Monday, March 2, 2015

Winter Newsletter from the Michigan Retirement Research Center

MRRC Newsletter: Volume 15, Issue 1 - February 2015

Director's corner

John Laitner

This newsletter has announcements and key findings for a number of recently completed MRRC research projects. The cycle of most MRRC projects ends with government’s fiscal year.

Online accounts help in financial planning

The Social Security Administration encourages workers and retirees eligible for benefits to sign up for a my Social Security account.

MRRC 2014 recap: key findings for the year’s working papers

Full papers are available online at www.mrrc.isr.umich.edu/publications/papers/.

MRRC experiences staff transitions

Becky Bahlibi, MRRC’s research process manager for 16 years, retired at the end of December 2014, although she has continued to work with us on a temporary basis while her replacement, Cheri Brooks, gets comfortable in the position.

Read more!

Social Security projections: Why do SSA and CBO differ?

Over at Investor’s Business Daily, Jed Graham looks at why CBO’s projections for Social Security’s financing are more gloomy than those from the Social Security Trustees. One issue Jed doesn’t highlight, but which I think plays a pretty big part, is that CBO takes a more optimistic view regarding longevity improvements than SSA does. Lower mortality is great for us, but not so great for Social Security.

Jed does hit on one unusual point:

CBO expects ObamaCare to shrink employment by the equivalent of 2.5 million full-time workers a decade from now — reducing Social Security payroll tax revenue. But SSA doesn't see any negative impact on work or earnings.

SSA Chief Actuary Stephen Goss told IBD that his department looked at Medicare's 1966 launch and "did not see any big move in the (labor force) participation rate."

I find the response from SSA confusing: CBO projects lower employment due to the ACA based on a number of very specific parts of the law that lower the return to work and, in some cases, can increase an individual’s income if they work less. While Medicare also provided people with greater access to healthcare, in the vast majority of cases these new beneficiaries were age 65 and up, making comparisons to the ACA dubious, to my mind. I can say for sure that the CBO’s projections for labor supply are correct – though I suspect they are – but SSA should analyze the work responses to the ACA in the same context that the CBO did, not simply by looking back at historical examples that may not be very relevant.

Read more!

Friday, February 27, 2015

Video of House Ways & Means Disability Hearing

Here’s the video for the February 25 hearing of the House Ways and Means Social Security Subcommittee on the solvency of the Social Security Disability Insurance program.


Broadcast live streaming video on Ustream

Read more!

Thursday, February 26, 2015

Testimony from February 25 Ways and Means Hearing on Social Security Disability

Chairman Johnson Announces Hearing on Maintaining the Disability Insurance Trust Fund’s Solvency
B-318 Rayburn House Office Building at 2:00 PM

Feb 25, 2015
U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security announced today that the Subcommittee will hold a hearing focused on the financial status of the Disability Insurance (DI) and Old Age and Survivors Insurance Trust Funds, and the available legislative options to ensure full DI benefits continue to be paid. The hearing will take place on Wednesday, February 25, 2015 in B-318 Rayburn House Office Building, beginning at 2:00 p.m.
Hearing Advisory
Witness List

Charles P. Blahous III, Ph.D.
Public Trustee, Social Security and Medicare Boards of Trustees
Testimony
(Truth in Testimony)
Ed Lorenzen
Senior Advisor, Committee for a Responsible Federal Budget
Testimony
(Truth in Testimony)
Webster Phillips
Senior Legislative Representative, National Committee to Preserve Social Security and Medicare
Testimony
(Truth in Testimony)

Read more!

Senate Budget Committee, Hearing on Social Security Disability

Held Feb 11 2015, 10:00 AM - 12:00 PM

The Coming Crisis: Social Security Disability

 

Witnesses:

Panel 1

Carolyn W. Colvin
Acting Commissioner of Social Security, Social Security Administration

Panel 2

Dr. Mark Duggan
Wayne and Jodi Cooperman Professor of Economics, Stanford University

Dr. Philip de Jong
Professor of Economics, University of Amsterdam - Amsterdam School of Economics

Kate Lang
Staff Attorney, National Senior Citizens Law Center

Read more!

Wednesday, February 25, 2015

Kolbe and Stenholm: Congress Can’t Dodge Disability Issue

Over at Roll Call, former Congressmen Jim Kolbe (R-AZ) and Charlie Stenholm (D-TX) – long leaders on Social Security reform – urge Congress to tackle the looming insolvency of the Disability Insurance trust fund:

As if stirring, like Rip Van Winkle, from a 20-year snooze, Congress is finally awakened to the teetering finances of the Social Security’s disability program. Better late than never, but policymakers have known for years that this day would arrive — and it has.

While some say the alarms being raised about the projected depletion of the Social Security Disability Insurance Trust Fund by late 2016 is a manufactured crisis easily fixed by accounting maneuvers, it is actually a stark reminder of the need to address the structural imbalance in the Social Security system. We can’t afford for Congress to ignore these challenges for another 20 years

Check out the whole article here.

Read more!

Monday, February 23, 2015

New paper from the NBER: “The Great Recession, Retirement and Related Outcomes”

The Great Recession, Retirement and Related Outcomes

by Alan L. Gustman, Thomas L. Steinmeier, Nahid Tabatabai - #20960 (AG LS PE)

Abstract:

This paper uses data from the Health and Retirement Study to examine retirement and related labor market outcomes for the Early Boomer cohort, those in their mid-fifties at the onset of the Great Recession. Outcomes are then compared with older cohorts at the same age.

The Great Recession increased their probability of being laid off and the length of time it took to find other full-time employment.

Differences in layoffs between those affected by the recession and members of older cohorts in turn accounted for almost the entire difference between cohorts in employment change with age. The Great Recession does not appear, however, to have depressed the wages in subsequent jobs for those who experienced a layoff.

In 2010, 17 percent of the Early Boomers were Not Working and Not Retired or Partially Retired, and 6 percent were unemployed, leaving at least 9 percent who were not working and not unemployed but not retired or only partially retired.

At the recession's peak, half of those who experienced a layoff ended up in the Not Retired or Partially Retired, Not Working category. But only a quarter of those who declared themselves to be Not Retired or Partially Retired, and were Not Working, had experienced a layoff.

Most of the jump in Not Retired or Partially Retired, Not Working appears to reflect a change in expectations about the potential or need for future work, a change that is not the result of an actual job loss.

http://papers.nber.org/papers/W20960?utm_campaign=ntw&utm_medium=email&utm_source=ntw

Read more!