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Activists participate in a rally calling for the expansion of Social Security benefits in front of the White House July 13, 2015 in Washington, D.C. (Photo: Win McNamee/Getty Images)

Let's Honor Social Security's Anniversary by Boosting Seniors' Benefits

This is a historic opportunity for Congress to take action for the people—and build upon the foundation of Social Security that President Roosevelt began eight-six years ago.

Max Richtman

One of our nation's most popular federal programs marks another year of success on August 14th.  Social Security—the income security program for workers, retirees, people with disabilities, and their families - was signed into law by President Franklin D. Roosevelt 86 years ago. But it's been almost four decades since the program was last reformed. In 1983, Congress took action to shore up Social Security's finances under the acute threat of insolvency. Fast-forward to the present.  We are confronted with a looming shortfall in the program's finances amid a growing demand to boost benefits.  But bi-partisan action to strengthen Social Security has been elusive—despite the best efforts of some lawmakers to put forward solid proposals.

Retirees shouldn't have to skim so close to the poverty line after contributing to Social Security for most of their lives.   

Here is what we are facing: The 2020 Social Security Trustees report projected that the program's trust fund will run dry in 2034. (The 2021 report is overdue.)  At that point, Social Security could still pay 76% of benefits. But seniors cannot afford a 24% cut. In fact, they cannot withstand any cuts—especially when their benefits are already so modest.     

Most beneficiaries rely on Social Security for the majority of their income, meaning millions of seniors live 'hand to mouth.' Try living on today's average benefit of $1,543 per month.  That's $18,500 in annual income, which is only about six thousand dollars above the federal poverty level for individuals. For women and people of color, the numbers are even lower:  $16,500 and $14,800, respectively.

Retirees shouldn't have to skim so close to the poverty line after contributing to Social Security for most of their lives. Let's remember that the reason President Franklin Roosevelt created Social Security in 1935 was to keep seniors out of the 'poor house.'  (It wasn't just a figure of speech. Millions of older Americans were, in fact, dwelling in poor houses across the country before Social Security was enacted.)

Eighty-six years later, the benefits are no longer adequate. Social Security cost-of-living adjustments (COLAs) are failing to keep pace with seniors' living expenses from year to year.  While next year's COLA is projected to be higher than in the recent past (because of pandemic-related inflation), previous COLAs have been relatively paltry—even dropping to zero three times since 2010.  This is largely because COLAs are calculated based on the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W), which doesn't reflect seniors' spending priorities.    

If anything, seniors will need more accurate COLAs and higher benefits to survive financially in the mid-21st century.  Middle-class income—which has been all but stagnant for decades—is expected to remain flat through 2030, according to a Kaiser Family Foundation estimate. At the same time, seniors' expenses will continue to rise, especially in the areas of health care and housing. Kaiser projects that Medicare beneficiaries' out of pocket medical costs could consume half of their average Social Security income by 2030. A Harvard study found that the number of senior households burdened by housing costs will increase 37% by 2035 (the same year that older Americans will face that 24% benefit cut if Congress doesn't act to strengthen Social Security).    

With retirement savings declining and employer-provided pensions disappearing, tomorrow's seniors will rely even more on Social Security to make ends meet.  That's why the program must be expanded and strengthened.  Despite the ongoing media narrative that "no one in Congress wants to touch" Social Security, there are earnest efforts on Capitol Hill to fortify the program's finances and increase benefits.     

Rep. John Larson (D-CT), Chairman of the House Ways and Means Social Security subcommittee, will soon introduce a bill based on his earlier legislation, the Social Security 2100 Act. It's expected to to align with President Biden's proposals for strengthening and expanding Social Security.  

The Social Security 2100 Act included an across-the-board increase for all beneficiaries, along with targeted increases for the most vulnerable—including widows, widowers, and low-income retirees.  It also called for the adoption of a more accurate formula for calculating COLAs, known as the CPI-E (Consumer Price Index for the Elderly). The CPI-E is much fairer and more accurate for seniors than the CPI-W because it better reflects what seniors spend most of their income on—especially health care.     

Along with these proposals, we hope President Biden's support for family caregiver credits will be included in the new bill.  Caregiver credits bolster workers' retirement benefits so they are not penalized for taking a break from paid work to care for loved ones.  

How would all of this be paid for? By asking the wealthy to contribute their fair share in Social Security payroll taxes. Right now, payroll wage contributions are capped at $142,800.  Growing income inequality over the past four decades has decreased the percentage of overall wages subject to Social Security payroll taxes. The cap should be adjusted so that high-earners make payroll contributions on wages exceeding $400K per year, honoring President Biden's pledge not to raise taxes on anyone earning less. This new revenue would extend the solvency of the Social Security trust fund beyond its projected depletion date.   

Unfortunately, there are some in Congress who want to cut Social Security benefits in the name of fiscal austerity.  Many conservatives claim that the program must be slashed in order to reduce the national deficit, even though the program is self-funded and doesn't contribute to federal red ink. These calls increased after the deficit-swelling Trump tax cuts for the wealthy and big corporations blew a $1.5 trillion hole in the federal budget.     

Now, some 'fiscal hawks' are proposing the creation of special Congressional commissions to decide the fate of Social Security, whose recommendations would bypass the traditional legislative process and be fast-tracked to a floor vote. The program could be cut without seniors and their advocates having so much as a seat at the table.

Conservatives are also pushing to raise the Social Security retirement age. (Congress already enacted a phased-in increase from age 65 to 67 as part of the 1983 reforms.) Now, proposals are being floated to increase the age again to 69 or 70. This would be a massive benefit cut, and assumes that all workers—regardless of health status or profession—can work that long. The truth is, millions can't, and will be severely impacted if their benefits are slashed.   

Opponents of benefit expansion insist that younger adults shouldn't 'support' today's seniors, even though Social Security has worked extremely well as an intergenerational compact since 1935. In fact, the younger generations will also retire someday. And if current socioeconomic trends continue, they will need every penny of their Social Security benefits—and more. Many will also need Social Security's disability and survivor's benefits long before they retire.

As Rep. Larson points out, while Congress made changes to the program in 1983, benefits haven't actually been expanded since 1972! Everything has changed since then—the need for two-income households, the disappearance of pensions, growing wage inequality, the diminishment of unions, worsening retirement disparities for women and communities of color, and more. This is a historic opportunity for Congress to take action for the people—and build upon the foundation of Social Security that President Roosevelt began eight-six years ago.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Max Richtman

Max Richtman

Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare. He is former staff director at the United States Senate Special Committee on Aging.

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