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A Strong Middle Class Blog

  • More Stable and Secure Health Care For Seniors

    Posted by Terrell McSweeny on September 17, 2009 at 2:00 PM EDT

    Vice President Biden and members of the Middle Class Task Force just concluded a health care reform discussion in Alexandria, Virginia. Along with Health and Human Services Secretary Kathleen Sebelius, White House Office of Health Reform Director Nancy-Ann DeParle, and Barry Rand, CEO of AARP, the Vice President led a discussion with older Americans on how reforming health care will lower costs, cut waste, create stability and improve quality for them.

    As health reform advances this summer, it’s important to recognize the benefits for two key groups that are all too familiar with the toll rising costs of health care are taking on their security: seniors and early retirees aged 50-64.

    Seniors face increasing health care costs while living off of fixed incomes – a situation that often forces them to make tough decisions– like cutting doses of important drugs to save money. The Medicare Doughnut Hole – the gap in prescription drug coverage that millions of seniors fall into- costs seniors a total of $15 billion dollars a year.

    Health care reform will help close that gap by providing deep discounts for medications for seniors who are stuck in that hole and allowing seniors to access more affordable generic drugs. Health reform will also ensure Medicare beneficiaries access to their doctors, fund 100% of preventative care, and cut the bureaucracy between seniors and their doctors by simplifying paperwork, computerizing medical records, and making sure that forms are easy to read for seniors. Health reform will prevent any insurance company from denying coverage based on a person’s underlying health status, and it will end discrimination that charges you more if you’re sick.

    Americans aged 50-64 are often the most at vulnerable and at risk in the current health care system. Too young for Medicare, they experience sky high insurance premiums and costs because of their age. Premiums for 50-64 year olds buying coverage on the open market were three times that of their peers who were lucky enough to have employer coverage. And that’s for people who aren’t automatically excluded because of a pre-existing condition.

    Health care reform will lower costs for 50-64 year old Americans by providing assistance to employer health plans to encourage them to cover recent retirees and by giving individuals access to an insurance exchange where participants will be able to compare prices of health plans – including a public plan - and decide which option is right for them.  Individuals will be eligible for help paying for insurance in the exchange based on their income. And in order to market a plan in the Exchange, insurance companies will have to comply with its rules: no denial of coverage for pre-existing conditions; no discrimination based on age; and fair prices, for good benefits.

    Everyone will have the security of knowing that if they lose their job, or if someone in their family develops a chronic disease or has a pre-existing condition, they will be able to find affordable health care for their families in the exchange. 
    Vice President Biden and the Middle Class Task Force are working to ensure that as Americans age, their care is stable and secure, affordable and effective.
     
    Terrell McSweeny is Domestic Policy Advisor to the Vice President

    Learn more about Health Care, Seniors and Social Security

  • Saving and Paying for College - Back to School

    Posted by Terrell McSweeny on September 9, 2009 at 12:00 PM EDT

    Vice President Biden and the Middle Class Task Force just wrapped up a town hall meeting on college affordability at Syracuse University. The back-to-school discussion focused on helping families save and pay for college amid rising tuition costs and flat-lining middle class incomes. Joining the Vice President at his law school alma mater were Task Force members Secretary Geithner and Secretary Duncan, Syracuse University Chancellor Nancy Cantor, State University of New York Chancellor Nancy Zimpher, and a panel of education policy experts. 

    Back in April, the task force held its first college affordability meeting in St. Louis, Missouri. The message from concerned parents, students, and administrators about what they saw on campuses was clear: more needed to be done. The process of saving and paying for college needed to be made fairer, simpler, and more efficient. 

    This afternoon in Syracuse, Vice President Biden and the members of the Task Force reported back on some of the work they’ve been doing, including simplifying the federal loan application process (pdf), implementing the new Income Based Repayment plan for student loans, studying ways to improve Section 529 (pdf) college saving plans, pushing for increased grants and loans paid for by reducing  subsidies to private lenders, and working with Congress on a landmark higher education bill.

    President Obama and Vice President Biden believe that a post-high-school education is important for a number of reasons:

    • it helps students realize both their earnings and their educational potential;
    • it is a gateway to the middle class; – it gives the United States a more competitive workforce in the global economy;
    • for parents, sending their children to college is a top priority.

    This is why the administration’s goal of having the highest proportion of students graduating from college in the world by 2020 is a central component of the Middle Class Task Force’s agenda. 

    And it’s why the administration has invested more than $100 billion dollars to improve our education system. It’s why the Recovery Act made Pell Grants larger and created the American Opportunity Tax Credit – a $2,500 a year credit for tuition. It’s why we’ll make historic investments in our nation’s community college system. And it’s why we significantly expanded the GI Bill, so that the service members who return from duty can get more help paying for their college education.

    In conjunction with today’s meeting, the Middle Class Task Force released a staff report (pdf) documenting the barriers that still block the pathway to higher education for many students. Please check it out and share with others. 

    After a productive afternoon in central New York, it’s time to head back to D.C. The task force will continue working to expand access to quality education, because as Vice President Biden said today: there is no better ticket to the middle class than a college education.

    Terrell McSweeny is Domestic Policy Advisor for the Vice President.

     

    Learn more about Education

  • Vice President to Chair Middle Class Task Force Meeting on College Access and Affordability Tomorrow

    Posted by Jared Bernstein on September 8, 2009 at 1:08 PM EDT

    Tomorrow afternoon the Middle Class Task force heads back to school. We’ll be traveling north to Syracuse, New York for our second town hall meeting on College Access and Affordability. Vice President Biden will be joined by Secretary Geithner, Secretary Duncan, Syracuse University Chancellor Nancy Cantor, State University of New York Chancellor Nancy Zimpher, and a panel of education policy experts. At the meeting, the Vice President and task force members will report back on some of the work we’ve been doing to make saving and paying for college easier and more efficient. Our first college affordability meeting in St. Louis, Missouri last April was helpful and informative, so we’re very much looking forward to the discussion at Syracuse University tomorrow. Be sure to check back in with us to hear how things go.
     
    Jared Bernstein is Chief Economist to Vice President Biden, and Executive Director of the Middle Class Task Force
     

  • This Time, We Can't Leave the Middle Class Behind

    Posted by Jared Bernstein on August 11, 2009 at 9:16 AM EDT

    Even before we got to the White House, the President, the Vice President, and the economic team were crafting policies designed to offset the deepest recession since the Great Depression. Back in mid-December of last year, I remember a meeting in Chicago, with the snow swirling outside, as we began to plan the Recovery Act, the financial stabilization plan, and housing relief, all in the context of a budget that would bring down the trillion-plus dollar deficit we were about to inherit as quickly as possible.
    I also remember the Vice President talking about the difficulties facing the middle class, struggles that predated the recession. With the campaign fresh in their minds, he and the President recalled that even in supposedly good times, when the economy was expanding and unemployment was low, the families they met on the trail were having far too much trouble making ends meet. Saving for college, paying for health care, keeping up with the mortgage payments … just making their basic budgets balance out at the end of the month seemed awfully hard in an economy that was supposedly solid.
    Of course, that solid economy was fading fast; the recession was a year old, unemployment was rising, and helping people get back to work had become our top priority. But the longer-term, structural challenges that have been facing the middle class since long before the recession began were never far from the President’s mind, which is why, shortly thereafter, he asked the VP to chair the Middle Class Task Force.
    Today, in August of 2009, we’re faced with yet another set of realities. After falling at a rate of about 6% from the last quarter of 2008 through the first quarter of this year, a rate of decline we hadn’t seen in half a century, the economy contracted at a 1% rate in the second quarter of 2009. Yes, our economy is still ailing, but six months ago, economists worried the recession would descend into depression; now they’re asking when recession will become recovery.
    Here in the White House, however, recovery means something very specific, and it’s different than what economists generally mean when they talk about it. According to the panel that decides when recessions officially begin and end, you don’t need job growth or falling unemployment to declare that a recovery is underway. In fact, in the last two recoveries, it took 15 and 19 months, respectively, before the unemployment rate peaked.
    That definition doesn’t work for us. No jobs, no recovery.
    But — and this is the real subject of this post — job growth isn’t enough either. Remember, unemployment fell to below 5% at the end of the last expansion, but middle-income families ended up worse off, in real dollar terms, than they were before that expansion began. The productivity of our economy increased by 19% from 2000 to 2007, but the real median income of working-age households fell $2,000. The share of Americans living in poverty was actually higher in 2007 than it was in 2000.
    How could this happen? In fact, the arithmetic is disarmingly simple. If the economy’s growing, but middle-class and low-income families are falling behind, then the growth must be accruing to the top of the scale. And that’s exactly what happened.
    Some of the best data on income inequality are collected by two economists: Emmanuel Saez and Thomas Piketty. Their data go back almost to the beginning of the last century, allowing us to make some pretty amazing observations, like the one shown in the figure below. Income concentration, measured as the share of income going to the top 1% of households, was higher in 2007 (23.5%) than in any year on record going back to 1913, with one ominous exception: 1928, the height of the speculative, bubbly "roaring 20s" and the year before the stock market crashed and the Great Depression began.
    Share of total income graph
    For middle-class families to be part of the next recovery, this trend must reverse.
    Yes, we want to see a GDP recovery take hold as soon as possible, and once we start seeing robust, consistent job growth we’ll know we’re solidly on track. But even then, we won’t be done: not until the prosperity we’re generating reaches everyone who’s contributing to it, not until all the bakers get their fair slice of the pie—not just the owners of the bakery or the investors in the bakery, but the men and women who are actually doing the work.
    Here’s what the President said about this way back in February 2007, when he announced his candidacy:
    "… let's be the generation that ensures our nation's workers are sharing in our prosperity. Let's protect the hard-earned benefits their companies have promised. Let's make it possible for hardworking Americans to save for retirement. And let's allow our unions and their organizers to lift up this country's middle class again.
    "Let's be the generation that ends poverty in America. Every single person willing to work should be able to get job training that leads to a job, and earn a living wage that can pay the bills, and afford child care so their kids have a safe place to go when they work. Let's do this."
    Though he may not have realized at the time, the President-to-be was really describing the work of the Middle Class Task Force. Vice President Biden, the Task Force staff, and our members at all the cabinet agencies will do everything we can to make sure that the next recovery lines up very differently than the ones in the graph above. The middle class won’t get left behind again.
    Jared Bernstein is Chief Economist to Vice President Biden, and Executive Director of the Middle Class Task Force
     

  • New CEA Report on Small Businesses and Health Reform

    Posted by Terrell McSweeny on July 27, 2009 at 5:36 PM EDT

    Two weeks ago, Vice President Biden hosted a Middle Class Task Force discussion on the rising costs of health care for small-business owners and employees and heard first-hand accounts of the tolls that high costs are taking on middle-class families across America.
    As President Obama discussed in his Weekly Address, the Council of Economic Advisors (CEA) released a report on Saturday on small businesses and health care, examining the challenges currently faced by smaller firms in the health insurance market and the likely impacts of health care reform on small businesses and the workers they employ.
    Key findings of the report include the following:
    Small businesses are crucial to the economy
    • Small businesses are an important source of job growth in the United States. Firms with fewer than 20 employees accounted for approximately 18 percent of private sector jobs in 2006, but nearly 25 percent of net employment growth from 1992 to 2005.
    • Small businesses account for a large majority of jobs in start-ups, a key source of innovation and economic growth.
    The current health care system is not working well for small businesses and their workers
    • The U.S. health care system imposes a heavy "tax" on small businesses and their employees. Due to high broker fees, fixed administrative costs, and adverse selection, small businesses pay up to 18 percent more per worker than large firms for the same health insurance policy. Some of these higher costs are passed on to small firm employees in the form of lower wages, and some eat into the profits of small businesses that could otherwise be used for research and development and for much-needed investments. This implicit tax disadvantages small firms in both the market for the best workers and the market for their products.
    • Because of their higher health care costs, small businesses are far less likely to provide health insurance for their workers than larger businesses. Only 49 percent of firms with 3 to 9 workers and 78 percent of firms with 10 to 24 workers offered any type of health insurance to their employees in 2008. In contrast, 99 percent of firms with more than 200 workers offered health insurance. Workers in small firms that do offer health insurance also tend to have less generous plans than their counterparts at large firms.
    • The fraction of small firms offering health insurance has been declining in recent years. From 2002 to 2008, the fraction of firms with 3 to 9 employees offering health insurance to their workers declined from 58 to 49 percent.
    Health care reform as envisioned in the current draft legislation would reduce the current burdens on small firms and their workers
    • Small businesses that meet certain criteria would be able to purchase health insurance through an "insurance exchange" allowing them to choose among a multitude of plans that would provide better coverage at lower costs than they could find in the current small group market.
    • Many small businesses that provide health insurance for their employees would receive a small business tax credit to alleviate their disproportionately higher costs and encourage coverage. The tax credit would be targeted to those firms with employees whose average wages fall below a certain threshold.
    • The current reform options provide financial incentives for medium- and large-sized firms to provide health insurance coverage through so-called "pay-or-play" provisions. Firms with payrolls or employment levels below a certain threshold, which would include the vast majority of small businesses, would be exempt from the pay-or-play provisions.
    • The creation of an insurance exchange would also provide better and lower-cost options for workers in small businesses that do not offer health insurance. Low-income individuals and families would receive sliding scale subsidies to help them purchase insurance. Additionally, health insurers would not be allowed to screen potential enrollees for pre-existing conditions.
    • The proposed reforms could help spur entrepreneurial activity by increasing the incentives for talented Americans to launch their own companies, and could increase the pool of workers willing to work for small firms. Further, successful reform would reduce the phenomenon of "job lock," in which workers are reluctant to leave a job with employer-sponsored health insurance out of fear that they will not be able to find affordable coverage. Small firms that are unable to provide health insurance for their employees bear the greatest cost of this phenomenon
    • Reductions in absenteeism and improvements in worker productivity resulting from better health outcomes because of expanded coverage would particularly benefit small businesses.
    Terrell McSweeny is the Domestic Policy Advisor to the Vice President
     

  • More Stable and Secure Health Care For Seniors

    Posted by Terrell McSweeny on July 16, 2009 at 2:00 PM EDT

    Vice President Biden and members of the Middle Class Task Force just concluded a health care reform discussion in Alexandria, Virginia. Along with Health and Human Services Secretary Kathleen Sebelius, White House Office of Health Reform Director Nancy-Ann DeParle, and Barry Rand, CEO of AARP, the Vice President led a discussion with older Americans on how reforming health care will lower costs, cut waste, create stability and improve quality for them.
    (Vice President Joe Biden speaks at a Middle Class Task Force meeting on healthcare at Dr. Oswald Durant Memorial Center in Alexandria, Virginia, Thursday, July 16, 2009. Official White House Photo by David Lienemann)
     
    As health reform advances this summer, it’s important to recognize the benefits for two key groups that are all too familiar with the toll rising costs of health care are taking on their security: seniors and early retirees aged 50-64. 
    Seniors face increasing health care costs while living off of fixed incomes – a situation that often forces them to make tough decisions– like cutting doses of important drugs to save money. The Medicare Doughnut Hole – the gap in prescription drug coverage that millions of seniors fall into- costs seniors a total of $15 billion dollars a year. 
    Health care reform will help close that gap by providing deep discounts for medications for seniors who are stuck in that hole and allowing seniors to access more affordable generic drugs. Health reform will also ensure Medicare beneficiaries access to their doctors, fund 100% of preventative care, and cut the bureaucracy between seniors and their doctors by simplifying paperwork, computerizing medical records, and making sure that forms are easy to read for seniors. Health reform will prevent any insurance company from denying coverage based on a person’s underlying health status, and it will end discrimination that charges you more if you’re sick.
    (Health and Human Services Secretary Kathleen Sebelius answers a question along with President Joe Biden during a Middle Class Task Force meeting on healthcare at Dr. Oswald Durant Memorial Center in Alexandria, Virginia, Thursday, July 16, 2009. Official White House Photo by David Lienemann)
     
    Americans aged 50-64 are often the most at vulnerable and at risk in the current health care system. Too young for Medicare, they experience sky high insurance premiums and costs because of their age. Premiums for 50-64 year olds buying coverage on the open market were three times that of their peers who were lucky enough to have employer coverage. And that’s for people who aren’t automatically excluded because of a pre-existing condition.
    Health care reform will lower costs for 50-64 year old Americans by providing assistance to employer health plans to encourage them to cover recent retirees and by giving individuals access to an insurance exchange where participants will be able to compare prices of health plans – including a public plan - and decide which option is right for them.  Individuals will be eligible for help paying for insurance in the exchange based on their income. And in order to market a plan in the Exchange, insurance companies will have to comply with its rules: no denial of coverage for pre-existing conditions; no discrimination based on age; and fair prices, for good benefits.  
    (Vice President Joe Biden kneels on the floor to talk to a woman in a wheelchair after a Middle Class Task Force meeting on healthcare at Dr. Oswald Durant Memorial Center in Alexandria, Virginia, Thursday, July 16, 2009. Official White House Photo by David Lienemann)
    Everyone will have the security of knowing that if they lose their job, or if someone in their family develops a chronic disease or has a pre-existing condition, they will be able to find affordable health care for their families in the exchange.  
    Vice President Biden and the Middle Class Task Force are working to ensure that as Americans age, their care is stable and secure, affordable and effective.
    Terrell McSweeny is Domestic Policy Advisor to the Vice President
     
     

     

    Learn more about Health Care, Seniors and Social Security