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.
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.
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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