Social Security Is More Secure
You might not know it from all the talk of major reform, but Social Security is on a roll. Recently, for the third year in a row, the system's trustees issued a brighter forecast about its future--pushing back the year its trust funds will be exhausted to 2037 from 2029 projected only a few years ago. While the program still faces fiscal problems, a continuation of recent economic trends would clearly lessen the measures needed to restore long-term financial solvency.
Meanwhile, defenders of the system stress the vital support it provides to a majority of the 45 million Americans who receive it. In light of that reliance and Social Security's improving fiscal outlook, they argue, major untested structural reforms such as privatization are both unnecessary and unwise.
Just how important is Social Security? According to an article in the current issue of Metropolitan Life Insurance Co.'s Statistical Bulletin, it is virtually the sole source of income for nearly a fifth of the elderly, and more than two-thirds of Social Security beneficiaries rely on their monthly checks for at least half of their income.
The article's authors note that Social Security pensions are particularly critical sources of support for older blacks and Hispanics, with 45% of these minorities depending on the program for 90% or more of their income. While 48% of white seniors would have been poor in 1997 without Social Security, the poverty rates for blacks and Hispanics would have been 61% and 56%, respectively (chart). Even with Social Security, the poverty rates for these minorities were still 24% and 20%, as compared with 8% for elderly whites and Asian Americans.
That's not all. As a report from Washington's Center on Budget & Policy Priorities points out, it's not only ethnic and racial minorities, but also women who are especially dependent on Social Security. Indeed, more than 60% of the people lifted out of poverty by the program are female, and even with those pension benefits, more than a fifth of women over 75 live in poverty.
Interestingly, ending poverty among the remaining elderly poor might not be inordinately expensive. A recent Century Foundation "idea brief" suggests that Congress institute a new minimum Social Security benefit for poor beneficiaries who receive at least 75% of their income from the system. Raising their checks to bring their incomes just above the poverty line, it estimates, would cost about $6 billion a year--less than 2% of current benefits.