Ireland, Patricia - National Organization for Women

National Organization for Women, Inc.
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Washington, DC 20036-5705
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STATEMENT OF NOW PRESIDENT PATRICIA IRELAND ON SOCIAL SECURITY REFORM

presented to the White House Conference on Social Security
December 8,1998

The question before the president and Congress is simple: As we cross the bridge into the 21 st century, are we willing to leave seniors -- especially older women -- behind?
The Republican Congress has already turned its back on the working poor by refusing to increase the minimum wage and pulled public assistance out from under the unemployed poor. Now conservatives in Congress are turning their attention not only to the elderly, but also to people with disabilities, widows and orphans. And we have no reason to believe that Social Security will survive a revamp by Livingston and Lott . . . unless our campaign to educate and mobilize the public is successful.
A chicken-little atmosphere has been created by the millions of Wall Street's dollars pushing for privatization of Social Security. (With the Social Security system taking in some $1.5 billion a day, the possible fees for managing even a fraction of that amount are quite an incentive.) But what we are facing is not a crisis; it's a scam. The threat our families face is not the imminent collapse in Social Security funding, but a possible shortfall after 2032.
Congress created the current Social Security Trust Fund (financed by the excess of current payroll taxes over current payments to beneficiaries and currently growing by more than $100 billion a year) to help the system meet the challenge of supporting baby boomers who will begin to retire in 2010. By 2032, when the Trust Funds may be drawn down to zero, the system will be purely pay-as-you-go - as it was from the 1940s through the 1960s.
And those projections are based on a cautious economic forecast. The Social Security Trustees project an annual increase in GDP, adjusted for inflation, of only 1.6% from 1997 to 2029. Growth from 1960 to 1974 averaged 4.1%; from 1975 to 1996, it averaged 2.7%. Maintaining current levels of growth would sustain Social Security through the next century without any changes in the program.
Women must be particularly wary of the remedies proposed to "fix" Social Security. After a lifetime of work, women often find ourselves in dire economic straits during what was supposed to be our golden years. Women are a majority of all Social Security recipients, and roughly three out of four of the recipients over 85 are women. Older women are twice as likely as men to live in poverty. And senior women are twice as likely to depend on Social Security as their sole support.
Privatizers want Generation X to join their attacks against Social Security, but young people should beware. Seniors aren't the only ones who benefit from Social Security. Three million children and their sole caretaker parents depend on Social Security's death and disability benefits to survive. Indeed, Social Security's safety net is wide; without it, vulnerable people of all ages will suffer.
Under the cover of a fantasy funding crisis and in the name of reducing government, conservatives want to revise or even eliminate Social Security in ways that will essentially eliminate the safety net. We must use this opportunity to strengthen and make Social Security more equitable, especially for women.
There are many important benefits under the current program that would not be available under privatization. For instance, 63% of women on Social Security receive benefits based on their husband's earnings (wives or widows' benefits), while only 1.2% of men receive benefits based on their wife's earnings; 37% of these women had no earnings history and 26% had a higher benefit as a wife or widow than as an earner. Under a private plan, the progressive aspects of Social Security that provide a buffer for the poor would be lost, i.e. Social Security replaces a higher proportion of low-wage workers' income when they retire.
In addition, lifelong benefits are especially important to women, who after reaching 65 have a life expectancy of 19.2 years compared to 15.6 for men. What are older women supposed to do if they exhaust their assets before death? Adjustment for increases in cost of living under Social Security is also crucial to saving older women from poverty. Without such protection even a modest 3% inflation rate cuts the purchasing power of a $100 benefit to $74 over 10 years and to $55 after 20 years. Inflation adjusted private annuities are non-existent in this country, and lifetime annuities, if available, would be prohibitively expensive.
As the economy fluctuates, so will the yields of privatized plans. Between 1965 and 1978 the market lost 45% of its value. Seniors need a steady income they can count on, not the booms and falls of the market. The impact on women would be disastrous.
While Social Security is an important program to seniors, the disabled and children who survive the death of a parent, there is a lot of room for improvement. Gender neutral language does not mean equality; women currently receive an average of only $621 in monthly benefits, while men receive $810.
We challenge Congress and the president to change the distribution of spousal and primary earner benefits to make them equitable so that homemakers are no longer penalized for choosing to work in the home instead of the paid workforce. We want the cap on social security taxes raised to remove the extra tax burden on secondary wage earners. And we want to establish earnings sharing that will allocate 50% of both spouses' combined earnings to each individual spouse, at long last allowing both spouses to have benefits in her or his own right. In other words, we want women's work - in and out of the home - to be counted and compensated.
NOW endorses the principles of the New Century Alliance for Social Security and the National Council of Women's Organization's committee on Social Security. NOW is a member organization of both coalitions.