The release of the Commission on Fiscal Responsibility and Reform co-chairs Erskine Bowles and Alan Simpson's draft proposal last month was, for many, the first public announcement that the fate of their Social Security benefits was even up for debate.
Although Congress may not move all of the Commission's recommendations forward, it's clear that the future of Social Security is on the bargaining table. What's essential as we move into the fraught political landscape of 2011 is that we educate ourselves and fellow citizens about Social Security and have an honest debate about the vital role that Social Security plays in staving off poverty for many millions of older adults and other low-income people.
The Center on Budget and Policy Priorities responded to the Bowles-Simpson proposal by saying that the "plan commendably puts everything on the table, but has major deficiencies because it lacks an appropriate balance between program cuts and revenue increases" and it "proposes policy steps that would prove a serious hardship for some of the nation's most disadvantaged individuals."
Eric Kingson of the Strengthen Social Security Campaign called the proposal "an equal opportunity disaster," adding that it "cuts Social Security benefits for virtually every American alive today and yet to be born."
In the economic crisis engulfing not only the United States but other countries, such as Ireland, where things are particularly challenging at the moment, it's more important than ever to assure that the most vulnerable do not bear the brunt of economic exigency. The economy is shifting under foot, unemployment is at dangerously high levels, and millions of people have lost or are on the brink of losing their homes. If the results of the recent midterm elections indicate anything, they show that Americans are frustrated that Washington has not done nearly enough to address these issues.
In challenging economic times, programs like Social Security are all the more important. Established in 1935 under President Franklin D. Roosevelt, Social Security is a social insurance program funded through dedicated payroll taxes paid by employees and employers. It is a promise to help all Americans, regardless of their means, in their old age, if disabled at any age and children after the loss of a parent.
Despite what many politicians and pundits would have you believe, Social Security isn't in crisis. To the contrary, it is one of the most successful social programs of all time. In January 2010, 52.7 million people, or about one in every six U.S. residents, received Social Security benefits. The bottom 40 percent of people over 65 years of age rely on Social Security for more than 80 percent of their income (see Figure 2); and almost two out of three older adults rely on Social Security for half or more of their income. The average benefit for all recipients is only $13,000 per year, less than the minimum wage and slightly higher than the poverty line. Nearly one in four families received Social Security income. Many don't realize that it is also the biggest and most generous program for children in the U.S. -- 9 percent of children under the age of 19 are dependent upon Social Security. Perhaps most compelling is the graphic (Figure 1) that starkly shows how many people across all racial groups would fall below the poverty line were it not for Social Security benefits.
This is especially true for older people of color: Among persons over age 65, Social Security is the only source of income for 40 percent of African-Americans, 40 percent of Hispanics, 28 percent of Asian-Americans and 33 percent of Native Americans. Without Social Security, the poverty rate among older African-Americans would triple, from 21 to 60 percent, and the poverty rate among Hispanic Americans would rise from 16 to 55 percent, according to The Battle For Social Security: From FDR's Vision To Bush's Gamble by Nancy J. Altman.
Some politicians and commentators have tried to conflate concerns about reducing the deficit and finding a solution for the long-term solvency of Social Security. But Social Security didn't cause the deficit, does not contribute a penny to it, and shouldn't be used to reduce it. As the co-chairs' draft proposal clarifies, it is making recommendations to "reform Social Security for its own sake, not for deficit reduction."
It is true that reforms are necessary to address the long-term solvency of Social Security. But the widespread claims that it already can't pay its bills, or that the trust fund will be depleted by the time today's children are ready to collect their benefits, are false. Social Security has a $2.6 trillion surplus that is expected to nearly double by 2025. Social Security can pay out all of its benefits through 2037, but will then only be able to pay about 75 percent of benefits if things remain status quo.
To address this shortfall, a number of proposed solutions do not involve slashing the benefits of the most vulnerable in the country, or raising the retirement age just because life expectancy for the wealthy is rising. As New York Times columnist Paul Krugman aptly put it:
While average life expectancy is indeed rising, it's doing so mainly for high earners, precisely the people who need Social Security least. Life expectancy in the bottom half of the income distribution has barely inched up over the past three decades. So the Bowles-Simpson proposal is basically saying that janitors should be forced to work longer because these days corporate lawyers live to a ripe old age.
Recent opinion research by Lake Research Partners indicated that Americans across all racial, political, age and income brackets want to protect Social Security and are willing to pay more to preserve it. But as long as Washington discusses the fate of Social Security behind closed doors, without the input of those most affected, the debate will continue to be distorted. That's why it's critical to support broad-based campaigns like Strengthen Social Security.
Social Security has lifted millions of people out of poverty in the 75 years since its creation as a promise to all Americans, regardless of their means. It represents the very core of American values -- hard work pays off, and we honor and care for our parents and neighbors. It is time to speak up -- for ourselves, our nation and the most vulnerable people who are entirely reliant on Social Security -- and insist that this promise be kept.
Note: A version of this article appeared at AtlanticPhilanthropies.org. The Atlantic Philanthropies is a funder of both The Center on Budget and Policy Priorities and the Strengthen Social Security Campaign.
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