On my way to 68 years old, with a Medicare card with my name on it in my wallet and my monthly Social Security check of earned benefits showing up like clockwork on the fourth Wednesday of the month, I was well suited to be at the White House Monday to cover and report on the once-in-a-decade Conference on Aging [COA] started in 1961 under President John F. Kennedy.
For the hundreds who were in the East Room of the White House, there were many topics on the day’s agenda that were near and dear to their health, hearts and happiness. From caregiving and caregivers to elder justice and financial security in retirement to strengthening Medicare and using modern technology in aging issues, the White House COA hit on chords of great concern amid a flurry of Republican politicos running for president who would undertake to reverse progressive actions with risky, untested plans.
Kasich Doesn’t Understand Social Security
For Gov. John Kasich of Ohio, who’s learned the trick of calling for innovation without detailing that innovation, would reform so-called “entitlement programs” like Social Security. Had Ohio’s governor attending the COA, he would have learned that what he wants to do doesn’t work and has been rejected previously by Americans.
“All the entitlement programs are going to have to be innovated in our country if we’re going to be able to get our budget deficit under control,” the 63-year old go-go CEO governor said, one report notes.
The governor who favors secrecy over transparency, and who keeps his tax returns from public eyes to prevent voters knowing how millions he’s made over his long and lucrative career in government, wants workers to be able to divert a percentage of their Social Security taxes into private investments accounts. The impact of retirement fund losses in the wake of the Great Recession should be a cautionary tale to all, especially someone like Mr. Kasich who made millions working on Wall Street for Lehman Brothers as others watched their retirement funds evaporate over night after the housing bubble, and the bankruptcy of Lehman Brothers, triggered the Great Recession. The stock market is volatile, a fact too many Americans learned first hand when their portfolios got knee-capped, leaving them worse off in their golden years with little chance to make it all up anytime soon.
Eliminate The Cap
Max Richtman, president of the National Committee to Preserve Social Security and Medicare, was among those attending the COA Monday. A strong voice against disabling Social Security and Medicare, Richtman said of Kasich’s unwise and misguided plan, “If his plan had been adopted and a large part of beneficiaries’ investments were in the stock market, they would have lost a lot of money in 2008,” according to a published report.
For a performance politician like Gov. Kasich, who spent 18 years in Washington, where he voted on many budgets, he should understand that Social Security is financed by a 12.4 percent payroll tax levied on the first $118,500 of a person’s annual pay. Workers pay half, employers pay the other half. With a dedicated source of funding, Social Security doesn’t add one penny to the national debt. At age 80, the popular social safety net program hasn’t missed one dime’s worth of payments to beneficiaries. In fact, with no reforms, Social Security will be able to meet its fiduciary requirements for another 30 years, then 75 percent after that for decades to come.
Future funding could be guaranteed by lifting or eliminating the cap on paying Social Security payroll taxes, a strategy Mr. Richtman and others including Ohio’s senior U.S. Senator Sherrod Brown propose. Social Security keeps retirees from living their senior years in poverty, pain and privation. If billionaires pay their fair share into the trust fund plan, it would help cement it for the rest of this century.
Kasich’s Risky Business
At his signing ceremony on June 30th for his latest, and most expensive spending plan in state history, Gov. Kasich, who’s ready to declare his candidacy on July 21 for president, said he hasn’t “left anybody behind.” Commenting on his $71.2 billion budget, he said it’s “real good stuff.” His critics say it leaves many behind, especially some of Ohio’s most vulnerable.
Basic Kasich is to call for innovative reforms. When innovation is forced, because simpler, commonsense solutions like raising or eliminating the cap on income for purposes of paying Social Security payroll taxes are ruled out by partisan political ideology, it can make matters worse. Ohio has plenty of experience with Kasich’s innovations. Advocating for people to bet their retirement savings on markets forces that can knee-cap portfolios in a heartbeat, leaving them with broken nest eggs, is clearly a lesson not learned. Bad things happen when markets tank, as they do periodically. Creating a trap door, as Mr. Kasich appears to want, makes saving for retirement very risky.
Ohio: Demographics Bode Bad
In the meantime, progressive leaders like Henry Cisneros, former Mayor of San Antonio, TX, and Secretary for Housing and Urban Development under President Bill Clinton, told me the nation will be better off the sooner the issue of appropriate housing for the nation’s aging population is undertaken in a significant way. Ohio’s slow population growth trends toward an older population. Cisneros said Ohio, with an aging population wrestling with financial stresses from lost industries and a low-paced recovery, has its challenges for seniors to address.
Watch my video of Henry Cisneros at the White House Conference on Aging: