Category Archives: Social Security

Demolition Days On End

The television talking heads are talking about today’s sound and fury from the White House as “Demolition Day;” as if every day the mullet-maned moron occupying the Oval Office hasn’t been doing this from day one.

What is buttressing my sanity for the moment is the fact that MMM had a 49.4% approval rating in Nevada as of January 2017 (38.9% disapproval) and dropped to an approval rating of 43.6% in September 2017 and a disapproval rating of 51.2% in the Silver State.  [CNBC]

Much more love from the Republican Congress and the President and Nevada’s going to find itself in a world of hurt.   Case in point:  If the Republicans get their way in the FY 2018 budget 56,044 Nevada families will lose food assistance as of 2023, and 52,613 will lose them as of 2027.   But wait, there’s even more fun … another grand idea in this budget fiasco is to shift $100 billion of SNAP costs to the states.  So, Nevada would have to come up with 10% of the costs by 2020 and this increases to 25% in 2023 and beyond. Just in case lower income, mostly working, families in Nevada aren’t punished enough the GOP plan says states will have more “flexibility” to cut benefit levels to “manage costs.”  Of course Nevada will have to figure out how to get lower income working families basic food items at the local groceries, at state expense.  In case someone’s thinking this makes economic sense (that tired old canard about welfare queens on food stamps with waste and fraud) the actual numbers indicate that for every $5.00 spent on food stamps $9.00 is generated in economic activity. [CBPP] [MJ]

Case in point: The FY 2018 budget calls for cuts in fire-fighting operations.  As if the fires in California weren’t headline news at the moment.  The IAFC isn’t happy  seeing an FY 2017 budget of $2,833,000 for wildland fire management cut to $2,495,058 in FY 2018; or cuts to State Fire Assistance from $78 million down to $69.4 million, and Volunteer Fire Assistance from $15 million to $11.6 million.  And, by the way, the FLAME program (pdf) funding (wildfire reserve suppression fund, large fires) would be eliminated in the GOP budget.  Supposedly, the FY 2018 would sustain current 10 year average costs for fire suppression. [ECO]  The word “supposedly” is used with some caution, because as we experience climate change effects, the cost of fire suppression can be reasonably expected to increase, with a coterminous effect on budgets.   Meanwhile, there’s the matter of expensive fires in Napa and Sonoma counties.

And, then there’s the not-so-small matter of FEMA:

“The president’s budget blueprint calls for FEMA’s budget for state and local grants to be cut by $667 million, saying that these grants are unauthorized or ineffective. The program it explicitly calls out as lacking congressional authorization is the Pre-Disaster Mitigation Grant Program, and a second proposed change would require all preparedness grants to be matched in part by non-federal funds. All of FEMA’s pre-disaster grants are meant to reduce federal spending after disasters, and according to the agency’s website, there’s evidence that $1 in mitigation spending saves $4 in later damages.”  [Newsweek]

There are two points to highlight in this paragraph.  First, the budget cuts are made to grants for disaster mitigation efforts, without saying why the grants are “ineffective,” and we should note that any program can be declared “ineffective” if the standards aren’t reasonable. Secondly, as in the case of food stamps, there’s an upfront economic benefit — for every $1 spent on mitigation we save $4 in subsequent damage costs.   Once more we have a grand example of being penny wise and pound foolish.

Nor are the Republicans keeping their promises not to mess with Social Security and Medicare.

“Not only would it (the FY 2018 budget) cut Medicaid by $1 trillion, it would also cut Medicare by more than $470 billion in order to pay for hundreds of billions in tax breaks to the wealthiest people and most profitable corporations in America. Further, the Republican tax plan this budget calls for would increase the federal deficit by $1.5 trillion over the next decade, which will likely pave the way for savage cuts to Social  Security.”  [SenDem]

Oh, and by the way… let’s sabotage the NAFTA talks, scrap the only treaty containing Iran’s arms aspirations (and tick off all the other European allies who signed on), send a signal to North Korea that our word’s not worth paper on which it’s written, let the health insurance market destabilize into chaos, and withdraw from UNESCO.

And here we sit, not a shining beacon on a hill, but a flickering flame bent to whatever winds happen to be blowing through the head of MMM in the White House.  Not only are programs and services in peril within our own state, but the nation and the world are facing similar dangers emanating from an unraveling White House.

Advertisements

Comments Off on Demolition Days On End

Filed under Economy, FEMA, Health Care, health insurance, Nevada, Nevada budget, Nevada economy, Nevada politics, Politics, public health, Republicans, Social Security, tax revenue, Taxation

Bits and Pieces: Misleading headlines, and other matters in Nevada Politics

Jig Saw Puzzle Sometimes the headline doesn’t quite fit the story. Here’s an example: “Millions in the red an Obamacare insurer has failed” compliments of the Las Vegas Review Journal.   You have to read a few paragraphs down to get the basics of the story.  In addition to poor administration and long repayment waiting periods, “the co-op made a critical mistake: Only Nevada allows enrollment in non-exchange plans outside of the federal sign-up period, which runs from Nov. 1 to Jan. 31. Most insurers require a 90-day wait to discourage people from going without a plan until they get sick, but the co-op started with no waiting period, then added a 30-day window in late 2014. That created a sicker — and pricier — member pool,..”  [LVRJ]  These aren’t issues with the Affordable Care Act, nor is this indicative of any flaws in the overall system. What this illustrates is that the reason most firms go under is poor administration and management.

Speaking of management:  Is Waste Management Inc. living up to the terms of the contract it signed with Washoe County?  The Reno Gazette Journal reports on a crucial point: “One central issue is whether Waste Management has fulfilled the requirement to build an Eco-Center in Reno to sort its single-stream recycling and provide other services to customers. The city allowed Waste Management to raise rates, in part, to finance the construction of the Eco-Center.”  Back in March, 2013, The RGJ reported that the Eco-Center was supposed to streamline recycling in the area, noting that there were still some “kinks” to be worked out. Evidently, the kinks are winning?

The Washoe County Democrats have a quiz for us.  How do you score on a test of Rep. Joe Heck’s statements on Medicare? Social Security? Immigration?  I’ll give you one – yes, he’s called Social Security a “pyramid scheme,” and called for it to be privatized.  By July 2012 he’d called the basic social safety net program a Pyramid Scheme at least four times. [NVDems]

One win for Solar Power:  Perhaps not a long term one, but for now the efforts of NV Energy Inc to slap down the solar power industry in Nevada have been thwarted in the short term. [LVSun]  The power company is all for solar, except: “NV Energy’s proposed plan would reduce the value of credits paid to consumers and add a new fees. In filings with the PUC, the company said that the current structure unfairly shifts costs to customers without solar. The rooftop solar industry expects that the utility-backed proposal would reduce the rate of adoption of solar power.”  Original NV Energy filing here (warning: slow loading PDF)  and here (warning: slow loading PDF).  There’s the Solar Energy’s proponent statement to the PUC August 18, 2015 which makes interesting reading – again a warning: slow loading PDF.

All this in time for the Valley Electric Association to build a 15 mega-watt solar project in the northern part of Pahrump. [PVT]

Comments Off on Bits and Pieces: Misleading headlines, and other matters in Nevada Politics

Filed under ecology, energy, energy policy, health insurance, Heck, Nevada energy, Nevada politics, Social Security

From Deep in the Dark Heart of Texas: GOP Scheme to Cut Social Security Foiled

Deep in the Dark Heart of Texas Representative Sam Johnson (R-TX3) had a great idea to find some offset money for the government to use for highway construction – or as the Congressman was pleased to say “fight crime and save taxpayer dollars.” [Johnson]  The idea is to cut Social Security benefits from those who have outstanding warrants for felonies, and superficially this might sound like a good idea. It isn’t a good idea and it was quashed when Senate Democrats put a spotlight on the notion and threatened to pull support from the Federal highway bill. [HuffPo]

Now why would someone go and crunch this crime fighting taxpayer dollar saving idea?

#1. It’s not like we’re paying benefits to Jack the Ripper: “Large numbers of those who will lose benefits had warrants routinely issued when they were unable to pay a fine or court fee or probation supervision fee. Eliminating what may be their only source of income does not help resolve these issues.”

And: “Many people never know that a warrant has been issued for them as warrants are often not served on the individual.”

And: “These warrants are often not easily resolved since many of those who lose benefits live far from the issuing jurisdiction.”  [JIA]

The aforementioned problems mean that the stage is set for the withdrawal of benefits from some elderly or disabled person who was in poverty in the first place (witness the unpaid fees or fines), who may not even know there is an outstanding warrant, and may not be able to resolve the warrant because it could have been issued years ago and miles away.

#2. The Social Security Administration’s gotten itself in trouble with the complexities of this situations before.  See: Martinez v. Astrue and Clark v. Astrue. [Proskauer]

The order is the culmination of more than five years of litigation in Clark v. Astrue – Docket No. 06-15521 (S.D.N.Y.) – a case brought against the U.S. Social Security Administration (SSA) challenging its practice of relying exclusively on outstanding probation and parole warrants as sufficient evidence that individuals are in fact violating a condition of probation or parole as a basis for denying them benefits. Rather than check the facts of a case, SSA merely matched warrant databases against its records. When it found a probation or parole warrant in the name of someone who was receiving benefits, SSA checked with law enforcement and, if the law enforcement agency was not actively pursuing the individual, SSA would cut off that individual’s benefits.

In March 2010, the U.S. Court of Appeals for the Second Circuit ruled that the agency’s practice of relying solely on outstanding probation or parole violation arrest warrants to suspend or deny benefits conflicted with the plain meaning of the Social Security Act. Under Judge Stein’s order, the SSA is enjoined from denying or suspending benefits in this manner and must reinstate all previously suspended benefits retroactive to the date the benefits were suspended. The SSA has until June 12, 2012, to submit a plan setting forth its anticipated time frames for implementing the terms of the order. […]

“The unlawful policy caused widespread suffering while it was in effect. Elaine Clark, one of the lead plaintiffs, had her benefits stopped in the beginning of 2006 because of a warrant from Santa Clara County, CA, where she had been sentenced to probation and ordered to pay restitution as a result of an embezzlement charge. During that time, she was diagnosed with end-stage renal disease on top of other ailments and was no longer able to work. Unable to get a kidney transplant in California, she returned to her hometown of Buffalo, NY, when she learned the waiting time there would be far less. Although she obtained the transplant, she was still in need of extensive medical care and unable to work. Her modest Social Security benefit was barely enough to pay the rent at the long-term care facility and not sufficient to pay the required restitution. Ms. Clark died in 2008 at the age of 65. All the while, law enforcement officials in California knew where she was and knew of her condition, and had no interest in pursuing her.” (emphasis added)

Information from the Social Security Administration concerning the cases and the settlement is as follows:

“If your Social Security, Supplemental Security Income (SSI), or Special Veterans Benefits (SVB) were suspended due to a felony arrest warrant, the Martinez settlement might offer you relief and reinstatement. On September 24, 2009, the United States District Court in the Northern District of California approved a nationwide class action settlement agreement in the case of Martinez v. Astrue. The Martinez settlement changes the types of felony arrest warrants that we will use to prohibit payment of Social Security, SSI, and Special Veterans benefits. This settlement does not apply to persons whose benefits we denied or stopped because of an arrest warrant due to a parole or probation violation.”

Thus, the SSA is already doing what the CUFF bill specified (proscribing benefits from those with parole and probation violations) and the remainder who would be affected are those individuals who are in that nebulous category of non-payment of fines and fees category.

#3. The amendment implies that Social Security benefits are paid from “taxpayers,” and in a sense they are, those benefits are paid by working people who paid for those benefits in payroll taxes, including those who have those outstanding warrants for non-payment of fines and fees.  Further, the amendment is a vehicle for moving payroll tax dollars out of Social Security and into general appropriations – and here I thought all along that the Republicans were all for “saving” Social Security?   The point was emphasized by an organization formed to protect the Social Security program:

“The National Committee to Preserve Social Security & Medicare hailed the decision to drop the provision. “Dropping the Social Security cuts from the Highway bill is the first encouraging sign we’ve seen from this Congress, when it comes to Social Security & Medicare, this year,” coalition spokeswoman Kim Wright said in an email. “We certainly hope they’ve finally realized using these programs as an ATM for everything else under the sun simple won’t fly with seniors who’ve paid into these programs their entire working lives.” [HuffPo]

It was a bad idea, but it’s not one which may stay out of sight and mind.  The CUFFS bill is part of the old “law and order” stable of increasingly outmoded nags hauled out for a periodic run by Republican jockeys.   It bears watching.

Comments Off on From Deep in the Dark Heart of Texas: GOP Scheme to Cut Social Security Foiled

Filed under Infrastructure, Social Security, Taxation

Great Retirement Scams: GOP pins hopes on Primerica Testimony?

GRANNY retirement As of 2013 the Census Bureau counts 13.7% of Nevada’s population as aged 65 or over.  The handy Plastic Brain tells us that amounts to 382,435 people.  Unfortunately, there’s a chunk of the 2,839,099 (2014) people in Nevada who have some silly and alarmingly self-serving ideas about how retirees should plan for those Sunset Years; and, more egregious ideas yet about how those under 65 should be planning for their retirement.  These would be the people in the “privatizer and opportunist” category. Let’s take a look at both. First, a quick review of the privatizers and Social Security (and by extension any public retirement program), and then a gander at the opportunists as exemplified by the unfortunate choice of champions brought to us by Senate Republicans.

The Great Scam

FALSE: “Social Security is Going Broke!”  Underpinning the Great GOP Retirement Scam shuffle is the notion that somehow Social Security “isn’t going to be there for young people…” and therefore younger Americans should pile their retirement funds into private sector wealth management schemes.  “But, but, but,” blubber the privatizers, “the Trustees Report and the CBO agree it will be b’b’b’..bankrupt by 2042 or 2052.” [CNNNo they didn’t.

They reported that in order to provide promised benefits for elderly people  the Social Security Administration will have to tap into the reserve fund – it is not – repeat not – going bankrupt. Nor, will those receiving benefits from the reserve funds live forever, thus at some point the system will stabilize. Tapping into the reserve fund – which was put in place to deal with the Baby Boomers – is not the same as “going bankrupt!”  There are some basic facts (of life) to deal with at this point.  The Census Bureau report, An Aging Nation, (2014) explains carefully: 

“In 2050, every age group is projected to be larger than it was in 2012. This is not the case between 2012 and 2030 or between 2030 and 2050. For instance, the number of men aged 48 to 58 and the number of women aged 47 to 58 in 2030 are projected to be smaller than those in the same age groups in 2012 (see Figure 2). This is because large cohorts of baby boomers were in these age groups in 2012, and smaller and younger cohorts will have replaced them by 2030. Similarly, the number of women aged 66 to 77 is projected to peak in 2030 and be smaller in 2050 than it was in 2030, as the smaller birth cohorts born in the late 1970s moves into these age groups.” [Census pdf]

A “smaller” cohort means that once the baby boomers die off, and they will do that because they are human beings, there will be less demand on the system for benefit payments.  That’s what the entire idea of the Trust Fund was based on, the knowledge that the system needed a “savings account” to get past the baby boomer generation.   “But, but, but..” sputter the privatizers, “there won’t be enough young people paying into they system..” Nonsense.  Take a look at this chart from the report on aging: (figure 2)

age structure us population chartSeriously, does anyone really think there are going to be more elderly retired people than younger workers in the foreseeable future?  If someone believes that then I guess I would try to sell them some scammy retirement savings plan!  I could also try to sell them an automatic kitchen gadget that “Cools your water in an instant! No Ice Cubes Required!”

FALSE: “Social Security won’t guarantee your retirement…”  this is right so far because Social Security was never meant to be an entire retirement program – it was meant to keep elderly people out of abject poverty.  However, the rest of the privatizers’ pitch gets more dicey, “therefore we should privatize the system and let people have a Choice…”  There’s a reason Social Security is called a Social Safety Net. It’s the safety net in case all else fails and an elderly person has little else to fall back on.  That we have a Social Security system to keep people from falling into an abyss of poverty doesn’t mean that people can’t choose to augment their retirement plans with pension plans, savings accounts, equity accounts, and all manner of other savings vehicles.  The privatizers would like for us to forget that we already have (and have had for decades) alternative savings plans for retirement!  The privatizers would be perfectly pleased to get all the money that’s paid into Social Security funneled into the hands of Wall Street traders… now there’s a thought that should lower one’s body temperature, or raise the blood pressure?

And now we get to the good part wherein the privatizers and scammers walk the halls of Congress to promote those alternative and supplemental retirement savings financial products.

retire savingsHowever, some of the plans are a dream for some and nightmares for others.  

The Smaller but Painful Scams

Consider:

“Sen. Elizabeth Warren (D-Mass.) on Tuesday embarrassed Primerica President Peter Schneider, who Senate Republicans had invited to testify against a new regulation designed to protect retirement savings from dodgy investment managers. The Obama administration estimates that Americans lose $17 billion a year from investment professionals who manage retirement accounts by prioritizing their own financial interests over those of their clients. It has proposed a simple solution: making that illegal.” [HuffPo]

Hmm, the Senate Republicans INVITED Primerica’s testimony against a fudiciary responsibility standard? And, what was Primerica testifying against?

“In February, the President directed the Department of Labor to move forward with a proposed rulemaking to require retirement advisers to abide by a “fiduciary” standard—putting their clients’ best interest before their own profits. And today, the Department of Labor is taking the next step toward making that a reality, by issuing a Notice of Proposed Rulemaking (NPRM) to require that best interest standard across a broader range of retirement advice to protect more investors.” [DoL] (emphasis added)

Thus, we could assume that the Senate Republicans are in favor of allowing retirement advisers to put their own profits AHEAD of consideration for their client’s best interests?  Okay, so what can happen when an investment adviser steers a client into territory which is not in the best interest of the client but really bolsters the firm’s bottom line?

“A system where firms can benefit from backdoor payments and hidden fees often buried in fine print if they talk responsible Americans into buying bad retirement investments—with high costs and low returns—instead of recommending quality investments isn’t fair. A White House Council of Economic Advisers analysis found that these conflicts of interest result in annual losses of about 1 percentage point for affected investors—or about $17 billion per year in total. To demonstrate how small differences can add up: A 1 percentage point lower return could reduce your savings by more than a quarter over 35 years. In other words, instead of a $10,000 retirement investment growing to more than $38,000 over that period after adjusting for inflation, it would be just over $27,500.” [DoL]

Actually there was more bad news from the Council of Economic Advisers in its report on the Effects of Conflicted Investment Advice on Retirement Savings (2015 pdf).   There’s this conclusion: “A retiree who receives conflicted advice when rolling over a 401(k) balance to an IRA at retirement will lose an estimated 12 percent of the value of his or her savings if drawn down over 30 years. If a retiree receiving conflicted advice takes withdrawals at the rate possible absent conflicted advice, his or her savings would run out more than 5 years earlier.”  And, if this weren’t bad enough, there’s another item: “The average IRA rollover for individuals 55 to 64 in 2012 was more than $100,000; losing 12 percent from conflicted advice has the same effect on feasible future withdrawals as if $12,000 was lost in the transfer.”

Thus, in general terms, retirees are losing an aggregate of some $17 billion from conflicted financial advice, losing a potential of five years worth of retirement savings value, and dropping 12% “in transfer” because of conflicted advice in the process.

And, to dispute this the Senate Republicans hauled in the CEO of Primerica? Oh, what a tangled web we weave when first we practice to deceive?

Let’s begin our Primerica Story in Florida in 2002 with a classic case of privatization:  

“Primerica’s legal battles stem from a change to Florida’s retirement system in 2002. It gave employees the option to switch from a traditional pension plan, in which they would receive lifetime benefits based on their salaries and years of service, or convert the value of their pension to a lump sum payment which they could invest in mutual funds and other securities offered through the state retirement system.”

Primerica told potential investors that they could put their pension money into an account which could (note Could) earn more than their pension benefits, and could be inherited by family members unlike standard pension benefits.   What Primerica sort of forgot to tell the state employee  investors was that the market could also go down. South. Pear-shaped. In the commode… And thus it did in 2007-2008.  By July 2013 Primerica was fighting off lawsuits in Florida and allocating $3.9 million to defend its claims in court cases and arbitrations. [Reuters]  As of January 2014 the amount set aside to settle various and sundry complaints against the company climbed to $9.3 million. [BfH]  The 2015 figure for fighting off the litigation was up to $15.4 million. [HuffPo]  And THIS was the company Senate Republicans thought would be a good source of testimony against the fiduciary responsibility rule?

So, what did the Senate Republicans get for their efforts to include Primerica’s CEO Peter Schneider on the witness list?

bamboozalah The Big Bambooza-a-lah began with Schneider’s written testimony:

“We are believers in educating the households we serve about fundamental financial concepts. Our investment education and philosophy is geared toward the needs of middle‐income households, who often are new or less experienced investors.  In that regard, we produce easy to understand educational pieces teaching fundamental investing concepts including the critical importance of taking the steps needed to start along the path of financial security.”

Uh, if your investment education process is “easy to understand” then why the escalating amount of funds the company is plowing into defending the itself  in some 238 cases?  When your defense fund increases by 295% in two years it’s pretty clear someone didn’t have a solid grip on “investment education” or “the fundamental investment concepts.”

Having wailed on about how Primerica was serving the Middle Class, a reference tossed in at just about every possible location in the testimony, Schneider got down to his real complaint “Guv’mint Regulations,” and the favored GOP buzzword, “burdensome.”

Those wonderful, admirable, Middle Class customers would be cheated of their opportunity to invest with Primerica because the rules for investment advice would be too “burdensome.”  Here comes the “Daze and Dizzy:”

“We draw this conclusion first and foremost because the Department’s expanded definition of fiduciary turns into a fiduciary act almost every conversation about an IRA that a financial professional might have. ERISA and the Internal Revenue Code prohibit fiduciaries from receiving commissions and other traditional forms of variable compensation in connection with a covered benefit plan such as an IRA unless what is known as a “prohibited transaction exemption” applies and provides relief.  Effectively, the DOL’s expanded definition of fiduciary makes an exemption from the prohibited transactions rules necessary to continue to effectively serve individuals investing in IRAs. Unfortunately, the exemption the Department has proposed to preserve the commission‐based services for IRAs – the Best Interest Contract Exemption (BIC) – is not operational.”

Translation: A conversation including investment advice for an IRA  would be covered unless there is an exemption, and the “best interest contract is not operational.”  We can take it that “not operational” means it won’t work.

This is followed by more “Daze and Dizzy” as Schneider attempts to explain, and at this point we need to parse the testimony carefully:

Instead, our primary concern is that the requirements and uncertainties of the BIC exemption are so complex and burdensome that the exemption is neither administratively nor operationally feasible. (1)  The trouble is that, from start to finish, the BIC exemption fails to offer certainty.  In operating our business, “certainty” with respect to regulatory compliance matters is critical because a failure to satisfy the proposed exemption may result in steep prohibited transaction penalties, including the forfeiture of compensation and excise taxes, as well as consumer lawsuits for breaches of contract, and potentially even class action lawsuits. (2)   Critically, the technical implementation of the exemption promises to be a substantial burden, and to cause a significant disruption of services to our clients, with no true added benefits in the way of investor protections. (3)

(1)Complex and burdensome,” could any phrase be more illustrative of any and all Republican complaints about consumer protection rules, product safety regulations, clean air and water standards?  This is standard GOP rhetoric, and no more probative because it is repetitive. Nor does this explain WHY the rule, and the exemption, would be a burden to a company intent on supervising its employees and representatives in such a way as to insure they properly represent the risks and rewards of their products.

(2)Creates uncertainty,” and again we have good old reliable Republican boiler-plate.  The well worn phrase has been applied often  to banking regulations (somehow the banks are still with us and doing quite well.) Once more the testimony doesn’t explain WHY anyone should be uncertain – IF the firm were providing the best financial advice it could in the most educational way possible.  If, however, the company was prone to, say, wrap backdoor payments and hidden fees in the fine print then they might be “uncertain” about how much they could get away with.   The fact sheet from the Department of Labor is really clear, for a technical document, about what constitutes investment advice.

(3) More boiler-plate. Now the implementation is a “substantial burden.” Not just any old regular garden variety burden, it’s substantial!  It’s interesting how many investment advisors there are in this country who don’t seem to have any trouble offering investment advice without selling products with hidden fees and backdoor payments.  In this instance old fashioned capitalism works, the firms sell products that people understand, and know both the rewards and the risks involved, then people recommend these firms to their friends and relatives – and so it goes.   If providing clear and honest investment advice without playing backdoor payment and hidden fee games is a “substantial burden,” then perhaps the business isn’t worthy of its clientele?

Then comes the “threat.” Consumers will lose their “freedom” to choose their investment advisers:

“This shift to advisory services is likely to cause millions of small balance IRA owners to lose access to the financial professional of their choice, or any at all. Those with enough investments to meet the account minimums will face higher costs and experience losses in retirement savings. These resulting losses by some estimates could be as high as $68‐$80 billion each year.”

Please. Let’s look at this from the consumer’s perspective – no one chooses to be ripped off. And, if one’s investment advisor is playing games for the firm’s bottom line at the expense of the retiree’s retirement savings then that future retiree should not be prey for the predators.   Is Mr. Schneider serious that NO brokerage firm will consider a small IRA or other investment?  That our little Middle Class man or women will be left shivering in the cold, facing the closed door of Merry, Berry, & Itch LLC, with $1,000 in hand?   Trust me, that money will go somewhere, and if it doesn’t meet Merry, Berry, & Itch’s minimum it will certainly find its way into a money market account at the local bank. If, the amounts do meet the minimum, would there be “higher costs?” Maybe, but they wouldn’t be hidden. Do private retirement accounts invested in equities lose money? Yes, again, but why shouldn’t the customer, the consumer, be made aware of this very fundamental fact?   However, we should observe in Mr. Schneider’s testimony that he presents no substantiation for his assertion that the costs will be higher and the losses any greater, other than his un-sourced “some estimates” phrase.

Senator Warren was correct to make an example of Mr. Schneider and his business model.  It should be noted that (1) the privatizers with their claims of insolvency for both Social Security and state retirement programs are doing a national disservice with false claims intended to frighten people into putting both the social safety net and public pension programs into the hands of the players in the Wall Street Casino; (2) private firms which utilize questionable business practices which involve lots of fine print hiding fees and management charges and which engage in back-door payoffs are not functioning in the customer’s best interests; and (3) trying to pass off clichéd, stale, and trite boilerplate as Congressional Testimony is unhelpful in the legislative process.

Comments Off on Great Retirement Scams: GOP pins hopes on Primerica Testimony?

Filed under Economy, financial regulation, Nevada politics, privatization, public employees, Social Security

Heads Up Items: Infrastructure, ALEC, Social Security, Financial Reform

Jig Saw Puzzle

There are items which don’t lend themselves to a full blog post, but are of immediate interest. Here’s a sampling:

#1. ALEC may be down to nine big corporate sponsors, but that doesn’t mean it doesn’t have a full agenda for its 2015 legislative season.  Watch for bills, often crafted from ALEC ‘models,’ on pre-empting efforts to increase the minimum wage. depriving low wage workers of health insurance, deregulating electronic cigarettes, protesting global taxes on tobacco, regulating ride share companies, lowering certification standards for dental practitioners, limiting the ability of individuals or businesses to dispute a denied property insurance claim, and school privatization.

#2. We’d probably ought to be watching the state of pipeline infrastructure in this country.  The current pipelines are aging, and some were constructed during the 1950s when low frequency electric resistance welds were popular – these welds are failing.  There’s more information from Inside Climate News, and from the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration reports.

#3.  There are inklings that the Republicans in Congress are planning to turn discussions of Social Security into an Annual Crisis – such as they’ve done with debates about the budget deficit and the national debt.  The process is almost an art form: Declare a CRISIS; mount a full-on publicity campaign complete with constant press releases, comments from members of Congress, and pundits on television; ignore factual refutation and information; then use the CRISIS to leverage concessions from the Democrats.

#4. Expect the Republicans in Congress to step up their attacks on the financial reform regulations enacted in the Dodd-Frank Act.  For some excellent background information see the conversation between Bill Moyers and Simon JohnsonSalon also has a piece on the same subject, and the New York Times weighs in as well.  If you missed these, it might be a good idea to have a click and read.

Comments Off on Heads Up Items: Infrastructure, ALEC, Social Security, Financial Reform

Filed under Economy, financial regulation, Infrastructure, Social Security

Dissing the Disabled Part 2: The Numbers in Nevada Counties

disability GOP social security

Generalities: When the House of Representatives voted in favor of a provision which could cut Social Security Disability benefits, it was part of a general assault on the Social Security program which has been manufacturing a “crisis,” a tactic of long-standing from opponents of the popular government program.[TPM] Senator Rand Paul (R-KY) was particularly dismissive of the recipients of OASDI benefits, in a comment that deserves as much publicity as can be obtained:

“The thing is that all of these programs, there’s always somebody who’s deserving, everybody in this room knows somebody who’s gaming the system. I tell people that if you look like me and you hop out of your truck, you shouldn’t be getting a disability check. Over half the people on disability are either anxious or their back hurts. Join the club. Who doesn’t get up a little anxious for work every day and their back hurts? Everyone over 40 has a back pain.” [TPM]

There is no substantiation for the Senator’s claim that 50% of Social Security Disability recipients are “anxious or their back hurts.” None. In fact, anxiety disorders are categorized under mental illnesses, and constitute only 3.5% of all disability claims. [LAT] And, that back pain?  As stated before, qualifying for benefits under the SSA criteria is far more than just “back pain, or nerves”  Thus, our answer to Senator Paul’s claim should be to declare it the southbound product of a north bound bull.  However, this utterly unwarranted attack on our most vulnerable citizens has some real consequences for Nevadans.

Specifics:  The following table shows the number and category of disabled people in Nevada who are blind and disabled (and under the age of 64) who would be affected by the proposed 20% reduction in benefits.

County Blind/Disabled Under 18 18-64
Churchill 384 71 306
Clark 27,909 7686 19,542
Douglas 318 57 258
Elko 384 66 311
Esmeralda xxx xxx xxx
Eureka xxx xxx xxx
Humboldt 166 27 133
Lander 55 xxx 48
Lincoln 47 xxx 44
Lyon 770 136 628
Mineral 102 xxx 96
Nye 858 129 702
Pershing 56 xxx 49
Storey xxx xxx 47
Washoe 5,261 1,097 4,070
White Pine 119 21 94
Carson City 756 117 627

*the XXX indicates a number so small that individual information would be revealed if the number/category were published.  Source: SSA Office of Retirement and Disability Policy. Table 3.

Nevada Congressional District 1 includes portions of Clark County, and the 27,909 disabled individuals are represented by Dina Titus (D-NV1) who voted against the proposed benefit cuts.

Nevada Congressional District 2 includes most of Lyon County, all of Churchill, Douglas, Elko,Eureka, Humboldt, Lander, Pershing, Storey and Washoe Counties, and Carson City.  Representative Mark Amodei (R-NV2) voted in favor of the proposed benefit cuts.

Nevada Congressional District 3 includes the area south of Las Vegas, including Henderson in Clark County. Representative Joe Heck (R-NV3) voted in favor of the proposed benefit cuts.

Nevada Congressional District 4 includes northern Clark County, part of Lyon County, all of Esmeralda, Lincoln, Mineral, Nye, and White Pine Counties.  Representative Cresent Hardy (R-NV4) voted in favor of the proposed benefit cuts.

From the table we know that there is NO Congressional District in the state of Nevada which does not have families who benefit from OASDI assistance, and yet only one Representative voted to maintain the benefit levels (meager as they are) for households in which a disabled person, who qualifies under the stringent criteria applied by the SSA, resides.  We can do better than this.

1 Comment

Filed under Amodei, Economy, Nevada politics, Politics, Social Security

Republicans Go Dissing the Disabled

Social Security Disability Demographics

One of the fine old  hirsute myths beloved by the Republican Party after they discovered (1) Social Security worked, and (2) Social Security was popular, is that we “have to save Social Security by reforming it.”  Their latest foray into dismantling Social Security in this fashion is an assault on the SSDI (Social Security Disability Insurance) program.

First, let’s note a crucial feature of the SSDI program:

“Unlike many other disability programs, Social Security’s covers only total disability — not partial or short term. Benefits are a function of how much a worker previously earned and put into the system, but on average these run under $1,200 per month. On top of this, a worker is allowed to earn some outside income, but this is capped at less than $1,100 a month.” (emphasis added)

So, the total a person living on SSDI could have per month is about $2,300– for a total disability.  Another figure which has attracted conservative attention is the fact that the number of people receiving these rather meager SSDI benefits has doubled in the past twenty years, the number now standing at 8.95 million to date.  Before we get too enthralled by the “massive number,” the plastic brains report that this figure constitutes about 2.823% of the entire U.S. population.  While contemplating the small percentage of the population receiving SSDI benefits, we should also remember that this figure doubled over a 20 year period.

Secondly, when Republicans speak of the ‘moochers’ who are on disability based income there’s a tendency to conflate the image of someone receiving state benefits for a temporary situation with the more rigorous federal program for those with permanent disabilities.

When the Republicans and other conservatives imply that the recipients of OASDI monies are back-achey-belly-whiners it’s time to take a look at who these people are (besides permanently unable to perform the work they did while paying into the Social Security funds, and being unable to adjust to other work because of the disability).

In Washoe County, NV for example,there are a total of 6,646 recipients, of whom 1,375 are “aged,” another 5,251 are blind or disabled. Of the recipients 1,097 are under 18 years of age, 4,070 are between the ages of 18 and 64, and 1,477 are over 65. [SSDI] We’d expect the largest number to be of working age, since the benefits are a function of the payroll taxes they paid during their ‘working lives.’  The total represents about 1.5% of the total county population.

There are 27,909 of a total of 37,209  in the blind or disabled category; 7,686 are under 18, 19,542 are between the ages of 18 and 64, and 9,981 are over 65 years of age. [SSDI] The total represents about 1.8% of the total county population.

The total number of recipients in Nevada is 48,817 of whom 11,591 are classified as ‘aged,’ 37,226 are categorized as permanently blind or disabled, 9,430 are under 18, 26,951 are between the ages of 18 and 64, with 12,436 over the age of 65. [SSDI] This yields a state percentage of 1.75% of the total population of 2.79 million.

Why?

The relatively small numbers, and really small percentages of total populations, involved in this debate might cause a person to wonder WHY the Republicans have targeted this portion of the Social Security Administration for attack.

A cynic might respond it’s because the numbers are small.  There aren’t that many individuals and households involved, and that means less public outcry over the maneuver.

It might also be a function of laying the groundwork for larger assaults later in the game.  If the GOP is successful at setting the table with cooperative pundits that the SSA is rife with ‘abuse’ of the program then later themes about the solvency of the total program will be enhanced.  This requires some ignorance on the part of those tasked with proclaiming the Republican message.

One would have to remain ignorant of some other basic numbers, such as of the 2,838,485 applications in 2010, 413,530 were in “pending” status, 878,497 were denied for technical reasons, another 688,348 were denied for medical reasons.  The total allowance rate for 2010 was 54.8%, a figure that’s dropped from the 62.8% allowance rate in 2001. [SSA]  A chart of the allowance rates from 1999 to 2012 looks like this:

Social Security Allowance Rate Chart

It might seem to the average viewer that it’s hard to sell the “blooming” rate of people on OASDI benefits when the allowance rate has either held fairly steady or has actually declined since 1999.

Whether it’s cynical, a prelude to later attacks on a very popular government program the Republicans have sought to attack since its inception, or both… the results are essentially the same.  It all plays to the haunts in the GOP closet – someone out there somewhere is ‘getting’ something he or she doesn’t deserve, and therefore no one should be able to ‘feed at the public trough.’  Be it the mythical Welfare Queens, or the Back Ache Cheat, the Republicans seemingly have made it an element in their ideological DNA to espouse a philosophy in which Rugged Individuals come without helping hands.

Comments Off on Republicans Go Dissing the Disabled

Filed under Economy, Social Security, Taxation