Category Archives: Social Security

Looking ahead for Social Security and Medicare

Charlie ClarkIn all the recent talk about changes to Social Security and Medicare it hasn’t always been easy to pick out what’s actually going to be different. One change that was discussed during the debt ceiling debate but does not appear to have been part of the emerging deal would require Americans to attain an older age before becoming eligible to receive benefits from these programs.

Specifically, this change might affect when benefits can start without being reduced for early commencement (for Social Security)—or, for Medicare, when benefits can start at all, except in extreme circumstances.

When changes like this are made, certain age groups may be “grandfathered,” i.e., protected against what could be perceived as adverse changes in the law. Congressman Paul Ryan (R-Wisconsin) proposed several months ago that Americans born in or before 1955 would be unaffected by any changes in our social insurance programs.

This raises at least one obvious question with which policymakers must grapple: Is grandfathering certain older Americans “fair”? For older Americans, “fair” might mean, “I’ve worked all my life and now you changed the game and that ain’t fair.” For younger Americans, it might mean, “I believe that U.S. social safety net programs are going to be around when I’m 65 as much as I believe the moon is made of green cheese, so sure, that’s fair.”

This raises difficult questions, and we’d like to know what you think:

What year would you propose for grandfathering?

Post a comment with your answer.

No more Social Security checks

Timothy ConnorRelax. It’s not what you think. Social Security is still here. But it has officially taken another step into the electronic age. We recently blogged about how the Social Security Administration (SSA) was suspending annual benefit statements this year and cutting the number of recipients of annual statements beginning next year as a cost-saving measure. Well, they are still looking for other ways to cut costs and found another. They rolled it out this past month. May 2011 was the first month where any new Social Security applicant had to choose an electronic payment method. The SSA also announced that anyone currently receiving their federal benefits by paper check must switch to direct deposit no later than March 1, 2013.

Along with the high-tech move came a “high-value” announcement that this decision would save taxpayers roughly $1 billion over the next decade. Aside from the U.S. Postal Service (and perhaps a few retirees set in their ways), we should all find this as welcome news. Every penny counts, especially given the current state of our entitlement programs.

The SSA has issued some press releases and public service videos, including a website at that is intended to assist new applicants and current retirees affected by the changes.

For once, leaving a paper trail behind seems like a wise move.

Social Security statements no longer

Timothy ConnorEvery year, three months before our birthdays, we receive our annual Social Security statements in the mail. And even if you’re one who immediately tosses it into your file cabinet, I’m sure you’ve at least glanced at this pamphlet-like enclosure with the familiar green bordering and the declaration at the top that this is “your” annual statement. It shows us projections of various benefits we may become entitled to under Social Security. It also details our history of earnings supporting the calculations, which is nice because it provides an opportunity for you to check your historical wages for accuracy each year.

If you’re one who likes getting this statement annually, get prepared for it to end, at least temporarily anyway. The Social Security Administration (SSA) recently announced it will stop sending the notices effective immediately for the remainder of this fiscal year. Beginning with next year (October 1, 2011), it will resume sending the statements, but only to those who have not retired and are at least 60 years old. The impetus behind this move is one of cost saving. The SSA spends about $70 million to send these statements each year. If it reduces the deliverable to only those near retirement (60 or older), it will save a large chunk of that annual $70 million outlay. In this day and age, every penny counts.

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Commission on Fiscal Responsibility Reform issues draft report

President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform presented a draft report on Wednesday aimed at rebalancing the budget by slashing spending on most federal operations, curbing increases in Social Security benefits, and cutting more than $100 billion a year in tax breaks for individuals and corporations. The report aims to cut $4 trillion from deficits over the next decade.

The plan makes five basic recommendations:

  • Enact tough discretionary spending caps and provide $200 billion in illustrative domestic and defense savings in 2015.
  • Pass tax reform that dramatically reduces rates, simplifies the code, broadens the base, and reduces the deficit.
  • Address the “Doc Fix” not through deficit spending but through savings from payment reforms, cost-sharing, and malpractice reform, along with long-term measures to control health care cost growth.
  • Achieve mandatory savings from farm subsidies and military and civil service retirement.
  • Ensure Social Security solvency for the next 75 years while reducing poverty among seniors.
  • The Commission is due to make its final recommendations by December 1, 2010.


A copy of the 50-page draft report released by the bipartisan Commission on Fiscal Responsibility and Reform is available here.