Social Security Equity /Labor, HHS, Education FY 2022

Ways and Means, Social Security: Equity in Social Security: In Their Own Words”, June 15, 2021

House Appropriations Labor, Health & Human Services, and Education FY2022, May 19, 2021

My first item concerns my personal welfare as an SSDI beneficiary, as well as for retirees. The need for an immediate COLA for Social Security recipients.

Even before the pandemic, my SSDI was inadequate for food, medicine, clothing and cable. If I owned a vehicle, there is no way I could maintain it or even buy gas. I have an above average benefit, high enough to be ineligible for SNAP or Medicaid. Many are not so lucky, even on a good day. 

In the last few months, days have not been so good. Were it not for stimulus payments, I would be running out of food as I write this and would not have just bought new clothes, from socks and underwear to a jacket I can wear when the Committee finally asks me to testify in person. As it is, I will need to use the last $600 from my December payment (which should have come through Social Security) to attend my upcoming high school reunion. Whale I have wifi, I cannot afford cable and a car is still out of reach.

Let me underline a point. In most months, new underwear is not an option, I rely on free bus rides due to the pandemic and subsidies from Ride On and there is never enough money in that last week before the check comes. When it does arrive, the cupboard is bare.

Double underline: food prices are skyrocketing. Part of the problem may be too much money chasing too few goods, but retirees and the disabled find (our)selves between a rock and a hard place. We need a COLA and we need it now. Most of us cannot even afford cola. Because this is a short term emergency due to the Pandemic, it should be funded out of the general fund until the normal process kicks in for next year.

SS Only: Another concern is the long waiting time to see a benefits specialist at my local Social Security office on Washington Street in Rockville to apply for SSI so that I could get Maryland Temporary Disability, as well as the offices in Washington, DC to apply forSSDI (only to be told to schedule an interview and Springfield, Virginia to get a replacement card for my low wage job.

After my first visit, I knew to set aside an entire afternoon. Post-COVID, we must do better. These Offices were as busy as the Virgina DMV on Saturdays.

My Driver’s License expired in November. It was disconcerting to need an appointment to get one, but because of the pandemic it was no problem with it expiring in the mean time (of course, I don’t drive anyway, so it was no big deal). Years before, a new license renewal meant almost an hour waiting for my number to be called. This time, there was very little waiting while my number was called to get a license. I imagine that my local Social Security office has done the same things to cope with Covid - at least I hope so. We need to preserve these lessons and create a new normal.

Money will be an issue. We need more Social Security offices and maybe, because they have similar functions, cooperation with the DMV might be in order. It would require cross training citizen service workers, but that just means we would have to pay them more and hire more of them. Just a stray thought. More importantly, building more offices for both DMV and Social Security will take money and it should not require higher driver’s license fees or take away from the pool of money used for benefits. 

Both: This brings us to the funding of Social Security administrative costs. They are low - the most efficient in retirement savings. However, they should not have any. This is especially the case responding to the pandemic. Use general revenues now to fund administration, improvements and more office space. As the pandemic wanes, caution will still be necessary for a while. It is time to build out some infrastructure in both government and leased space. The same is the case for Medicare and Disability Insurance costs.  The general fund already owes trillions of dollars to the Social Security Trust Fund. Rather than trying to figure out how to extend the fund for 75 year balance at the expense of future retirees, fund n0n-benefit costs immediately from the general fund.

Appropriations Only:

State governments are under financial pressure as a result of the pandemic, especially in the area of healthcare costs, most especially for seniors in nursing homes who are “dual eligibles.” The heart of President Reagan’s Federalism Proposal was the transfer of state Medicaid expenses to the federal government, largely to fund baby boomers who would become dual eligible with time. Time is now up, or will be shortly. 

Welfare has been reformed, allowing state and federal governments to save money - which was part of the New Federalism bargain that was not accepted at the time. We will address this part shortly, but the irony is that federal money was reduced without the second part of the trade-off. Finish the process and create Medicare Part E for low income disabled and retirees. This will put investigation of nursing home conditions into the federal sector. States have done a poor job in enforcement of health and safety standards. It is time to make this a national responsibility.

The President’s Infrastructure Proposals include funding human capital needs.  These needs are urgent for not only young people going to college, but everyone who is ill served. from English as a Second Language up. 

We recommend that funding include the freshman and sophomore year at four-year institutions as well. Technical training should be covered as well at both public and accredited private schools, including religious schools. In Espinoza v. Montana, prohibitions on funding private schools (Blaine Amendments) were found to be unconstitutional. New (and existing) funding should reflect that fact.

A main problem with current training regimes is that potential students have opportunity costs that are not covered by training. TANF is simply too narrowly tailored and directs too many people to low wage work, especially in the dirtiest jobs in the medical field. The woke among us do not have to look hard for the intrinsic sexism and racism in this scheme.

Payments for tuition, stipends and family support would be funded by employer-paid subtraction value added taxes. Ideally, both state and federal subtraction VAT will be enacted. A federal VAT would be levied to assure that a minimum amount of funding is available should states underfund their programs, which some will.

The American Recovery Plan Act requires payment of the child tax credit in advance of the annual tax filing. This is appropriate and will change the culture of such credits, which should be for continuing support, not an annual bonus. The current plan is for the IRS to manage payments. I submit that, over the long-term, it would be more acceptable to distribute them either through other government subsidies, such as Unemployment Insurance, Disability Insurance, or a training stipend OR through wages. In the latter case, until a subtraction value added tax is in place, the credit would be paid in advance by employers and then deducted from their quarterly tax payment.

Unemployment insurance must be less punitive, particularly where younger workers are concerned. In lower wage jobs, the preference is to find potential supervisors (whose compensation is usually subpar as well) and keep a file of infractions to justify firing workers who do not work out. A punitive work environment that does not exactly make any kind of work attractive. 

In certain circumstances, unemployment compensation should be available on a no-fault basis. Better still, employees should be allowed to voluntarily leave firms with a history of quickly dismissing employees without penalty. There should be no expendable jobs or workers. 

Current punitive taxes on employers would not be appropriate, so a more general levy, such as employer-paid subtraction VAT (if employers continue to pay former workers and help them find jobs or paid training) or a goods and services tax, likely levied, at least partially, at the federal level, with states providing most of the funding.

Unemployment Insurance would include CTC payments and automattic subsidized health insurance coverage with eligibility in the soon to be proposed Public Option.