Tuesday, January 02, 2007

Really, It IS Simpler Than It Looks

Chris Crain, the former editor for the Washington Blade, has on his blog a piece discussing the impending retirement of Republican House member Jim Kolbe and the issues on which Chris feels Kolbe should speak out more.

By and by, it's fairly even-handed; however, there's one thing that caught my attention.
Ironically, Kolbe complains later in the interview that the Human Rights Campaign hasn't devoted more energy to extending Social Security survivor benefits to gay couples — a move that would require repealing the half of DOMA that goes unmentioned in the article.

Actually, that's not quite the case.

DOMA, as Chris correctly points out, prevents the Federal government from recognizing anything that isn't a man-woman coupling as a spouse or married.

However, that only causes a problem if Social Security conditions survivor's benefits on spousal or marital status.

Many private pension and retirement plans do not; they allow an employee to designate beneficiaries, who may or may not be related or married to them, to receive their accrued benefit upon their death. This process was made even easier and simpler by the past year's pension reform bill, which allowed such transfers to take place without an immediate tax hit regardless of the individual's relationship to the beneficiary.

Congress is more than capable of changing Social Security to match that; instead of requiring "spouse", they could with perfect right institute a beneficiary system in which you designate someone to receive your survivor benefits from Social Security regardless of their relationship or other status. Since you would no longer need to be a "spouse" to receive these benefits, DOMA would not be violated.

However, it kind of begs the question.......why bother?

To explain why, one need only take a look at what would happen under Social Security if my partner and I were married and I died. First off, because he isn't old enough or disabled, my partner would not have immediate access to my survivor's benefits in the first place; he would only be able to claim them if he were of a certain age and/or disability status. Second, even if he were of age or status, any amount that he could collect would be reduced relative to his income if he continued to work. If he begins to collect Social Security -- or is already collecting Social Security -- he gets the better of his direct benefits or what he can collect of my survivor's benefits, not both of them; in either case, he must take them as a cash distribution and be taxed accordingly. Finally, if he were to remarry, the government could with perfect right immediately terminate any survivor's benefits he was receiving.

In contrast, if I were to die, my private retirement plans would immediately pay out my accrued benefit to him as my beneficiary as he preferred, either as a taxable cash distribution or as a tax-free transfer into his own retirement account, there for him to invest as he sees fit and use when he needs it. He doesn't have to choose between his own retirement funds and mine; he gets both. Furthermore, he gets to keep both regardless of whether he remarries or not with no dimunition in their value.

This convoluted mess is why we found straight couples arguing for domestic partnerships in last year's battle over the Arizona marriage amendment; they're trying to dodge the fact that, if they get married, their Social Security payouts drop, either by the negation of survivor's benefits or the fact that the Social Security limit on payouts to their household is lower than the combined value of their benefits if considered separately.

In short, until meaningful reform to Social Security takes place, the argument over gay couples needing marriage to get Social Security benefits is pointless AND contradicted by the fact that straight couples are avoiding marriage so as not to lose Social Security benefits by getting married.

And the chances of a Democratic lapdog group like HRC advocating for meaningful changes to Social Security are about the same as that of Perez Hilton advocating for restraint in journalism.

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