Back in 1983, when Social Security was reformed to avoid insolvency, retirees received full benefits at age 65 and lived, on average, for 11.7 years receiving Social Security retirement benefits and Medicare coverage. The normal age for full benefits has now risen to 66, but life expectancy has grown to a point where they receive 12.6 years of pension checks (and 13.6 years of Medicare whose eligibility age remains 65).
That’s why I’m not sympathetic to those who hyperventilate about raising the age further, perhaps to age 69 by the latter part of this century. We’re living longer and the number of years of benefits will continue to increase irrespective of reforms. The number of years we’re working, by contrast, has been declining for years, partly because people stay in school longer and enter the workforce later.
Americans are also living better in retirement, rhetoric about the inadequacy of retirement savings notwithstanding. In 1983, 22% of Americans at least 65 years old had income that didn’t exceed 125% of the poverty threshold. In 2009, this figure had declined to 14.3%. In 1983, 10.3% of Americans living in poverty were old. In 2009, the percentage had declined to 7.9%. It is also worth recalling that the group most likely to have health insurance is over 65.
And, during a period when the number of seniors in America’s population was growing the absolute number living in poverty actually declined.
This all leads me to conclude that Social Security is an incredibly successful program that can be tweaked in ways reformers are proposing without causing great pain to the next generation of retirees. Those who argue otherwise should be asked to produce current seniors whose lives have been significantly and negatively impacted by the 1983. I’ve yet to meet one.
It is, of course, possible to find elder Americans who don’t have adequate income for a comfortable life. Interestingly, the latest budget reform proposal suggests spending more on such people. This is apparently the only program they recommend expanding. Those who most need help tend to be older, never-wed women who worked for low wages. They need and deserve help.
But it takes a big jump to get from their problem to the position that the annual Social Security cost-of-living increase is sacrosanct. Justifying a COLA in today’s environment where the cost of living doesn’t appear to be rising and incomes of many working people are stable, at best, is even more challenging.
Social Security was once known as the third rail of American politics (it isn’t, but Medicare may be) and Democrats habitually tried to keep seniors on the reservation by reminding them that it was initially a Democratic program that Republicans dream of savaging. That strategy makes theoretical sense, especially inasmuch as seniors remain the group most likely to vote.
But that argument is losing whatever traction it once had. The last time Democrats won more than 52% of their vote was in 1992 when Bill Clinton was first elected President. This year they voted Republican by a 58-42 margin, the reverse of what happened in 1982. There may be some who think that happened because Democrats collaborated in the 1983 reforms, but I’m not among them and see no evidence to make this case.
Some Democrats seem to think their best argument for winning a majority is defending the status quo, declaring proposed Social Security reforms dead on arrival and hoping this will win senior support. I wouldn’t bet on it.
For 16 years, Jim Jaffe worked for House Democrats who served on the Ways and Means Committee, apprenticing with Representatives Green, Gibbons and Gephardt before working for Chairman Dan Rostenkowski.