New Posts

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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Will Bush's Social Security Reform Plan Succeed?

President Bush has been clear that Social Security reform is a top priority in his second term. Even though he has not announced a plan, he expressed his desire to allow people the option of creating private – or in Bush language, personal – investment accounts. Given the necessity of benefits cuts as well as heavy transition costs years into the future, several high-ranking Republicans have begun expressing doubts about the president’s plan. Moreover, many are beginning to question whether Social Security really has a “crisis” as Bush claims.

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Divisions in Social Security Reform Widen

The lack of a proposal from the White House on the President's specific plans for Social Security reform has continued to raise doubts and widen the divide of consensus on the proper way to approach this issues. In yesterday's Washington Post, House Ways and Mean Committee Chairman Bill Thomas (R-CA) was quoted as saying the President's plan would be a "dead horse" upon arrival in Congress and that it "cannot, given the politics of the [Congress]" win passage. Representative Thomas is one of the most powerful Republicans concerning tax policy and will have a huge influence on the fate of Bush's domestic agenda in his second term - particularly Social Security reform. Also recently released, a new analysis by Center for American Progress/The Century Foundation senior fellow Ruy Teixeira on recent polls concerning Social Security. It seems not only has Bush lost Congress, but he continues to be unable to sell the American public on his policies.

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Washington Post Series On Social Security

In an editorial yesterday, the Washington Post proclaimed that it plans to offer an occasional series of discussions on social security, in light of the recent onslaught of attention being devoted to the issue. The first article in the series can be read here. In the series on social security, the Washington Post hopes to explore many questions, including the following: What is the role of Social Security in today's retirement system? What is the size of the shortfall? What are the alternatives for addressing it? What are the risks and potential benefits of private accounts? How have they worked in other countries? Check the Post in the upcoming weeks for in depth coverage on the subject. Columnist Paul Krugman of the New York Times also continues to regularly discuss his feelings on social security reform in frequent op-eds. The latest can be read here.

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Britain's Go At Pension Privatization

With all of this talk about social security, many analysts and politicians are looking to examples from abroad to either back their proposals or disprove others' proposals. One particular case getting a lot of attention is Great Britain. In her American Prospect article, "A Bloody Mess," author Norma Cohen discusses Britian's go at pension privatization approximately twenty years ago. In fact, it appears that there are basic similarities between what Britain enacted, and what President Bush may propose in the very near future; that is, a cut in guarenteed benefits with the option for beneficiaries to make up for those cuts by earning high returns on private accounts. Check out the article to see why there is now growing consensus in Britain that the privatization policy must be reversed. Paul Krugman also discusses the issue in a column today titled "The British Invasion."

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Social Security Reform Comes Front and Center

The debate on Social Security continues to rage, with scores of new articles, reports, and speeches generated every week. Analysts, economists, politicians and a wide range of others on all points of the spectrum have been holding briefings, discussions, and forums addressing how and when to reform the Social Security investment program.

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Insider Info on the Push for Social Security Reform

Reporters at the Wall Street Journal and CongressDaily have obtained a memo written by Peter Wehner -- a senior official in the Bush administration. Besides stating that social security reform would be "one of the most significant conservative governing achievements ever," the memo notes that not only is the creation of private accounts key to reform, but benefits cuts would be key as well. The latter point is not one that the President has publicly said would accompany any social security reforms, although this memo makes it clear that it is on the minds of many. See this New York Times article to read about differing views on social security reform.

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Option 2 "Makes Sense" to Frist But Risks Cuts In Benefits

In 2001 Bush appointed a commission to look at social security, and this commission came up with three proposals. One of the proposals, called Option 2, is currently receiving a lot of attention on Capitol Hill, with Bill Frist recently stating that "[It's] on the table, and it makes sense to me." Option 2 would link future social security benefits to increases in inflation over a worker's lifetime, rather than wages. One of the major problems with this proposal is that in our economy wages rise faster than inflation. According to this Washington Post article, the new benefits formula would "stunt the growth of benefits, slowly at first but more quickly by the middle of the century." While the proposal would work towards solving the problem of social security's long term deficit, the program does not show signs of reaching the level of "crisis" that many in the government are claiming. In fact, as Krugman points out in a New York Times column, if these proposals are put in place it "will do nothing about the real fiscal threat and will instead dismantle Social Security, a program that is in much better financial shape than the rest of the federal government." These overhauls would also come with a stinging cost to future retirees. The average middle class worker retiring in 2022 would see a benefits cut of 9.9 percent, while in 2042 benefits would fall by more than a quarter. These cuts would be detrimental considering that over the past 60+ years the social security program has done more to stave off poverty than any other program. In a recently released report, the Center on Budget and Policy Priorites highlighted the fact that other policies embraced by this administration will end up costing the country a lot more than the social security shortfall in the future, particularly the cost of Bush's tax cuts and Medicare prescription drug benefits. The report can be found here.

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Senator Graham's Perspective On Social Security

Retiring Senator Bob Graham has a valid reason for being concerned about social security reform: One dollar out of every 14 dollars in benefits paid by the Social Security Administration goes to a resident of the state he has served for the past eighteen years -- Florida. In a recent article written by Senator Graham he outlines the necessity of a social security safety net, and discusses many of the problems that come with President Bush's ideas for reform, including added risk for people collecting benefits, the embellishment of the crisis facing the system, and the fact that "our grandchilden" could be paying for this overhaul further down the road. To read the article, titled "Save Social Security From the White House," click here.

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The President's Economic Summit

Last week, Bush convened a number of experts in Washington, D.C. for an Economic Summit to discuss budget and tax reform, social security, and the possibility of extending last term's tax cuts. A transcript of Bush's summit comments can be found here.

As an article in today's Washington Post points out, Bush may see significant opposition to some of his plans from Congress, academics, and economic experts and analysts. Many people have been recently vocal about some of the administration's proposed policy reforms. For example Alan S. Blinder, former Vice Chairman of the Federal Reserve and a Princeton economist, recently stated the following concerning Bush's social security policy: "Under these changes, Social Security would be neither social nor provide security. This would be a piece of a program to expose people to more and more risk…. There are millions of Americans who have no desire and no ability to gamble on the financial markets, and they shouldn't be pushed to."

The next few months should include a good deal of debate concerning issues such as tax and social security reform. To read more about the Economic Summit, click here.

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Will Privatization Increase SS Management Fees?

As Paul Krugman noted in the New York Times this morning, social security overhaul comes with a lot of risks. He points out other countries have dabbled in privatization and is baffled at the lack of understanding of their experiences. For example, in Chile's program, privatization has caused management fees to be as high as 20 precent, whereas in the United States currently, 99 percent of social security revenues go towards benefits. This is another pitfall of privitization that is not mentioned by the Bush administration. Krugman's column is worth a read.

Also, click here to read the latest Center on Budget and Policy Priorities report about price indexing and how Bush's reform proposal could significantly reduce benefits in the years to come.

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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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