How secure is Social Security?
In today’s Congressional Corner, Massachusetts Congressman Richard Neal wraps u[ his conversation with WAMC’s Alan Chartock.
This interview was recorded July 1st.
Alan Chartock: Richie Neal is my congressman, the first district of Massachusetts. It is a great pleasure to welcome you back, Richie. Always fun to talk to you. You are so smart. And that is one of the things that makes me really proud to be your constituent. So I wanted to ask you this. Social Security. I know that there are a lot of people who are very afraid that President Trump is going to lay hands negatively on a couple of institutions, one of which is Social Security. And then the other is the post office, because he doesn't like the voting online or by mail. So can you address those two?
Representative Richard Neal: I sure can. I mean, he's not gonna do anything to disturb Social Security while I'm chairman of the Ways and Means Committee and we have full responsibility for Social Security. Social Security has met its obligations from the time that Mr. Roosevelt offered it until the mail was delivered or the check deposited in the last few days. One of the great things about Social Security that I really enjoy reminding people of is you can outlive an annuity. You cannot outlive Social Security. Retirement savings should be based upon the bedrock guarantee of Mr. Roosevelt's genius, Social Security, some personal savings, and a retirement plan. And I think, with the Social Security initiatives that were offered by President Bush Jr. Just think what would have happened with the subsequent collapse of Wall Street had the Social Security trust fund as Mr. Bush envisioned, having been turned over to Wall Street. And I think that the Social Security trust fund, as even currently constructed, it has challenges but we've always repaired it. And it pays full benefits, even as we're talking until 2033. And after that, it would pay about 80 cents on the dollar for the next two decades. That's not going to happen because we're going to make sure, as we always have, that you're going to have to make adjustments to Social Security. It is such a fundamental part of American Life. And here's a number that I think is essential for the listening audience to pay attention to. The average Social Security benefit in America is $16,000 a year. That's slightly over $300 a week. So people don't get rich on Social Security. It is an earned benefit that you begin to contribute to with FICA taxes early on in life. And you can begin to call the Social Security office in your 50s or whatever and give them a suggested date on which you might retire. And Social Security will tell you what you can expect to get. The other part of the Social Security initiative that is so critical, and I remind people this all the time, that if you postpone taking the benefit from 62 when you're first eligible, until 69 you earn an additional 7% a year. So by the time you get to 69, you actually almost double your Social Security benefit, and people have intended to work longer. They intend to stay with work longer. And the optimal benefit for the baby boomers was about 66. And when I hear people say, well, you're you need to address some of the actuarial realities with social security, we're already raising the age of optimal benefit by one month, every year. So again, for certain generations, the optimal benefit would have been derived at 65. For my generation, it's the optimal benefit, is at 66 or 67. And many of the people I know intend to keep working so if you continue to work, you can bank on the social security trust fund, providing you with the prescribed benefit, as the law said it would.
What about the post office?
Well, the post office is a story that’s near and dear to my heart. I mean, if you're a veteran in America right now, millions of them depend upon this the whole idea of the Postal Service getting them their prescription medications every month. And not to miss the point that the President's position as it relates to the Postal Service is in my judgment irresponsible. If they would just redo the calculation about upfront costs on retirement and treat retirement the way everybody else in America does in terms of your payments in, the postal service would be fine. It's doing much better. Even though in this atmosphere of the pandemic, the postal services they're able to get that those packages out there doing it efficiently. I watch them as I’m out in the yard cutting my lawn. I will watch those trucks on a Sunday drive up and down the street to different neighbors. And it's all because the president is upset with Bezos and Amazon. And the other part of the postal service that I think needs to be brought to the surface again is the number of senior citizens in America who depend on those footprints in the snow for not only their benefits, but as a security force. Those postal workers, they know when somebody doesn't pick up their mail for three or four days on the back steps. They know when they base their conversations with the citizenry, about the reliability of the postal service. And I always use the example of those footprints in the snow, because I think that it's very, very telling that that mail is delivered. And the other thing that I would remind people of in the Heroes Act, which I hope will be the next round of discussion, negotiation and a law before the end of July, which will, I think bolster the American people in terms of COVID and bolster the economy, we have put in there $25 billion for the postal service. And I think that the postal service performs a very valuable service every day in America. And the President's actions are petulant, as they relate to the postal service because he doesn't like Jeff Bezos, and The Washington Post, that's really what it's about.
It's absurd. So we have the Markey Kennedy primary elections. And in the past, you've said you like them both? Have you changed your mind?
I still do. I talk to them both all the time. I think they see me as an honest broker.
Right, right, so who's likely to win? I think I heard that. Kennedy was slightly ahead. Is that what your understanding was?
Well, I mean, I just I follow the statewide polling. And it looks as though that he's maintained a slight lead during the last, oh, maybe six weeks or so. There's always a trend and an election. It's just a question of whether or not you catch the trend or get run over by the trend. But there is always a trend and I think that for the moment, the debates that have taken place and the campaigning that's pretty limited physically has not established a runaway victor. That's for sure. So I talked to Joe Kennedy just a couple of days ago. I talked to Ed Markey about a week ago. We talked about policy, by the way, we try to limit our conversations to speculation and policy.
That's great. So if Joe Biden gets elected President of the United States, and I'm assuming you're going to continue as the chair of the powerful Ways and Means Committee, and we've heard a lot of talk about healthcare, we see the president to this moment is trying to destroy the Obamacare legacy. What do you expect to have happen in a Biden administration?
Well, he's already indicated that he would expand and lower the age of eligibility for Medicare. And I think that's a good thing that he would take that to 55. I also think that we would no longer have to worry about the Affordable Care Act being diminished. And, you know, the Affordable Care Act, in large measure, was the expansion of Medicaid across the country. And I helped author the Affordable Care Act. So I'm very proud of it. When I hear critics talk about this or that, the expansion of the healthcare under the Affordable Care Act, it really ranks up there with the achievements of Social Security and Medicare, in terms of what it was able to accomplish for the American people. And I regret very much that there are still 15 states that have not expanded Medicaid, even though the federal government offered a very handsome inducement for that very purpose. But it's also ironic that in the state of Texas, which has now seen a huge uptick in COVID-19 cases, that there's less treatment that's available. If in fact, the governor of Texas had expanded Medicaid into the state that would have gone a long way toward addressing many of those health care issues. And again, the federal government was prepared to provide a handsome incentive for that very purpose. So I think that as we go forward, a Biden presidency has already indicated they would explore expand the Affordable Care Act and reduce Medicare eligibility to 55 for a buy-in purpose, which I think makes a good deal of sense. I mean, Medicare's been very successful. But there are a lot of Americans, particularly organized labor folks, who have really good health care plans that want to keep those as well. So I think that the Biden candidacy is already offered a template for how he would treat healthcare initiatives going forward.
Wonderful to talk to my congressman Richie Neal from the first beautiful Berkshire district. Not only Berkshires, but over in Springfield too. I suppose that Richie that a lot of people know you as their Congressman, depending on where they're living, and we are just very happy to have you on the air and we know how busy you are as the chair of the powerful Ways and Means Committee and good luck to you.
Thanks very much, Alan. Wonderful to be with you.
