CEOs got an average 3.9 percent pay increase last year. This increase is subsidized by taxpayers because corporations can deduct it as an expense.
Meanwhile, America’s struggling seniors will receive no cost-of-living allowance (COLA) increase next year because the COLA doesn’t take into account the things seniors need to buy. If only there were some way to make an adjustment that fixes this discrepancy…
The SAVE Benefits Act
Sen. Elizabeth Warren (D-Mass.) introduced the Seniors and Veterans Emergency Benefits Act (SAVE Benefits Act). If passed, the act would provide a one-time 3.9 percent ($580 on average) payment for Social Security recipients, disabled veterans and SSI recipients in 2016. This week, Rep. Alan Grayson (D-Fla.) introduced a companion bill in the House.
Seniors, disabled veterans and others will receive no COLA adjustment next year. This is because the method of measuring living costs – the Consumer Price Index for Urban Consumers – is not weighted toward seniors. For example, it counts the decrease in gasoline costs for commuters and not the big cost increases in the pharmaceuticals seniors need.
The SAVE Benefits Act would adjust for this in 2016. It would be funded by eliminating a corporate tax deduction that subsidizes CEO “performance pay” increases.
“Our seniors and veterans have not received a raise in 40 years,” Grayson was quoted as saying by the Orlando Political Observer. “We have been using the wrong system to determine their Cost of Living Adjustments (COLA). Giving our seniors and veterans a 3.9 percent raise, the average raise CEOs at the top 350 American companies got last year, is an important step to righting this wrong.”
Last week Senator Warren wrote an op-ed for CNN, “Give Social Security recipients a CEO-style raise,” describing the need for this bill,
While vets and seniors get no raise, CEOs at the top 350 American companies received, on average, a 3.9% pay increase last year. That’s a lot of money. The average CEO at one of the top 350 American companies made $16.3 million and got more than half a million in pay raises. So CEOs get huge raises, while seniors, veterans and others who’ve worked hard don’t get an extra dime. Why? It’s not an accident. It’s not inevitable. It’s the result of deliberate policies set by Congress.
… Skyrocketing CEO pay is also, in part, the result of policies set by Congress. Taxpayers subsidize CEOs’ huge pay packages through billions of dollars in tax giveaways, including subsidies like special tax-deferred compensation accounts and a crazy loophole that allows corporations to write off obscene bonuses as business expenses.
… Giving vets and seniors a little help and stitching up these corporate tax write-offs isn’t just about economics; it’s about our values. For too long, we’ve listened to a handful of people with money and power who say: Cut taxes for those at the top, cut rules and regulations that keep everyone honest, and let everyone else fight over the scraps. We tried trickle-down economics, and it failed.
But we can make different choices — choices that reflect our values. We don’t have to ignore this problem. We can give a small boost to 71 million Americans who have earned it and who need it.
A Clear Contrast: Seniors Or CEOs?
Elections are about deciding which candidates/parties are on your side and which are not. Even when a vote for a bill like this one is symbolic it is important because it provides information to the public, enabling them to make decisions.
This bill forces politicians to choose between seniors and CEOs. This needs to be publicly debated so people can see where their representatives and senators stand before the next election.
It also needs to be brought up in the Democratic Presidential debates – except the next isn’t until the last Saturday night before Christmas and the one after that is on the Sunday night of a three-day holiday weekend in which people have Monday off, and is on TV up against the football playoffs. So not many people will see it – which is apparently the point.
One politician who remains up in the air on this is Hillary Clinton. Last week Isaiah J. Poole wrote in “Warren’s Social Security COLA Bill Poses a Question for Clinton“:
… Clinton has received some heat for what have been interpreted as equivocal statements regarding Social Security. She raised concerns in last month’s Democratic presidential debate when she said she would “fully support Social Security” against efforts to “privatize it” but would only “enhance” benefits “for the poorest recipients of Social Security.” …
Clinton has also yet to endorse a key measure that would help ensure Social Security’s long-term solvency and make the payroll tax that funds Social Security more fair: Lift the cap (now about $118,000) on the portion of wages that are subject to Social Security taxes. …
Standing with Warren on the cost-of-living bill would make a powerful statement about her priorities for improving this income security pillar for seniors and people with disabilities.
CEOs Also Get Platinum Pensions
It’s not like CEOs will be left hurting if the taxpayer compensation subsidy is removed. From October: “Retirement benefit gap: CEOs have platinum pension packages“:
The gap between CEO retirement benefits and the nest eggs of average U.S. workers is even wider than the imbalance between compensation for the highest- and lowest-paid employees, a report issued Wednesday shows.
The 100 largest U.S. CEO retirement packages are worth a combined $4.9 billion, equal to the entire retirement account savings of 41% of American families, according to the report by the Center for Effective Government and the Institute for Policy Studies watchdog groups.
The CEO nest eggs on average are worth more than $49.3 million, enough to produce a $277,686 monthly retirement check for life, the report said.
In contrast, 31% of the bottom economic group of American families have nothing saved for retirement.
● Next year Social Security recipients get a zero cost-of-living-allowance (COLA) increase – the third such since 2009 – even though cost of things seniors need are soaring.
● Last year CEOs got an average 3.9 percent increase in compensation.
● Taxpayers actually subsidize that CEO increase because it is a tax deduction.
● Senator Warren and Rep. Grayson propose to kill that subsidy and give Social Security recipients an average $581 payment in 2016 – 3.9 percent.
● This vote will draw a clear contrast that tells people whose side their politicians are on.
This should be a no-brainer for Democratic politicians who are on the side of seniors, disabled veterans and others who are not CEOs. Ask your representative, senators and favorite presidential candidate: Which side are they on?