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Time to Organize a Mass Movement in Defense of Social Security and Medicare for All

Call to (locked) arms

It’s true that because of demographic changes and medical advances — a declining birthrate, a major increase in life expectancy, and the arrival of a massive wave of so-called “Baby Boomers” born in the two boom decades that followed the end of World War II — there is a bulge in the number of people reaching retirement age and eligibility for both Medicaid and Social Security retirement benefits. We know that is happening (the first Baby Boomers reached 62, the earliest age for claiming benefits, in 2007, and reached 66, the age of eligibility for what is known as “full retirement,” in 2011). That bulge in elderly citizens claiming benefits will continue enrolling for retirement and Medicare eligibility until the period 2026 through 2034, when the last Boomer babies, born in 1964, will be reaching, respectively, either age 62 or age 70, the latter being the age one can file and receive maximum monthly benefit checks. (Then, left unsaid, is the reality that the shortfall problem will begin to go away as older retirees in the bulge begin to die off. In therwords the system isn't a "ponzi scheme" -- it simply has a cash-flow hiccup caused by the Boomer population bulge.)

Coincidentally, 2034 is also the year that, if nothing is done by Congress to bolster the Social Security Trust Fund in advance, the system as currently established under the 1936 SSA Act, will have to draw on just the FICA tax receipts from then current workers. That, we’re told, would mean cutting benefits by some 21%. That’s hardly going bankrupt, but it would be a hard blow for the elderly who depend upon only Social Security benefits to survive on, as they have no retirement savings and no pensions thanks to America’s poverty-level minimum wage and the termination of most traditional pensions. But the countries of Europe, as well as Japan and Taiwan, all face these same issues and have dealt with them, keeping their much more generous systems solvent. Here the story is different.

Ten years ago, this temporary shortfall in the Trust Fund and this predictable extra draw on the system’s resources because of the retirement of Baby Boomers could have been dealt with by a few simply tweaks, such as eliminating or even just raising the cap on income subject to the FICA tax (it’s currently capped at the first $127,000 of earnings). But Congress has refused to deal with such a fix, and longer allegedly people’s deliberative body waits, the more dramatic and costly that fix will have to be. Today, the shortfall could be eliminated by changing the law so that all income — even multi-million-dollar incomes — be made subject to the payroll tax, and by a few smaller tweaks, like adding a transaction tax of perhaps 0.25% to every short-term stock trade — something many countries in Europe (where retirement systems are much better funded) do. Or the amount employers pay into worker accounts could be raised from the current matching 6.2% to 7.2% or 8.2%.

Okay, so we know that Social Security and Medicare, two of the most popular programs of the United States government, are in the gunsights of Republican strategists. Ergo, it is urgent that we begin building a mass movement to not only defend but to expand those programs, which are actually among the most meager and inadequate of retirement and state-run health programs among all developed nations.
 



story | by Dr. Radut