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Social Security COLA Cut Will Drive Single, Senior, African American Women Into Poverty

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The chained CPI, a Social Security COLA cut on the table in deficit talks between the President and Republicans, could dramatically worsen poverty among unmarried senior African American women. As such, it violates the request of major progressive organizations in a letter to the White House and Congressional leaders to "make sure that deficit reduction is achieved in a way that does not increase poverty."

According to the National Women's Law Center's analysis of Current Population Survey data, in their report on how the chained CPI would affect women, the median annual Social Security benefit for a 65-year-old single African American woman is $10,680. (By contrast, the median benefit for all single senior women is $13,200.)

That puts the median benefit for African American woman seniors just above the 2010 poverty line for individual seniors, which is an obscenely low $10,458.

Which brings us to the chained CPI (consumer price index), an obscure change to the COLA formula that would cut benefits more with each passing year. If the chained CPI were adopted, by age 70--after just five years of collecting Social Security benefits--the median benefit for African American single women seniors would dip below the poverty line, and continue on a downward spiral as those women age, cutting nearly $1,000 by the time they reach age 95.

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By dmarans at 2011-07-14
Click here for a jpg of the graph above.

This in itself does not mean that the chained CPI would push many senior African American women into poverty. But according to SSA (Social Security Administration) data nearly half--45.6 percent--of non-married African Americans aged 65 older rely on Social Security for all of their income; 54.1 percent rely on it for 90 percent of their income or more.

Taken together, these two pieces of information--that the median benefit would go below the poverty level for non-married African American women, and that a near-majority of non-married elderly African Americans rely on Social Security for all of their income--lead to the conclusion that the chained CPI would lead to an increase in poverty among elderly African Americans.

What is more, the fact that the chained CPI's cuts increase as beneficiaries age will be especially harmful to African American women, who live longer than African American men. Life expectancy for African American women at age 65 is 83, compared with 79 for African American men.

Worst of all, non-married African American women seniors already suffer from high rates of poverty and near-poverty. According to the Census's Current Population Survey, nearly half--47.8 percent--of African American women living alone have an income under 125 percent of poverty, and one-third--33 percent--have income below 100 percent of the poverty line.

At least two of the progressive organizations that signed the letter to the White House and Congressional leaders asking that deficit reduction not harm the poor--the Center for American Progress (CAP) and the Center on Budget & Policy Priorities (CBPP)--are on the record supporting a switch to the chained CPI COLA cut. (See here and here for evidence of CAP's and CBPP's support for the measure, respectively.) Given those groups' specific commitment to deficit reduction that does not "increase poverty," perhaps they should reconsider their support for the chained CPI--at least as it is applied to Social Security.

Of course, any changes to Social Security will have no effect of deficit reduction, because Social Security cannot contribute a penny to the deficit. But if implemented as part of a "deficit reduction" deal, the chained CPI is, at the very least, purported "deficit reduction," that has the effect of increasing poverty.

Views expressed are those of the author, and do not reflect the views of Social Security Works or the Strengthen Social Security Campaign.