GAO Report Reveals Social Security Benefits Gap between Rich, Poor

Published in Woonsocket Call on May 1, 2016

We intuitively know that there is a growing income gap between America’s rich and poor. We heard it for months during the presidential democratic debates. But a newly released GAO report documents this charge, the disparities and their impact on Social Security Benefits.

Growing disparities in life expectancy between America’s rich and poor is eroding the progressive nature of Social Security. A new Government Accountability Office (GAO) report, “Shorter Life Expectancy Reduces Projected Lifetime Benefits for Lower Income,” requested by Senator Bernie Sanders, shows that low-income American men (making about $20,000 a year) will lose 11 percent to 14 percent of their lifetime Social Security benefits while high-income men (making $80,000 annually) will see a 16 percent to 18 percent benefit boost due to this growing gap.

Life Expectancy Impacts SSA Benefits

The GAO study, released on April 4, 2016, found that raising the Social Security retirement age would result in even fewer benefits for lower-income groups. Lower-income men are living between 4 and 13 fewer years than higher-income men, and lower-income women are living between 2 and 14 fewer years than higher-income women.

“Poverty should not be a death sentence,” said Sanders, who serves as ranking member on the Primary Health and Retirement Security Subcommittee. “When over half of older workers have no retirement savings, we need to expand, not cut, Social Security so that every American can retire with the benefits they’ve earned and the dignity they deserve,” he says.

According to 64 page GAO report, the wealthiest Americans are not only living longer and collecting more in Social Security benefits, they are also contributing less of their income toward Social Security. Almost all of the income gains over the past three decades have gone to those earning above the $118,500 earnings cap and have therefore been exempt from Social Security taxes, costing the Social Security Trust Fund over $1.1 trillion, says the report.

“Today, the wealthiest Americans contribute less to Social Security than at any other time in recent history. We must reject calls to raise the retirement age and instead strengthen Social Security by ensuring millionaires and billionaires pay their fair share,” Sanders said.

Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM), says that the GAO report is especially important when you consider the push in Congress to raise Social Security’s retirement age to reduce benefits. “Forcing average Americans to delay retirement until 70, as suggested by some in Washington, would mean even smaller benefits for lower-income groups,” he says.

Richtman notes that NCPSSM has long opposed increasing the Social Security retirement age, stating that it is “nothing but a cruel cut in benefits” The GAO report shows exactly how cruel it would be, he says.

Instead of cutting Social Security, Richtman calls on Congress to boost benefits so that retirement income program can continue to fulfill its promise providing an adequate base of income for America’s seniors.

Lawmakers Push to Protect Social Security

Sanders, a presidential Democratic candidate, has introduced legislation that would ensure that Social Security would be able to pay every benefit owed to every eligible American for the next 58 years. His plan would increase benefits by more than $1,300 a year for seniors with less than $16,000 in annual income. This includes boosting yearly cost-of-living adjustments by making the consumer price index better reflect seniors’ rising costs for health care and prescription medicine.

To shore up the retirement program’s trust fund, the Senator would lift the cap on taxable income so everyone who makes more than $250,000 a year would pay the same percentage of their income into Social Security as middle-class working families.

“This report reinforces the importance of strengthening Social Security and preserving the guarantee of Medicare, especially for working and middle class Rhode Islanders,” said Congressman Cicilline (D-RI), who is a co-sponsor of the Protecting and Preserving Social Security Act. “After a lifetime of hard work, Rhode Islanders should be able to retire with economic security and peace of mind, he says, pledging to continue his efforts to support “commonsense” legislation that strengthen Social Security benefits.

The GAO study is a warning that proposals to raise the retirement age “would fall hardest on those who can least afford it,” says Senator Sheldon Whitehouse (D-RI). As a founding member of the Defending Social Security Caucus, Whitehouse plans to explore ways to strengthen the Social Security, “the bedrock of American retirement security.”

GAO made no recommendations in this report. However, in comments the Social Security Administration (SSA) agreed with GAO’s finding that it is important to understand how the life expectancy in different income groups may affect retirement income. The federal agency sees financial literacy as a key factor in preparing for a “secured retirement.”

According to a SSA official, “Social Security offers one of the best tools for the public to plan for their retirement and educate themselves about their benefits – a my Social Security account which is a secure, personalized online account that can be created at http://www.socialsecurity.gov/myaccount. With a my Social Security account, people can check their Social Security Statement to learn about future Social Security benefits, verify annual earnings, and plan for their financial future. More than 23 million people have already created secure, convenient accounts,” he says.

In recent years Congress has looked for ways to keep the Social Security program afloat by adjusting Social Security tax contributions, increasing retirement age, and reducing benefit amounts. Now with the release of the new report findings, the message is clear. Congress must not tinker with Social Security until it understands the unanticipated impact on those receiving the benefit checks, especially on the lower-income retirees.

For more information, contact Charles Jeszeck at (202) 512-7215 or jeszeckc@gao.gov.

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AOA Reauthorization Bill Goes to President Obama for Signing

Published in Woonsocket Call on April 10, 2016

The Older American’s Act (OAA) current authorization expired in fiscal year 2011 because lawmakers were unable to reach an agreement on its reauthorization. On a bipartisan basis, Congress has finally passed the long-stalled legislation reauthorizing the OAA when the Senate passed the House-amended bill on April 7. Three weeks earlier the House had passed an amended version of S. 192, the Older Americans Act Reauthorization Act of 2016, by a unanimous voice vote. This legislative proposal amended the bill passed by the Senate on July 16, 2015. Now the passed legislation goes to President Obama, once signed it becomes law.

The very bi-partisan Senate reauthorization bill was sponsored by Chairman Lamar Alexander (TN) and Ranking Member Patty Murray (D-WA), of the Senate Committee on Health, Education, Labor and Pensions, and had 27 co-sponsors from each party.

OAA Authorization Has Lots of Positives

OAA’s latest reauthorization offers new support for modernizing multipurpose senior center, highlights the importance of addressing senior’s economic needs, permanently requires health promotion and disease prevention initiatives to be evidence-based, and promotes chronic disease self-management and fall prevention.

The law also includes: stronger elder justice and legal services provisions; needed clarity for caregiver support and Aging and Disability Resource Centers; new opportunities for intergenerational shared sites, and promotes efficient and effective use of transportation services.

Legislative inertia and a general undercurrent of opposition to any government programs by some members of Congress slowed consideration of the bill , says Dan Adcock, Director of Government Relations and Policy for the National Committee to Preserve Social Security and Medicare (NCPSSM). “You need champions to break through the ‘legislative inertia’ and OAA just did not have enough,” he says.

Senators Lamar Alexander (R-TN), Patty Murray (D-WA) and Bernie Sanders (I-VT) along with Reps. John Kline (R-MN) and Bobby Scott (D-VA) worked hard to finally get the Senate and House to pass this year’s OAA reauthorization, Adcock noted, stressing that there was no opposition to the bill when it passed the House and Senate on voice votes

While the passed OAA reauthorization bill has many positives, its chief weakness is that it does not raise the funding authorization level enough, says Adcock. “Unfortunately, the Older Americans Act has suffered under flat funding and sequestration cuts for several years and will need significant increases in appropriations to meet the critical demands of a senior population that will nearly double by 2030, warns Adcock, noting that that an increase of 12 percent a years is needed for the next several years to raising funding to an acceptable level.

“AARP urges President Obama to quickly sign this bill,” said AARP CEO Jo Ann Jenkins. “We are appreciative of the bipartisan work to get this bill passed. Reauthorizing the OAA will help the millions of vulnerable older Americans who depend on the programs and services that the OAA helps to fund.

“Reauthorizing the OAA is as important as ever to modernizing and improving the aging services network in our country. It’s passage reflects the heroic efforts of many advocates working together to educate Congress about how programs funded by the OAA support older Americans,” observed Steven R. Counsell, MD, AGSF, American Geriatrics Society President.

Adds Senator Sheldon Whitehouse (D-RI), who serves on the Senate Select Committee on Aging, “I am glad we were able to reauthorize and improve the Older Americans Act. This legislation authorizes more funding for meals and social services seniors depend on. It includes new protections against elder abuse, which I’ve been fighting to pass. And it gives residents of long-term care facilities-who often can’t communicate their wishes-a stronger advocate to speak on their behalf.”

Ratchet Up AOA Funding

For more than 50 years the Administration on Aging with its National Aging Network (State Units on Aging and Area Agencies on Aging) has provided federal funding, based on the percentage of the locality’s population 60 and older, for nutrition and supportive home and community-based services, disease prevention/health promotion services, elder rights programs, the National Family Caregiver Support Program and Native American Program.

Aging advocates will tell you that Congressional funding has not kept with the rising inflation or the increased demands of an aging society. Deep Congressional budget cuts, push by the GOP, have significantly reduced OAA’s ability to provide services to those on increased waiting lists. Being “penny-wise and pound foolish” should not be the way Congress looks at future OAA reauthorizations. NCPSSM’s Adcock will tell you that programming geared to helping seniors to age in place at home in their communities can save billions by reducing costly nursing facility and hospital stays.

Hopefully, the President is expected to sign it in a week or two. Hopefully he signs this it quickly on Monday .

Financial Exploitation of Elderly Must Be Addressed

Published in Pawtucket Times, February 7, 2015

 Professor Philip Marshall, Coordinator of the Historic Preservation Program at Roger Williams University in Bristol, entered Room 562 in the Dirkson Senate Building not to testify on historic preservation policy, as he often did, but to share a family tragedy.  Marshall’s testimony detailed how his grandmother, New York philanthropist Brooke Astor, was financially exploited in her later years by his father.

Brooke Astor, a philanthropist, socialite and writer, was presented the Presidential Medal of Freedom by President Bill Clinton in 1998, for her generous giving of millions of dollars to social and cultural cause.  Marshall, one of four witnesses who came before the U.S. Senate Special Committee on Aging this past Wednesday, would say, that his 105 year old grandmother, who died on August 13, 2007, was considered to be “New York’s First Lady,” and a “humanist aristocrat with a generous heart.”

Marshall, a resident of South Dartmouth, Massachusetts, told the panel his mother would never have wanted to be known as “one of America’s most famous cases of elder abuse.”

“Nor did she, while in the throes of dementia, choose to be victimized to be deprived, manipulated and robbed – all as a calculated ‘scheme to defraud,’ as later characterized by the Manhattan District Attorney,” said Dr. Marshall.

Astor’s financial exploitation “may be her greatest, most lasting legacy,” says  Marshall.

In his testimony, Marshall told the attending Senators that after a three-month battle for guardianship to protect his grandmother’s assets, a settlement was reached five days before the court date.  A criminal investigation launched by the Manhattan District Attorney after a potential forgery was referred to his Elder Abuse Unit, would later lead to the indictment in 2007 of his father and a lawyer, says Marshall.

Two years later, after a six-month criminal trial the jury would find Marshall’s father guilty on 13 of 14 counts against him.  All, but one, were held up on appeal.

“While my grandmother’s stolen assets were reclaimed, many elders never reclaim their money – or their lives,” observes Marshall.  “Here, for financial transactions, enhanced detection, mandatory reporting, and greater reporting of suspicious activity will help,” he says.

A Growing Epidemic

 In her opening statement, Senator Susan M. Collins, (R-Maine) who chaired, the Senate Aging Panel’s hearing, “Broken Trust: Combating Financial Exploitation Targeting Vulnerable Seniors,” warns that a growing epidemic of financial exploitation is happening – one that she estimates to cost seniors an estimated $2.9 billion in 2010, according to the Government Accounting Office.

Financial exploitation is a growing problem in Rhode Island, too, notes Senator Sheldon Whitehouse (D-RI), a member of the Senate Aging Panel. “Sadly, this number likely underestimates the cost to victims because older adults often do not report abuse, particularly when it involves a family member.”

Senator Whitehouse noted that this week’s Special Committee on Aging hearing examined the challenges to identifying and prosecuting fraud schemes and highlighted strategies to prevent the financial exploitation of seniors. “There are steps we can take to address this problem, and I strongly support the Older Americans Act, which recently advanced out of the HELP Committee and addresses financial exploitation and other forms of elder abuse,” he added.

“Over the past several years the Rhode Island State Police has experienced a steady increase in the number of complaints of elderly exploitation and larceny from individuals over sixty-five-years, says Colonel Steven O’Donnell, who oversees the Rhode Island State Police.  During the past six years his Agency has investigated 40 complaints amounting to a total loss to victims of over $1,000,000.00.

According to O’Donnell, in 2010, State Police investigated four complaints related to elderly exploitation and/or larceny.  Four years later, 14 complaints were investigated. “These increases may be attributed to the increased computer literacy of willing perpetrators and the increased accessibility to bank accounts online, which provides perpetrators the opportunity to conduct their criminal activity behind closed doors,” he says.

Combating Financial Exploitation

To ratchet up the protection of older Rhode Islanders against financial exploitation, Rhode Island Attorney General Peter Kilmartin and the Rhode Island General Assembly passed a bill last year that extends the statute of limitations for elder exploitation from three years to ten years. Kilmartin says the new law, sponsored by retired Representative Elaine A. Coderre (D-District 60, Pawtucket) and Senator Paul V. Jabour (D- District 5, Providence), gives law enforcement officials the necessary time to build a proper case for charging and subsequent prosecution, bringing it in line with other financial crimes.

“The law about financial exploitation is on the books—let’s enforce it,” says, Kathleen Heren, State Long Term Care Ombudsman, at the Warwick-based Alliance for Better Long Term Care. “What a sad world we are in where a senior or a disabled person loses everything they have scrimped and saved for to a greedy individual who, in the majority of cases, is a family member,” she adds.  Over the years she has also seen financial exploitation involving clergy, lawyers, bank tellers, brokers, and “people who you would never suspect would steal from a frail elder.”

“Many people who hear “elder abuse and neglect” [or financial exploitation] think about older people living in nursing homes or about elderly relatives who live all alone and never have visitors. But elder abuse and financial exploitation are not just problems of older people we never see. It is right in our midst, and as Attorney General, I am committed to doing all I can to protect all of the citizens of our state,” says Kilmartin.

“Many elders rely on others for assistance, but oftentimes think they can easily trust these helpers to handle their financial affairs, only to be robbed of their hard earned money,” says Kilmartin, noting that in some cases the perpetrator leaves the victim penniless.

Kilmartin notes that financial exploitation of elders is one of the most challenging crimes to investigate, charge and prosecute.  By the time law enforcement becomes aware of the abuse and investigates the matter, the statute of limitations has often expired.  “The statute of limitations needs to be more reasonable so these complicated cases can be prosecuted appropriately,” states Rhode Island’s Attorney General. “Seniors, especially those who must rely on others for care, were unnecessarily made more vulnerable by the previous short statute of limitations,” he says.

According to Kilmartin, The Office of Attorney General has a specialized unit of prosecutors and investigators that handle elder abuse cases.  Several years ago, the Elder Abuse Unit was created because of the large percentage of Rhode Islanders who were age 60 and over. The special needs of the older victims and the fact that elder abuse, neglect and exploitation crosses all racial, socio-economic, gender and geographic lines made the need for a special unit apparent.  Coupled with this fact that this age group is the State’s fastest growing demographic, crimes against older persons often times go unreported, presenting high temptation and low risk for prosecution.

In Rhode Island, there is a mandatory duty of all citizens to report a suspicion of elder abuse and/or elder financial exploitation. To report elder physical abuse and/or elder financial abuse, contact your local police, Rhode Island State Police or the Rhode Island Division of Elderly Affairs at (401) 462-3000 or dea.ri.gov.

Herb Weiss, LRI ’12 is a Pawtucket writer covering aging, health care and medical issues.  He can be reached at hweissri@aol.com or at 401 742-4372.