Surprise -- Policymakers Who Work In Air-Conditioned Offices Don't Care About Blue Collar Workers

From the McCLatchy chain of newspapers:

Young Americans might not get full Social Security retirement benefits until they reach age 70 if some trial balloons that prominent lawmakers of both parties are floating become law.

No one who's slated to receive benefits in the next decade or two is likely to be affected, but there's a gentle, growing and unusually bipartisan push to raise the retirement age for full Social Security benefits for people born in the 1960s and after. ...

Raising the age eventually to 70 could prove to be politically acceptable because it wouldn't have an immediate social impact, but it would demonstrate that politicians are resolute enough to mend one of the government's most popular social programs and to tackle the national debt. ...

"For awhile, there's been a consensus among economists that raising the retirement age makes a lot of sense," said Richard Johnson , a senior fellow and the director of the Retirement Policy Program at the Urban Institute , a Washington research group. ...

"There are some incredible ramifications to raising the age," said Barbara Kennelly , the president of the National Committee to Preserve Social Security and Medicare . "Not everyone can work until they're 70."

NADE Newsletter

The National Association of Disability Examiners (NADE), an organization of the personnel who make initial and reconsideration determinations on disability claims for Social Security, has issued its Summer 2010 newsletter. A brief excerpt from one article:

NADE continues to advocate for a significant reduction in the 15 year vocationally relevant period and we were greeted with wide enthusiasm for this proposal by advocacy groups and Congress. With SSA finally voicing limited support, NADE is hopeful positive action may occur on this issue.

One odd note to the newsletter is a photo of NADE members participating in a "mud volleyball tournament." That's something you don't see everyday!

Social Security Subcommittee Hearing Scheduled

From a press release issued by the House Social Security Subcommittee:

Congressman Earl Pomeroy (D-ND), Chairman of the House Ways and Means Committee Subcommittee on Social Security, announced today that the Subcommittee will hold a hearing on the continued importance of Social Security for seniors, survivors, and persons with disabilities and their families as the program approaches its 75th anniversary.

The hearing will take place on Thursday, July 15, 2010 in room B-318, Rayburn House Office Building, beginning at 9:30 a.m. ...

Subcommittee Chairman Earl Pomeroy (D-ND) stated "In addition to commemorating the 75th anniversary of Social Security, this hearing will provide an opportunity to learn how vital this program continues to be for the well-being of all Americans and why we should consider very carefully any changes being proposed for how they will affect the lives of current and future generations of beneficiaries.

Social Security Report Delayed -- Why?

The Angry Bear blog reports that there has been a significant delay in issuing the annual report of the Social Security trustees. Normally, the report is issued on March 31 of each year but this year's issue is still hanging fire. There was a rumor that the report would be issued in April and then a later rumor that it would be coming out in June but still no report and no word on when it is coming.

So, what's going on?

A Possibility Not Mentioned

Andrew Biggs, former Deputy Commissioner of Social Security, has written a piece for the American Enterprise Institute blog on lifting the cap on earnings covered by the Social Security F.I.C.A. tax. He's against it. His argument is that:

The real question is whether to impose higher taxes on high earners in order to pay higher benefits to high earners. I say no. They care a lot more about their taxes than their benefits and they’re fully capable of saving on their own. I’d be more than happy to have a Social Security program that was more redistributive—and more generous to low earners—than today’s system if we could also make it smaller and more affordable. Given the other bills coming due, that makes more sense to me.

It is arguable whether high wage earners care more about taxes than benefits. In any case, there is another possibility: Raise the F.I.C.A. cap but cap Social Security benefits. That makes Social Security more redistributive. It also eliminates foreseeable Social Security funding problems. It does not make Social Security smaller but that is Andrew Biggs' goal. I see no evidence that the public shares this goal. Raising taxes on the wealthy to solve Social Security's long term funding problems is wildly popular. Take a look at the polls:

• March 2010
• August 2009
• August 2008
• February 2005

Senate Finance Committee Schedules Social Security Hearing

The Senate Finance Committee has scheduled a hearing on "Choosing to Work During Retirement and the Impact on Social Security" for July 15 at 10:00. The scheduled witnesses:

• Stephen Goss, Chief Actuary, Social Security Administration, Washington, DC
• Marc Freedman, CEO and Founder, Civic Ventures, San Francisco, CA
• Marcia Brown, Chief Operating Officer, National Center for Appropriate Technology, Butte, MT
• Nicole Maestas, Economist and Group Manager, RAND Corporation, Santa Monica, CA
• Bonnie Shelor, Senior Vice President for Human Resources, Bon Secours Richmond Health Systems, Richmond, VA

Court Finds DOMA Unconstitutional

A federal district court judge in Massachusetts has declared the Defense of Marriage Act (DOMA) unconstitutional. DOMA prevents Social Security from considering state-sanctioned same sex marriages even though Social Security normally is bound by state law in determining family relationships. If this stands, and that is a big "if," there would be significant effects upon Social Security benefits for wives, husbands, widows and widowers.

Consensus Forming On Cutting Social Security?

Is there a Congressional consensus forming on cutting Social Security benefits? TPM fears there may be and that "it could happen swiftly, with very little notice."