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Feb 8, 2016

Top 400 Taxpayers See Tax Rates Rise, But There’s More to the Story

As Americans were gathering party supplies to greet the New Year, the Internal Revenue Service released their annual report of cumulative tax data reported on the 400 tax r...

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Feb 4, 2016

Chlorine Bleach Plants Needlessly Endanger 63 Million Americans

Chlorine bleach plants across the U.S. put millions of Americans in danger of a chlorine gas release, a substance so toxic it has been used as a chemical weapon. Greenpeace’s new repo...

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Jan 25, 2016

U.S. Industrial Facilities Reported Fewer Toxic Releases in 2014

The Toxics Release Inventory (TRI) data for 2014 is now available. The good news: total toxic releases by reporting facilities decreased by nearly six percent from 2013 levels. Howe...

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Jan 22, 2016

Methane Causes Climate Change. Here's How the President Plans to Cut Emissions by 40-45 Percent.

  UPDATE (Jan. 22, 2016): Today, the Bureau of Land Management (BLM) released its proposed rule to reduce methane emissions...

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Administration Steers Away From Payroll Tax Diversion

Treasury Secretary John Snow indicated yesterday that the White House would in fact accept a form of Social Security overhall that did not include diverting a portion of payroll taxes into private investment accounts. This is a major shift in the administration's position. Snow said that personal accounts would be part of any Social Security legislation, but that they were open to funding these accounts through means other than the payroll tax. Congressional Democrats have almost unanimously opposed the idea of funding personal accounts with a diversion of payroll taxes. Bush's plan -- backed by many Congressional Republicans -- to allow individuals to put as much as 4 percentage points of their payroll tax contributions into private accounts has been one of the more controversial aspects of the discussion to overhaul Social Security. Opponents think that private accounts would would risk reducing benefits for low-income individuals, and also could result in higher interest rates because the government would need to borrow more to finance transition costs. In other Social Security news, an article in the New York Times today reports many Americans differ from Bush in their priorities regarding Social Security. A new New York Times/CBS News report showed that 51 percent of Americans believe investing a portion of payroll taxes into private accounts is a bad idea. Sixty-nine percent believed private accounts would be a bad idea if they would result in any benefit reductions, and 45 percent believed that private accounts would actually weaken the retirement system.

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Opposition to Social Security Reform Pays Off

It appears as though all of this talk about a Social Security overhaul is not working in the President's favor. The Washington Post reports today, "President Bush's bid to restructure Social Security may have to wait until next year and might not involve the individual accounts the White House has been pushing hard." Senate Majority Leader Bill Frist (R-TN) expressed these sentiments yesterday, and they are a blow to the administration's obvious efforts over the last few months to market their plans for Social Security privatization. Many GOP Congressman have been out in the field pushing SS overhaul over the past few weeks, and many are now wary about forging ahead with a politically risky plan that doesn't have a good deal of demonstrated public support. So, it appears that Social Security reform may be put on the back burner for a while. This is due to both the fact that many Democrats have been voicing strong opposition to the private accounts supported by the administration, as well as because Republican lawmakers are extremely divided among themselves as to how to proceed with an overhaul, and whether or not our economy could sustain borrowing trillions of dollars to finance it. To read more about the current hurdles facing a Social Security overhaul, click here.

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SS Benefits Keep Millions of Seniors Economically Stable

In an op-ed column in today's New York Times, Paul Krugman argues that the GOP leadership's drive to create private Social Security accounts isn't about "finding a way to strengthen Social Security; it's about finding a way to phase out a system that conservatives have always regarded as illegitimate." Lawmakers will need to find a way to ensure that benefits aren't cut for Social Security recipients in the future, whether or not that includes some form of private accounts. They will need to do so, however, in a way that doesn't place those benefits at risk. Social Security benefits are currently responsible for keeping 13 million elderly people from living below the poverty line. If those benefits did not exist, almost 50 percent of elderly people would live below the poverty line. If the level of those benefits were to be put at risk through the creation private accounts, some seniors would fare well; however a number of them would end up losing out on thousands of dollars per year, and many household incomes would fall below the poverty line. Click here to see a new report from the Center on Budget and Policy Priorities that outlines the effect of Social Security on poverty among senior citizens. The report provides data on a state-by-state basis.

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‘Slow Down’ Is the Bipartisan Buzz for Social Security

As President Bush continues his efforts to raise anxiety across the country about the Social Security program, more and more members of Congress, both Democrat and Republican, are starting to speak uniformly on the need for patience in working towards a solution. Even House Speaker Dennis Hastert (R-IL) and Federal Reserve Board Chairman Alan Greenspan urged caution and called for further debate in approaching Social Security reform this past week.

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Social Security Benefits Cuts Calculator

In continuing efforts to combat what they see as a detrimental plan by President Bush to overhaul Social Security, Senate Democrats have unveiled a new tool to aid their cause: a social security calculator which shows how much individuals will lose if benefits are "price-indexed" as opposed to "wage-indexed." Many Senators are posting these calculators on their official web sites to bring attention to the issue. While the calculator cannot accurately portray what would happen with an overhaul because no specific plan has been announced, it does show what would happen if the criteria to which benefits are currently indexed were to change. This is a policy which is supported by a number of Congressional GOP leaders, as well as many senior administration officials.

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Bush To Consider Raising SS Income Cap

As reported in the Washington Post this morning by Dan Froomkin, President Bush has said for the first time he would consider raising the cap on income subject to payroll taxes. The president has previously stated firm opposition to raising the tax rate but has remained silent on the cap on social security payroll taxes, currently set at $90,000. The president's announcement opens the door to the possibility of dramatically increasing Social Security revenues. Estimates by Social Security actuaries show by lifting the cap completely, it may be possible to close the entire funding gap in the program over the next 75 years.

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Bush Makes Social Security Centerpiece of State of the Union

When President Bush addressed Congress and the nation on the evening of Feb. 2, he devoted much of his address to his proposed changes to Social Security, yet declined to provide the American people with details regarding exactly which reforms he plans to pursue. Many believe this strategy is to avoid what President Clinton faced when he tried to reform health care a decade ago. Clinton had submitted a heavily detailed proposal to members of Congress, who were then able to pick it apart and subsequently defeat it.

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Bush's Comments On Social Security

In last night's State of the Union Address, President Bush made Social Security one of his key topics of discussion. In his speech, he mentioned many true statistics about social security. It is true that over the years the number of workers paying into the system compared with the number of retirees collecting benefits is declining. It is true that sometime around the year 2020, if th system is left alone, the Social Security trust fund will be paying out more than it takes in. It is true that some sort of reform will be necessary in order to ensure that the system is solvent in the future. However, Bush did use some potentially misleading rhetoric during his speech. When discussing the growing Social Security shortfall -- which will begin after the year 2020 -- he said "by the year 2042, the entire system [will] be exhausted and bankrupt." This statement is misleading on many levels. The words "exhausted and bankrupt" do not accurately describe the situation. The Social Security Trustees have predicted a 27 percent benefits cut by the year 2042 if no reforms to the program are passed. The Congressional Budget Office has predicted a 22 percent benefits cut by the year 2052 if no reforms are passed. A cut in benefits of approximately one-quarter is not the same as "exhausted and bankrupt." By that year, our surplus will be exhausted, but not the entire trust fund. Bush used these words in an attempt to make the situation appear more dire than it actually is; in order to garner more support for his plan to overhaul what is, in reality, a financially sound program. Another interesting comment regarding what would happen if no reforms were passed was when Bush mentioned, "In the year 2027, the government will somehow have to come up with an extra $200 billion to keep the system afloat." While $200 billion sounds like a lot of money, it is nowhere near the shortfall created by Bush's tax cuts -- all of which have been financed by the deficit as opposed to spending cuts. $200 billion is also roughly the amount that our defense operations in Iraq and Afghanistan have cost. If the government is really interested in preserving Social Security - our most successful social insurance and poverty prevention program - there is no doubt they could find other ways to come up with $200 billion, without engaging in a costly overhaul that will also necessitate benefits cuts. For more on Bush's discussion of Social Security in his State of the Union address, see this article and this article. For a great report on how Bush's plan will phase out Social Security and result in benefits cuts, read this report from the Center for Economic and Policy Research.

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Chile's Pension Plan

President Bush has stated in the past that the United States could "take some lessons from Chile, particularly when it comes to how to run our pension plans." Chile's retirement insurance program has gotten attention lately because the reforms enacted in the country a little over twenty years ago share many similarities with reform plans being discussed by U.S. Republican leaders today. The major similarity is that Chilean workers pay a percentage (roughly 10 percent) of their salaries into private investment accounts. This system was put in place with the thought that these accounts would spur economic growth as well as provide monthly pension benefits larger than what the traditional system could offer. Two major differences, however, include the fact that Chile's private pension system is not currently optional, and also, according to this article in the New York Times, the country "was careful before it started its private system to accumulate several years of budget surpluses." The U.S., unlike Chile, is considering a social security reform in the midst of multiple consecutive years of budget deficits. The New York Times article provides a good description of how Chileans have fared under this system. As the first group of workers to depend on this system begin to retire, it is becoming evident that benefits are falling short of what was originally advertised when the program was put into place, and will unfortunately plunge many once-comfortable retirees into poverty. Not only that, but the Chilean government has had to continue diverting billions of dollars into a safety net for workers whose monthly contributions were not large enough to ensure a minimum pension. While the Chilean and U.S. economies and workforces are different and thus will benefit differently with private pension plans, it helps to look at the problems Chileans are experiencing with their private accounts if we are going to be considering enacting similar policies.

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Social Security Will Impact More Than Just Seniors

One of the most gaping holes in the debate on Social Security reform is the lack of discussion about Social Security as a life and disability insurance program. The program insures much more than just the elderly in retirement; fully one-third of payments go to non-retirees. These benefits – to around 17 million Americans – insure workers and their families from slipping into poverty when a worker becomes disabled or dies. The issue of disabled workers sheds light on many of the problems of private account proposals.

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Resources & Research

Living in the Shadow of Danger: Poverty, Race, and Unequal Chemical Facility Hazards

People of color and people living in poverty, especially poor children of color, are significantly more likely...

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A Tale of Two Retirements: One for CEOs and One for the Rest of Us

The 100 largest CEO retirement funds are worth a combined $4.9 billion, equal to the entire retirement account savings of 41 percent of American fam...

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