Social Security

The Center for Rural Strategies, an awardee of NASI’s Improving Lives of Vulnerable Americans Through Social Security project, recently analyzed Social Security recipients by county in the U.S. The Daily Yonder (affiliated with the Center for Rural Strategies) used this breakdown of Social Security beneficiaries to find the counties most dependent on Social Security.

This Thanksgiving, nearly 24.2 million Americans, will undoubtedly be thankful for three critical social insurance programs that helped keep them out of poverty in 2010: Social Security, unemployment insurance and workers' compensation.

In recent weeks, all but one of the Republican Presidential candidates (Jon Huntsman) have made comments favoring privatization of social security, that is, its replacement or partial replacement with privately managed individual investment accounts.  This was the approach advocated by President George W. Bush, unsuccessfully, after his reelection in 2004. The candidates’ renewed interest in social security privatization is striking given the recent volatility of financial markets and the losses that Americans have incurred in their 401(k) and other private investment accounts.  It is perhaps even more striking given the large body of analysis showing that privatization would disadvantage low- income workers while benefitting the wealthiest Americans. This was, for example, a key finding of the U.S.

For a long time – even before some of the current crop of presidential candidates began accusing America’s most successful public program of being nothing more than a “Ponzi scheme” – the national conversation about “fixing” Social Security has centered around cutting benefits or raising the retirement age (also a benefit cut, albeit by another name).

Rumor has it that the Joint Select Committee on Deficit Reduction, aka “supercommittee,” is considering a switch from the present Consumer Price Index (CPI) to a “chained CPI” to determine Social Security’s cost-of-living adjustment (COLA). While proponents describe the change as a “technical correction” (because the present CPI is believed to overstate the inflation experienced by average consumers), the chained CPI would understate the inflation experienced by older Americans, largely because of their relatively high out-of-pocket healthcare costs and their limited ability to make substitutions (such as fuel for food) when prices rise. Switching to a chained CPI would mean cutting Social Security benefits by gradually eroding their purchasing power – a cut that would compound over time, becoming more and more severe as beneficiaries grow older.

Two NASI fact sheets discuss the consequences.