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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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Portuguese historical films will premiere on 29 December.

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Portuguese historical films will premiere on 29 December.

Method Media Bermuda will present the documentary FABRIC: Portuguese History in Bermuda on Thursday, December 29 at the Underwater Research Institute of Bermuda.

A spokesperson said: “Method Media is proud to bring Bermuda Fabric: Portugal History to Bermuda for its 5th and 6th showing at the Bermuda Underwater Observatory. In November and December 2019, Cloth: A Portuguese Story in Bermuda had four sold-out screenings. Now that Bermuda has reopened after the pandemic, it’s time to bring the film back for at least two screenings.

“There are tickets Ptix.bm For $ 20 – sessions at 15:30 and 18:00. Both screenings will be followed by a short Q&A session.

Director and producer Milton Raboso says, “FABRIC is a definitive account of the Portuguese community in Bermuda and its 151 years of history, but it also places Bermuda, Acors and Portugal in the world history and the events that have fueled those 151 years.

“It took more than 10 years to implement FABRIC. The film was supported by the Minister of Culture, the Government of the Azores and private donors.

Bermuda Media Method [MMB] Created in 2011 by producer Milton Raposo. MMB has created content for a wide range of clients: Bermuda’s new hospital renovation, reinsurance, travel campaigns, international sports and more. MMB pays special attention to artistic, cultural and historical content.

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CRISTANO RONALDO CAN MAKE UP A GIANT IN CARIOCA AND PORTUGUESE TECHNICIAN SAYS ‘There will be room’

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CRISTANO RONALDO CAN MAKE UP A GIANT IN CARIOCA AND PORTUGUESE TECHNICIAN SAYS 'There will be room'

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Maestro de Braga is the first Portuguese in the National Symphony Orchestra of Cuba.

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Maestro de Braga is the first Portuguese in the National Symphony Orchestra of Cuba.

Maestro Filipe Cunha, Artistic Director of the Philharmonic Orchestra of Braga, has been invited to conduct the Cuban National Symphony Orchestra, as announced today.

According to a statement sent by O MINHO, “he will be the first Portuguese conductor to conduct this orchestra in its entire history.”

In addition to this orchestra, the maestro will also work with the Lyceo Mozarteum de la Habana Symphony Orchestra.

The concerts will take place on 4 and 12 March 2023 at the National Theater of Cuba in Havana.

In the words of the maestro, quoted in the statement, “these will be very beautiful concerts with difficult but very complex pieces” and therefore he feels “very motivated”.

From the very beginning, Rachmaninoff’s Piano Concerto No. 2 will be performed by an Italian pianist (Luigi Borzillo), whom the maestro wants to bring to Portugal later this year. In the same concert, Mendelshon’s First Symphony will be performed.

Then, at the second concert, in the company of the Mexican clarinetist Angel Zedillo, he will perform the Louis Sfora Concerto No. 2. In this concert, the maestro also conducts Tchaikovsky’s Fifth Symphony.

“This is an international recognition of my work. An invitation that I accept with humility and great responsibility. I was surprised to learn that I would be the first Portuguese member of the Cuban National Symphony Orchestra. This is a very great honor,” the maestro said in a statement.

“I take with me the name of the city of Braga and Portugal with all the responsibility that goes with it, and I hope to do a good job there, leaving a good image and putting on great concerts. These will be very special concerts because, in addition to performing pieces that I love, especially Rachmaninov and Tchaikovsky, I will be directing two wonderful soloists who are also my friends. It will be very beautiful,” concludes Filipe Cunha.

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