Tikkun Olam, repair of the world, is a fundamental value embraced by the Jewish people. The American Jewish community has long advocated the principle of collective responsibility and worked to promote equal opportunity, social justice, and support for those in need in our society who are elderly, widowed, orphaned, poor or have disabilities.
Based on these fundamental precepts, the JCPA historically has supported public and private programs that prevent or alleviate poverty. While Social Security was conceived as a universal social benefit, and still functions as such, it is also one of the most effective anti-poverty tools ever created by the federal government. Without Social Security, nearly 50% of the U.S. elderly population would live beneath the poverty line.1 The Social Security system is particularly beneficial to women, especially widows and divorced women, and low-income workers, who receive a higher proportion of their lifetime aggregate earnings in Social Security benefits. The program also provides special benefits to orphans.
Maintaining solvency of the Social Security system is a national priority. Americans have an obligation to ensure that future generations of elderly are not denied the benefits to which earlier generations have been entitled. Moreover, America must continue its commitment to those vulnerable people, including the elderly poor, who rely so heavily on the Social Security system to relieve -them from lives of poverty. Unfortunately, current predictions indicate that without any reform of the Social Security system, the Trust Fund will begin to run a deficit in approximately 15 years; by the year 2034, it is expected that the federal government will only have enough assets in Trust Fund reserves to cover approximately 75% of current Social Security payments.
In light of its longstanding commitment to the viability of government programs that ensure the welfare of the most vulnerable groups in American society, the JCPA set out in the winter and’ spring of 1999 to examine the issue of Social Security reform. Included in this process was a consultation at which experts from across the ideological spectrum presented their differing views on this complex subject.
Based on these deliberations, the JCPA believes the following guiding principles should be reflected in any reform plan adopted by the federal government.
1 With Social Security benefits, this number is reduced to 11.9%. Porter, Larin & Primus, “Social Security and Poverty Among the Elderly: A National and State Perspective,” Center on Budget and Policy Priorities, Revised April 14, 1999.
- Preserving Social Security should be the federal government’s chief priority in determining allocation of current budget surpluses.
- Any reform plan adopted should strive to preserve as many features of the current system as possible, while ensuring the long-term fiscal health of the Trust Fund. Most important, the reliability of the program must be maintained, to ensure continued benefits for all Americans.
- Social Security should maintain its universal character, to ensure that it retains widespread support as a program that serves all Americans.
- The defined-benefit nature of the Social Security program must be retained, in order to ensure that all beneficiaries receive a minimum level of financial support, regardless of economic circumstance.
- This minimum benefit guarantee should be provided through the Social Security system itself, and not through a supplemental “safety net” package. Social Security must be preserved as a universal social benefit. A supplemental “safety net’ program would invariably be perceived as yet another form of relief assistance, subject to stigmatization and reduced public support.
- Primary responsibility for securing federal retirement benefits should continue to reside with the federal government. Any reform plan should seek to minimize individualized risk.
- One goal of any reform plan should be to tightly control administrative costs and burdens. Maintaining low administrative costs will ensure maximum financial benefit to beneficiaries.
- The current system’s progressive benefit structure favors low-income wage earners, who receive a higher proportion of their lifetime aggregate earnings in Social Security payments. To ensure that the Social Security system retains its strength as an anti-poverty tool, this feature should not be eliminated or weakened.
- Social Security is particularly advantageous to women. The program provides special benefits to widows and divorced women who were married for ten years and have not remarried. Additionally, those aspects of the program that favor low-income workers are particularly helpful to women, whose earnings continue to be lower than men .2 it is imperative that those aspects of the program that provide extra benefits to women be retained.
- Any adjustment of the eligibility age for Social Security should include provisions to rectify inequalities that might result. For example, adjustments should be made to address the needs of those who have disabilities, or have limited or no other source of income.
- Any reform effort must not adversely and disproportionately affect legal immigrants and refugees.
- Proposals to permit the federal government to invest a portion of Social Security Trust Funds in the stock market require additional study. Similarly, proposals to permit future retirees to invest a modest portion of Social Security contributions in alternative retirement investments, including stock and bond index accounts, require further review.
- Women receive 53% of Social Security benefits, while paying only 38% of Social Security payroll taxes. Recent studies indicate that a greater percentage of elderly women than men rely on Social Security to lift them from poverty. Social Security therefore plays an important role in reducing the gap in poverty rates between elderly men and women. Porter, Larin & Primus, “Social Security and Poverty Among the Elderly: A National and State Perspective,” Center on Budget and Policy Priorities, Revised April 14, 1999.