The Rockefeller Foundation's Campaign for American Workers Initiative supports the development of new rules and new tools for the 21st century economy though innovative products and policies to increase economic security within the U.S. workforce, particularly among poor and vulnerable workers.
The National Academy of Social Insurance (NASI) is a non-profit, nonpartisan organization made up of the nation's leading experts on social insurance. Its mission is to promote understanding of how social insurance contributes to economic security and a vibrant economy.
Social Security and Medicare Benefits Are Inadequate at Best and Continue to Decline
The economic security of Americans has been deteriorating over the past decade – and particularly during the current recession. Many predict that the economy will get worse before it gets better. Americans and our institutions have not been challenged to such an extent in several generations, and some question our resiliency.
On the eve of the 74th anniversary of Social Security, nearly nine in ten (88%) Americans say Social Security is more important than ever as a result of today's economic crisis, and three-quarters of Americans say it is critical to preserve Social Security even if it means that working Americans have to pay higher taxes to do so, according to a poll released today by the National Academy of Social Insurance (NASI) and the Rockefeller Foundation.
The poll of 1,488 Americans, conducted between July 7-14 by the Benenson Strategy Group, sends a strong message to policymakers about the value that Americans place on Social Security benefits for themselves and the country as a whole – with over 75 percent of Americans saying that Social Security is or will be an important part of their retirement and nearly half of recipients stating that they would be unable to afford food, clothing or housing without it.
With the vast importance that Social Security has in the lives of so many Americans, an overwhelming number – 90 percent – want Congress to act within the next two years to preserve Social Security. Americans are willing to pay for Social Security because they value it for themselves (72%), for their families (75%), and for the security and stability it provides to millions of retired Americans, disabled individuals, and children and widowed spouses of deceased workers (87%).
“The recession underscores the critical role Social Security fills for working families and retirees across the nation,” said Kenneth S. Apfel, Chair of the NASI Board of Directors and Commissioner of Social Security from 1997 to 2001. “On the eve of the 74th anniversary of the signing of the Social Security Act, it is striking to see how deeply Americans value the program, they want to preserve and improve it, and they are willing to pay for it.”
"In these challenging economic times, Americans are calling on their leaders to ensure that Social Security remains a strong, sustainable safety net," said Judith Rodin, the Rockefeller Foundation's president. "Seventy-four years ago, the Rockefeller Foundation helped inform Social Security's inception and implementation. Today, we're proud to build on that legacy by supporting a new generation of products and policies that bolster resilience to economic risk and protect Americans' retirements."
“The recession has changed the way Americans think about their future,” said Joel Benenson, President of the Benenson Strategy Group. “Americans have re-learned that we can't always count on the stock market, so we need to be able to count on Social Security. Americans are willing to invest in the peace of mind Social Security provides.”
With about 31 million Americans expected to retire in the next decade, the impact of today's economic situation on worker insecurity is clear from the poll, as 65 percent of Americans want to see an increase in Social Security as a result of lost savings and 78 percent of Americans are concerned about having enough money for retirement.
Large majorities of Americans support strengthening benefits for those who need them most. - 78% support extending benefits to children under age 22 of deceased or disabled parents while attending college or vocational school;
- 76% support increasing benefits for widowed spouses of low-earning couples;
- 75% support increasing benefit for people over the age of 85;
- 69% support improving benefits for steady, low-paid workers at retirement; and
- 64% support improving benefits for working parents who take time off to care for children.
For more on the poll findings, see Americans' Views on Social Security.
Social Security is the main source of income for most retirees
While benefits are modest, Social Security is the the main source of income for most elders.
For 2 in 3 beneficiary units, Social Security is half or more of total income.
For 1 in 3 beneficiaries, Social Security is almost all (90% or more) of total income.
Options to improve adequacy
Options can target vulnerable groups
1.Guarantee that retirees with at least 30 years of work get a benefit that meets a meaningful standard of adequacy.
2.Improve benefits for widowed spouses of low-earning dual-earner couples.
3.Increase benefits at advanced age –say 85.
4.For children of deceased or disabled workers, continue benefits to age 22 while in college or vocational school.
How can we pay for more adequate benefits?
Social Security does not need more money now. But we can schedule now what we expect it to need later.
Options for future revenue
1.Keep the 2009 estate tax and devote it to Social Security (1/4 of the shortfall)
2.Graduallyrestore the tax cap to cover 90% of all wages (1/3 of the shortfall)
3.Pay a legacy tax on earnings above the tax cap (1/4 of the shortfall)
4. Schedule FICA increases in the future –e.g., for employers and employees increase FICA from 6.2 to 7.0 in 2021 and to 7.8 in 2051 (all of the shortfall).
As real wages rise, future workers would share part of their higher standards of living so that elders fall less far behind (Thompson 2004)
Medicare Project Overview Pressures to curb health care spending, the projected insolvency of the Hospital Insurance Trust Fund, and concerns about gaps in coverage that leave beneficiaries exposed to significant health care costs will shape the evolution of the Medicare program. The National Academy of Social Insurance (NASI) Medicare project provides neutral, timely analysis of the most important policy questions facing Medicare over the next several years. It draws on the Academy's expertise in health care financing, innovative public policy approaches to paying for and delivering health services efficiently, and the institutional context in which the Federal government implements health policies.
Medicare Insurance increases costs yearly while Social Security Benefits decline
Benefits coverage decline yearly by limiting services provided and lowering payment amounts to providers. Many practitioners refuse to provide to Medicare beneficiaries
Conclusion
*Benefit adequacy is important in Social Security solvency debates.
*Benefits are modest; yet are the main source of income for most beneficiaries.
*Benefits hold their value despite market meltdowns. Other sources are less secure and less efficient.
*Many options exist to strengthen and pay for Social Security for families and elders in the 21stcentury.
Contact:
Virginia Reno
VP for Income Security
National Academy of Social Insurance
www.nasi.org
Vreno@nasi.org
202-452-8097
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