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Social Security Battle's New Turn: Unions Call For Increase In Benefits

Posted: 03/16/2012 4:22 pm Updated: 03/16/2012 5:50 pm

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Richard Trumka is the president of the AFL-CIO, which is calling to increase Social Security payments

Throwing the debate over Social Security on its head, the AFL-CIO is issuing a call to expand the program rather than shrink it.

Social Security's current benefits are too low, the labor group wrote in a statement published Wednesday. Advocates of the program are lining up behind the union.

"Labor just stood up for every American -- union and non-union alike -- who values Social Security and wants it to be there for themselves, their children and grandchildren. Social Security is a uniquely American solution, not a problem, the AFL-CIO's Executive Council just declared," said Eric Kingson, co-director of Social Security Works, announcing his group's backing of the new position.

The nearly 54 million people drawing Social Security benefits receive, on average $1,073.80 per month, according to the Social Security Administration, HuffPost previously reported. The Center on Budget and Policy Priorities estimates the program keeps about 20 million people out of poverty, including 13 million elderly Americans.

Gary Engelhardt and Jonathan Gruber, in a 2004 National Bureau of Economic Research report on the program, calculated that each 10 percent cut in benefits would lead to a 7.2 percent increase in poverty. Such cuts are beginning to seem likely, despite the robust state of the program's finances, which can cover full benefits through 2037 and boasts a surplus trust fund of $2.6 trillion as of this past fall. Reversing that trend and increasing Social Security payments likely would lead to a reduction in elderly poverty, if past history is any guide.

"It is time to stop thinking of Social Security as a problem and start thinking of it as a key solution to our retirement security crisis," the AFL-CIO statement begins, arguing that aging baby boomers are increasingly vulnerable as a result of flattening wages and a financial crisis that devastated 401(k)s.

A more generous Social Security, the AFL-CIO argues, is the best fix. "While Social Security is an obvious solution to the [retirement] crisis, its current benefit levels are too modest. Social Security’s income replacement rate is one of the lowest of all the industrialized countries," the statement says.

The AFL-CIO is a longstanding opponent to any reduction of Social Security benefits or raising of the retirement age. The union said calls for cuts are unjustified, and that the program is fiscally sustainable.

"The reason why the debate in Washington, D.C., has gone so far in the wrong direction is that the enemies of Social Security have spent enormous amounts of money spreading misinformation about the program," the statement says. "The truth is that Social Security is not in crisis. It can pay all scheduled benefits through the year 2036 and three-quarters of all scheduled benefits thereafter. If Social Security were a pension plan, it would be in the 'green zone' -- the healthy zone -- under the Pension Protection Act. Social Security does not contribute one dime to the deficit, it is legally prohibited from borrowing or going into debt and it is not a significant driver of long-term fiscal imbalances."

Proponents of cuts to Social Security, including presidential candidate Rick Santorum , say cutting the program is necessary to curtail the national debt.

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