Responses to Moderator's Questions for 5/25 and 5/26

[National Dialogue Moderator <moderator>]

I would like to address Ms. Janson's question first and then answer the more general questions from Maureen.  While Ms. Janson was not able to collect Social Security survivors benefits from her first husband, there are circumstances under which a surviving spouse who remarries would be able to receive benefits from a previous marriage.  If Ms. Janson was 60 or older when she remarried, she could have received benefits based on her first husband's earnings record.  Additionally, if her second marriage ended, she would be eligible to receive benefits based on her first husband's benefits.  And if she was raising children by her first husband, they would receive his survivors benefits, even if she remarried.  It appears that Ms. Janson was under 60 when she remarried.  She became part of a new family and is eligible for benefits within this family.  She can receive benefits based on her own earnings record or that of her second husband, if her benefit is less than 50 percent of his.

	Social Security benefits are not and should not be transferable assets.  The program is and should remain a social insurance program.  There are some circumstances when all of the payroll taxes contributed by a worker are not received as benefits by the worker or spouse.  There are many other instances, however, when the benefits received substantially exceed the payroll taxes contributed and also exceed what the worker would have received from a transferable asset.  For example, the Social Security Administration estimates the value of survivors benefits paid to  the family of a worker who dies at a young age is about $300,000.  It is unlikely that a worker with average earnings could accumulate assets of this magnitude at an early age to leave for his family.  In addition, many workers, especially low-wage workers, would not be able to afford a life insurance policy in the private market that provides this level of coverage.

	The goal of the Social Security program is to replace earnings, not to accumulate assets.  Expanding the objectives of the program would increase its cost substantially, and it is unclear where the money would come from to finance the new functions. The money might come from reducing basic benefits for some beneficiaries.  Social Security should continue to be an insurance program that provides basic coverage for all workers and their families.

	Having said this, it is important to add that Social Security reform should more fully address the needs of elderly widows, as President Clinton and some other policymakers have suggested.  Elderly women are more likely than elderly men to be poor.  After counting Social Security income, about 15 percent of elderly women remained in poverty in 1997, compared to about eight percent of elderly men.  And widows experience poverty at higher rates (about 20 percent) than married women (less than five percent).  A majority of the members in the 1994-1996 Advisory Council on Social Security expressed concern over the extent of poverty among elderly widows and proposed gradually increasing the benefit for surviving spouses - most of whom are widows - to 75 percent of what the couple would receive if the deceased spouse were still alive.  Inclusion of this proposal in Social Security reform measures would improve the financial well-being of widows without placing at risk the protections for women that the program currently provides. 

Kilolo Kijakazi