The mission of the Alliance for Retired Americans is to strive for social and economic justice, and civil rights for all citizens to enjoy lives with dignity, personal and family fulfillment, and security. The Alliance believes that all older and retired persons have a responsibility to strive to create a society that incorporates these goals and rights and that retirement provides them with opportunities to pursue new and expanded activities with their unions, civic organizations and their communities.

Friday, April 18, 2014

Board member researches the future of Social Security

Report on the Accuracy of Predictions of Social Security Insolvency
presented by Sara Dustin, New Hampshire Alliance for Retired Americans Board Member

During his meeting with board members of the New Hampshire Chapter of the Alliance for Retired Americans in November, 2013, Senator Ayotte's State Director, Bud Fitch, asked me if I would go through the most recent Annual Report of the Social Security Trustees (2013) with him to assess the accuracy of its predictions of program insolvency. I agreed to do this once I had completed my analysis of the relevant data in this 254 page document.

I have identified four problems with the data the Report uses to predict the date at which the program is expected to become insolvent. These problematic data series are used to estimate the date when the program's combined annual income from payroll taxes, interest on the U.S. Treasury Bonds held by the Trust Fund, and Treasury's redemption of Trust Fund Bonds, will fail to match the total sum of the benefits owed in that year.

1.The Trustee's estimates of the future growth of the U.S. labor force and the U.S. economy are unrealistically pessimistic, speeding up the date when they predict the program will become insolvent.
While the Trustees allow a brief up-tick in annual GDP growth of 2.9 to 4 .0 % per year for the five years between 2013 and 2018, they then project that the economy will settle back down to a historically low average-growth-rate of 2.0 to 2.1% per year for the rest of the century!  Over the same time period, labor force growth is projected to drop to one third of its 1960-2000 average. These expectations lead them to predict that payroll tax receipts will not increase fast enough to keep up with the demand for benefit payments after the last Trust Fund Bonds have been cashed out, in 2033, even though the Baby Boom Bulge will have subsided by the time they predict that that event will occur. They underlie their warning that the system will be permanently insolvent after that date, and fuel the urgency with which they request that benefit growth be slowed or program revenue increased now. [The 2013 Annual Report of the Board of Trustees of the Federal Old Age and Survivors' Insurance and Federal Disability Trust Funds, p. 105, Table V.B2.: Average annual unemployment rate, Labor force and Real GDP; “Historical Data” 1966-2007 and “Intermediate” (projections) 2014-2090.]

The Trustees base this prediction on two major assumptions of questionable accuracy. First, they expect total immigration to drop so substantially it can no longer compensate for the slowdown in the number of new workers the native population, with its dropping birth rates and aging population, will be able to contribute to the 21st century workforce. Since economic growth rates are heavily dependent on the availability of workers to hold jobs, this slowdown in workforce growth can be expected to slow GDP growth. However, if total Immigration returns to its pre-Great Recession levels, job growth and payroll tax receipts can be expected to exceed the Trustees' expectations, and the date of insolvency to recede into the future. [See section 3. below, for detail]

The Trustees also appear to expect that once the economy has recovered from the Great Recession, the Federal Reserve will return to its long standing policy of prioritizing inflation control over job growth. It is their stated assumption that they can count on the consistency of Fed policy, and their unemployment projections are consistent with the expectation that sometime around 2015, the Fed will begin to clamp down on economic growth again in order to maintain the 5.5% rate theoretically believed necessary to keep inflation at 2%, and persist in this policy for the remainder of the century. That outcome can reasonably be expected to slow GDP growth, job growth and the growth of payroll tax revenue.
The re-instatement of this Federal Reserve policy of maintaining elevated unemployment rates would also contributing to further increases in income inequality as the buying power of slower growing wages* fall or stagnate against inflation and the entire $ value of increased worker productivity accrues to ownership. The appointment of a new Fed Chairman with a stated priority for job growth, and mounting concerns about the effects of steadily growing inequality on our democracy suggest that the Trustees may be mistaken. If Fed policy should change to allow the economy more latitude to grow, GDP growth, job growth and payroll tax receipts will increase. [*A number of well vetted studies show that higher unemployment rates are associated with slower real wage growth.]

Finally, Trustees appear to be predicting GDP growth for the remainder of the 21st Century by projecting the slow growth record of the recession and jobless recovery years of between 2000 and 2012. However, the previous 50 years, including the 1990s during the second four years of the Clinton Administration, are characterized by annual GDP growth rate averaging 3.0% or better. This growth level not only produced sufficient payroll tax revenues to pay all current obligations during that period, but also generated the consistent annual surpluses that, at last report, have purchased $2.8 Trillion Dollars of Treasury Bonds for the Trust Fund.

In the past, Trustees' forecasts which gave too much weight to slow GDP growth rates in bad years have led to premature predictions of insolvency. For example, projections generated shortly after the deep recession years of 1979 and 1980-1981 predicted the Social Security system would be insolvent by the mid 1990s.

2. Because the average rate of GDP growth is expected to be so slow, future federal interest payments on the Trust Fund Bonds are underestimated, accelerating the projected date of insolvency.
Depressed GDP growth rates are typically accompanied by elevated unemployment rates, and have historically led the Federal Reserve to keep interest rates on Treasury Bonds low in an effort to avoid depressing the economy further. Lower interest rates mean smaller interest payments on the Trust Fund bonds and thus to a prediction that the future income available to the program from this source will be less than it would be if the economy were to grow more strongly than predicted. And because surplus interest payments are immediately reinvested in Treasury Bonds and deposited in the Trust Fund, they also expect the reserve of bonds in the Trust Fund to grow more slowly and run out sooner than it would if the economy returns to its pre-recession vigor and interest rates rise. [p.105, Table V.B2: Average annual interest rate/Nominal/”Historical data” 1966-2007 and “Intermediate” (projection) 2012-2090. Also Introduction p.4, Paragraph 2, last sentence.]

3. Future immigration appears to be substantially underestimated, reducing projected job growth and payroll tax revenues and supporting predictions of short and long term insolvency.
The trustee's project a substantial and permanent decrease in total annual immigration. They predict that annual legal immigration, which has increased almost without interruption for the last 70 years, to cease growing after 2015. And they expect illegal immigration to fall to two thirds of the levels prevailing in the pre-recession 2000s by the end of the century. The prediction that illegal immigration will decline sharply is based on the stated assumption that improved border control measures will work. History suggests that desperate people will always find new routes to come to America.

The Trustees also seem to be over weighting the steep decline in the flow of illegal immigration that occurred between 2008 and 2012, as the Great Recession reduced the number of jobs available to the undocumented. The projection appears to reflect the expectation that the economy and the job market will remain weak enough for the rest of the 21st century to prevent immigration from ever rebounding to pre recession levels. [p.86, Table V.A1: Principal Demographic Assumptions, Calendar Years 1940-2090/ Net Immigration/ Legal and Other/ Historical data 1940-2012 and Intermediate (projection) 2015-2090.]

4. Because of these minimal GDP growth projections, the growth rate of the population of workers retiring early on Social Security Disability may be overestimated, leading the Trustees to overestimate future costs to the program and underestimate the growth of jobs held and payroll tax revenues.
At first glance, the Trustees' projection of the growth of the portion of the labor force on disability over the course of the 21st Century appears, if anything, conservative. However, the  Trustees do project that the population of workers who are drawing disability benefits will remain at the record levels set during the Great Recession for the near future, and grow upon that base thereafter. If the economy should improve rather than flat lining, older workers will be more likely to be able to remain in their career jobs until retirement and less likely to be forced onto the Disability Program prematurely by layoffs and the exhaustion of their unemployment benefits. For this reason, the population on Disability can reasonably be expected to grow more slowly and payroll tax collections from older workers to remain higher if the post-recession economy grows more strongly than projected. This would, at the very least, push out the date of insolvency and possibly put off that problem indefinitely. [p. 133, Table V.C5, “DI Beneficiaries With Benefits in Current Payment Status at the End of Calendar Years 1960-2090/ Disability prevalence rates/Gross/ Historical data 1970-2012 and Intermediate (projection) 2013-2090.]

Further observations and a policy suggestions that emerged from the Board's discussion of Section 4:
Board member and long term State Representative Larry Converse pointed out that recession increases disability payments because it forces older workers laid off from their career jobs to re-enter the job market in entry level positions designed for young bodies. Because these jobs are much more physically demanding than the more skilled positions they acquired during a lifetime of work, they accumulate injuries that force them onto Disability.  If the economy grows more strongly than the Trustees predict, older workers can be expected to remain healthier and work longer, increasing payroll tax receipts and reducing the percent of workers on disability.

Sara pointed out that because Social Security disability payments are so low, many older, laid-off workers, forced onto SSI by recession layoffs, must supplement their checks with  part-time work in order to pay their basic living expenses. Unrealistically restrictive SSI limitations on earnings force them to seek these jobs in the underground economy, where the income can be hidden from the program---and is not subject to payroll taxes.  Therefor, revenue that would be available to the program if the economy was healthy is lost to the Social Security system.

The enactment of more realistic SSI supplemental earning limits, sufficient to legalize the attempts of disabled workers with some remaining capacity to work to assemble a living income from a combination of benefits and part-time work, would permit these workers to work above the table and contribute what they still can to the national payroll tax wage pool.  Even if the economy were to remain slow, this reform would increased payroll tax revenues and extend the solvency of the Social Security system.

Tuesday, April 8, 2014

Testimony on New Hampshire Paycheck Fairness Act (SB 207)

Statement from Lucy Edwards, Chair of the Executive Board of the New Hampshire Alliance for Retired Americans

My thanks to the Chair and members of the committee for allowing me to speak to SB207.  I am the President of the Board of the New Hampshire Alliance for Retired Americans. The mission of our Alliance is to strive for social and economic justice, and civil rights for all citizens to enjoy lives with dignity, personal and family fulfillment, and security. The Alliance believes that all older and retired persons have a responsibility to strive to create a society that incorporates these goals and rights and that retirement provides them with opportunities to pursue new and expanded activities with their unions, civic organizations and their communities. Here in New Hampshire we represent approximately 14,000 members.
Why would a ban on discussing wage and salary levels affect the lives of older Americans, especially women?  The experience of Lily Ledbetter is a great illustration of how these bans discriminate against pay equity for women. If I, as a woman, am not allowed to discover that a man who does the same work as I do gets paid more, and often substantially more than I do, how can I ever achieve pay equity?
But why would this matter to a retiree?
First: Social Security benefits are based on lifetime earnings.
Second: the ability to save for retirement outside of Social Security depends on earnings.
Third, and often forgotten or skipped over: women on average live longer than men.
Because of these realities, women who are unfairly deprived of wages and salaries that men doing the same work enjoy are much more likely to live in poverty in old age.
That matters to women, to families, to our children, and for some of us, our grandchildren, who may have to support us in old age, and who are also paying into the system and planning their own retirements.  I hope it matters to you as well.
I have a few informational handouts I would like to leave with you as you consider this bill.  The New Hampshire Alliance for Retired Americans urges you to vote OTP on SB207.

Tuesday, March 25, 2014


Local programs for seniors are threatened.

Senior Corps volunteers run food pantries, tutor and mentor children, drive frail elderly folks to medical appointments, prepare and serve meals, teach exercise classes, and much more.  They assist more than 370 public and non-profit agencies and provide almost 540,000 volunteer hours in New Hampshire each year.

These dedicated and compassionate people focus their energy and purpose on helping others.  Incalculable amounts of work have been accomplished by Senior Corps members in towns across the state for almost 50 years.  They are most well known as Foster Grandparents, Senior Companions and RSVP volunteers.

Each year, Foster Grandparents provide more than 150,000 hours tutoring and mentoring more than 3,500 struggling children in N.H. schools, Head Starts and childcare centers.  They serve at least 15 hours each week.  Students who are experiencing serious life challenges receive caring one-on-one assistance using targeted interventions to help them succeed.  Foster Grandparents can provide the experienced, consistent, caring presence needed to aid emotional growth and learning.  Throughout the United States, Foster Grandparents help 215,700 children annually.  In addition, low-income seniors benefit from a tiny but essential stipend of $2.65 an hour.  This program enables struggling but capable seniors the dignity of earning while doing something important.

RSVP is the largest volunteer network in the country for people 55 and up.  In New Hampshire, RSVP helps meet the critical needs of communities by mobilizing more than 2,370 experienced and motivated seniors.  RSVP strengthens public and nonprofit agencies by matching dedicated volunteers to vital programs that meet the needs of struggling families and individuals.  RSVP volunteers focus most of their work on health and independent living, disaster preparedness, economic opportunity, education and veterans and military families.  RVSP volunteers delivered 537,845 hours of service and assisted 371 organizations in New Hampshire last year, achieving results that would not have happened without them.  Nationwide, 320,600 RSVP volunteers deliver more than 47 million hours to address unmet needs annually.
The Senior Companion Program pairs senior volunteers with isolated frail or disabled individuals to help them remain in their own homes.  They help with routine chores, provide transportation to medical appointments or for basic needs and provide friendly, caring companionship.  Senior Companions are often the only reason these vulnerable individuals are able to remain independent.  In New Hampshire, 84,652 hours are provided by about 100 Senior Companions.  Nation-wide, they help more than 50,000 individuals avoid costly institutionalization.  These hard-working, low-income seniors also earn a $2.65 an hour stipend.
But, these programs may experience fundamental changes and federal funding cuts in 2015.  Proposed changes would reduce all services next year, and then eliminate them.  The great success of these programs is evident in their continuing service for decades.  This year, the Senior Companion Program celebrates its 40th anniversary.  In 2015, the Foster Grandparent Program will celebrate its 50th year.
In these challenging days, we need the wisdom and massive collective efforts of our expanding senior population.  They are our nation’s largest under-used resource.

# of Volunteers
# of Donated Hours
# of Agencies Utilizing Volunteer Services

Monday, March 24, 2014

Democracy Matters talks Medicare and Social Security

"Democracy Matters" is a new on-going program hosted by Community Organizer Karen Kelly with NH Citizens Alliance. This show mixes education and action on a variety of issues of social, economic and political justice. Karen's first guest was Natasha Perez, Regional Field Organizer with the National Committee to Preserve Social Security and Medicare. The two organizations partner on programming throughout the state.

The first episode focuses on Medicare. Karen and Natasha look at the establishment of Medicare, how it works, threats to Medicare and what you as a Granite Stater can do to take action to protect Medicare.

The second episode focuses on Social Security.

Sunday, March 23, 2014

Senior Meet N' Greet - You are invited!

Seniors and Veterans are our silent majority. What do you think NH seniors need most? Please share your experience with us!

Join the New Hampshire Alliance for Retired Americans on Friday, April 11 from 10 am to 1 pm at 161 Londonderry Turnpike in Hooksett. We'll supply lunch.

Please RSVP by Tuesday, April 8 by calling 603-545-9989.

Saturday, March 15, 2014

Elder activism - time to bring it back?

David Wallis writes in the New York Times
Whatever the reasons, several social scientists say deteriorating conditions for retirees and older Americans in general — intensifying fear about retirement security, age discrimination, increasing poverty among the elderly and new threats to cut programs for seniors — could be the impetus for what some are calling a “silver revolution.”
He reviews the history of elder activism in this country and wonders if it's time for another wave of actions in the streets and at the seats of government.  We at the New Hampshire Alliance for Retired Americans have already begun. Come join us!

Saturday, March 8, 2014

Right-Wing PAC Makes False Claims About Medicare Advantage To NH Seniors

by Matt Murray, originally published by NH Labor News, reproduced with the author's permission.

We are a mere 241 days from the 2014 elections, and the hard right super PAC’s are already spreading lies throughout New Hampshire.

Recently the conservative super PAC YG Network sent an unsolicited mailer to the constituents of NH First Congressional district, currently represented by Congresswoman Carol Shea-Porter.

The YG Network describes themselves on their website as:

“A non-profit 501(c)(4) dedicated to supporting conservative center-right policies and the efforts of policymakers who fight for those policies. By seeking solutions that create jobs, encourage innovation, instill fiscal discipline, establish a patient-centered health care system and pursue energy security, we can foster the optimal environment for America’s businesses and entrepreneurs to succeed and flourish.”

The mailer is an attack on Congresswoman Shea-Porter’s stance on the Affordable Care Act and Medicare specifically.

You can see the full flyer here.

They make the claim that Rep Shea-Porter and President Obama are trying to cut $716 billion dollars from the Medicare Advantage program.   The irony in this right-wing attack is that the $716 billion dollars in savings to the Medicare Advantage program is a key part of the Ryan Plan, the budget proposal that everyone on the right is pushing.

YG Network also claims that;

Millions of seniors may be dropped from Medicare Advantage.
Higher premiums for care.
Higher prices for prescription drugs.
Cuts in coverage of dental and vision plans.
These claims by the YG Network are completely FALSE!  Time and time again multiple ‘fact checkers’ have busted these false accusations.

“Neither Obama nor his health care law literally “cut” a dollar from the Medicare program’s budget.
Rather, the health care law instituted a number of changes to reduce the growth of Medicare costs. At the time the law was passed, those reductions amounted to $500 billion over the next 10 years. Time’s passage has only boosted that number.”  (Politifact, 9-6-12)

“In reality, the $716 billion is not a “cut” in benefits but rather the savings in costs that the Congressional Budget Office projects over the next decade from wholly reasonable provisions in the reform law.” (New York Times 8-18-12)

The facts are undeniable; Granite Staters saved on average $800 a year in prescription drug charges thanks to the Medicare changes as part of the Affordable Care Act.

The truth is that seniors in New Hampshire, and throughout the country, are benefiting from the changes to the Medicare Advantage program. These changes are strengthening Medicare, while saving taxpayer dollars.   Congresswoman Shea-Porter was right to support these changes that add additional funds to the Medicare Trust fund, therefor boosting it’s solvency to 2026.

Unfortunately we are still 241 days away from the 2014 elections, which means that this is only the beginning when it comes to unsolicited lies from the right-wing super PACs.