Sanders: Obama proposal would impoverish 250,000

[defendandprotect]

Sanders: Obama proposal would impoverish 250,000

By Erik Wasson - 07/09/11 04:33 PM ET

The Social Security Administration estimates that a proposal floated by the Obama administration would put 245,000 people into poverty, according to an analysis released by liberal senator Bernie Sanders (I-Vt.) on Saturday.

That level of impact would be felt by 2050 if a proposal to change the way inflation is measured is adopted, Sanders announced. The change to the way SSA would calculate the Consumer Price Index has been floated in debt ceiling talks between Congress and the White House. The White House has suggested revising CPI for both the tax code, in order to generate more revenue, and for benefits.


Social Security Administration’s Office of Retirement Policy estimated that by 2030, according to the report prepared for Sanders, there would be 173,400 more people living in poverty in the United States.

Benefits for those who are 80-89 would drop by $960 a year. Benefits for women would fall by 3.5 percent overall while men’s benefits would drop by 2.9 percent.

http://thehill.com/blogs/on-the-money/budget/170543-sanders-obama-proposal-impoverishes-250000-people




---------------- Failure to pay COLA's -- even though based on a gimmicked formula --

for the second year now and presumably as well in the coming year -- will reduce Social

Security to a poverty wage --

Keep in mind that any $1 anyone had pre-Bush is now worth 50% --

Social Security and Minimum Wage should be at least doubled -- !!

[sarcasmo]

1. The wealthy are winning this class war and Bernie Sanders is about the only one on our side.

[Name removed]

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[RaleighNCDUer]

8. Those who make peaceful revolution impossible will make violent revolution inevitable.

John F Kennedy

[robcon]

2. Sanders is a fool. Measuring a 'real life' inflation rate is correct.

n/t

[Drale]

4. .........

:popcorn:

[Name removed]

5. Deleted message

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[white_wolf]

39. Wow your calling one of the few people on our side a fool?

I guess we know which side your on.

[Capitalocracy]

47. I'm thinking you're not entirely familiar with how this works.

nt

[roguevalley]

48. Sanders is the only warrior we got. He's no one's fool.

[bhikkhu]

68. In this case he has the math wrong - the change will impoverish no one

No reductions of benefits will result from using the chained CPI formula, any more than you reduce benefits by using the current system.

The change is to the amounts added to the benefits. Decreasing the amount you add to a sum is different from decreasing the sum itself.

Sanders has misinterpreted the report and come up with a ridiculous and misleading statement in this case, though he is far from the only one.

[Capitalocracy]

69. Not after adjusting for inflation.

Just like average wages... they've gone up, but if you adjust for inflation, they've gone way down.

[bhikkhu]

74. My mistake...Sanders is probably right

To retract my statement too late to edit.

Basically social security benefits put most people right at the poverty line, so a little change has a big effect.

In any case, what I would really like to see is a COLA set-up that actually does what its supposed to do - which is help people keep up with inflation. What we've had for the last 20 years or so doesn't do that (as most are well aware), and chained CPI isn't exactly an improvement.

[Bluebear]

72. "Sanders is a fool." - I'll take his intellect over yours, sorry.

[Amerigo Vespucci]

6. "Collateral Damage."

I think he'd be willing to do it in order to keep the Republicans happy.

[WorseBeforeBetter]

7. Awesome...I'm female and was planning to retire around 2030!

If this goes through, no one from the Obama camp better ask me for a fucking dime toward re-election -- it's going to retirement.

Hope and change, ba-by!

[shanti]

37. so with this deal

they get you coming and going :( if you start collecting your ss as soon as you can, at age 62, you are penalized by almost half what you would get at 66. yet, if you hold off until collecting later, this chained CPI kicks in and you're screwed there too, because you may not live long enough to collect anything!

this really chaps my ass! :mad:

[hfojvt]

9. by 2050?

All anybody alive today needs to do is put $10 a month into an account paying 3% amd they will have over $9,000 by 2050. That will cover their benefit cuts for ten years, until they are almost 100.

As for the inflation rate.

$100 now was worth $76.21 in 2000 according to the CPI inflation calculator. Meaning prices only went up by 31% since pre-Bush, not by 100%. Unless you are talking about Bush senior. Prices have gone up by 98.91% since 1987, an average inflation rate of a little less than 3%, which is really not that bad. Krugman (and I) think the economy works better with a little inflation.

You do know that if income doubled for all of us overnight, that we would end up in exactly the same spot, as logically prices would double as well.

By the way, in 1987 the minimum wage was $3.35 an hour, which it had been in 1981. By now it is $7.25 an hour - a 116% increase.

Again, though, if social security payments are keeping up with prices I think that is good enough. They don't need to keep up with wages. Not even when I am one of those people getting social security, which is a mere 13 years away or so. Of course, I am planning to move in with my nephew anyway.

[The Velveteen Ocelot]

10. Good luck finding an account that pays 3% these days.

You can't get that rate on a 5-year CD, let along a savings account.

[kenny blankenship]

14. But if you found a pot of gold under a rock in your neighborhood

you could take advantage of any number of different investment opportunities available to persons of means, including sitting on your pot of gold in hopes that inflation will cause it to multiply in nominal value. Your failure to find a rock with Leprechaun's gold under it isn't hfojvt's problem or failure - nor is it any Republican's problem or failure.

Is the true problem here that the assumed 3% rate savings acct is a chimera, because the economy is so weak from 30yrs of bad policies that prevailing interest rates now amount to confiscation from savers, or isn't it REALLY that more people aren't lifting rocks looking for those magic pots of gold? You could also hit the lottery - your choice.

You gotta believe!

[hfojvt]

16. yeah because saving is exactly the same thing as finding gold under rocks

Maybe you've gotta believe in the helplessness of everybody, but I certainly don't believe that about myself. Nor do I think I am anything special. "I am America and so can you."

Although now that I think of it, I don't make nearly as much money as Stephen Colbert even though I have way more education and I am much funnier.

[hfojvt]

15. true enough

but there is no reason to assume that these rates will last until 2050. In the past rates have been much higher. 41 years ago, my first savings account was paying 5% interest.

[defendandprotect]

27. When FED gave banks bail outs at 0% ... they bought Treasury notes @ 3.5% - 4% interest---!!!

[indurancevile]

18. I think there are some problems with your calculations. For one, minimum wage in 1987 = $4.63 in

1996 dollars, whereas minimum from 1956-1984 was consistently worth more than $5/hr (as high as $7.21 in 1968) in constant 1996 dollars.

Since reagan, minimum wage has consistently been worth less than $5/hr except for 1997, when it was worth 3 cents more.

why did you chose 1987 as the base year?

[hfojvt]

20. why use 1996 as a base year?

I used the nominal minimum wage, not the real one. I went from 1987, because according to the CPI, prices have almost doubled since then (they grew by 98.91%) while the minimum wage (in nominal terms) grew by over 100%, faster than the rate of inflation. That does not say anything about where the minimum wage was in today's dollars. It was $8.48 in 2011 dollars in 1972 and $9 in 1979. It has not kept up with inflation since 1970, but it has kept up with inflation since 1987. Perhaps because it was at a low point in 1987, not having been raised for six years under Reagan. It fell from a real value of $8.15 in 1981 to a mere $6.53 in 1987 to $5.98 in 1989 before it was raised again to $6.91 in 1991.

But it is higher today in real terms then at any time since 1984.

[indurancevile]

76. it's "high" currently because they finally raised in the last couple of years to get

back to its reagan-era "heights" after falling to a post-war low. it's still lower than it was 1950-1987.

[muriel_volestrangler]

21. an inflation rate of 2.9% (from your 98.91% over 24 years) means an effective saving rate of 0.1%

for your 3% account, which puts the amount they'll have by 2050 at about $4900 in today's dollars, even if they increase the monthly savings amount to keep up with inflation.

The actual question is whether, using the chained CPI inflation definition, the payments would keep up with the prices that retirees with modest incomes pay. They spend less on electronics and so on, and so probably suffer higher inflation than the general populations do.

[kenny blankenship]

22. But you COULD find a pot full of gold, if you were out looking for it

WERE you looking - or were you complaining that savings accounts and other vehicles tied to lending rates pay essentially no interest, and haven't for a long time?

[hfojvt]

24. presumably Sanders calculation is in nominal dollars

and not in real dollars. Hence, it is the nominal amount that matters, and not any projected real amount.

[xphile]

38. 3%? Where the hell are you going to find an account that pays 3%?

Even a high yield online savings account which pays higher than other banks are paying less than 1%.

Do you have a suggestion that's based in oh I don't know, reality, in how one should offset the theft from future retirees?

[hfojvt]

61. see above

is it realistic to assume that 1% interest rates are gonna be the norm for the next 39 years? 41 years ago my savings account was paying 5%.

[woo me with science]

11. Two replies on the thread so far in support of chained CPI Social Security cuts.

It's a dance that is becoming oh-so-familiar...

Stage One: Deny that the conservative policy is even being considered
Stage Two: Defend and rationalize the conservative policy

Here we go again...

[hfojvt]

19. your own argument does not seem very scientific

are you sure that wooing you with science is gonna be worth the effort?

I can see arguments in its favor, where are the equal but opposite counter-arguments? It seems that Newton's second law of arguments is no longer holding true.

After all, I am the one who gets flamed on DU when I suggest eliminating the Bush tax cuts for people with incomes over $100,000. So it would seem that many more on DU would be opposed to raising the cap as well. Like Richardson and Hillary, they would call that a "tax increase on the middle class".

[woo me with science]

23. You mean where I counted to two?

Sorry if that was too hard to follow.

Or did you mean the part where DUers line up to support despicable Republican policies that reduce projected Social Security benefits?

Gee, I was right about that, too. :puke:

[hfojvt]

26. we may need to start with a definition of science

because counting and insults and disgust don't really qualify any more than really bad videos do http://www.youtube.com/watch?v=JWitntwPjM4

[defendandprotect]

28. Ah ... but fewer and fewer all the time ---

I've seen at least three or four posters say they are out on Obama in

these recent threads -- and one or two were long time supporters here.

[woo me with science]

33. Thanks

for letting me know you saw that.

It does help.

[Marr]

30. Yep-- I was just noticing that myself.

Very familiar.

[woo me with science]

35. And depressing as hell.

:thumbsup:

[Fumesucker]

12. Make it 245,000 banksters..

And I'm way down with it.

[woo me with science]

13. Disgusting and unconscionable. nt

[somone]

17. This from a Democratic president

Vile.

[spanone]

25. has the President actually put forth a proposal? did i miss it?

[defendandprotect]

29. Obama -- not a Repug -- suspended the COLA's payments for two years now ...

did you miss that?

And if Obama doesn't know just from common sense -- leave alone personal

ability to research, or inside info on government -- that the CPI is gimmicked

since the 1990's then Obama shouldn't be in the Oval Office.

[spanone]

31. link?

[cherokeeprogressive]

32. From ssa.gov: COLA increases going back to 1975. Look at 2009 and 2010.

http://www.ssa.gov/oact/cola/colaseries.html

[defendandprotect]

36. Imagine how high the increases would have had to be to cope with what Bush and wars did

to the dollar!!

And, we have never had less than 3% inflation since Ike afaik -- !!



Thanks for the info -- :)

[mzmolly]

43. Which is why Obama A sent out extra stim money to seniors and B may be considering

a different formula to calculate benefits. The current calculations are obviously failing seniors.

See my response below please.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1459672&mesg_id=1461213

[defendandprotect]

34. You want a link to common sense? Or are you saying you didn't know that Obama

stopped COLA payments?

[mzmolly]

45. Obama did NOT stop COLA payments. Current formulas

were impacted by energy prices and a failed formula, used for calculating increases since 1983. Obama actually sent seniors extra money, repeatedly to make up for the current failed COLA adjustments.

http://retirementrevised.com/money/250-social-security-payment-resurfaces-in-obama-budget

[defendandprotect]

49. CPI formula is BS -- any high school kid would know that -- and Obama doesn't?

It's over --

[mzmolly]

52. You need to read

the facts presented. Obama has nothing to do with current cola calculations. They've been calculated the same way since 1983.

[defendandprotect]

62. Any Demcoratic president should have EVERYTHING to do with preserving Social Security and

Medicare -- especially from gimmicked attacks on the programs!!

Its over --

[mzmolly]

42. Please see my response.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1459672&mesg_id=1461213

:hi:

[defendandprotect]

50. It is absolute nonsense to suggest that we have no inflation ...

We have had nothing less than .03% inflation every year since Ike --

And if Obama can't figure out that the CPI is gimmicked and has been since the

late 1990's -- then he shouldn't be in the Oval office --

[mzmolly]

53. You're

missing the point.

[defendandprotect]

58. Actually ...

rather than a point it looked like simply more alibing for Obama --

It's over --

[mzmolly]

41. Obama sent seniors cost of living checks, because the current formula failed them.

Please see this for starters as you appear to think that Obama is behind the failed cola increase?

http://www.snopes.com/politics/socialsecurity/cola.asp

Again, Obama actually sent out cost of living increases to seniors with the stimulus money because current formulas (tied to consumer prices) failed to give them a COLA increase.

http://money.cnn.com/2009/10/14/news/economy/obama_seniors_payment/index.htm

To help counterbalance the hit, President Obama is calling on Congress to send another $250 relief payment to seniors and other Americans to stem the economic strain.

"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession," Obama said in a statement Wednesday. "That is why I am announcing my support for an additional $250 in emergency recovery assistance to seniors, veterans, and people with disabilities to help them make it through these difficult times."

Last year, Social Security beneficiaries got a 5.8% cost-of-living adjustment, the largest since 1982, largely because of the spike in energy prices.

"This year, in light of the human need, we need to support President Obama's call for us to make another $250 recovery payment for 57 million Americans," said Commissioner of Social Security Michael J. Astrue in a written statement.

[defendandprotect]

51. How would one time checks make up for monthly cuts every month over two years?

Ending COLA's make SS a poverty wage -- it has to be adjusted for inflation --

the true inflation rate!!

[mzmolly]

56. You're suggesting the President is responsible for how COLA's

are calculated, which again is false.

You're free to dismiss the Presidents attempt to help ease the burden on seniors if you like.

[defendandprotect]

59. I'm saying that Obama knows that the CPI is gimmicked and he's playing the game --

and if Obama doesn't know that we've had at the minimum .03% inflation every

year since Ike, then he shouldn't be in the Oval Office --

In fact, the W Bush years reduced every $1 anyone had to 50 cents --

It's over --

[mzmolly]

64. I'm sorry, but you've demonstrated that you're clueless

on this particular issue.

Cheers.

[defendandprotect]

66. Oddly enough ...

was just having similar thoughts about your posts --

Cheers.

[mzmolly]

40. I haven't seen one. I've noted lots of upset about a rumored

proposal, however.

[defendandprotect]

55. Guess that letter from Democrats in Congress to Obama NOT to cut SS was just a "rumor" ..???

Obama is a threat not only to Social Security, Medicare and the Democratic Party

but to the economic stability of the nation --

[mzmolly]

57. Did you read the

letter? If so, please point out to me where Democrats said that Obama WANTED to cut SS.

[defendandprotect]

60. Are you possibly trying to suggest that Democrats didn't think Obama is a threat to SS and Medicare?

:rofl:

It's over --

[mzmolly]

63. Democrats are asking Obama to protect SS from Republicans.

They're not suggesting HE is the threat in questions.

[defendandprotect]

65. No -- they saw him as a threat in his suggestions that Social Security and

Medicare cuts should be on the table --

Obama has also supported cutting the funding of Social Security --

It's over --

[Hawkowl]

71. You calling Senator Sanders a liar?!

I think Senator Sanders knows a bit more than you. If I had to put money down on who's lying....

[mzmolly]

75. Sanders took on Republicans

and urged the President not to give in to their demands. The media spin is one thing. Sanders letter to the President, another.

[dionysus]

44. dupe

[Name removed]

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[amborin]

54. K&R

[bhikkhu]

67. Ugh! Same stupid math error!

From the OP:

"Benefits for those who are 80-89 would drop by $960 a year. Benefits for women would fall by 3.5 percent overall while men’s benefits would drop by 2.9 percent.Can anyone explain how "

Can anyone explain how a 2.9 - 3.5% drop in benefits works out to be a $960 decrease in benefits?

It doesn't, its just another stupid math mistake by people who should know better. This one is slightly different from previous ones, so at least he isn't just repeating someone's old mistake...

The change doesn't impoverish anyone there are no reductions to benefits themselves. The worst it gets is a 9% reduction in cost of living increases (which are added to benefits as an adjustment) by age 95.

...and no, I don't think chained CPI is a good idea - what we need is a real system that fairly adjusts benefits to the cost of living, which we don't have now either.

[bhikkhu]

73. Ugh again - I made a mistake myself...

and realized too late to edit.

In any case, Sanders is probably correct. The change is fairly minor, but projected out that far it probably is enough to tip that many into poverty. One problem is that Social Security benefits are so often right at the borderline of poverty levels...

[Name removed]

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