Social Security

Although the seeds of war were being planted in Europe at the time, overall 1935 was a good year. With President Roosevelt leading the country, It was the year that RADAR, the helicopter, fluorescent lights and Nylon were invented, the first Sugar and Orange bowl games were played, Ozzie married Harriet, Babe Ruth played his last game, Alcoholics Anonymous and the CIO were formed, and Persia was renamed Iran. It was the year that Elvis, Julie Andrews, the Dali Lama, Sonny Bono, Luciano Pavarotti, Woody Allen, the Deception Pass bridge and I were born. In fact Monica Lewinski and I share the same birthday, 38 years apart. But, 1935 also gave rise to one of the most important pieces of U.S. legislation from the 20^th century, the Social Security Act.

                                                            The Problem

For seventy six years Social Security has helped keep hundreds of thousands of seniors out of poverty.  This was accomplished by a tax on worker’s salaries to fund the system. Over this time, while the amount of salary being taxed has increased, the numbers of people drawing Social Security benefits have increased faster than either the numbers of workers making current contributions or the level of tax being assessed. For example, the advent of the boomer generation into the ranks of the retired, along with other factors such as increasing longevity and the improving productivity from technology, is helping to create a long-term Social Security financing shortfall. As a result, there is general agreement that the trust fund’s present income and reserves will cover full payments until the end of 2037. After that time, payments will fall to about three quarters of the scheduled benefits. This then is the broad scenario that anyone seeking to retire and who was born around 1970 or later will face unless changes to the system are made

It should be noted here that referring to Social Security as an “entitlement” program is a complete misnomer. This term has acquired a negative context in recent years and fundamentally misrepresents what Social Security really is. Not unlike a savings account, the benefits paid out have been EARNED by individual contributions over a workers employment time. While workers are entitled to receive the earned benefits, it is on the basis of what they have already paid into the system and their forecasted longevity. There will be “winners” and “losers” depending on how long an individual lives, but this is accounted for in the management of the trust fund and the established contribution rates that do change with time. It is also a fully paid and independent system that does not include use of general taxpayer funds. Thus, to term the program as an “entitlement” in the context of welfare is simply wrong. Also, while I’m using the term “benefits” here, I would suggest that “returns” is a better choice to avoid reinforcing the wrongful “entitlement” characterization.

A number of ideas for introducing fixes and/or changes to the Social Security system have been and continue to be advanced. Policy questions are on the table that will affect millions of people. Should benefits be cut or the retirement age increased to eliminate the shortfall? Should the tax be increased and/or the salary cap be raised? Should neither or both be done? Should means testing be introduced? Should system reserves be placed in private investments? Should the Social Security system even be continued? Will currently vested enrollees be protected? Are there other approaches that would make the system permanently viable? These are daunting questions for a severely bipartisan Congress to deliberate. While negative actions on these questions constitute the potential bad news, the good news is that there is time right now to fix the system if the political will is sufficient. Assuming the system is continued, the fundamental decision will be to decide between increasing the revenue to the system, cutting benefits, or some combination of both. Exactly   how to accomplish either approach is the sticking point. The closer we get to the time decisions concerning Social Security will be made, the more vocal critics of any proposed fix will become and the more “scare” stories will be put forward, some with no or misrepresented facts. To find the truth and to check out the facts of any such item go to www.snopes.com or www.factcheck.org

                                                So, What Should Be Done?

In 2010 a U.S. Senate Special Committee on Aging issued a report outlining the policies Congress could institute to eliminate Social Security’s projected deficit. The May 18, 2010 issue of U.S. News published a summary of potential fixes as follows:

Reduce Benefits

If Social Security payouts were reduced by 3% for new beneficiaries beginning in 2010, it would reduce the funding shortfall by about 18 percent. A 5% reduction would reduce the deficit by 30 percent.

Raise the Retirement Age

The current eligibility age is 65 to67 for unreduced benefits depending on the worker’s year of birth. Proposals include increasing the full retirement age to as high as age 70 and indexing the age to keep pace with increasing longevity. Either of these changes would eliminate less than one third of the deficit.

Increase Worker and Employer Contributions

The current contribution rate is 12.4% of wages up to $106,800. If employed, half,  or 6.2%, is paid by the employer. If the rate were increased by 1.1% to 7.3 % of earnings, Social Security’s deficit would be eliminated. Using this proposed increase, a worker earning $43,451 (in 2010) would face a tax increase of $478 a year or $9.19 a week, and the employer would face an identical increase.

Boost Future Contributions

If current benefits are maintained and the contribution rate is increased to 7.2% in 2022 and 8.2% in 2052, the shortfall would also be eliminated. This scenario would be possible due to present trust fund reserves. If the tax rate is gradually increased by 1/20% annually for 20 years, the Social Security shortfall would be decreased by about 69%.

Tax as Needed

Contribution rates could be designed to increase as funds are needed and to reduce when there is a surplus. Increasing efforts to collect unpaid taxes could be increased as well.

Modify the Social Security Tax Cap

The present cap on eligible earnings is $106,800. If all income above that level were subject to the tax but not used for benefits, the projected shortfall would be eliminated. If used also for benefits, about 95% of the shortfall would be covered. The cap could also be increased to 90% of all worker earnings.

Average in More Working Years

Current benefits are based on an average of the top 35 years of earnings. If the averaging period is increased to 38 or 40 years, the shortfall would be reduced by 14% and 23% respectively.

Decrease the Cost-of-Living Adjustment

Until recently, Social Security benefits have been adjusted each year to keep up with inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers. If this COLA is reduced by 1% each year it would eliminate 78% of the shortfall.

Lower Spousal Benefits

One proposal is to gradually lower the spousal benefits from 50% at present to 33% by 2026. This change would only reduce the shortfall by about 6%.

Include More Workers

About 94% of workers currently pay into Social Security. Exemptions are made for some Americans, for Federal workers hired before 1984, for State and local government workers participating in alternative retirement systems, for college students working at academic institutions, and ministers who choose not to be covered. If Social Security coverage was extended to workers not currently participating, It would only reduce the shortfall by about 9%.

A Legacy Tax

The first retirees who received Social Security payments did not pay the tax over all of their life. For example, a 60 year old in 1935 only had to pay in for 5 years before starting to collect benefits. Several proposals are under consideration for counteracting this “legacy” cost to recoup the amounts not paid in by the early retirees. If implemented by, for example, a 3% surtax on higher incomes over the present cap, it would eliminate about one-third of the shortfall. Another proposal to direct estate tax revenues into the Social Security trust fund would eliminate 20% of the fund’s deficit.

Diversify Investments

This approach would invest a portion of the trust fund in equities to try to earn returns that would help offset the shortfall. Unrealistically high investment amounts and rates of return (eg., 9-10%) would be required to make a significant impact on the shortfall. At the same time this exposes the trust fund to losses if the market turns down.

                                                            Pros and Cons

Each of these possible approaches have pluses and minuses, some heavily one way or the other. And, the ultimate solution(s) lies in the eye of the proponent. I would hope that, first and foremost, the basis for any change would be to “do no harm”. Keep the system and keep it independent as at present. Avoid building in risk. Any change should not adversely affect the currently vested enrollees. Implementing any change in a graduated way is also a good basis to minimize individual impact, and, there appears to be sufficient time to do that. Change that retains the security of the system for both present and future enrollees is essential. This is exemplified by periodic adjustment of the tax rate/salary cap and maintaining the annual cost of living adjustment in order to stay current and assure a healthy reserve. Without further elaboration, what do you think about these possibilities?

                                                            What Can I Do?

The possibilities for action outlined above may not list every alternative available. You may have an idea nobody else has thought of. But, no matter what else, stand up, speak up and be counted. Make your voice heard.  Talk to your family, friends and neighbors. Communicate with your Congressional members that will be deciding how to proceed. E-mail makes it easy but try to catch them face to face at recess time as well. And appeal to them to act in their best bipartisan way. This is participatory democracy by “We the people”.  Your thoughts are important but do no good if kept to yourself. Finally, make sure you are registered and vote!

Rationality

As we rush pell-mell daily to embrace “progress”, we need to take time to smell the roses and assess what we are doing and what we are leaving behind. The last decade in particular has seen a progression of new assaults on our senses, our wallets and our psyches, aided and abetted by the media. Essentially nothing has been left untouched by major change, whether it be the world, our country or us, individually. Technology, terrorism, wars, politics, and the waning economy, have all taken their toll, literally and emotionally. And while it’s not all negative, it’s an impact anyway. Even positive impacts are, or can be, stressors. So, what is this doing for our capacity for rational thought?

ra-tion-al 1.  Having or exercising the ability to reason. 2. Of sound mind: sane. 3. Manifesting or based upon reason; logical.

rea-son 4. The capacity for rational thought, inference or discrimination. 5. Good judgment; sound sense; intelligence. 6. Normal mental state; sanity.

Many items of technology are proving to be significant increases in personal convenience. However, the exploding use of the internet is having a profound effect on our world and our lives. One program alone, Facebook, is said to have 750 MILLION worldwide users! That’s more than twice the entire population of the US, men, women and children combined, and more “friends” than most of us wish to have. E-mail messages probably number in the billions daily and texting messages may well exceed that. This usage has spawned a plethora of “gadgets” to connect and utilize this capability, computers we can carry and others we can’t, cell phones both smart and not so smart, the I-Pad and all its cousins. It’s possible today to carry an entire library around in your pocket. We are light years from cuneiform writings painstakingly scratched on clay tablets and even the more recent pony express delivery. Now, we have instant access to each other and to a world of information within arm’s reach continuously. This unprecedented access to information, and to each other in particular, is without parallel in history and impacts us all, sometimes favorably, sometimes not. It seems clear though that major impacts of this are higher dollar cost, higher emotional cost and a loss of continuity with our roots.

Technology has similarly exploded in the medical field. New treatments, new processes and equipment, new materials, and new medications have increased longevity and improved the quality of life for millions of people. Long term studies of the safety and efficacy of these new items, however, are not keeping pace. In the automotive field, technology is asserting itself in the form of improved passenger safety and convenience, improved gas consumption and incorporation of communications media like On-Star, internet and cell phone availability. While generally beneficial, these advancements have led to higher costs, some impacts to driver attention and a profound sense of nostalgia for the '56 Chevys, Barris customs and throaty Hollywood mufflers of our recent past (whatever happened to identifiable fenders and running boards?).     

Are these impacts/shortcomings of technology affecting our rational thought? I think yes. At least, it would seem that it gives rise to increased anxiety because of our extreme accessibility, overwhelming amounts of new information, ever increasing costs, and the losses of moving away from past lessons learned. The somewhat intrusive and always impersonal communication practices nowadays distance us from others and easily foster misinterpretation and misunderstanding when we’re not face to face. When was the last time you wrote an actual letter to someone? It’s easier and infinitely faster to simply bang out an e-mail instead. It’s almost a stigma today to be without e-mail. Does your cell phone ring at awkward or embarrassing times? When it does so with a loud ring or when you speak loudly in a crowd, do people around you look at you funny? Do you wonder about people wandering through the supermarket seeming to talk to themselves until you notice that odd-looking blue tooth “growth” on their ear? Excepting for some super sports cars, does the sameness of today’s automotive designs bore you? We might as well all be wearing the same uniform to go with them!  If a new technology permits an advancement, does that mean it should be pursued? Will it pass a “laugh test” or result in a higher price? When it’s recalled months or years in the future because of “unanticipated consequences” is there any responsibility for its defects? There’s no free lunch.     

Wars cost extraordinary amounts of money and cost many lives. Terrorism has created fears and mistrust. Both in recent years have given rise to a milieu of widespread financial impact, feelings of hate and aggression, racial tension, greed, and political and individual polarization. Fear mongering should not be taken for the truth of a matter. Blaming others is rampant. Fueled by copious amounts of money, responses to both war and terrorism have fostered greed and power grabs in institutions and individuals on a scale never before seen. At the same time, families and individuals are experiencing major economic downside repercussions and some have made the ultimate sacrifice of their lives. Political institutions have reached a level of polarization that is bringing our nation to paralysis. These and other societal impacts have had the effect of creating an atmosphere of mistrust, lack of respect for our government, corporations and each other, and a diminished ability to think and act rationally or to identify truth. Are we so desperate for progress that we seize on mistruths and new “-ism’s” as gospel without taking an in-depth look at the whole problem? Change that is meaningful takes time and thought AND rational thinking.

The media have largely abandoned their reportorial role and are following sensationalism. Any pronouncement from a person in the current limelight is quoted verbatim, often out of context, with little or no regard to assessing the truth of what is being said. It’s enough if the utterance is from someone with a little prominence, no matter how harsh the rhetoric. Single issue extremists have center stage. Unflattering labels are used or invented to characterize situations or persons of opposing views, the critics proliferate, and superlatives exaggerate the realities. Non-controversial news is banished to the back of the bus.

Have we ceased to be rational human beings? Are we only capable of spontaneous reactions without thoughtful consideration of a situation? And, as Lee Iacoca famously asked in the title of his book, “Where Have All the Leaders Gone?”. Iacoca asserted the following characteristics of leadership:

            Curiosity

            Creativity

            Communication

            Character

            Courage

            Conviction

            Charisma

            Competence

            Common Sense

Very few people exhibit all of these traits or have them in equal amounts. But they form a checklist against which leadership candidates may be measured. One does not have to be an attorney or a millionaire to be an effective leader. In fact, just the opposite may be true. Have we arrived where we are today because of a vacuum in leadership? I think so. And then, what about our personal responsibility? These and related questions bother me immensely, the more so because I have lived through this time of change and am therefore a participant.

If I were king, I would want to reinfuse the public with the values that we have long held individually and as a nation but that seem to be getting left behind by many. These values include honesty, trust, discipline, common sense, optimism, common courtesy/respect and rationality. In other words, let’s get back to basics and start the process of regaining our rationality. We need to get out of Dodge and start righting our ship at home. We need to reassert the separation of church and state and get on with the business of both separately. And we need the leadership at all levels to bring all this about both by policy and by example.

Volunteering

It would be so easy to sit here at the beach and vegetate. It’s quiet and usually peaceful as long as the world’s news doesn’t intrude through the TV or internet and the weather stays calm. And then, there are occasional days when just vegging out at home watching the world go by makes good mental-health sense. But, if I want to be able to keep tying my own shoes, getting out and involved with the community and the world is not only rewarding but necessary.

There are lots of ways to get engaged with the community. But the first question to come up is “Why?”.  I think the best overall answer to that is the same reply I used to give my kids when they asked that question – “Because”. The variety of opportunities does not lend itself to one answer that fits all our urges. It’s not just altruism, i.e., “wanting to give back”, but it may be. Volunteering may originate from a long term hobby which leads to a local group concerned with the same thing and, in turn, develops into volunteer work either directly or through the contacts being made.

Just as likely, the reason to volunteer may be to acknowledge a long-held interest or desire, or to “fulfill a dream”. Have you always wanted to fly an airplane, jump from one, drive a race car or boat,  learn to play an instrument, or go back to school as a student or as a teacher. These aren’t volunteer positions but they illustrate latent passions that, when we think about it, motivate us to get up off the couch and get involved in something.

Volunteering may or may not relate to any actual experience we have or any particular expertise and, more often than not, it will not lead to employment. Remuneration isn’t the volunteer’s goal. If it was, it would be part-time work and that’s not what this is about (getting reimbursed for expenses though really helps). We may simply seek the socialization that is involved with being a volunteer. Often, just the interest in doing something we’ve never done before is the motivator. When I first retired from engineering and management work, I thought it would be fun to become a kindergarten to second grade teacher. Young ones at that age are little sponges that absorb learning readily and, generally, they aren’t old enough yet to be behavior problems. Their sense of discovery in learning something new is amazing to watch develop. With some investigation, that didn’t work out but it did motivate me to find something through volunteering that fit the need to get out and get busy.

The next question is “where”. As a practical matter, volunteering is best managed by staying local. It minimizes traveling, creates accessible new friends and, most importantly, fulfills your own community’s needs. So, what are some local opportunities? Perhaps the most obvious opportunities are service clubs – Lions, Rotary, Kiwanis, AAUW, Soroptimists, Community Foundation, etc. A community Historical Society is another prominent group. Aside from the social interactions, each has a particular focus that requires volunteers, such as collection of eyeglasses for reuse, overseas outreach, scholarships for local students, provision of a color guard for public events, oversight of community parades, historical preservation, etc. Beyond service clubs are numerous local community groups run by volunteer boards with very limited or no paid staff and which use a multitude of volunteer members. Senior Services for example needs volunteer drivers for medical appointments, meals-on-wheels and center/event support. Friends of the Library sponsor events and programs. Churches have a variety of volunteer needs. United Way oversees the sponsorship of a number of grants to local organizations. Red Hat ladies provide woman-power to many civic activities. Several artists and art organizations volunteer their artistic talents and products. Environmental groups include volunteer parks development and maintenance, trails development and maintenance, marine program activities, and land use review and comment. Our local animal shelter provides a vital community function and runs mainly with volunteers that operate and maintain the facility. Our local fairs are managed and produced by volunteers. Many groups adopt a section of County road for litter pickup. These are just a few of the multitude of available local volunteer organizations and activities.

Children’s groups such as Boy and Girl Scouts, Big-Brother/Big Sister, 4-H, Little League, soccer, and numerous others are in constant need of volunteers. My first volunteer work was as a little league coach in southern California, fresh out of the Navy in good physical shape and full of energy and optimism. Our team did well and had an excellent pitcher that threw hard and was ready for Pony League but not old enough. One Saturday at practice, I was catching this pitcher and our smallest player, barely old enough to be playing, came to bat. He was choked up fully half the length of the bat just to be able to make a full swing. After a couple of pitches which he cleanly missed, he swung again and just tipped the ball. It deflected upward over my glove and impacted squarely on the end of my nose. Unhappily, I wasn’t wearing a catcher’s mask and, instantly, there was blood everywhere – bad example for the kids! So, in order to make lemonade from lemons, I called the team around me and used the situation as a learning experience for them to ALWAYS wear the mask if catching. There was a further irony to this. The small boy that tipped the ball was the son of a lady that worked at the same place as my mother. On Monday my mom stormed in to work in mock anger and accused her coworker’s little son of breaking my adult nose!

Several years later, I was the den father for a group of cub scouts. We had great fun working through the badges, wolf, bear, etc. But our major accomplishment was that every single boy in the den earned his Webelos badge, the highest you could go as a cub.

As a further example of a volunteer experience, at one point in the late 1960’s, a youth drop-in center was formed in Bellevue to provide a safe place for young people to gather in the evenings. I volunteered to become a “rapper”, a person who would simply be available to talk with any kids that dropped in. It’s where I learned what it’s like to see the world through the eyes of a teenager suffering from schizophrenia. With training, I went on to become a “flyer”, a person that would go out in the streets to intervene in various kinds of youth situations. Those situations included drug overdoses, drug induced hallucinations/paranoia, mental health breaks, threats of suicide, or whatever came up on the spot. We worked in pairs, wore a “bell boy” (early pager) and would be on call 24/7 for a two week stretch. Callouts at night were common and this work was stress inducing, but at the same time was one of the most rewarding volunteer jobs I have ever had. I spent part of my 50^th birthday searching for my partner and a kid in trouble but without success. The address I had proved to be phony and, after several hours of searching, I came back home dejected and found a surprise birthday party organized and perpetrated by a group of friends. Their diversion really worked to get me out of the house for a while!

Periodically, a one-time group of volunteers will gather to accomplish a specific purpose. The Camano Island State Park was founded this way some years ago as was the new Rotary-supported Camano  playground that was planned for a year and built in a matter of days by a very large group of volunteers. Volunteers were also responsible for the pro bono acquisition and development of Freedom Park at Terry’s corner on Camano.

Government agencies use a surprising number of volunteers in advisory or other support activities. This is especially important in the current times of diminishing budgets. Examples are a number of boards and commissions that provide a citizen voice and recommendations on a wide variety of subjects as diverse as land use planning, mosquito control, water resources, workforce development, aging services, roadside cleanup, local parks operation and weed control. Other volunteers support our first responders in the form of Sheriff office duties, citizen patrol, on-scene emergency support, Red Cross aid, emergency preparedness, and fire district and law enforcement equipment support. Beyond local government needs, the state has a large number of boards and commissions that provide advice to the Governor and the various state agencies on virtually every subject that the state addresses from cemetaries to transportation to aging and public health.

With the advent of the 2012 political season, candidates and issues will demand an army of volunteers. Duties will involve fundraising, advising, doorbelling, phone calling, sign placement, research, and a lot of “grunt work”. Shortly after moving permanently to Camano, I was drawn by a local news article to a meeting of the newly formed Camano Community Council, a statutory group that sought a say in Camano Island land-use planning. After attending meetings for a while, a Council vacancy came up. I volunteered and was voted in as a council member. We struggled mightily with comments on and a local version of the County’s Comprehensive Plan. This went on for several years during which time, Council members had to stand for reelection and the County Commissioners went to court to get our group disenfranchised. The County prevailed and we were forced to abandon the effort. At the same time, a volunteer group formed on Whidbey to pursue the same objective of working with the County to create a new, State-mandated Comprehensive Plan. I joined with them and after two years of intense work and meetings, the County approved a plan that at least partially included citizen input. Lingering frustrations from that experience led me then to decide to run for a County Commissioner position which proved successful.

A major activity of many volunteer groups is fundraising. This is an important function where needed and can occupy a significant amount of time to be successful. As a person gets more involved volunteering, it’s easy to get overcommitted. Thus, an ability to say “no” when reaching that point is an important characteristic of a rewarding and sustainable volunteer commitment.

So, let your passions come out, follow those interests and you’re bound to find rewarding experiences by volunteering. Count on finding a lot of fun and satisfaction, developing long-term friendships and memories to last a lifetime. As for the “when” part, there’s no time like the present to get involved. Just get up, tie your shoes while you still can, and start looking for the next opportunity.