Social Security Cuts Devastate Older Women!

By Kathie Piccagli, OWL National Board Member

I am coming increasingly to see the attack on Social Security as an attack on women. Instead of recognizing the financial restrictions women have faced and valuing the countless unpaid contributions to society made by women, the Debt Reduction Commission is expected to try to cut back on the program that enables women, particularly, to survive.

Women reach Social Security age with fewer resources than men. There are a number of reasons this is true. First, they make less than men for comparable work . It is estimated that over a lifetime, the wage disparity adds up to approximately $400,000. Second, they have often taken time out of the workforce to raise families and to care for parents and other relatives. Women are usually the ones that provide unpaid supports for families, and this time out of the workforce has consequences in terms of pay, advancement, and even the kinds of jobs they can get. Third, they more frequently than men do not have pensions, because of the positions they’re in, in working years.

So women enter “retirement” with fewer resources. As OWL says, “you can’t save what you didn’t earn”. Women have fewer other resources, and, thus, are more dependent on Social Security. The three-legged stool concept of retirement income (Social Security, pensions, savings.) is particularly unrealistic for women. As they age (and women live longer than men), meager resources, such as savings, are depleted. At 62, women are 57% of social security beneficiaries. By 85, they make up 69% of beneficiaries.

Even though women have fewer other resources, they receive less social security than men. On average, women get $2000 less annually than men. The average annual payout for men is somewhere around $13,500; the average payout for women is around $11,500. Women have fewer other financial supports, and lower social security payments at the same time.

It is imperative for women that social security be continued and strengthened. Women over 65 depend on social security for almost half their income. Over 85, that figure increases substantially. Half of women recipients are kept out of poverty by social security.

We MUST keep hammering this point home. Women need social security. The social security program may not compensate for years of unequal pay or years out of the workforce for caregiving, but it enables most women to survive. Social Security is some small recognition of the value women have contributed. A just society needs to look more at how the system can be strengthened in light of women’s circumstances. Women need progress, not regression.

(I got to talk about some of these issues last week, on the radio: HYPERLINK http://kpfa.org/archive/id/63157 - about 10 minutes into the program. Check it out!)

RAISING SOCIAL SECURITY RETIREMENT AGE: A BIG BROTHER “REFORM” THAT REDUCES BENEFITS, WHILE INCREASING RISKS – QUITE UNECESSARILY

By Joan and Merton Bernstein

It takes colossal gall to propose, during a period of near-record unemployment, forcing older people to work longer by cutting their Social Security benefits and calling that “reform.” Yet that is precisely what Alice Rivlin, one of President Obama’s appointees to his Commission on Fiscal Responsibility and others propose. Their mantra is: we are all living longer and so should work longer. Advocates of this “reform” don’t also urges measures to assure job availabilioty. Nor do they proposes like limitations on private plans subsidized with employer tax breaks. Nor do they advocate banning employer offers to induce employees to retire early, offers often accompanied by threat of layoffs if “voluntary” acceptances prove insufficient.

“Reformers” attempt to neutralize senior opposition to these and other proposals to cut Social Security benefits with assurances that such changes will exempt those already retired or those aged 55, sometimes 57, on other occasions age 60, the different numbers used by former Senator Alan Simpson, President Obama’s appointee commission co-chair. Mr. Simpson at a commission meeting shrugged off his imprecision by explaining, “I’m not a numbers man.” The promised exemption cannot survive once the tens of millions marked for the benefit reductions realize they would be bilked.

But an accomplished numbers man, Jeffrey Liebman, President Obama’s Deputy Director of the Office of Management and Budget (OMB) collaborated on a 2005 “Nonpartisan Social Security Reform Plan” that advocated “Benefit cuts” through [rejiggering the benefit formula and]….”an increase in retirement age.” Raising the age at which full benefits become payable also reduces benefits that become payable thereafter at any other age.

In addition, they proposed raising the earliest eligibility age [EEA] from current age 62 to age 65. Liebman and his colleagues asserted that raising the EEA does not reduce overall program payout because a deferred benefit increment boosts benefits for each year of delay. But, the three omitted years are lost to those who die before age 65. It is no answer that surviving family members spouse would draw benefits – because they would be lower than the husband/wife combined benefit and for people dying at ages 62-64 surviving children would be uncommon. Shorter-lived program participants, disproportionately low earners, would get a lower return for their long-term work and program payroll tax contributions than under current arrangements.

Liebman and collaborators assert that boosting the early eligibility age “is likely to have positive labor market effects…encouraging people to work longer…because we want to protect individuals who might shortsightedly retire too early if given access to their Social Security benefits at too young an age.” They also refer to “myopic individuals who claim benefits too soon.” In other words, big brother knows best.

Such advocates mistakenly assume that personal choice determines the timing of applications for Social Security benefits. In the real world, technological change, surging imports or other competition, plant, office or store shutdowns, layoffs, an individual’s health, the health of one’s partner or parent, the absence of local or regional job prospects often force that determination.

In the real world, labor force participation by older people has steadily increased since 1994. Past age 65, a major determinant is extensive education. That argues for improving opportunities for education and training.

Beyond that, the presence of a pension plan than Social Security, more often available to high-earning white men, can be a major factor facilitating retirement. Some employers seeking to trim their work force provide extra benefits from retirement as early as age 55 to the onset of Social Security payments. In yet other circumstance, applicants have been out of work prior to the age of earliest eligibility.

Plans like the self-styled non-Partisan proposal offer no amelioration of dire circumstances. Rather, as Candidate Obama noted, the ownership society really means “you’re on your own.”

Advocates of delayed retirement assert that they seek to provide incentives for people to choose continued employment over Social Security. But it is cruel to “induce” such a choice when realistically many cannot choose work. Further, Social Security is already chock full of such incentives for those who can choose. Continued work produces higher benefits by virtue of a deferred retirement credit for each year of delay. Moreover, Medicare is unavailable until age 65. Yet the great majority of program participants commence Social Security before age 65, most do so by age 62 ½. We should pay attention to that conduct and not, as Jeffery Liebman and his cohorts urge, adopt a policy that eliminate options that fit personal circumstances best known by those living them.

The proposal would divert substantial funds now used to pay for assured benefits and place them in private accounts – the very device President Bush proposed for privatizing Social Security. Such accounts incur additional administrative costs and risks that the investments will fail, as they did so disastrously in the recent past.

Indeed, we should improve Social Security’s protections and benefits. We can afford Social Security and assure long-term solvency with only slight changes, for example the very revenue improvement that Candidate Obama urged – raising the upper limit on Social Security taxable earnings. And we should extend the Medicare’s coverage below age 65, thereby providing both necessary protections and achieving savings through the efficiencies and economies that Medicare constantly produces.

SOCIAL SECURITY “REFORM” DOESN’T PROTECT THE YOUNG, HURTS US ALL

By Joan and Merton Bernstein

Social Security “reform” advocates like former Senator Alan Simpson claim they will shield young people from future tax burdens. Simultaneously they assure seniors that they would be exempt from benefit reductions. If that were true, only benefits to those below age 55 or 57 or 60 (Simpson uses all three) would be cut. But then, the rules of the game under which most people have been working and contributing for decades would change. The budget hawks are whispering bogus sweet nothings.

The most touted “reforms” would: reduce benefits outright, raise retirement age (also lowering benefits) and trim COLA (ditto). In other words, “reform” would protect against future tax increases by reducing most participants’ benefits. Once people realize that, the promised exemption for seniors will most likely evaporate. So far, the media, diverted by Senator Simpson’s cornpone expostulations, do not report these underlying realities. Senator Simpson is not a Tea Party loudmouth; he’s President Obama’s pick to co-chair the new Committee on Fiscal Responsibility. Co-chair Erskine Bowles’ assurance to a banker’s convention that “We’ll mess with Social Security”, drew sparse media attention. Corn pone or boring prose, their plans will hurt – everyone.

Recently on 60 Minutes, Senator Simpson described Social Security recipients as “people who live in gated communities and drive their Lexus to” dine out. In the real world, after the meltdown of stock market, pension plans, 401(k) s, IRAs, and home value, program beneficiaries, including over 3 million children, will depend more heavily than ever on Social Security’s modest benefits. This year retiree benefits average $1,168 a month (many get less); $13,016 a year is not Lexusland, its penny pinching territory. On average, women earn less, draw lower benefits and less frequently receive pensions than men, making their Social Security benefits especially crucial.

Raising normal retirement age would reduce benefits for those retiring thereafter. No one can justify moving the goal posts that way for millions who have already contributed to the program for decades.

The “reformers” argue that because we live longer, we should work longer. That ignores people worked out by hard jobs. And the “reformers” offer no measures to assure available jobs, nor measures to curb the inducement for employers to minimize employing older people because their health insurance costs more. Indeed, many employers seeking to reduce costs offer early retirement inducements to employees, often spiced with warnings that, if too few “voluntarily” elect retirement, layoffs will ensue. While some “experts” favor raising retirement age, the prospects of job loss and lifetime benefit reductions chill most everyone else.

Some urge reducing COLA, claiming that it overstates inflation. In reality, the current formula catches up to past prices, not current ones, and so chronically trails rising prices. And, its formula averages medical care costs, thereby understating the higher health care costs of older people.

Federal Reserve chairman Ben Bernanke explained the budget hawks’ focus on Social Security “because, to quote bank robber Willy Sutton, that’s where the money is.” “The money” is already over $2.4 trillion of reserves, accumulated from payroll taxes and interest the U.S. Treasury owes for borrowing from Social Security to pay other government expenditures. The deficit causing so much alarm stems largely from the Bush Administration’s borrow-and-spend policies, the financial meltdown resulting from the burst real estate bubble, the stimulus measures they made necessary, the Bush tax cuts, two major foreign wars and long-term tax breaks that go mainly to the wealthy. In contrast, Social Security pays its way, causing not one dime of deficit.

Many believe that Social Security is unsustainable because, with Baby Boomers retiring, the beneficiary population will grow faster than the working population, resulting, they fear, in too few young people to support them. This oversimplification simply ignores that increasing the employee and employer FICA tax rate by one percentage of payroll each would generate 75-year actuarial balance. Living standards would rise because, same projections show, incomes will rise more than those modest contribution increases. That outcome results from improving productivity – the greater output of goods and services by each person working, generating more to share.

We don’t hear that message or the deficit-reducing potential of Candidate Obama’s popular proposal to raise the cap on income subject to the payroll tax. Rather the “reformers” and media warn that without benefit cuts and/or higher retirement age we face national bankruptcy, that we must cut benefits to persuade foreign investors to buy U.S. Treasury bonds. In reality, foreign investors are flocking to buy Treasury issues, the ones so often derided by “reformers” as worthless iou’s, despite the hawks’ cries of “wolf.”

Cutting Social Security beneficiary purchasing power by tens of billions would damage most of us, including the legions of merchants beneficiaries patronize. Those businesses employ countless others, whose wages go to purchase the goods and services of yet other employers. The famed Samuelson and Nordhaus describe this “multiplier effect,” as “an endless chain of secondary consumption respending.”

Cutting Social Security benefits is bad for beneficiaries, bad for business, bad for the economy.

When did “older” become a bad word?

We at OWL are often told that we should get a new name. In 1980 when OWL was founded, it was called The Older Women’s League. As years passed, the name was changed to OWL, the voice of midlife and older women. But, even with that change, women objected to being called older – lots of women, and not only those in their 40s, but also those in their 50s, 60s, and 70s.

When did we decide we didn’t want to look good, we wanted to look young? Why would we spend money and risk infection to stretch a wrinkle off our faces? Why do we want to deny the years we have lived? Who has made us ashamed?

I am reminded of a society that convinced African-Americans that their hair should be straight and their skin should be lighter to be attractive. Or convinced gays and lesbians to be ashamed to come out of the closet.

It is time we pushed back. Older women need the equivalent of a “Black is Beautiful” campaign or a Gay Pride Day. It is time 50, 60, and 70 year-old women stood up and said, “Take a look. This is what “older” looks like and I like it!” No more pretending we are something we are not. No more trying to go back in time to the “good-young-days” which probably weren’t that great anyway.

Fifty is older! Face it. There is nothing wrong with being older. In fact there is a lot to say for it. You have probably accomplished quite a bit through your work, raising a family, helping your community, etc. You have collected experiences that have made you wiser, whether you acknowledge it or not. And you probably have a better sense of what is important to you. All this is because you are OLDER.

But changing our perceptions of being “older” is not something we can do alone nor is it just an individual decision. We are all affected by societal images and our culture. For older women to be free to say we are older we need to join together, stand up to the media, come out together, and show our pride in who we are.

You’ve got to have Guts

By Ellen Bruce, President Emerita, OWL

On Tuesday, President Obama signed into law a bill which will extend coverage to 31 million uninsured people by 2014. It is far from perfect but there is much to like in this bill – the elimination of gender rating and pre-existing condition exclusions, the expansion of Medicaid to more low-income people, the eventual elimination of the prescription drug coverage “doughnut hole”, and some much needed cost-savings.

I find it particularly satisfying to note that the two leaders with the guts to push for the vote in the House were Speaker Nancy Pelosi and President Barack Obama. These two people were apparently driven more by the desire to provide health care coverage to more Americans than by the fear of failure.

After a year of dilly-dallying, our elected officials in Washington, DC finally got serious. I have no doubt that, had the bill not passed or at least been brought up for a vote, we would be waiting another twenty years before the topic of universal coverage would be brought up again.

The opponents of the bill are vowing to repeal it. The fight isn’t over. The public campaign to explain the bill to the voters has to continue. The opponents would have us believe we would be better off with the status quo, but there is no status quo. Costs are rising and the numbers of uninsured are rising. The suffering of people who lack health care coverage when they are sick and the burden of rising costs on businesses and individuals can’t be ignored.

Doing nothing would be putting our heads in the sand. President Obama and Speaker Pelosi showed us that they have the guts to shape an uncertain future. Now it is our turn to show that we have the guts to make it work.

Reflections on Gray Hair

My very dark hair started turning gray when I was 16. The bright “silver” strains would pop-up and refuse to lie quietly. It didn’t bother me. By age 35 my hair was officially salt and pepper. People would tell me how beautiful it was. My face was still young enough to make my hair look startlingly and I loved it. But by the time I was 50 my hair was decidedly gray and it made my rapidly aging face look old. Now I am 60 and no one thinks my hair doesn’t match my face, body, or age. Indeed I look like someone who should have gray hair. I look like a grandmother. (By the way, I am not.)

Looking older doesn’t bother me at all as I never looked that great when I was young. What is interesting, however, is that people treat me differently. On the bright side men offer to put my bag in the overhead bin on airplanes and take it down. (I think they are afraid it will fall on them if I try to do it.) Sometimes someone will offer me a seat on a crowded subway. I used to refuse these gracious offers but now, more often than not, I will accept them. I actually don’t need the help (I always try to pack lightly) but I appreciate people’s understanding that life is better for everyone if we support each other.

I treasure my independence as much as the next woman, but I also like to help people and suspect that others do too. The person offering the seat probably does have stronger legs and sometimes the bag is a bit too heavy for me. Our society will work better if we all are used to giving and receiving help.

On my last flight we were stuck on the tarmac for 3 ½ hours. Everyone was getting a bit edgy with crying children and missed flights. I found myself sitting with 20-30 year olds who were understandable impatient, but I felt quite calm, talking about other flights with screaming kids (my own), missed connections, and a desire to be in a bar. At the end of the flight, the man in the next seat to me commented that it was a horrible flight but that I had made it bearable. We all help each other in the ways we can.

I am learning to except that I both look older and am older. That people see me in way that I don’t see myself. It startles me to look in the mirror but I am learning what is meant by aging gracefully – appreciating people’s help and offering help in return. As we get very old and frail, we may not see how we help other people -- but the unexpected smile, the decision not to complain when everyone knows you have so much to complain about -- those things are gifts to the people who care about us.

--Ellen Bruce, President Emerita, OWL

Mary Gardiner Jones

(Mary Gardiner Jones died on December 23, 2009, she was on the OWL Board of Directors from 1988-1992)

Mary’s death is a great loss, but her life was an enormous gift to all who were touched by her. She was a brave advocate for justice who was stalwart in the face of injustice. She worked prodigiously to right wrongs, and to smooth the path for persons who were disadvantaged. She was generous, compassionate, brilliant and stubbornly determined.

It was my honor to encourage Mary to run for election to the Board of OWL (Older Women’s League) on which she served with conviction. Among her contributions was her dedication to promoting a more diversified membership. She initiated a survey to help the Board understand the unique problems of older women who were Black or Latino.

I admired Mary’s knowledge, breadth of experience and energy. I loved Mary for her warmth, her courage in the face of opposition, her insights on the need for change and her continuing push for self understanding. She was my friend.

-- Lou Glasse (Past President of OWL)

Her full obituary is here: http://charles-watkins.com/mary/obit.htm