RE: Women and Children

[National Dialogue Moderator <moderator>]

Ms. Beckett,

I can appreciate your concern for women, especially women who leave the
workforce to care for children or for other reasons.  Since Social Security
is a payroll-based system, you are right to examine closely the impact of
reform on these individuals.

The Kolbe-Stenholm bill contains several provisions that would be beneficial
to women.  Most notable is a minimum benefit provision that would provide a
more robust benefit than what is afforded by current law.  In our bill, if
an individual works for 20 years, that person is guaranteed a benefit equal
to 60% of the poverty level.  If that person works for 40 years, they are
guaranteed a benefit equal to 100% of the poverty level (there's a sliding
scale in between).  As a result of this provision alone, 50% of women and
10% of men will do better under the Kolbe-Stenholm plan than under current
law.  

Our bill also allows for voluntary contributions.  Workers are permitted to
contribute an additional $2000 per year to their personal account.  Women
who expect to take time off to raise children can make voluntary
contributions both before and after their hiatus to "catch up."  For women
who earn less than $30,000, our bill provides a savings subsidy.  For the
first $1 voluntary contribution, an eligible worker will receive a $150
match from the federal government.  Each additional dollar is matched 50% up
to a cap of $600 per year (there is an example of how this provision works
on my web page: http://www.house.gov/kolbe/liw.htm).  For eligible workers
who are unable to contribute voluntarily, we allow them to redirect a
portion of their Earned Income Tax Credit (EITC) into their personal account
to qualify for the savings match.

One of the reasons the Kolbe- Stenholm bill will be a better deal for women
is the changing nature of divorce.  Current law stipulates that if a
marriage lasts 10 years or more, a woman is entitled to 50% of her
ex-spouse's Social Security benefit.  Unfortunately, not only has the
divorce rate skyrocketed since 1935 when Social Security was first adopted,
but marriages also are not lasting as long.  Two or more decades ago,
divorces were fewer and occured after 15-20 years of marriage.  Today,
divorces are more likely to occur in the fourth or seventh year of marriage.
Moreover, more and more women are not re-marrying.  As such, many women are
heading into retirement alone and without the benefit of a spouse's Social
Security income.  As more and more women are raising children alone and
working in lower-paying jobs, the minimum benefit provision and the savings
subsidy will do much to lift these women out of poverty.

I hope my comments here have assuaged some of your concerns about Social
Security reform and it's impact on women.  I encourage you to keep asking
questions on this topic as you examine other proposals.

-- Jim Kolbe