Washington Policy Watch

News and perspective on public policy issues affecting Washington's economy and quality of life, brought to you by the Economic Opportunity Institute.

November 23, 2011 • 10:47 am 0

Committee’s failure is nation’s gain

From the Everett Herald:

John Burbank, Executive Director

If you only read the headlines, you might think that by not reaching an agreement to cut the nation’s deficit, the congressional “supercommittee” was a colossal failure. But in fact, their failure was our success. We dodged a bullet that would have decreased economic security and increased personal misery.

One ploy some members of the supercommittee wanted to consider: a reduction in the cost-of-living adjustment for Social Security. Over time, that would have amounted to a $1,000 annual cut for an 86-year-old — equivalent to one entire month’s worth of benefits. Sen. Maria Cantwell spoke out against that idea, urging the supercommittee to put that notion into the circular file. We’re fortunate they did just that.

Unlike the bailouts given to the big banks that wrecked our economy, America’s workers actually earn their Social Security benefits, whether they make the minimum wage — $8.67 an hour here in Washington — or $51 an hour. All workers pay in, and all workers are covered.

And thanks to those worker contributions, Social Security now has an accumulated surplus of $2.7 trillion (that’s trillion with a “t”!). That money goes back to workers when they retire, or if they become disabled and are unable to work; their spouses and children receive Social Security benefits if they die. It is a universal social insurance program. Read the rest of this entry »

Filed under: retirement security, , , , ,

April 29, 2011 • 11:34 am 0

Pension benefits reduce poverty, decrease hardship in retirement

From the National Institute on Retirement Security (NIRS):

A recent study by the National Institute on Retirement Security found that defined benefit pension income plays a critical role in reducing the risk of poverty and hardship for older Americans. The report, The Pension Factor, found that pensions reduce – and in some cases eliminate – the greater risk of poverty and public assistance dependence that women and minority populations otherwise would face.

Key findings from the report indicate that pension receipt among older American households in 2006 was associated with:

  • 1.72 million fewer poor households and 2.97 million fewer near-poor households;
  • 560,000 fewer households experiencing a food hardship;
  • 380,000 fewer households experiencing a shelter hardship;
  • 320,000 fewer households experiencing a health care hardship;
  • 1.35 million fewer households receiving means-tested public assistance;
  • $7.3 billion in public assistance expenditures savings, representing about 8.5 percent of aggregate public assistance dollars received by all American households for the same benefit programs.

Read the full report The Pension Factor: Assessing the Role of DB Plans in Reducing Elder Hardships »

Filed under: retirement security, Uncategorized, , ,

April 27, 2011 • 9:18 am 2

Examining public pensions: A system that works for all

From the Everett Herald:

john burbank

John Burbank, Executive Director

Pensions enable us to live out our older years in dignity. In the United States, an employer-provided retirement plan has long been considered an essential complement to Social Security and personal savings to ensure retirees have satisfactory incomes and certainty for household finances.

Since 1937, our state has developed a network of pension plans to enable financial security in retirement for its public servants. Now these pension plans cover all state and local public employees, including teachers, firefighters, police, social workers and natural resource and parks employees.

There are more than 300,000 public employees contributing to these pension plans and 130,000 retirees. All told, one out of every 14 Washington residents are in our public pension systems. Read the rest of this entry »

Filed under: retirement security, , ,

March 2, 2011 • 8:50 am 0

Improving Social Security’s Benefits is Critical to Economic Recovery and Security

From the National Academy of Social Insurance:

Alex Stone, Communications Manager, EOI

By Alex Stone

At NASI’s 2011 annual conference, the session “Should We Adopt the Social Security Recommendations of the Fiscal Commission Co-Chairs?” demonstrated the complexity of the Social Security reform debate.

Charles Blahous, a Social Security trustee, argued in favor of adopting the Fiscal Commission proposals, which he characterized as a “reasonable compromise” because it utilizes ideas from both sides of the aisle.

Andy Stern, a member of the Fiscal Commission, ultimately voted against the co-chairs’ proposal. He emphasized that while a crisis exists, it is of middle class retirement security in general – not Social Security – due to shrinking personal savings, fewer pension plans, and the erosion of family-wage jobs.

Janice Gregory, NASI President, then pointed out major flaws in the Fiscal Commission’s proposal, arguing that it goes too far in the direction of benefit reduction, and unfairly characterizes Social Security as contributing to the deficit. Gregory also expressed concern that the proposal’s dramatic changes are unwarranted because Social Security shows stable long-term cost projections and a large trust fund.

Despite disagreeing on the proposal, the panelists were able to find common ground on the value of maintaining Social Security’s benefit-payment link, and its importance to lower- and middle-income Americans. These two points are critical measures of success for the Social Security program, but weren’t given equal value in the Fiscal Commission’s final proposal.

Strengthening Social Security was never the main charge of the aptly-named Fiscal Commission. Rather, the foremost concern of its co-chairmen was to rein in the deficit, and their proposal reflects that ultimate goal. While their proposal maintained the benefit-payment linkage, they recommended increasing the retirement age for future generations and adopting a new COLA formula that would lower benefits. Read the rest of this entry »

Filed under: retirement security, , ,

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