don’t leave our future in the hands of Congress

By Sondra L. Shapiro

If Medicare and Social Security are going to continue to provide a safety net for retirees long into our old age and that of future generations, I and my fellow boomers need to speak loudly, making enough noise for Washington to stand up, take notice and act on our behalf.

We can learn a thing or two from the older generation that has always spoken up. As they did recently during an AARP telephone town meeting where more than 7,000 seniors took the time out of a beautiful summer day to listen to and ask questions of Sen. John Kerry, D-Mass., and AARP policy experts. This is in addition to the more than 20,000 AARP members from Massachusetts who over the last month proved they weren’t pushovers by contacting members of the state’s Congressional delegation.

Their message: Medicare and Social Security should not be on the table during deficit reduction talks. Rather, Congress should reduce wasteful spending and eliminate some tax breaks for the wealthy and corporations. And, the health of Social Security and Medicare should be taken up separately.

The backdrop to the town meeting was the nation’s Aug. 2 legal cap on borrowing that had the president and the leadership of the Democratic and Republican parties attempting to eke out a deal to raise the $14.3 trillion debt ceiling. Without consensus, the government might default on its obligations with President Obama telling CBS News he couldn’t guarantee that Social Security checks would go out after Aug. 2 unless Congress agrees to increase the debt ceiling.

While Republicans pushed deficit reduction, President Obama countered that without also increasing taxes, the entire burden would fall on those who can least afford it including seniors and poor children. “And that’s not fair,” Obama said.

Many Democrats were unnerved by the president’s proposals during debt ceiling discussions to curb spending on Medicare and Medicaid and for a new inflation measure for Social Security. The Bay State’s senior senator said that he and his fellow Democrats would not consider entitlements as part of the negotiation.

“Under no circumstances should benefits be cut to try to balance the budget,” said Kerry during the town meeting.

“Social Security did not cause the deficit so it should not be used to cut the deficit,” agreed Rhonda Richards, AARP health policy expert, during the meeting.

Truer words were never spoken.

Or, perhaps I should say that equally insightful was a comment by Gayle from Ware, who while verbalizing frustration that Congress doesn’t seem to get that most retirees can barely make ends meet, asked Kerry, “Are they so away from the average person on the street that they don’t know what is happening?”

Gayle’s lament was typical of those participating in the town meeting. Many seniors offered up solutions, such as this one from Waltham’s Carol, who suggested that if Congress participated in Social Security, there would be more money in it to help strengthen the program.

Social Security is the primary source of income for nearly two-thirds of older American households, AARP’s Richards said during the meeting. “Nearly one-third of those households depend on Social Security benefits for nearly all of their income,” she said.

Though Kerry said Social Security is not the driving force of our “near-term deficits” and is not currently in crisis, he said it could be reformed to strengthen it for the rest of the century. And, he has no problem with those discussions “paralleling” deficit negotiations.

“Social Security is easy to fix. I am confident we can fix and strengthen it without cuts in benefits,” said Kerry. He added that the principals for Social Security reform should be:

•The need to return long-term solvency to strengthen Social Security for future generations;

•Opposition to any measure that privatizes or weakens the system;

•Opposition to any approach that slashes benefits for future generations;

•That no current beneficiary should see his or her benefits reduced;

•Strengthening retirement security for the most vulnerable, including low-income seniors; and

•Maintaining very robust disability and survivor benefits.

One of the measures being considered during the debt reduction talks is a change to the cost of living adjustment (COLA), which Richards said would result in the loss of thousands of dollars for today’s seniors and reduce the benefits for younger workers. “It would cut Social Security by $112 billion over the next 10 years,” she said.

The option is called Chained CPI, which would replace the traditional Consumer Price Index (CPI) now used to calculate cost of living adjustments. If Social Security adopted the measure, annual increases would be 0.3 percentage points smaller, according to Tom Nichols, AARP Social Security policy expert, who was also in attendance at the town meeting.

“It would have a cumulative affect. As you continue to get 0.3 percent less every year in terms of COLAs, over a 15-year span that results in about a 5 percent reduction in Social Security benefits. People on fixed incomes would be hurt. These are real dollars,” Nichols said.

Since average Social Security benefits are about $1,100 a month, or about $13,000 a year, this idea is penny wise and pound foolish. It was originally mentioned about nine years ago by a government agency as a way to figure out how consumers compensate when services or products rise in price. Logically, people either buy something less expensive or go without. Translation: If financially strapped retirees had even less money on which to live, they would likely scrimp on essentials — a phenomenon I have personally witnessed more times than I’d like. Not to mention such poverty would ultimately cost the government more.

Kerry was right when he admitted that tackling Medicare would be tougher. Richards denounced hastily devised proposals that came up during the deficit reduction debate that would impose arbitrary or harmful cuts into Medicare, shift additional costs onto beneficiaries, require people to pay more for their benefits through higher premiums or co-payments or add co-payments for services where there are currently none.

She offered that tackling waste and fraud right now would prudently trim costs. Adding that AARP supports bipartisan legislation called the Medicare & Medicaid FAST Act that would call for stronger penalties for Medicare fraud; curb improper payments and establish stronger fraud and waste prevention strategies; curb identity theft; expand the fraud identification and reporting work of the Senior Medicare Patrol; take steps to help states identify and prevent Medicaid overpayments; improve the sharing of fraud data across agencies and programs; and deploy cutting-edge technology to better identify and prevent fraud.

Consider that Medicare scams cost taxpayers from $60 billion to $90 billion each year — a crime that the current system seems incapable of policing or acting upon, according to newly released statistics by the Government Accountability Office (GAO).

While Social Security and Medicare — which is in more immediate danger — need reinforcing to serve future retirees, Americans deserve solutions resulting from methodical debate. Anyone who has a stake in the outcome should get more involved in the process.

That means demanding accountability from Washington lawmakers — like Sen. Scott Brown, R-Mass., who had a scheduling conflict during the town meeting. We shouldn’t squander this very critical time when the outcome affects our secure retirement. We must show up for the fight and demand an audience.