The Dems say they’ll protect the “most vulnerable” seniors. Who are the most vulnerable?
by digby
So, this happened:
It’s just a “technical” fix, you see and they’ll make sure to “protect” the most vulnerable seniors. I’m so relieved. Ezra Klein takes this little bit of sneaky obfuscation apart, here.
And this happened too:
Nancy Pelosi supports latest White House deal
This is significant: Nancy Pelosi, the Democratic minority leader in the House, tells MSNBC that she could back the latest White House deal.
That’s important because Pelosi wields influence over the congressional party’s liberal wing, in case of a backlash against the chained CPI indexing of benefits.
This seems to be a united front to get all of us liberals to unwad our panties poste haste and get on with the program.
Here’s the thing. I don’t know how they are defining the “most vulnerable”, but a vast number of the elderly are barely getting by already.
Social Security Is the Principal Source of Family Income for Nearly Half of Older Americans.Twenty-four percent of those aged 65 and over live in families that depend on Social Security benefits for 90 percent or more of their income. Another 26 percent receive at least half but less than 90 percent of their family income from Social Security.
Social Security benefits are particularly important for women, because, on average, women live longer and earn less than men. Fifty-two percent of all women aged 65 and older depend on Social Security benefits for 50 percent or more of their family income, compared to 45 percent of men.
Additionally, reliance on Social Security as a source of guaranteed income increases with age Eighty-eight percent of individuals aged 65 and over include Social Security benefits as a source of family income, which is double the number of individuals receiving income from pensions and retirement savings. Social Security retirement benefits are guaranteed for life and are adjusted to keep pace with inflation. In contrast, pensions and retirement savings accounts are rarely indexed to inflation, and retirees may outlive those assets.
As the only guarantee of income in retirement, Social Security has performed admirably over the years in keeping older Americans out of poverty. In 2010, Social Security income kept roughly 35 percent of older Americans out of poverty.
BTW:
75% of unmarried women older than 65 get half or more of their income from Social Security.
So, I don’t know how much “protection” they are offering to the “most vulnerable” but unless it covers all of those people and everyone else who stands to outlive their pensions and asset losses, I’m not really seeing the point.
I love this though:
White House Press Secretary Jay Carney rejected Speaker John Boehner’s “Plan B” for the “fiscal cliff,” and said it would be “shocking” if Republicans did not agree to President Obama’s latest proposal, which raises the threshold for tax increases to those making more than $400,000 per year.
Yeah, I’d be shocked too. It’s a helluva deal for the Republicans. let’s hope they’re still as crazy as everything thinks they are.
Also too, this from Matt Yglesias:
Once upon a time there was an idea that a healthy part of a middle class individual’s retirement should be secured via a defined-benefit pension program that would be provided by his employer and that his employer would be encouraged to provide thanks to implicit subsidies in the tax code. That paradigm was very similar to the paradigm of employer-provided health insurance, and over time it’s tended to unravel for similar reasons. Except the pension case is even worse than the health care case, because we’ve been able to make employer-provided health care semi-viable through “continuity of coverage” rules and COBRA to let people transition from one employer-provided plan to another.
So defined benefit pensions are dying off. One natural substitute is tax-preferred individual savings vehicles like the IRA and the 401(k). Those have some conceptual virtues, but also considerable practical drawbacks since they’ve created a vast rent-seeking market in extracting management fees from careless middle class savers. They also have a lot of undesirable instability. I retire comfortably in March of 1999, you retired wiped out in March of 2001.
The natural supplement to the problems with individual retirement savings and substitute for the problems with defined-benefit corporate pensions is a large public sector program. Every working person gets a bit less take home pay than they would have otherwise had, but in exchange gets a guaranteed annuity when they’re retired. And fortunately for us we have a program that’s already more or less structured like that. It’s called Social Security. And as the defined benefit pension paradigm fades away, the natural and proper thing would be to rely more on Social Security as a vehicle for ensuring adequate living standards for senior citizens. The fact that this is happening more or less simultaneously with a demographic transition in which the elderly will be a larger share of the population is interesting, but doesn’t fundamentally defeat the analysis.
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