Social Security

Social Security is America's success story. After bank failures and a stock market crash wiped out the savings of millions of Americans, Social Security was created to ensure that retirees have a decent income. It provides a safety net for our families. Through Social Security, everyone who works hard is guaranteed a decent retirement. Today, barely half of all workers have access to a retirement plan through work; some citizens have supplementary retirement savings. For a vast majority of Americans, Social Security is all they can rely on. Currently, 90 percent of people over age 65 receive Social Security benefits.

Social Security is a good program that needs to be strengthened, not dismantled. Social Security is not a contributor to our deficit and has enough surplus revenue to pay full benefits for the next 27 years. After that, incoming revenue will still be able to cover 78 percent of scheduled benefits. Rep. Grijalva will not support any attempts to privatize Social Security. The stock market, as we have recently seen, is extremely unpredictable. Taking savings from Social Security and investing it in Wall Street is not a responsible policy. Diverting money from trust funds into private accounts would be extremely costly and could cause benefits to be dramatically scaled back.

Social Security benefit levels are modest – only $14,000 a year for the average retiree. The median income for senior households is just $24,000, reflecting just how much Social Security means to most elderly Americans. Six in ten seniors rely on Social Security for more than half of their income, and about a third of retirees have little more than Social Security on which to live.

Women and Social Security

Social Security is exceptionally important for women in the United States. Women earn less money than men and, overall, spend less time in the workforce. They are more likely to take time to raise children and take care of family members. Shorter work history and lower wages means women typically have less lifetime income. Women are also less likely to have pensions or savings than men.

The Cost of Living Adjustment

For the first time since automatic cost of living adjustments (COLAs) for Social Security benefits began in 1975, there was no COLA in January 2010. 2011 will be the first time ever that two years have passed in which Social Security retirees and other beneficiaries will receive no automatic increase in their monthly Social Security, SSI, VA Pension and Compensation, and Railroad Retirement benefits. Over the past decade, these cost of living adjustments have averaged 3 percent per year. The Social Security COLA is set annually according to a formula which has been in the law since 1975. The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It is calculated by comparing the CPI-W from the third quarter of the current year to the year prior. The current situation is a result of economic conditions, not Congressional action.

Legislation to Strengthen The Program

Rep. Grijalva supports the Preserving Our Promise to Seniors Act to strengthen the solvency of the program and to protect it from attempts to privatize and dismantle it. The Act would strengthen Social Security for the next 75 years while improving benefits by fixing the outdated COLA formula. Currently, people do not pay Social Security tax on anything they make over $106,800. It is unfair to ask some to pay taxes on their entire income and let the wealthy only pay taxes on a small portion. This bill gradually phases out the payroll tax exemption on incomes over $106,800 and keeps Social Security’s tradition of increased benefits for increased contributions. Additionally, this bill would improve the current COLA formula by indexing it to seniors’ costs through the creation of a Consumer Price Index for the Elderly. Finally, the legislation provides a supplemental payment to all COLA-tied retirees when there is no COLA for seniors.

He also supports legislation to provide one-time payments of $250 to Social Security recipients when there is no yearly COLA adjustment. A $250 payment will help seniors, veterans, railroad retirees and people with disabilities who receive Social Security make ends meet when housing values are down, other retirement income is volatile, and many are facing rising expenses. Similar Recovery Act payments in 2009 boosted GDP by about 0.5 percent in the second quarter of 2009, translating to roughly 125,000 jobs created or saved, according to estimates from the Economic Policy Institute.