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Why Social Security should be expanded

Social Security Admin
REUTERS/Brendan McDermid

In the world of financial uncertainty that surrounds vulnerable, elderly and middle-income Minnesotans, Social Security provides broad stability to a degree that may be surprising to many of us.

Here are a few statistical snapshots showing how well this bedrock foundation of economic security actually works for every single person in the North Star State, and not just those who receive their hard-earned monthly benefits:

Nearly 1 in 5 Minnesotans receive Social Security retirement, disability, or survivor benefits that they earned through years of work and contributing. That includes more than 860,000 workers who have either retired or been forced to stop working because of serious and permanent disabilities. It also includes more than 58,660 children whose parents have died or become disabled.

$16 billion in benefits in Minnesota

Social Security also works more broadly to stabilize Minnesota’s economy for all of us. In 2017, Minnesotans received $16 billion in benefits – 5.1 percent of Minnesotans’ total personal income. That percentage tends to be much higher in rural and Greater Minnesota counties, where the population tends to be older. The benefits are primarily spent in the local community, creating jobs and income for other Minnesotans. Indeed, an AARP report found that every dollar of Social Security benefits generates $2 of economic output.

Nancy Altman
Nancy Altman
Not surprisingly, Social Security also lifts 248,000 Minnesotans out of official poverty and lessens the depth of poverty for many more. Without Social Security, the elderly poverty rate in Minnesota would be a whopping 35 percent. Instead, it’s around 7 percent– which is still too high. Expanding Social Security will lower elderly poverty still further.

Social Security is the nation’s most universal, secure, efficient, and fair source of life insurance, disability insurance, and retirement annuities. Less than a penny of every dollar spent goes to administration and overhead. More than 99 cents is paid in benefits.

Average Minnesota benefit: around $16,000 per year

The only glaring shortcoming is that benefits are simply too low. Minnesota Social Security beneficiaries receive an average benefit of around $16,000 a year. Those benefits are vital, making all the difference between getting by and desperation for so many Minnesota families, and they deserve a raise.

Increasing Social Security’s earned benefits is profoundly wise policy. It is a solution to the nation’s looming retirement income crisis, created by disappearing private pensions and stagnant wages over the last half-century. It is thus a solution to the financial squeeze on working families, as well as the nation’s rising and perilous inequality in wealth and income.

Dane Smith
Dane Smith
Fortunately, the overwhelming will of the American people is solidly behind expanding Social Security. As polarized as the nation is over many issues, we are not divided on Social Security. Support for benefit expansions and opposition to benefit reductions crosses all ideological divides. Poll after poll finds that large majorities of Republicans, Independents, and Democrats share these views. They are held by self-identified Tea Partiers and union households. All ages, genders, income levels, races, and ethnicities hold this opinion.

President Trump won the support of many seniors with his 2016 campaign claim to be the only Republican candidate who would not cut Social Security. But, as president, he included Social Security cuts in his budget, and his administration has not put forth a plan to assure its long-term solvency or to increase benefits. Senate Majority Leader Mitch McConnell and other Republican politicians have already started using budget deficits caused by their tax cuts as an excuse to slash Social Security, as well as Medicare and Medicaid, if Trump wins a second term. Indeed, Trump has reportedly said privately that cutting Medicare will be a “second-term project.”

The Social Security 2100 Act

The good news is that Democrats are listening to the American people. Nearly 90 percent of House Democrats are co-sponsors of the Social Security 2100 Act, which would increase Social Security benefits for every beneficiary and keep the program strong through the 21st century and beyond.

The 2100 Act’s co-sponsors include all five Minnesota House Democrats: Angie Craig, Dean Phillips, Betty McCollum, Ilhan Omar, and Collin Peterson. These representatives span the full ideological spectrum of the Democratic caucus, from moderates to progressives. But they are united in their support for expanding Social Security.

Similarly, nearly every Democrat in the 2020 presidential primary supports expanding Social Security benefits. The only debate is by how much. Former Vice President Joe Biden supports targeted increases. Both Sen.  Bernie Sanders and Sen. Elizabeth Warren have plans to increase benefits for everyone, plus additional targeted increases. Sen. Amy Klobuchar has expressed her support for expansion as well.

It’s likely that the House of Representatives will pass the 2100 Act within the next few months. But to make Social Security expansion the law of the land, we must have a Senate and White House that agree with the American people on this issue.

Fortunately, we have an election next year. All candidates for federal office must be asked whether they support expanding or cutting Social Security, and candidates should not be allowed to dodge the question. The long-term economic security of families in Minnesota and across the country is at stake.

Nancy Altman is the president of Social Security Works and chair of the Strengthen Social Security coalition. Dane Smith is a Senior Fellow for Growth & Justice, a policy advocacy group focused on building a more equitable economy for Minnesota.


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Comments (11)

  1. Submitted by lisa miller on 10/16/2019 - 09:25 am.

    An even bigger issue was mentioned by Klobucher last night–ageing people and Medicaid. The reality is even those who are middle class and upper class usually run out of money when needing long term care and then end up on Medicaid as Medicare does not pay the costs. The issue is only those who are low income qualify for Medicaid and those who make more need to ‘spend down’ their assets before qualifying. Assisted living and nursing facilities cost at least 3-4,000 per month( and up to 6 or 7,000 per month). Also Medicare does not pay for personal in home care. I would prefer to see this first addressed.

  2. Submitted by Edward Blaise on 10/16/2019 - 12:03 pm.

    My WW2 vet dad came home in the mid 1950s and told my mom: “I have this sore on my lip that won’t heal”. She urged him to see a doctor and 6 weeks later he died of leukemia.

    I grew up on a Social Security survivor benefit and a VA death benefit. It saved our family. Taking SS off the political table through a long term funding solution that includes benefit increases is essential.

    The Paul Ryan/GOP school of thought was and is to curtail income to the government, forcing cuts to things that would otherwise be unpopular:

    “We really hate to do this, but, we are the fiscally responsible ones and can’t spend money we don’t have”

    The GOP smoke machine has been remarkably successful in getting folks to believe this and coupling that with convenient scapegoats like immigrants has kept them in the power they have.

    The problem can be solved through removing FICA earning limits and building in funding circuit breakers when there are shortfalls.

    And all this money finds it’s way right back into the economy immediately, paying for the goods and services essential to a good quality of life for our seniors.

    And let’s not forget that during the past 40 years of growing income inequality our promise with the workers who helped fuel the success of those reaping the income inequality benefits was: Social Security and Medicare benefits contributing to a fulfilling retirement.

    To now say: “Sorry we could not pay you then and we can’t pay you now” is reprehensible.

    • Submitted by Mike Hogan on 10/17/2019 - 04:19 pm.

      The irony is that Paul Ryan is a SS Survivor Benefits recipient himself. Talk about pulling up the ladder behind you!

  3. Submitted by Ron Gotzman on 10/16/2019 - 12:38 pm.

    To further strengthen SS the government could tax healthcare insurance benefits as income.

    • Submitted by Frank Phelan on 10/16/2019 - 08:58 pm.

      Nonsense. The income cap should be raised. This has the additional benefit of a small amount of remediation of soaring income inequality.

  4. Submitted by Dennis Tester on 10/16/2019 - 03:08 pm.

    If Minnesota democrats cared so much about social security benefits for our state’s elders, they would vote to stop taxing those benefits. Instead, it was the republicans who proposed that change and the democrats, including the democrat governor, who blocked it. The state’s bureaucrats need that money more than Grandma does apparently.

    • Submitted by Frank Phelan on 10/16/2019 - 08:56 pm.

      Is every dollar of benefits taxed? For retirement as well as disability? Or is there an income threshold?

    • Submitted by Paul Udstrand on 10/16/2019 - 09:11 pm.

      Taxing SS benefits as income was Reagan’s idea back in the 80’s. The states just collect their share once the federal adjusted income is calculated.

      • Submitted by John Evans on 10/17/2019 - 10:37 pm.

        In other words, SS is treated as regular income, and the income of most seniors is too low to be taxed. On top of that, some states that levy a personal income tax will exempt or exclude SS from the income calculation, which does nothing at all for people who aren’t at least fairly well-off.

    • Submitted by Edward Blaise on 10/16/2019 - 09:21 pm.

      The rest of the story:

      “According to Department of Revenue estimates, about 357,600 tax returns would receive an average tax reduction of $1,070. The cost to the state coffers would be $382.6 million in Fiscal Year 2020, gradually rising to $459.8 million in Fiscal Year 2023.

      And that’s the part that troubled Mary Jo George, associate state director of advocacy for the Minnesota chapter of the American Association of Retired Persons. She wrote a letter to the committee expressing concern that HF56 “would not leave the state with adequate state resources to fund the very programs seniors need as they age.””

      The state, reflecting its’ constitution has a balanced budget each year. Take out half a billion dollars with no offsetting increase in other tax revenue is irresponsible and simply follows the usual GOP strategy as I stated above:

      The Paul Ryan/GOP school of thought was and is to curtail income to the government, forcing cuts to things that would otherwise be unpopular:

      “We really hate to do this, but, we are the fiscally responsible ones and can’t spend money we don’t have”

  5. Submitted by John Evans on 10/17/2019 - 03:17 pm.

    I agree with Nancy Altman and Dane Smith, but maybe we’re getting ahead of ourselves. The priority right now is to preserve our Social Security, which is still very much under threat. This is an underappreciated issue for the next election, and it needs a lot more attention.

    The Republican Party is unanimous in its determination to reduce and eventually eliminate Social Security. It has aggressively pursued cuts at every opportunity. They have been engaged in a generations-long campaign to disparage the program and distort public perceptions of it. The conventional wisdom in the media now is that some benefit cuts will be needed to keep the program afloat. Of course, this isn’t any kind of a mathematical fact; it’s more a political and a value judgement.

    Many on the Democratic side have been willing to accept some cuts. Obama actually offered cuts as part of a larger budget deal.VP Biden went around trying enthusiastically to sell the deal to the leaders of both parties in the Senate. Republican leadership rejected it at the time only because they thought they had the leverage force even deeper cuts. Their failure at that juncture may have been one of Nancy Pelosi’s greatest achievements.

    During his campaign, Trump vowed repeatedly and loudly never to cut Social Security. He changed his tune right after the election, even before inauguration day.

    So we know that every single Republican will vote to cut your Social Security benefits. What about the Democrats? Biden has proven that he’s soft on it. Warren, Sanders and some others seem quite firm. Klobuchar … who knows?

    Between our two senators, Smith seems a little firmer. As for Minnesota’s House delegation, Emmer, Stauber and Hagedorn will vote for any cuts. Colin Peterson seems very soft on it. McCollum and Omar would never vote for cuts, but Phillips and Craig could probably vote for cuts if they found it politically pragmatic to do so.

    So the lesson is this: If we want to avoid benefit cuts in our Social Security, we should ask every candidate, “Will you promise to never, under any circumstances cut Social Security benefits?”

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