Tag: Social Security

Entitlement is not bad

The word “entitled” has developed an unfair negative connotation. There is nothing inherently negative about it. Merriam-Webster defines “entitled” as having a right to certain benefits or privileges. It’s actually a good thing to have a right to certain benefits or privileges when they are deserved.

How did the word end up with a negative connotation? It happened from people using it improperly. People call other people “entitled” when they actually mean the exact opposite—that they do not have a right to certain benefits or privileges. When someone believes they should receive a benefit or privilege that they do not have a right to, it should be said that they have an undeserved sense of entitlement (“sense” being the operative word) because they inaccurately feel they are entitled.

A classic example of a true entitlement is Social Security benefits. Most workers pay into the Social Security trust fund throughout their professional career via paycheck withholdings and their employer’s contributions to it. Therefore, when a worker becomes eligible for Social Security benefits, they are entitled to receive them.

Nonetheless, there is a viral Internet meme that incorrectly says “Social Security is not an entitlement.” In fact, Social Security is not only an entitlement by the definition of the word (a right to benefits specified especially by law or contract) but also by official designation. The federal government defines an entitlement as:

A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans’ compensation and pensions are examples of entitlement programs.

United States Senate Glossary

It’s a good thing they are entitlement programs because if the government designated the benefits as “discretionary spending,” they would not be protected. Discretionary spending is subject to the whim of annual appropriations acts and congress has proven completely inept at passing them. That’s why when congress fails to pass one, the government shuts down but beneficiaries continue to receive their Social Security benefits.

So be proud when someone says you are entitled to a benefit or privilege that you have a right to. But if someone says that someone is “entitled” to something they do not deserve, let them know that they are not entitled.

Senator Dianne Feinstein on Social Security disability income

Motivated by news that the Social Security disability trust fund could run dry soon, I wrote to my federal representatives. President Obama was the first to reply to me but I recently received a reply that more directly addresses my concern from Senator Dianne Feinstein. Here is what she had to say:

Dear David:

Thank you for writing to me about Social Security benefits for people with disabilities.  Your correspondence is important to me, and I welcome the opportunity to respond.

I recognize that millions of Americans with disabilities rely upon Social Security benefits to maintain their independence and live heathy, productive lives.  According to the most recent figures, 709,509 disabled workers, 12,586 spouses, and 128,447 children in California received Social Security Disability Insurance (DI) benefits in 2014, and more than 1.3 million Californians received Supplemental Security Income (SSI) in 2013.  I hope that Congress will act to ensure the long-term solvency of these important programs.

The Old-Age and Survivors Insurance (OASI) retirement program and DI programs are funded largely by revenue from a dedicated payroll tax collected from both employers and employees and paid into each program’s respective trust fund to earn compounding interest.  The 2015 annual report by the Social Security Board of Trustees projects that DI trust fund reserves will be depleted by late 2016.  In the absence of Congressional action, this reserve depletion would force the Social Security Administration (SSA) to implement an across-the-board reduction in payments to DI beneficiaries by an estimated 20 percent.  This would mean that the average monthly DI benefit for July 2015 would be reduced from $1,022.16 to $817.73 per month.

In the past, Congress has routinely reallocated payroll tax revenue between the OASI trust fund that supports retirees and the much smaller DI trust fund, which supports people with disabilities and their families.  Congress has reallocated payroll revenue between the trust funds a total of 11 times since 1968.  In five instances Congress transferred payroll tax revenue from the DI trust fund to the OASI trust fund.  According to a recent analysis by the Center on Budget and Policy Priorities, a reallocation of payroll tax revenue to put the two trust funds on an even footing would expedite the OASI trust fund’s projected reserve depletion by one year (from 2034 to 2033) while extending the solvency of the DI trust fund by an estimated 17 years (from 2016 to 2033).

You may be interested to know that I am an original cosponsor of the “Social Security Earned Benefits Payment Act of 2015” (S.2090), which was introduced by Senator Ron Wyden (D-OR) on September 28, 2015.  This legislation would reallocate a part of payroll taxes to the Social Security Disability Insurance trust fund to ensure full benefits are paid through the early 2030s.  S.2090 currently awaits action by the Committee on Finance, of which I am not a member.

As you may know, the SSI program provides monthly cash assistance to low-income people who are disabled, blind, or elderly with no real financial assets to help those individuals achieve a basic standard of living.  Unlike OASI and DI, the SSI program is funded by general tax revenues from the U.S. Treasury and not Social Security payroll taxes.  As such, each year Congress authorizes taxpayer funds that are used to pay eligible SSI recipients.  Many SSI recipients who have worked long enough and paid payroll taxes are also eligible to receive Social Security benefits.

Please know that I will continue working with my Senate colleagues to preserve Social Security programs for the millions of Americans with disabilities and their families who count on these vital programs.

Again, thank you for your letter.  If you have any additional comments or questions, please feel free to contact my Washington, D.C., office at (202) 224-3841 or visit my website at http://feinstein.senate.gov.  Best regards.

Sincerely yours,
Dianne Feinstein

I commend Senator Feinstein for co-sponsoring S.2090. Let’s hope the senate Finance Committee advances the bill to the floor.

President Obama on Social Security

Motivated by news that the Social Security disability trust fund could run dry soon, I wrote to my federal representatives. So far, only President Obama replied. Although his reply doesn’t directly address my concerns about the disability trust fund, he shared his position on Social Security in general:

Dear David:

Thank you for writing. It’s clear you have faced great challenges, and I want you to know I am listening. I have heard from many Americans who are concerned about their financial security in retirement, and I want you to know I am listening.

As President, one of my top priorities is keeping Social Security a rock-solid, guaranteed progressive benefit that every American can rely on. However, a Social Security check often is not enough on its own. After a lifetime of hard work, too many Americans reach their golden years unable to supplement their Social Security and enjoy a secure retirement. At a time when Americans are largely responsible for making their own choices about how much to save and how to invest their savings, my Administration is making it easier to prepare for retirement. In every budget I’ve put forward since taking Office, I’ve proposed legislation that would give 30 million additional workers access to a workplace savings opportunity. And last year, the Treasury Department launched “myRA,” a simple, safe, and no-fee savings program that stays with you even if you switch jobs.

At the same time, families who act responsibly by building up their savings should be able to trust that the retirement advice they receive is in their best interest. But right now, outdated regulations allow brokers to put their own financial gain ahead of their clients’ retirement security—costing savers approximately $17 billion each year. That is why my Administration is updating the rules and requirements for retirement investment advice. The bottom line is that what you earn on the nest egg you’ve worked a lifetime to build should work for you, not anybody else.

Again, thank you for sharing your thoughts. A critical test of the strength of our economy is whether hardworking Americans feel confident in their retirement security. As long as I hold this Office, I’ll keep fighting to preserve the basic bargain that anyone who works hard all their life can enjoy a stable and secure retirement.

Sincerely,
Barack Obama

In all fairness, there’s little President Obama can do about the disability trust fund at this point. When the fund runs dry, he will have to make some executive decisions but he’ll nearly be leaving the Oval Office by then. In the meantime, he can only respond to what congress brings to the table.