So I am very excited to finally present to you all the responses from the staff of the man who authored the Protecting & Preserving Social Security Act of 2013, S. 308:
Senator Mark Begich's (D. AK) took a lot of time answering the questions you submitted in my diary:
Here's a quick summary of what the Protecting and Preserving Social Security Act of 2013 entails:
The Protecting and Preserving Social Security Act of 2013 has been endorsed by both the Alaskan AARP and the Strengthen Social Security Coalition. Senator Begich introduced the bill in late 2012 to make the point that Social Security does not contribute to the deficit:
Here are the response to your questions about S. 308:
Can we get a little background on the Protecting & Preserving Social Security Act of 2013? What was it that influenced Senator Begich to draft such a bold plan to strengthen Social Security?
Sen. Begich has been an advocate of making balanced cuts and smart investments to address our nation’s growing deficit, but he has always said that since Social Security does not add a dime to the deficit, it shouldn’t be put on the chopping block when we talk about creating a smart and balanced budget for the country. Social Security is an essential guarantor of a healthy and dignified retirement for hard-working Americans who have paid into the system for their entire working lives. The “problem” of Social Security funding is easily solved with a commonsense approach, like the one Sen. Begich takes in his bill.
Your plan would seem to fill only MOST of the gap, what if anything do you propose for the REST of it? With a subtext being that under CBO scoring that remaining gap is suspiciously close to that which Chained-CPI would address.
There are lots of options for increasing Social Security's long term solvency, and I think we should look at them carefully. But, it's also important to remember that long-term solvency isn't an all-or-nothing deal. Sen. Begich’s bill would significantly extend solvency - importantly, with no benefit cuts - and this would give us ample time to consider how we can extend solvency even further without hurting the seniors, people with disabilities, and families who have lost breadwinners that rely on earned social security benefits.
Senator Bernie Sanders (I. VT) also proposed a plan to strengthen Social Security. It's the plan President Obama campaigned on in the 2008 election. Would you please outline the major differences between your bill and the Sanders bill? Why would you advocate that the Protecting and Preserving Social Security Act of 2013 is better plan to protect and preserve Social Security over Senator Sanders' plan?
Sen. Sanders and Sen. Begich share the same goal of long-term health and stability. The primary differences are in the tax base, benefits cap, and COLA formula. We both approach Social Security taxes from the basic position that everyone should pay the same rate on their income. Most Americans agree with this, and many assume that it’s already the case. It isn’t. For this year, the government will tax all income up to $113,700, the current cap, at the same flat rate of 12.4%. They will not tax a cent over that ceiling. This means the Social Security contribution of someone making $113,700 is the exact same dollar amount as millionaires and billionaires. It also means that the actual rate one pays into Social Security greatly decreases as one becomes wealthier. That isn’t a fair way to fund such an essential system.
Tax base: Sen. Begich’s bill would phase out that arbitrary ceiling over 7 years, to make a smooth adjustment to a fair tax. Each year, the government subjects an additional 14% of earnings above the current maximum to the 12.4% tax, with full equality in 2019. Senator Sanders’ approach immediately subjects income over $250,000 to the full 12.4% rate, which creates a temporary “donut hole” between $113,700 and $250,000. Since the current cap is adjusted each year for inflation, that hole will naturally close over time, eventually achieving full equal taxation.
Benefits cap: Sen. Begich’s feels that fairness in benefits is just as important as fairness in contributing. The bill will increase the maximum benefit, setting $250,000 as a new “bend point” for determining benefits, which we set to grow with the average wage index. Benefits would grow 3% between the current maximum benefit base and the new “bend point” of $250,000. Above that point, benefits would grow to replace .25% of all earnings. So, while the progressivity of Social Security benefits is strengthened, those who make more also will see increased monthly benefits in accordance with their increased contributions. Senator Sanders’ approach maintains the maximum benefit base at $250,000, which would also grow with the average wage index. But his plan doesn’t increase the benefits received by those who have paid Social Security tax because their incomes were over $250,000.
What would be the largest benefit check for the richest of Americans, under the AMIE formula, that your bill would create?
Your benefit will be determined by the formula, which includes AMIE. There is no hard cap on the maximum benefit.
Does your bill increase the average benefit?
Yes.
Does your bill increase the minimum benefit Check?
Yes.
People with much higher incomes often have options as to how their income is described for accounting purposes. Will your lifting of the cap calculations be affected if, for example, many high-income individuals suddenly start receiving a much more significant portion of their compensation as, say, stock dividends or capital gains rather than wage/salary income?
Sen. Begich’s bill focuses on fairness - if you pay more into the program, you will also receive a larger benefit. Equity has been a bedrock principle of the program from the start.
What do you predict will be the effect on the perception of legitimacy of Social Security when in a few years someone qualifies for benefits - in 2012 dollars - of $10,000 per month plus, of course, $5,000 for his/her non-working never-worked spouse?
Removing the artificial caps on contributions and benefits only increases the program’s legitimacy. Sen. Begich believes this will help maintain American’s confidence in the program.
And do you see a problem in the apparent trend that those receiving the lowest monthly benefits receive them for disproportionately fewer years as compared to those who receive the highest benefits? In other words, doesn't it seem possible that SS will be paying $1,200 a month to a lot of people for 50 or 60 months of post-retirement life while paying those $10k benefits for 300 or 360 months?
Sen. Begich’s plan expresses that, in general, the benefits calculation formula has served Americans well. Social Security is intended to supplement and provide a secure retirement, based on an individual's contribution to the system over his or her lifetime.
Your plan calls for adjusting cost-of-living increases with a Consumer Price Index specifically for the elderly which was created to more accurately measure the costs of goods and services seniors actually buy. What if one isn't elderly? What if one is a relatively young vet? The chained plan is very destructive to VA benefits if they are included because it compounds over a longer period of time (a very bad thing if one is disabled at 18 in Afghanistan).
You shouldn’t confuse CPI-E for Chained CPI. Sen. Begich and Rep. Deutch’s bills both use the CPI-E which recalculates the market basket of goods which would ultimately help an injured veteran since CPI-E gives extra weight to health expenses, which impact both the elderly and the disabled more than the rest of the population. The CPI-E would provide an appropriate added benefit for all disabled veterans, regardless of the age.
Senator Begich stated on the Senate floor in late 2012 that Social Security does not contribute to the deficit. Does he still stand by that statement?
Senator Begich still stands firmly by the statement that Social Security does not contribute to the deficit. It has a dedicated revenue stream and its own trust fund, which are solvent for decades.
Senator Begich hails from a red state with a large senior population. Senator Max Baucus hails from a rural red state with a high senior citizen population. Shouldn't the Democrats be making the 2014 midterms about winning over the Senior Citizen vote if they want to both win the House and keep their majority in the Senate?
A few months ago a study by the nonpartisan National Academy of Social Insurance confirmed that the overwhelming majority of Republicans and Democrats not only oppose cutting Social Security, but support lifting the cap on contributions and improving benefits – exactly what the Deutch-Begich plan does.
Currently, Social Security benefits are adjusted by the Consumer Price Index for workers. However, costs and spending patterns for seniors do not mirror those of the workforce. That is why the bill calls for adjusting cost-of-living increases with a Consumer Price Index specifically for the elderly which was created to more accurately measure the costs of goods and services seniors actually buy.
If the Democrats agree to something like the Chained CPI or cuts to programs like Social Security, wouldn't the Republicans make them own these cuts to Social Security? Wouldn't Karl Rove, the Koch Brothers and every other big right-wing Super PAC spend big on attack ads claiming that President Obama and the Democrats cut Social Security?
The Protecting and Preserving Social Security Act of 2013 doesn’t’ make cuts to Social Security. Sen. Begich likes to remind folks that Alaskans don’t like outsiders coming into their state and trying to tell them what’s right and what’s wrong and that’s a fact.
Can it be possible to reform Social Security without cutting benefits? We could start by streamlining the Social Security Administration operations, enhancing IT infrastructure, etc.
Increasing efficiency has to be a primary goal for all government programs, Social Security included, so he supports any efforts to streamline operations and enhance data infrastructure. It is important to note, however, that Social Security already boasts extremely low operating costs. And yes, it is possible to reform SS without cutting benefits – which is exactly what the Protecting and Preserving Social Security Act does.
Do you have a plan to advance this legislation though committee and beyond? If so, what are some details of how that plan will be effective?
Sen. Begich has a long record of reaching across the aisle to work with both Republicans and Democrats alike and would welcome the opportunity to work with any of his colleagues on this issue. Senators Sanders and Harkin have both put forward strong proposals with the same goal of strengthening Social Security and Sen. Begich will continue to work closely with them on Social Security.
Senator Dick Durbin (D. IL) recently called for a commission to look into Social Security. Senator Tom Harkin (D. IA) believes this commission will only come up with ways to proposing making cuts to Social Security. Do we really need another commission to see if Social Security contributes to the deficit?
More information and analysis can only be beneficial to decision-making. Several commissions in recent history have provided valuable insights into complex situations like the recent financial crisis. While Sen. Begich is firm that Social Security does not contribute to our deficit, a commission to discuss different methods of strengthening the program, like those included the Protecting & Preserving Social Security Act of 2013, would not necessarily be a bad thing.
I'd Like to thank Senator Begich's staff for taking the time to answer our questions. If you would like to get more info about S. 308, please call Begich's office:
I'd also like to thank Roger Fox, joannelon, Bruce Webb and Social Security Defenders group for putting this blogathon together and for all those who participated. And please sign Roger's petition telling President Obama to not agree to cuts to Social Security as part of a Grand Bargain: