Here's a stat that might surprise you: Nearly half of our nation's 41 million seniors are economically vulnerable, meaning their income is less than two times the supplemental poverty threshold.
Benefit cuts to Social Security and Medicare would severely impact these seniors' ability to afford health care, food and other basic living necessities, according to a new Economic Policy Institute (EPI) study.
The older you are, the more economically vulnerable you get. Women, Latinos and African Americans also are also less likely to have enough to get by in old age. EPI reports if Paul Ryan's Medicare proposal, a.k.a. "coupon care," was passed, nearly 3.5 million more seniors would be economically insecure.
The "chained" CPI proposal for calculating Social Security cost-of-living adjustments (COLAs) also would heighten economic troubles for seniors:
For example, a switch to the "chained" CPI would boost the share of 70- to 75-year-olds below two times the supplemental poverty threshold by 1.2 percentage points, resulting in 132,000 more economically vulnerable seniors.
If policymakers truly want a more accurate formula for Social Security COLAs, Sen. Mark Begich (D-Alaska) and Rep. Ted Deutch (D-Fla.) have introduced a proposal that includes the CPI-E (Elderly Index), a formula that better reflects what seniors spend money on (health care, housing, etc.).
Instead of pulling the rug out from under our nation's seniors who have paid for these earned benefits throughout their working lives, it's time to discuss improving Medicare and increasing Social Security benefits.
The AFL-CIO Executive Council, in March 2012, called for building on the success of Social Security to address the retirement crisis:
While Social Security is an obvious solution to the crisis, its current benefit levels are too modest. Social Security’s income replacement rate is one of the lowest of all the industrialized countries. To compensate for the decline of traditional pensions and the loss of retirement savings, Social Security retirement benefits must be increased across the board, which would be especially meaningful for low-income seniors. In addition, Social Security COLAs need to take into account the higher health care costs faced by seniors. Finally, too many employers look for ways around making their contributions to Social Security through labeling their workers as independent contractors.
Echoing the sentiment of the AFL-CIO, Los Angeles Times columnist Michael Hiltzik called for expanding Social Security benefits in a column this week:
There's no trick to making Social Security more relevant to more Americans. Benefits should be increased, especially for those whose lifetime annual earnings have averaged $50,000 or so (roughly two-thirds of all beneficiaries). The benefits for women who have spent most of their working-age lives as caregivers by raising a family or tending to aged parents should be augmented through a "caregiver credit" that recognizes their contribution. You know all those politicians who go on the stump or on TV to praise family and motherhood? This is a chance to put their votes where their mouths are.
How to pay for that? No trick to that, either: Raise the payroll tax cap, or even better, scrap it. The most common objection to this solution to Social Security's fiscal issues is that it would raise taxes on the wealthiest Americans to, well, "unsustainable" levels.
A National Academy of Social Insurance report from January showed that America's working families emphatically rejected benefit cuts to Social Security and supported policies that would close the future modest funding gap by scrapping the tax cap.
Working families are calling on Congress to protect Social Security, Medicare and Medicaid from benefit cuts (i.e., raising the retirement age and the "chained" CPI), repeal the sequester and close tax loopholes for corporations and the wealthiest 2%.