Social Security in ‘better shape,’ no benefit cuts are warranted

AFL-CIO President Richard Trumka and Alliance for Retired Americans Executive Director Edward Coyle issued this joint statement Friday on the 2013 Social Security and Medicare Trustees Report:

The most important message from the 2013 Social Security Trustees Report is that our Social Security system continues to work for the American people.  After years of economic crisis for working families, Social Security is in better shape and more dependable than 401(k)s, private pensions or any other public or private program. We must call out those who will try to misuse today’s report as political cover for unwarranted and ill-advised benefit cuts, like switching to the “chained CPI” to calculate Social Security’s annual cost-of-living increase (COLA).

The truth is that at a time when America’s retirement income deficit is estimated to be an astounding $6.6 trillion because too many people have nothing or too little in pensions or savings, we cannot afford to cut Social Security’s modest benefits in anyway whatsoever, including how it keeps pace with inflation through its annual COLA. The report reaffirms that, without any changes, Social Security can pay full benefits until 2033 and three-quarters of benefits after that, unchanged from last year’s report.

Social Security provides a critical base of financial security and dignity for Americans in retirement or unable to work due to disability or when a working parent dies and is survived by young children. Going forward, strong economic growth broadly shared will serve to strengthen the program further. While much might be made of the projected shortfall in the disability trust fund, there is a simple step that should be taken to address any short-run concerns.  As it has done eleven times before, Congress should reallocate the income across the two funds.

The good news from today’s Medicare Trustees report, extending the life of the Hospital Insurance Trust Fund by another two years to 2026, reminds us that we do not have a Medicare problem. We have a health care cost problem. Recent reforms have helped strengthen Medicare and appear to have contributed to a significant slowing of health costs overall in the short run. If we are to succeed in the long run, however, we need to continue taking steps to make health care more affordable and the health care system more cost effective, and reject proposals to cut benefits or shift costs to individuals.

More news related to the trustees’ report:

► At TPM — Medicare chief: Obamacare is extending Medicare’s life — The chief of Medicare on Friday credited Obamacare for continuing to help extend the life of Medicare after a new trustees’ report said it will be solvent for two years longer than expected.

► In the NY Times — The geezers are all right (by Paul Krugman) — The truth is that the long-term outlook for Social Security and Medicare, while not great, actually isn’t all that bad. It’s time to stop obsessing about how we’ll pay benefits to retirees in 2035 and focus instead on how we’re going to provide jobs to unemployed Americans in the here and now.