Social Security was created in 1935, during the Great Depression, as an anti-poverty program for senior citizens and disabled Americans. It has helped millions of Americans avoid poverty in their golden years, upon becoming disabled, or after the death of a family wage earner. Less than forty years ago, more than one third of all seniors lived in poverty. Today, thanks in large part to Social Security, less than 11 percent of seniors live in poverty.
Many believe that the Social Security program is in crisis and on the brink of collapse. Some have claimed that the Social Security Trust Fund has been used to pay for other government programs, leaving the fund with trillions of dollars of worthless "IOUs." On the contrary, the Social Security Trust Fund is actually full of U.S. Treasury Bonds that are backed by the full faith and credit of the United States.
The Social Security Trust Fund is a completely separate account from our general revenue fund. Monies from the Trust Fund are not used for or to offset federal expenses. The Social Security Trust Fund is as safe as it can be. In fact, Social Security will actually have a $4.6 trillion surplus by 2023. Without any changes, Social Security benefits will continue to be sent every month for the next twenty five years.
In 2016, the disability fund is estimated to reach levels below the required threshold that could reduce benefits for those who receive Social Security disability benefits. A 1956 law requires that an individual’s one Social Security contribution be distributed into two different trust funds- one for retirement and survivor benefits and another for disability insurance benefits. Currently the disability fund is slated to be under required levels in 2016 which would result in a 19% cut to individuals receiving disability benefits.
To combat this problem, I have cosponsored H.R. 3150, the One Social Security Act. This bill would combine the two trust funds, and would not a penny to the debt. When combining the two funds, current CBO estimates state that Social Security would remain solvent until 2035. The benefits the American people rely on should not be held hostage to the budgetary and technical requirements of Congress and this bill will address that issue.
I fully understand how fundamental Social Security is to our nation – it is one of America’s most successful and proudest achievements and a critical safety net for the 58 million beneficiaries that rely on Social Security for some portion of their income. I support balanced, common sense reforms that will sustain Social Security without jeopardizing our economy or the program as we know it. We need to make sure Social Security continues to provide the retirement safety net not only for our parent’s generation, but also for our generation and our children’s generation.
Cost of Living Adjustments
Our nation’s seniors rely on Social Security to help them make ends meet. They have earned this economic security by paying into it over the course of their lives. Part of the promise our country makes to those on Social Security is that the benefits they have earned will keep up with inflation.
The Cost of Living Adjustment (COLA) is designed to keep that promise. Unfortunately, in tough economic times, inflation can be very low or non-existent. As a result, COLA will not always result in a substantial increase. As any senior can tell you, low inflation does not mean stable prices for necessary medication or doctor visits. Goods such as gasoline can rapidly increase with only a limited effect on inflation. I support action to ensure Social Security benefits keep up with the increases in costs that seniors experience. In the recent past, we had consecutive years without a COLA increase; this should not be allowed to happen again.
Some have suggested that we reform the Consumer Price Index (CPI) as a way to deal with COLA adjustments. The Consumer Price Index (CPI-W) is the tool that is used to track price increases on the prices of food, clothing, shelter, energy, charges for doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living.
Another proposal, the Chained CPI proposal, would measure inflation through the extent to which people substitute one item for a cheaper item in the face of a price increase. By choosing a cheaper item, inflation will not occur as fast, and the result will be the slowing of increased COLA benefits. Chained CPI assumes every Social Security recipient would act the same and move to cheaper items. I am concerned Chained CPI would result in reduced Social Security benefits and I do not support placing these burdens on Americans that have worked hard to earn Social Security.
Neither the current Consumer Price Index (CPI-W) nor Chained CPI reflect the inflation experienced by older Americans. For example, Americans 65 and older spend more than twice as much of their total spending on healthcare and healthcare costs, which have consistently risen more rapidly than inflation. In response to these concerns, the Bureau of Labor Statistics has created a new index known as the CPI-Elderly or CPI-E. From 1985 to 2009, the CPI-E has risen about 0.3 percentage points more per year, on average, than the present index used to calculate Social Security COLAs. In hope of providing our nation's seniors, veterans, and people with disabilities with a more fair COLA, I support legislation that would change the Social Security cost-of-living adjustment index to the Consumer Price Index for Elderly Consumers (CPI-E), to make it a more accurate measurement of cost increases that older Americans face.
Senior Issues Forum
As part of my town hall series, I also host a Senior Issues Forum twice a year to meet constituents in person and discuss legislative issues affecting seniors. In addition, we bring representatives from agencies like the Social Security Administration, Centers for Medicare and Medicaid Services, Houston/Harris County Area Agency on Aging, and Better Business Bureau Education Foundation to share important information on their programs and services and be available to answer questions.
More on Social Security
Join Congressman Green for his Senior Issues Forum to discuss policies and issues important to the District.
Washington – Congressman Gene Green released the following statement after the Social Security Administration announced today that there will be a 1.5% Cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income (SSI) beneficiaries for 2014.
Texas has 3.6 million Social Security beneficiaries including retired workers, disabled workers, widowers and dependents. In the 29th District, 70,446 recipients will benefit from the increase.
Washington, DC – In response to the FY 2014 budget introduced by President Obama today, Congressman Gene Green released the following statement:
Washington, DC – In response to the budget introduced by House Republicans, which cuts funding to vital domestic programs, jeopardizes Medicare, and eliminates the most beneficial elements of the Affordable Care Act, Congressman Green released the following statement: