Women Most Vulnerable in Social Security Debate

By Joel Pett, Lexington Herald-Leader. reprinted with permission.

Social security was a top issue for voters in this election, and politicians emphasized their commitment to "save Social Security." But beyond this poll-driven catch-phrase, candidates failed to tell voters what they really had in mind. Now congressional Republicans and President Clinton have declared their intention to seek a deal on Social Security this year. Women are skeptical about the prospects, as well we should be.

The question before the president and Congress is simple: As we cross the bridge into the 21st century, are we willing to leave seniors -- especially older women -- behind?

Congress has already turned its back on the working poor by refusing to increase the minimum wage and, with the collusion of the president, pulled public assistance out from under the unemployed poor. Now conservatives in Congress are turning to Social Security, which benefits not only the elderly, but also people with disabilities, widows and orphans. And we have no reason to believe that Social Security will survive a revamp by Livingston and Lott . . .unless we can educate and mobilize the public.


A chicken-little atmosphere has been created by the millions of Wall Street dollars pushing for privatization of Social Security. (With the system taking in some $1.5 billion a day, the prospect of fees for managing even a fraction of that amount are quite an incentive.) But the threat we face is not an imminent collapse in Social Security funding, but a possible shortfall after 2032.

Congress created the Social Security Trust Fund (financed by the excess of current payroll taxes over current payments to beneficiaries, now growing by more than $100 billion a year) to help the system meet the challenge of supporting baby boomers who will begin to retire in 2010.  By 2032, if the Trust Fund is drawn down to zero, the system will be purely pay-as-you-go - as it was from the 1940s through the 1960s.

And those projections are based on a cautious economic forecast. The Social Security Trustees project an annual increase in Gross Domestic Product, adjusted for inflation, of only 1.6% from 1997 to 2029. Growth from 1960 to 1974 averaged 4.1%; from 1975 to 1996, it averaged 2.7%.  Maintaining current levels of growth would sustain Social Security through the next century without any changes in the program.

Under the cover of a fantasy funding crisis and in the name of reducing government, conservatives want to revise or eliminate Social Security in favor of individual investment. Privatizers want Generation X to join their attacks against Social Security, but young people should beware. Seniors aren't the only ones who benefit from Social Security. Three million children and their sole caretaker parents depend on Social Security's death and disability benefits to survive.  Indeed, Social Security's reach is wide; without it, vulnerable people of all ages will suffer.


Women must be particularly wary of proposals to "fix" Social Security.  After a lifetime of work, women often find themselves in dire economic straits during what were supposed to be their golden years. Women are a majority of all Social Security recipients, and roughly three out of four of the recipients over 85 are women. Older women are twice as likely as men to live in poverty and to depend on Social Security as their sole support.

Privatization of Social Security would be risky and expensive. (Administrative costs of Social Security are just 1% of benefits, compared to 12 to 14% for private insurers.) Most of the proposals offered would create private accounts by diverting Social Security taxes while cutting benefits and raising the retirement age to make up for lost revenues.

Many existing benefits important to women would not be available under privatization. For instance, Social Security replaces a higher proportion of low-wage workers' income when they retire. Under a private plan, this progressive aspect of Social Security that provides a buffer for the poor, who are disproportionately women, would be lost.

In addition, lifelong benefits under Social Security are especially important to women, who after reaching 65 have a life expectancy of 19.2 years compared to 15.6 for men. And without the protection of cost-of-living adjustments in benefits,  even a modest 3% inflation rate would mean cuts in the purchasing power of a $100 benefit to $74 over 10 years and to $55 after 20 years.  Inflation-adjusted private annuities are non-existent in this country, and lifetime annuities, if available, would be prohibitively expensive. What are older women supposed to do if they exhaust their assets before death?

And as the economy fluctuates, so will the yields of privatized plans. Between 1965 and 1978 the market lost 45% of its value. Seniors need a steady income they can count on, not the booms and falls of the market. The impact on women would be disastrous.


We must guard against changes that will further impoverish women and use this opportunity to strengthen and make Social Security more equitable.

While Social Security is an important program to seniors, the disabled and children who survive the death of a parent, there is a lot of room for improvement. Gender neutral language does not mean equality; 63% of women on Social Security receive benefits based on their husband's earnings (wives' or widows' benefits), while only 1.2% of men receive benefits based on their wife's earnings; 37% of these women had no earnings history and 26% had a higher benefit as a wife or widow than as an earner. Women currently receive an average of only $621 in monthly benefits, while men receive $810.

We challenge Congress and the president to change the distribution of spousal and primary earner benefits to make them equitable so that homemakers are no longer penalized for choosing to work in the home instead of the paid workforce. We want the cap on social security taxes raised; highly compensated workers pay no Social Security on earnings over $68,300 which means low-waged workers carry an extra tax burden that represents a higher rate of total earnings. And we want to establish earnings sharing that will allocate 50% of both spouses' combined earnings to each individual spouse, at long last allowing each spouse to have benefits in her or his own right. In other words, we want women's work - in and out of the home - to be counted and compensated.

In the coming months we must bring higher visibility and organizing on these issues. Our grassroots activists can and will refocus this debate, insist that politicians level with the public about their plans for Social Security and the impact on the lives of women and our families, and stir and direct public fear and frustration toward effective action.

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