“Saving” Social Security Won’t Save Democrats

Social Security CardBack 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. PunditWire Initials

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.

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  • maggiemahar

    Jim–__ (Part 1 of comment)

    __Often, I agree with you. But this time. . . I'm afraid I can't. ____"WE" are not living longer. __Upper-middle-class and upper-class white Americans who work in offices are living longer.____Lower-income and even middle-class African American males are lucky if they live long enough to collect a couple of years of social security. ____I'm glad you think that Older-never wed low-income women "deserve" our help. __As you probalby know, most of them are white. (Latino & African-American women are a) more likelly to marry at some point in their lives and b)don't live as long as white women.)____So someone's low-income maiden aunt deserves our help, but a 68-African American veteran of the Vietnam war living on $10,000 a year doesn't.? How about an African-American woman who raised 4 children by herself, kept them out of trouble, cleaned office buildings at night and managed to find ways to make sure that all four got some college education. Does she "deserve"our help now that she is 65 with total income of ? $15,000?____

  • maggie mahar

    Jim (part 2 of my comment)

    You write: "It is, of course, possible to find elder Americans who don’t have adequate income for a comfortable life"
    You think?

    Seniors aren't as poor as they once were only because at the top some are very rich.
    But if you look at median income for people over 65, you'll find that it is roughly $20,000–and that includes ALL income- Social security, pensions, dividends, capital gains, income from working part-time, . .
    This means that half of all seniors life on less than $20,000. Could you imagine yourself living on $10,000 a year–total–when you are 67?
    Then there are the many people, of all races, who do heavy-duty physical labor. Their bodies wear out sooner
    The cost-of-living doesn't appear to be rising??
    Only the cost of the necessities of life: food, health care, utilities, rents in many places and property taxes in many places. Yes, people over 65 are on Medicare, but do you know how high the co-pays and deductibles have gone in recent years or how much a supplemental MediGap policy costs?

    • jim jaffe

      while Maggie and I have some differences, I fear we're talking in code here. it is important t remember that folks can retire starting at age 62 and that benefits rise for each month they wait until they turn 70. no one is suggesting that be changed. today most people start receiving benefits before they turn 65, which makes a lot of sense in certain situations, particularly if they're unable to work and don't expect to live beyond 70. what we're discussing is raising the "normal" retirement age, which suggests how long we think it is optimal for people to work. I think people a few decades hence will be living longer and should be working longer. the "normal" age is an artifact that sets when you can take benefits without an offset against employment and is a benchmark for setting other payment levels. to repeat — no one is suggesting people who want benefits at age 62 be denied them.