Is 70 the new old?

The American Academy of Actuaries held a media briefing in which members of the academy discussed Social Security's long-term financial soundness. Thomas Terry, vice president and chairman of the Pension Practice Council at the academy, said Social Security will go into debt in 2017 and be completely exhausted of finances in 2041 without legislation that alters the system.

Terry said baby boomers, who begin qualifying for Social Security in 2008, are only part of the problem. According to Terry, the current age of retirement is frozen at 67, an increase of two years since President Franklin Roosevelt enacted Social Security in 1935. Terry said a major way to reduce strain on Social Security is to raise the age of retirement. Terry said Americans' life expectancy continues to rise, causing more people to claim benefits for longer periods of time.

Bruce Schobel, chairman of the Retirement Security Principles Task Force at the academy, gave statistics that show American longevity. He said in 1940, the average person outlived the age of retirement by 12 to 13 years. He countered that data with 2008 statistics in which people, on average, outlive retirement by 16-19 years. Schobel gave a hypothetical situation whic proposes that if the age of retirement is increased by two months annually until retirement reaches the age of 70, half of Social Security's long-term deficit would be eliminated. Schobel reiterated that raising the age of retirement is not an all-inclusive solution to Social Security's long-term finances. He did say, however, that any future legislation should include changes in the age of retirement. He also noted that this particular proposal would not affect those born prior to 1960.

Long term health care budget likened to a dysfunctional relationship

The long term budget outlook for slowing the growth of health care costs was discussed at a hearing before the U.S. Senate Committee on Finance. Panelist Dr. Peter R. Orszag, Director of the Congressional Budget Office (CBO), gave the analogy of a dysfunctional relationship to illustrate the unsustainable state of the federal budget. Orszag said that, like such a relationship, there was no telling how long the budget would last but the end was bound to be messy.

Panelist Mr. Gene Dodaro, Acting Comptroller General of the Government Accountability Office (GAO) cautioned that Social Security cash surplus would start declining in 2011. Dodaro said that this would force increased borrowing from the public, reduced spending or increased revenue. Dodaro also said that American standard of living would be affected in terms of how the types of services would be funded.

Chairman Max Baucus (D-Mont.) noted that Congress would be able to help more if given more data regarding health care costs and guidelines. Orszag agreed and discussed ways to constrain costs without adversely affecting health benefits. Orszag recommended increasing the salience of health costs and improving health care efficiency. He said that might result in a change in cost-consciousness which would shift demand. Orszag also recommended generating more information about effectiveness and changing incentives such that people pay for ‘better care and not just more care’. Lastly, Orszag stressed the importance of adopting measures that promote healthier living such as increasing cigarette tax to discourage smoking.

Ailing economy makes every day a struggle

Senators Harry Reid (D-Nev.) and Byron Dorgan (D-ND) held a press conference today on “Making the American Dream More Affordable.” Reid said that Republicans are preventing progress on making higher education more affordable and improving social security and Medicaid. Dorgan said that the economy is “sick” and that the minority in the Senate keeps saying no to the necessary changes Democrats wants to make.

Treena Walker, an office cleaner and single mother, said that she struggles to provide for her children, unable to pay for all of the food, gas, and healthcare her family requires. Sadie Coleman, a senior member of the Alliance for Retired Americans, said that she struggles to pay for her medications and that she has seen friends cut pills in half to make medications last longer. Sheila Isong, a recent graduate of the University of Pittsburgh, said that she has overwhelming student loan debt and hopes that the Democrats can make real changes to make high education more affordable.

Senator Amy Klobuchar (D-Minn.), said that the Senate is mere votes away from passing legislation to ease economic woes, but that the minority is preventing progress

Committee compares employee verification systems

Today the Social Security Subcommittee of the House Ways and Means Committee held a hearing to discuss various employee verification systems that determine worker eligibility for jobs throughout the United States.

The various measures included Rep. Heath Shuler’s (D-NC) Secure America through Verification and Enforcement (SAVE) Act, which would expand the use of E-Verify, a searchable online database of citizen identities and official documentation numbers. Another proposal was Rep. Sam Johnson’s (R-TX) New Employee Verification Act (NEVA), which cosponsor Rep. Gabrielle Gifford (D-AZ) said was the more “realistic” approach that rejects the use of E-Verify. Gifford said that since E-Verify was mandated in Arizona in 2007, it has been found “complicated, unreliable, and burdensome” and “mandating E-Verify nationwide for all employees would be disastrous.” She also pointed out that not all employers have the Internet access that E-Verify requires to screen applicants.

Shuler said that E-Verify has resulted in a match for 93 percent of new employees, and of the 7 percent who were not matched, less than one percent “bothered to contest the results.” He called the system “easy to use” and said it is “currently being updated and expanded” to meet increased demand.

House Committee on Ways and Means investigates clearing the disability backlog

The House Committee on Ways and Means held a hearing today to investigate why Social Security distribution backlogs are at an all time high. Wait times for people in need to receive money range from 500 to over 700 days, with districts in urban communities like Atlanta and Milwaukee being among those with the longest waits.



The Committee questioned Commissioner of the Social Security Administration Michael Astrue about the progress his staff has had in solving the backlog problem. Astrue explained that his group was succeeding in making progress to help individuals in need of receiving their social security benefits, but that his program was vastly under-funded. Commissioner Astrue emphasized the importance of having more, better allocated money for hiring staffers and making the money distribution process run faster and more effectively.



Committee Chairman Charles Rangel (D-NY) told Astrue that the issue of providing social security and helping Americans is one that is “neither Republican nor Democrat.” His sentiments were backed by members like Jim McDermott (D-WA) who said that the current murky backlog situation is “lose lose” for everybody involved.