September 26, 2011
The Honorable John Kerry
One Bowdoin Square
Boston, MA 02114
Dear Senator Kerry:
The Older Women’s League (OWL) is a nonprofit, nonpartisan, national grassroots membership organization which conducts research, education, and advocacy to improve the lives of midlife and older women. OWL was formed in 1980 and works to improve women’s access to high-quality, affordable health care, and to ensure that all women have the tools to build their economic security. Through research, education events, and advocacy activities, OWL aims to improve the status and quality of life of midlife and older women. More information about OWL National can be found at: www.owl-national.org and our local chapter, Eastern Massachusetts OWL: www.massowl.org .
Over 90 percent of older Massachusetts residents rely on Social Security benefits; the program protects the middle class retiree population and vulnerable people in our communities. Social Security is especially important to women, nearly half of older women are kept out of poverty with Social Security. Of those age 65 and older receiving Social Security benefits, 56 percent are women. Because of taking time out of the workforce to have children and to provide caregiving to family members, women have lower savings and less access to pensions, leaving them dependent on Social Security benefits.
OWL opposes cuts to Social Security and Medicare benefits. OWL supports policies that maintain and strengthen Social Security. Medicare is being addressed in the greater context of health care reform which is appropriate. We oppose any additional cuts which would jeopardize the health and economic well-being of older, retired individuals generally and women in particular. We would like to discuss with you further how the budget deficit might be addressed while preserving Social Security and Medicare, two of our most successful programs.
We understand that you are on the Debt Committee. We respectfully request a meeting in your Boston office to discuss how Social Security and Medicare protect older women and how to maintain the programs for current retirees and future retirees.
Ellen A. Bruce, JD
Chair, Eastern Massachusetts Chapter
Letter from Congressman Keating to Attendees at OWL Breakfast
Dear friends and neighbors,
I apologize for not being able to attend this morning’s event, but I was unexpectedly called to Washington due to scheduling changes precipitated by the debt ceiling challenge currently facing our country.
Many politicians in Washington keep saying that America is broke. Their solution to this problem is to cut Medicare and Social Security – two vital programs for our seniors. At the same time, though, they refuse to cut taxes for the wealthiest 2% of this country or for Big Oil companies receiving subsidies.
I don’t believe this is a valid solution. I agree that we need to get our fiscal house in order and have already crossed the aisle to do that on a number of occasions since coming to Congress. But, we cannot get our fiscal house in order on the backs of the people who have built this country for the past 50 or 60 years. It’s not right and it’s certainly not fair.
Because many news outlets covering the debt ceiling story haven’t actually explained what the debt ceiling is, I wanted to take a moment to do that. The debt ceiling is the limit for the amount of money the United States can borrow. This is different from the deficit, which is the amount of money the United States owes. It’s important to note that we are not raising our debt ceiling so that we can spend more. We are raising it so that we can pay our current bills.
In a 1987 radio address, President Reagan said of the raising the debt ceiling:
Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans’ benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility – two things that set us apart from much of the world.
The debt ceiling was raised under President Reagan seventeen times. It was raised seven times under the second President Bush. In fact, the debt ceiling has been raised seventy-four times since 1962 without controversy. So, why are certain people in Washington bringing us to the brink of default today?
The answer is sadly simple.
The United States is essentially being held hostage by a group of people in the House who are advancing an extremely conservative agenda. What this group fails to realize is that they are not playing with Monopoly money. They are playing with people’s Social Security checks and veterans’ benefits and mortgage rates. They are playing directly with our citizens’ lives.
Worse, their radical bills and ideas have no chance of passing the more moderate Senate, making it only more evident that they are not taking our fiscal crisis seriously. This sort of ideological posturing and extreme partisanship is exactly what is wrong with Washington.
We like to think of America as a prosperous country, but prosperity isn’t about how much personal wealth citizens can amass. It’s about how many citizens can join in and experience the benefits of our country’s prosperity. By those standards, America does not look like a very prosperous country right now. Millions of citizens are starving for work, hard-working families are barely living paycheck to paycheck, children are seeing their education benefits taken from them and our seniors are living under a constant fear that their Social Security and Medicare benefits many be eliminated.
Thus, our discussion about raising the debt ceiling shouldn’t center around how that will affect America’s credit rating or our financial markets. Of course we need to consider those factors because they are important, but our discussion should be centered around how default will hurt our citizens – the people who have built this country, the ones who have paid into the programs that the majority in the House of Representatives is threatening to eliminate.
It has been estimated that if our country defaults on its obligations we could lose over 600,000 jobs. Mortgage payments could increase by over $1,000 for the average family, credit card interest could increase by $250, the cost of food could go up $318 per year and the average cost of utilities increased by $182 per year. This is all in addition to the billions of dollars that would be added to our already-high debt.
America cannot default on its obligations, but similarly, the solution cannot be extreme cuts to or elimination of Social Security and Medicare. Those two programs have become the poster-children for entitlements, but something is not an entitlement when you have paid in for it.
With respect to both Social Security and Medicare, there is one overwhelming fact that always resonates with me when discussions to change or eliminate those programs come up. It’s that the average income for a senior citizen is $19,000. $19,000 is nothing when we think of all the costs a senior faces. When you’re living on $19,000, the value of receiving health insurance in the form of Medicare cannot be quantified and every Social Security check you receive is vital.
And turning Medicare into a voucher program, as the majority in the House has suggested, would only lead to increased costs. Over 17% of the residents in our district are age 65 or older. That would have a devastating and immediate impact right here for many of you in this room, your friends and loved ones.
Under this proposed program, the vouchers our seniors would receive might not even pay for a health insurance plan’s base premium. Before Medicare, over half of our seniors had no health care and over thirty percent lived in poverty. If the House majority succeeds in turning Medicare into a voucher program, we could be looking at those numbers again.
I am in Washington right now fighting to make sure that does not happen.
The other major thing I am fighting for in Washington is jobs. It has been 202 days since this current Congress started and the House majority has not offered one jobs bill. Instead, they are advancing their ideological agenda.
We need stop fighting an ideological war in Washington and start fighting an economic one. We need to start coming together to create jobs, secure our seniors retirements and help our children get a proper education. We need to start focusing on jobs and promoting legislation that will create them. I vow to continue working each day to make sure we get our priorities straight and start putting the people of this country first.
I want to close by thanking the dedicated members of OWL, the Marshfield Council on Aging and the Gerontology Institute: UMass Boston, in particular Carol Hamilton and Ellen Bruce. I also want to take a moment to thank Edris Kelly as well as my dear friends Sue Thomson and Norma Fenochietti, who helped organize the event.
Again, I extend my sincerest apologies for not being able to attend this morning and I hope to see you all in the near future.
On behalf of the Eastern Massachusetts Chapter of OWL, members Mollie Feeney and Ellen Bruce sent the letter below to our U.S. Senators and Representatives stating OWL's position on Social Security. We will be posting any responses on this page.
We, members of the Eastern Massachusetts Chapter of OWL (the Voice of Midlife and Older Women founded in 1980 and is the only national grassroots organization dedicated entirely to addressing concerns of midlife and older women) who are your constituents, wish to voice our deep concern about the case being made in Washington to raise the Social Security retirement age as a means to reduce the federal debt crisis. We ask that you NOT vote to raise the retirement age.
We quote from the Economic Policy Institute Fact Sheet…”At a time when more Americans are living longer, raising the retirement age may seem like a good way to strengthen Social Security. The following reasons explain why it is not.” The EPI Fact Sheet makes the following points:
1. Raising the retirement age is a benefit cut, and benefits are already too low. The average retiree receives less than. $14,000 a year from Social Security, which is less than the minimum wage.
2. It cuts benefits for all retirees, whether they retire at age 62, age 70, or any other age—and it is a cut for retired workers’ spouses, widows, and dependents, as well. When the retirement age was raised from 65 to 67, it cut benefits for the average worker who retires at 65 by 13%, meaning they lose, on average, $28,154 over the course of their expected retirement. Raising the retirement age further, to 70, would cut benefits another 19%, costing the average worker another $35,419, for a total loss of $63,573.
3. Social Security’s problem is not that people are living longer. The ratio of working years to retirement years will be no higher in 2022 than it was in 1983, when Congress last raised the retirement age. People work roughly two years for every year of retirement, and while people at age 65 are living three years longer than they did 27 years ago, the 1983 law requires them to work two years more, maintaining the same basic ratio of work years to retirement years. In other words, the share of time spent in the labor force compared to retirement will be the same in 2022.
4. The biggest financial problem facing Social Security is rising income inequality, which cannot be addressed by raising the retirement age. In 1983, 10% of all earnings were above the taxable earnings cap, compared to 16% today, which leaves high earners with a windfall and Social Security with a shortfall. If those earnings were brought back under the cap and taxed, about 40% of the Social Security funding shortfall would disappear.
5. Raising the retirement age affects all workers, even those who have seen little or no increase in life expectancy. Men in the top half of the earnings distribution have increased their life expectancy at age 65 by five years since 1982. Lower-income men have seen a gain of only 1.1 years, and lower income women have seen life expectancy decline.
6. Older Americans are already working longer than they did even 40 years ago. Working longer is not a choice for millions of Americans, many of whom hold physically demanding jobs. Sixty-one percent of physically demanding jobs are held by workers in the bottom 40% of the wage scale.
7. About 70% of the American people oppose raising the retirement age. Over 60% favor lifting the payroll tax cap for incomes over the current threshold.
The shortfall can be reduced without cutting benefits. Taxes should be raised on the highest earners who pay a much lower share of their income in Social Security taxes. Closing the loopholes and raising the taxable earnings cap, so it covers the same share of national income as in 1983 would eliminate more than half of the Social Security budget shortfall. Removing the cap on the employer’s taxes would all but eliminate the rest of the shortfall, which is a simple solution to this deception. It is time to make the pension system fair. The rich need to pay at the same rate that the rest of us do.
The responses we have received so far (as of 11/10/2010) are posted below (you can also follow the links to the PDF versions):
Representative Niki Tsongas
Senator Scott Brown
Representative Bill Delahunt
Representative Barney Frank
From Representative Niki Tsongas