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Thievery: How Congress Keeps Stealing From Our Retirement Benefits and Social Safety Net

Military pensions, unemployment, disability and Social Security are all targets.
 
 
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Congress has a nasty habit that’s not going away. It has been stealing a few billion here and a few billion there from earned retirement and safety net payments, overlooking whether those benefits have been promised or are even sufficient.

As the House and Senate passed its $1.012 trillion 2014 budget last week, veterans were blindsided when they learned that Congress had cut cost-of-living increases for retiree pensions by 1 percent. A master sergeant who served 20 years could lose $80,000 in his lifetime, said Col. Mike Barron of the Military Officers Association of America. 

The cuts will affect 1.1 million retirees, 400,000 of whom retired after 9/11, and save an estimated $6 billion. “It’s deferred compensation,” Barron said. “You are changing the rules of the game in the middle of the game. It’s very unfair. It’s a clear breach of faith with us.”

But it’s not just military retirees who are prey to Congress’s petty thievery. In the Senate, there are competing Democratic and Republican proposals to extend unemployment insurance (UI) for 1.3 million longterm jobless people. Unemployment is another earned benefit that people pay into from years of work. The UI extension would be funded by taking money that now goes to Social Security disability recipients, so someone could not receive both unemployment and disability. 

The GOP plan, proposed by Ohio Sen. Rob Portman, cuts off all disability benefits—so there is no so-called double-dipping. The Democratic plan, from Majority Leader Harry Reid, cuts back disability payments dollar for dollar, deducting whatever amount is received in unemployment. Eleven million Americans received disability benefits in December.

This Hunger Games mentality of playing off groups of deserving people against each other for earned social insurance is part of Congress’ nasty habit. The other nasty piece is what Congress has been doing since the 1980s with Social Security cost-of-living formulas: chipping away at yearly increases. 

Going after promised pensions, or shaving back retirement benefits, or tinkering with cost-of-living formulas is hardly confined to Congress. It’s become a budget-balancing tactic that shadows government employees nationwide, and has equivalents in the private sector as workers pay more for their benefits.

In terms of magnitude, the several billion dollars involved in the military pensions and disability cuts pale compared to what’s at stake when tinkering with Social Security’s inflation formula.

When President Obama presents his 2015 federal budget next month, one of the biggest questions is will he again propose using a stingy cost-of-living increase formula for future Social Security payments, known as the chained CPI (consumer price index). That tool would shave off about a third of a percent a year from annual cost-of-living increases. Like the military pensions cuts, it adds up over time—think of it as the magic of compounded interest in reverse.

The National Women’s Law Center analyzed the impact of chained CPI and found that it would result in a 6.5 percent cut in Social Security benefits paid over 20 years, and a 9.2 percent cut over 30 years. For an 85-year-old single woman receiving a $1,100 monthly check, NWLC estimated that would translate to 16 weeks of “food lost."

Senate Democrats seem to be taking different stances when different benefit cuts are on the table. On Social Security and the chained CPI, there’s a campaign to push Obama to drop the idea in his 2015 budget. But all the Democrats voted yes for the 2014 budget that cut military retiree pensions. Since that vote, more than a dozen new bills have been introduced to reverse the pension cut. 

Pragmatists will say this is the untidy way Congress works. But as progressive economist Dean Baker has pointed out, Social Security has been pared back by more than 20 percent since the 1980s by using intentionally stingy cost-of-living formulas. Similarly, Social Security disability benefits have also been cut back recently, due to the federal budget sequester, making it harder for eligible people to qualify and then to get annual increases.   

“They’re always looking to hit at vulnerable groups,” said Baker, who is co-director of the Center for Economic and Policy Research. He said current House GOP inquiries into disability benefit fraud are having the result of creating bad press for the program instead of focusing on rooting out a few bad actors—which any big system serving millions will generate.

“The big picture is we are making cuts,” he said. “We don’t need to make these cuts.”

When senators and congressman take the floor and start making speeches in coming days about treating military retirees fairly, just stop and substitute public employees, teachers and everyone else who has spent a lifetime paying into Social Security and Medicare. And then ask yourself, what aren’t they discussing America’s retirement security crisis this way?

These are the individuals who have contributed to AlterNet's Retirement Crisis Reporting Fund:

Nancy Adams | Maria Alvarez | Dolores Amato | Sara Baker | Jerry Banks | Catherine Barnes | Patti Batchelder | Maryann Bayne | William Bell | Hugo Benoit | Werner Bergman | Lisa Beutler | Patricia Bewley | Gary Billey | Gary Binderimz | Rosemarie Blake | Bhikkhu Bodhi | Robert Bottman | Christopher Boutelle | Angus Bowen | B. Bowers | Charles Brainard | Kern Braswell | Catherine Brave | Jody Breslaw | Kim Brown | Marilyn Bruning | Bonnie Burkart | John Burke | Jeffrey Cancilla | Alice Canty | Dorothy Cinquemani | Kenneth Clark | Suzan Clausen | Robert Cohen | Harriet Cohen | Sandra Colombo | Michael Conley | Casey Conner | | Eugene Constant | Rachel Cooke | Peter Costello | Sydney Crawford | Iris Culter | Kathleen Daugherty | Gary Davis | Michael Davis | Richard Dawson | Jorge De Cecco | Kenneth Deed | Nandi Devam | Kim Dexter | J.A. Dingman | Elizabeth DiPalma | Patricia Dodds | John Doheny, Jr. | Gloria Donohue | Don Dougherty | Albert Driscoll | Stu Duckman | Ronald Dumont | Kim Ecclesine | Nancy Eckel | Cynthia Ellsmore | Edwin Engelmann | Judith Espovich | Virginia Eyman | Matthew Farrell | Karen Fedorov | Perrin Ferris | Thomas Firpo | Carolyn Fletcher | Christopher Flores | Terry Fontenot | Barbara Ford | Thomas Friel | Linda Fulton | Larry Gaylord | Marion Gehlker | David Glater | Nancy Goldberg | Donald Goldmacher | Alison Gomez | Florence Granowitter | Emily Greene | David Griscom | Terrence Grywinski | Shawn Hansen | Debra Harpole | Louise Harris | George Hart | Stuart Hartley | Bill Healey | Geoffrey Hendricks | Robert Henning | Marion Hirseman | Martin Hittelman | Cathy Hoot | James Hopkins | David Huhn | Will Husa| Ayed Hyder | Linda Irenegreen | Aaron Jacobs | Bobie Johnson | Wynn Kapit | Elizabeth Kelley | Jae Kenworthy | Ronald Kestler | Anita Kichefski | Jeremy Kilborn | W. Kimzey | Kerry Kleiber | Denise Kobylarz | Sandra Korn | Nancy Kranich | John Kyper | Bruce Lee | Marilyn Lee | Theodore Leibowitz | Carol Lemieux | Henry Lesnick | Betty Leyerle | Ellen Linnemanstons | Robert Lipsyte | Joan and Wallace MacDonald | Susan MacMillan | Charlene Maker | Barry Maloney | Josepha Maly | Tommy Mandel | Lawrence Mar | Louis Mariani | Joseph Mastalski | Annie Masters | Chris Matthews| George Matkovits| Kay Matthews| Frank McEvoy| Gail McMullen| Kevin Meismer| Elizabeth Mewhinney| Mary Micek| Rosemary Migas | Claire Mills |  Jonathan Morris | Nina Murano | Christine Murphy | John Murrill | Deborah Mytels | Jean Naples|  Peter Nasatir| Aileen Nelson| Terrance Newton| Deborah Nitasaka| D. Ocker| Janet Ohlhausen| Clifford Olin| Judith Pearson| Charles Percival | Jeanne-Marie Peterson | Mary Peterson | Cynthia Peterson | Ted Pfeiff | Brian Porter | Rudolph Radau | Joseph Rainho | Richard Rayford | Lisa Reswick | Debbie Richards | Sharon Richey | Leonard Rifas | Marvin Ritzenhaler | Nancy Roca | Edwin Rogers | Sue Rosen | Richard Ross | Nancy Ryan | Susan Salazar | Joseph Sanchez | Terry Sanders | Elizabeth Sands | Carole Sauriol | Carol Scher | Scott Scherman | Wanda Schertz | Gerda Seaman | Carolyn Semiglasow | Marlene Shaner | Elaine Simon | Crystal Sloa | Sara Sogut| Helen Sohne| Priscilla Solomon| Wayne Stinson| Patricia Stroud| Francis Sullivan, Jr.| Jyun Takagi| Tasmin Taylor| Diane Thatcher | C. Thompson | Keith Thornton | Lisa Tomchesson | Priscilla Toth | Catherine Twohill | Eric Weis | Teresa Welborn | Wilma A. Wheeler | Joel White | Dolores Whitman | Terry and Barbara Williams | Hugh Wilson | Liddy Wilson | Carroll M. Wilson | Eric Wilson | Jack Wilson | Charles Witt | William Woodward | James Woolsey | Eleanor Wynn | Christine Wynne | David Yamada | Leroy York, II | James Young | Marian Zaouk | Susan Zencka

Steven Rosenfeld covers national political issues for AlterNet, including America's retirement crisis, the low-wage economy, democracy and voting rights, and campaigns and elections. He is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).