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Hiltzik: Coronavirus threatens several benefits of Social Security

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Hiltzik: Coronavirus threatens several benefits of Social Security

Coronavirus continues to confound policy makers in its impact on public health, social structure and the economy. Now supporters of Social Security are beginning to understand its unexpected impact on millions of older workers

Simply put, anyone who is 60 years old this year can face a reduction in life-long Social Security benefits because of the uniqueness in the program benefits formula that makes them vulnerable to economic decline this year.

That will almost certainly happen unless Congress takes action by implementing a one-time fix. Damage can be felt somewhere between 3 million and 5 million workers and their families.

People do not have to suffer a large reduction, permanent benefits in their Social Security simply because they are 60 years old, become disabled, or experience loss of breadwinner around the beginning of a deep recession.

Paul Van de Water

Without repairs, preferably in the next coronavirus recovery bill, “Social Security Benefits will be significantly lower for workers aged 60 years and will be eligible for early retirement benefits by 2022,” writes Paul Van de Water of the Center for Budget and Priorities Policy in the latest siren calls about this situation. “Those who qualify for disability or benefit young survivors in 2022 will also see lower benefits.”

The earliest notice of the problem came from conservative commentator Andrew Biggs, a former Social Security official, who spoke warning in the Wall Street Journal and a paper published by Wharton School of the University of Pennsylvania in early May.

When he calculated, the mistake could make pensioners lose money with an average lifetime income of around $ 3,900 per year, until the end of their days. That would be equivalent to more than 20% of today’s average annual Social Security benefits.

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Based on his own assumptions, Biggs puts a gap of about 13% of what is projected by the 2019 Social Security trusteeship report for workers born in 1960, who will turn 60 this year. Whatever it was, it was a pretty big hit.

Biggs carries out valuable services by sounding the alarm, even though the proposed improvement will not be supported by many in the Social Security advocacy community. More about that in a moment.

The problem is basically technical. Here’s a direct explanation (I hope).

Social Security benefits are calculated based on an employee’s average career income, resulting in what is known as an indexed average monthly income. As Van de Water explained, the income of workers up to the age of 59 is then adjusted to account for economic wage growth, using the “average wage index.”

Under normal conditions, this is the right way to assign benefits: It adjusts them higher when average wages rise, and because wages tend to rise faster than prices about 1% a year over time, which allows benefits to reflect economic progress long-term .

The problem arises if overall wages fall sharply. That is likely to occur as a result of months of economic lockdown caused by coronaviruses and residual layoffs and leave during the end of the year. Van de Water proposed a reduction in average wages of at least 5% in 2020; Biggs based his calculation on a 15% reduction.

As Biggs explains succinctly, referring to the year when workers were 60 years old, “the decline in the national average wage in that year reduced the size of the Social Security index of all past income. This results in a calculation of lower career average income, and hence lower Social Security benefits. “Deficiencies affect the benefits of workers for life.

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This situation is clearly unfair to anyone who is 60 years old. So what to do?

Biggs proposes the abolition of the wage index completely, replacing the inflation index (that is, based on price increases rather than wage increases) plus some other formula adjustments.

That is unpleasant for Social Security supporters, who value wage indexing because it helps maintain a balance between benefits and therefore the relevance of Social Security for newly retired workers, and because wage errors are largely a one-time problem stemming from the extraordinary conditions at the moment.

Van de Water and other Social Security experts propose a simpler solution: Request Congressional mandate that changes in the wage index never produce lower benefits.

There are two precedents for that. The maximum annual income that is subject to Social Security tax pay is never down even when wages go down (this year, $ 137,700, up from $ 132,900 last year).

And adjusting the cost of living with annual benefits can never produce benefits that are lower than one year to the next, even if the consumer price index on which they base falls.

That’s the best choice for Congress, and that should be included in the next coronavirus assistance bill so that this problem is not ignored. The retirement benefits of millions of Americans depend on balance.

Social Security, as observed by Franklin Roosevelt at the time of its creation, was designed to help Americans deal with “danger and life change.”

The phrase correctly defines the current economic landscape. As Van de Water wrote, “People should not suffer a large reduction in their Social Security benefits just because they are 60 years old, become disabled, or experience losing a breadwinner around the beginning of a deep recession.”

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Another Portuguese club declared insolvent

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Cova da Piedade x Estoril Campeonato Português

After Académica OAF, another Portuguese club is in a delicate position.

SAD CD Cova da Piedade, a team that played in the Portuguese Second League until 2021, has become the latest Portuguese sports organization to file for insolvency.

After being relegated due to failing to submit all legal paperwork to play in the Segunda Liga in 2021/2022, Margem Sul’s SAD ended up playing in Ligue 3 and decided to suspend seniors this season and juniors. football 19.

In a conversation with Lusa, club president Paulo Veiga said he was waiting “further position from the club’s legal department.” However, the club, which is also one of the largest creditors of SAD do Cova da Piedade, is confident of a football asset as early as next season: “Guaranteed next season we will have a senior team and a junior team representing the colors of Cova da Piedade.”

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Bola na Rede is a project started on October 28, 2010 at the Escola Superior de Comunicação Social. Since then, we have been trying to provide you with the best sports vision at the national and international levels through opinion pieces as well as breaking news. On October 28, 2019, we decided to expand our reach by launching live broadcasts on the channel. BALL IN THE TV NETWORKNo YouTube. In addition to direct, we also have a lot of information through our social networks and in various models podcasts. Operating Systems podcasts from Bola na Rede are available on a wide variety of platforms and aim to give you a little bit of everything about the world of sports in general. Currently we can offer you the following content:

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Prize for the Portuguese. Andre Silva is Champions League Player of the Week

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Prize for the Portuguese.  Andre Silva is Champions League Player of the Week

BUTndre Silva won the competition and became the best player of the week in the Champions League, informed UEFAthis Thursday.

The former Porto striker scored in Jota’s 3-1 victory over Celtic Leipzig, scoring a brace in a match that was signed after his Portuguese compatriot equalized.

In addition, Andre Silva also provided the assist for Nkunku, scoring the first goal of this Wednesday’s game in which huge show of foreign fans.

In addition to the Leipzig striker, Di Maria (Juventus), Bellingham (Borussia Dortmund) and Di Lorenzo (Napoli) also fought in the fight for the prize, but it was the Portuguese who managed to smile after voting for the third round of the competition, the famous This Thursday is the fair.

Read also: Diogo Costa and Andre Silva named to Champions League Team of the Week

See also: Andre Silva among the nominees for the title of the best player of the week in the Champions League

See also: double dose. Andre Silva returned to celebrate and sentenced doubts

See also: Andre Silva took advantage of Hart’s colossal mistake and responded to Jota’s goal

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Eternal Portuguese deja vu – Renaissance

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Eternal Portuguese deja vu - Renaissance

At the end of the summer of 1972, exactly half a century ago, SEDES – Associação para o Desenvolvimento Económico e Social (the most famous reformist think tank during Marseilles) issued a document for the country entitled “Portugal: The country we are, the country we want to be “. The Marseille spring had already turned into autumn: Américo Thomas had just been re-elected, the colonial war had dragged on, repression had intensified, and an economic crisis was already brewing. Seeing the general frustration, and at the same time willing to go against it, the signatories of CEDES began by asking “Where will we be and how will we be in 1980?” to criticize the obstacles that overshadowed Portugal in the early 1970s.

Among the “problems that are getting worse without a solution”, emigration stood out, indicating the country’s inability to offer better living and working conditions to those who left; the growing inflationary process, reflected in the cost of living; the inevitability of economic integration in Europe when the country is not ready for international commercial competition; “disaggregation of regional economies” with “continuous depopulation of municipalities and regions” within the country; or “deterioration of public administration” when the government fails to promote a “prestigious, moralized, revitalized and efficient public sector”. “No one will have any difficulty,” continued the text, “to add to a new list of urgent questions that seriously endanger national life, about which much has been said and which, year after year, continue to wait for a sufficient solution.” Therefore, “the prevailing feeling in the country” in contemplation of the recent past and present could not but be “annoyance at urgent battles, the need for which was endlessly discussed, at decisions that were changed or postponed, and at rejected goals” or which were not clearly formulated ” .

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Between “untapped resources” and/or “lack of organizational and decision-making capacity” there was “widespread anxiety” stemming from the inevitable observation that “we are very far from the results that we could achieve thanks to the progress of the Portuguese and Portugal”. This was the macro goal of the reformist, humanist and liberalizing technocrats that SEDES brought together. “Ultimately,” they reminded Marcelo Cayetano, “the real obstacle can only be associated with the low political priority of economic and social development in our country.” So, in short, there was an urgent need to “radically change our economic, social and political way of life”, since “a national balance based on general anemia, repression and weakening of various participants” is unsustainable and pernicious.

SEDES did not know that the Estado Novo would fall in April 1974, that democracy would come in 1976, and Europe from the EEC (after EFTA) in 1986 of repression, finally gained the freedom that was discussed between the lines of the 1972 manifesto ., there would be conditions for solving (almost) all economic and social problems of development and cohesion.

Fifty years have passed since this manifesto, and almost the same number has already been in democracy. However, if we compare the above quotes with the Portuguese present, the feeling of deja vu is indescribable. SEDES wondered what the country would be like in 1980 and is wondering today (in its recent study “Ambition: Doubling GDP in 20 Years”) where we will be in 2040. It may be a replay of a sad fate: knowing (some) where to go, but never getting there!

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