The New New Deal
Millions of Americans rely on social security for their basic needs. However, for more than 50 years, public policy has forced them to live in poverty.
by Susan E. Stutz
As the parent of a disabled adult child, I understand the importance of social security benefits as well as the inadequacy of those benefits in providing for the needs of those who receive them. Were my son not fortunate enough to have been born into a family that can put a roof over his head and food on his plate, he would be homeless and hungry. In one of the richest countries on the planet, that is a disgrace.
According to the Social Security Administration, as of December 2020, there's an average of 65,000,000 people who receive social security benefits on a monthly basis. Retirees get a maximum monthly benefit of $1544 while a disabled person’s maximum benefit is $1277. While those benefit amounts are not chump change, they are grossly inadequate in meeting the everyday needs of the recipient. Being retired or disabled does not reduce your rent, your grocery bill, or your living expenses. You still need a roof over your head, clothes on your back, food in your belly, and a means by which to get around whether that be by car, mass transportation, or by foot. It does not take a mathematician to recognize that social security benefits fail miserably in providing adequate funds for today’s housing market. Furthermore, if you are fortunate enough to have some of your benefits left over after paying rent, what remains is certainly not enough to cover the rest of life’s necessities such as electricity, water, insurance, transportation, or food. never mind anything else. Critics of social security might suggest that recipients live with family members to defray costs; however, your monthly benefit amount is likely to be reduced by more than 50% if you do so. If your benefit amount did not cover your rent, your reduced benefit of about $600 per month is certainly not going to stretch any further in meeting your needs.
In 1973, Congress enacted legislation that provided that SSI benefits would have automatic annual Cost of Living Adjustments (COLA) increases. Prior to that time, Congress had to approve each increase. The COLA increases have kept pace with the cost of inflation; however, when the benefit amount is insufficient to cover life’s necessities, to begin with, a 1.3% increase (2021 COLA), which equates to an additional $16 per month, is more insulting than helpful. All of these failings keep recipients of social security firmly below the federal poverty level.
According to Justice in Aging, the eligibility rules for receiving benefits have not been updated for more than 4 decades and the amount of financial assets a recipient can have has not been increased since 1989. No changes have been made to the monthly benefit amount despite the fact that the cost of living in 2021 is more than 5 times the cost of living at that time. Additionally, someone who is receiving disability payment cannot save for large purchases no matter how much they may need to do so as they are limited to a maximum of $2000 in savings. And, the amount one can receive from outside sources to meet their needs is only $20. Since money went a lot further then, today's $20 is the equivalent of $3 back then. Inflation has effectively eaten $17 out of the buying power of the outside source allotment. So, people who rely on social security as their only source of income cannot count on their benefit amount to take care of themselves nor can they look to other sources without fear of reprisal and a reduction of their already inadequate benefits.
In response to the economic catastrophe of the late 1920s, Social Security was designed to lend a helping hand to America’s retirees and disabled people. In the intervening years, recipients have been left to try and eke out an existence below the poverty level with no alternative means of support without engaging in activities that put their benefits in jeopardy. Congress finds trillions for tax cuts for the filthy rich. Surely our coffers have more to give to those who need it the most.
It is long past time for this country to take the necessary steps to lift social security recipients out of poverty and to give them the resources they need. The Social Security Restoration Act of 2021, which was introduced in the House on June 11th (H.R. 3824) and in the Senate on June 15th (S. 2065) is the place to start. If enacted, here is what we can expect:
- The SSI benefit rate will be increased to at least 100% of the Federal Poverty Level, adjusted annually, so that no one receiving SSI will be left to live below the poverty line.
- Couples will receive their full SSI benefit, totaling twice the individual rate, rather than a reduced marriage penalty rate.
- Low-income seniors and people with disabilities who can’t work enough to meet all their basic needs will be able to save up to $10,000 and couples will be able to save up to $20,000 for emergencies such as car repairs, new roofs, and other unexpected expenses, without losing benefits.
- Disabled individuals will be able to receive up to $128 monthly from other sources, such as Social Security benefits or pension payments, without a corresponding loss in benefits.
- Individuals who are able to work will be able to earn up to $416 a month without being penalized.
- Individuals who live in households with others, including family members, will no longer be penalized with lower benefits through the in-kind support and maintenance provision.
- Individuals who transfer assets (even small amounts of money to a family member) will no longer suffer harsh penalties.
- Exclude retirement accounts from countable resources to allow people with disabilities to build up their savings for retirement and use those resources to pay for expenses in later life.
- State and local earned income tax credits and child tax credits will be excluded from income calculations in the same manner as general tax payments.
Interested in the net effect of those changes? Here is the letter from the Chief Actuary of the Social Security Administration which outlines the anticipated changes and the cost related thereto.
There is also another way that Congress can address this issue and that is by including measures to improve these benefits in the Reconciliation Bill that they are presently working on. Reconciliation requires a simple majority vote as opposed to requiring 60 votes for passage and may be our best bet in reforming social security. And, if President Biden's efforts are successful, social security taxes will be paid in by individuals who earn $400,000 annually which is a considerable increase from the current $142,800 threshhold.
Want to learn more about social security, take a listen to this interview with Matthew Cortland, an attorney from Massachusetts whose practice focuses on helping patients navigate the health care system. His activism is dedicated to advancing the recognition of health care as a human right.
What You Can Do
Text SSI to Resistbot to join your fellow Resistbotters in sending an open letter to Congress in support of the changes to social security that will benefit Americans who rely on that income.
Want to send a letter of your own or start a new petition? Send congress to Resistbot and encourage your representative to support or sponsor the Social Security Restoration Act of 2021 so we can do what must be done to provide for America’s disabled and retired population.
Thank you to Chris T.