How to Expand Our Nation’s Most Effective Anti-Poverty Program
by Linda Benesch, Communications Associate at Social Security Works
Social Security is our nation’s most effective anti-poverty program. The system’s modest but vital benefits lifted 21.4 million Americans out of poverty in 2014, including 1.1 million children. It could lift millions more if we expand the program’s benefits—but things have taken a distressing step in the opposite direction.
In recent years, low and non-existent cost-of-living adjustments (“COLAs”) have been gradually eroding the value of Social Security benefits. These COLAs are calculated using an inflation measure that is intended to reflect costs faced by workers. The measure does not accurately account for costs faced by seniors and Americans with disabilities, who spend a far higher percentage of their income on health care.
To the wealthy few, the extra $40 or $50 a month from a COLA increase might not seem like a big deal. But to elderly Social Security beneficiaries, , this increase is much-needed income that they can use to put food on the table and pay for lifesaving prescriptions.
That’s why Social Security’s 59 million beneficiaries were devastated to hear the news that, for only the third time in 40 years, there will be no COLA in 2016. They know that the cost of basic necessities, including medical care, prescription drugs, food, and housing, has continued to increase. But their benefits are not increasing accordingly and are losing their purchasing power. If this trend continues, younger generations will have effectively lower benefits, even though the decline of pensions and rising inequality means that they will be even more reliant on these benefits than their parents and grandparents are.