New tax bill is bad for seniors

FILLERS

BY JOHN CULLEN

If you are age 65 or older, or plan to be some day, then as soon as you finish reading this column you should call Senators Chuck Grassley and Joni Ernst and tell them to vote against the Billionaires Tax Cut that will be considered by the United States Senate in the next few days.

Conservatives for years have been railing about our nation’s addiction to deficit spending, but the Congressional Budget Office and all leading economists predict that if this tax plan passes, deficits will increase by more than $1.5 trillion over the next 10 years.

To pay for that deficit, other items in the budget will have to be cut. The favorite targets for conservatives are Social Security and Medicare. They call them “entitlements,” like they are giveaways to free-loaders. In fact, every one of us has paid into them. I have been paying into Social Security and Medicare for 53 years, ever since I got a part-time job changing letters on the marquee at the Corral Drive-In and Vista Theatre when I was 14 years old, so I don’t see them as entitlements, I see them as my hard-earned money put into a retirement program that was guaranteed by the United States of America. By my reckoning, my investment over the last half century, multiplied by the magic of compound interest, is worth several hundreds of thousands of dollars today. That’s my money, not Donald Trump’s or Paul Ryan’s.

All wage-earners in America have 7.65% of their pay deducted for deposit into their Social Security and Medicare accounts. Your employer matches this amount, so your retirement fund increases by 15.3% every year with the guarantee by Uncle Sam that the money will be available to you when you retire. (If you’re self-employed, you pay the whole 15.3%.) Originally the retirement age for full benefits was 65, but to save money that age was increased to 66 and now it’s 67 for anyone born after 1960. (You can retire at 62 with 70% benefits.) That happened in 1983 when Ronald Reagan was president, and that was supposed to put Social Security and Medicare on solid financial footing forever.

There’s plenty of money in those accounts, but the problem is the U.S. government has taken all that money to pay its other expenses like defense spending, so what is left is a giant IOU.

Politicians like Speaker of the House Paul Ryan have talked about cutting Social Security benefits by 25%. I don’t know how people could get by on that. Most people on Social Security probably receive less than $2,000 per month. The most anyone can make on Social Security is about $2,200 per month. In my case, my gross benefit is about $1,728, with $150 deducted for Part B Medicare insurance, for a net of $1,578.

For the benefit of my children and any others under age 65, here’s how it works: Medicare only pays 80% of your medical claims, so to cover this 20% gap, most people buy Part B Medicare insurance from private insurers like Wellmark. You also have to buy prescription drug coverage from private insurers. In my case, that’s another $35 per month. But there’s still a deductible that must be reached before prescription coverage kicks in. My deductible is something like $500. After that, Medicare prescription drug coverage pays most of the cost of generic prescriptions. If you are on a prescription that has no generic equivalent, then you must pay more based on what tier the drug is. In my case, I take Eliquis, a blood thinner, since I have a history of atrial fibrillation, an event that causes your heart to race out of control. The cardiologists at Mayo Clinic, who treated me after an emergency room visit there a year ago, apologized for prescribing Eliquis but said it was the best drug available for my situation. It costs a lot to pay for all those TV commercials — in my case, about $400 a month out of my pocket. I could get it cheaper from Canada, Mexico or any other country in the world, but the U.S.  — whose legislators have been paid off by the big pharmaceutical firms — forbids discounts on these drugs.

Bottom line is that after all is said and done, my Social Security benefit that starts out at $1,728 per month actually ends up as about $1,200 in my pocket before taxes. Yes, Social Security is taxable income, thanks again to Reagan. Mary receives even less because as a school teacher and city librarian, she never made much money. If Social Security was our only income, we would starve. We’d have to move in with Bridget or Justin — I’m sure they’d be thrilled about that — or depend on the kindness of strangers.

And those benefits will probably drop by 25% and retirement age will probably be extended to 70 if the new tax bill for billionaires is enacted.

I get it that people live longer today, but I’m pretty sure that after paying over 15% of my income into this fund for 53 years there should be enough to take care of me in my doddering old age.

I won’t even get into all the other reasons this new tax bill is a bad deal. The ramifications for Social Security and Medicare alone are enough to trash it.

As soon as I finish writing this, I am going to call Senator Chuck Grassley at (202) 224-3744 and Senator Joni Ernst at (202) 224-3254 and tell them to vote against this bad tax bill for billionaires.

I hope you make the calls as well.

Or tell your children you’re moving in with them.