Social Security, America’s Most Important Safety Net Program, Protects 253,000 New Yorkers Under Age 40
These and other recipients of Disability and Survivors Insurance would be particularly jeopardized by privatization.
Most people think of Social Security as our nation’s foremost income security program for the elderly. And it is, keeping hundreds of thousands of elderly New Yorkers out of poverty. But it is also the most important safety net for workers under 40 who become disabled and for people under 18 whose parents die or become disabled.
In reality, about 253,000 New Yorkers under the age of 40 collect Social Security benefits each month, according to Young Social Security Beneficiaries in New York, a new report by 2030 Action, a non-profit, non-partisan advocacy group for young adults, based in Washington, DC.
This first-ever report on the impact of Social Security privatization on young New Yorkers was released today in Albany by the Fiscal Policy Institute (FPI), the Capital District Center for Independence, the NYS AFL-CIO, the Statewide Senior Action Council, the Gay Men’s Health Crisis (GMHC), the Student Association of the State University (SASU), NYSUT, CSEA, the NY Aids Coalition and Citizen Action of NY.
The report also explains how Social Security privatization would impact on the recipients of Social Security Survivors and Disability Insurance benefits. According to FPI’s Executive Director Frank Mauro, “Some supposed experts are offering privatization as the remedy for all that ails the Social Security system. In reality, however, as this new report from 2030 does an excellent job of explaining, allocating a portion of Social Security contributions to private accounts will make it harder rather than easier to solve the Social Security problem that most Americans care about: ensuring the long term solvency and stability of the system without cutting benefits.”
Sue Meineker, Benefits Advisor for the Capitol District Center for Independence and a Social Security disability recipient, underscored the human implications of the 2030 report. “Where is the money going to come from to pay for these vital benefits that so many New York families depend on each month to meet their expenses?” she asked . “How are cuts in these benefits avoided if a trillion dollars is drained from the system? When we see workers who have become disabled through job related injuries, we know they get a sizable Social Security disability benefit that is able to help them support themselves and their families. They have contributed to the Social Security system and are able to reap the benefits provided by this vital trust fund now that they need it. Our concern is with taking money from the fund and putting it into private accounts. How are you going to be able to support yourself and your family? As a Social Security disability recipient, I see first hand the difference that monthly benefits make. We cannot cut into the guaranteed portion of Social Security, and that’s just what privatization does. The consequences for vulnerable families, particularly those where a parent has become disabled or died or a wage earner in their prime has become disabled, as well as retirees, would be severe.”
Focusing on the segment of disability insurance beneficiaries who live with HIV and AIDs, Ronald Johnson, Director of Public Policy and Communications for the Gay Men’s Health Crisis concluded that “Privatization is a high risk gamble for fragile people living with HIV and AIDS. As the AIDS epidemic grows and as people live longer with this disease, reliance on Social Security disability benefits can only increase.”
Among those joining in the release of the 2030 report were labor organizations that represent a large portion of the New York workers who pay the FICA taxes that fund the Social Security Trust Funds. Thomas Y. Hobart, Jr., President of New York State United Teachers said that “Hundreds of thousands of NYSUT members fund Social Security through their payroll taxes. It is fitting and proper that NYSUT take the leak in educating its members and other New Yorkers about privatization and other threats to the Social Security system.”
“Social Security is a vitally important program that touches the lives of virtually all Americans and is a lifeline that delivers monthly benefits to close to 3 million New Yorkers,” said Denis Hughes, President of the NYS AFL-CIO. “One-third of these benefits provide income support to workers who become disabled and to survivors of deceased workers. We need to keep Social security working for families. Privatization would replace guaranteed benefits with benefits dependent on workers’ luck or skill as investors and the ups and downs of the stock market. For families that had a parent die or become disabled and now depend on Social Security to make ends meet each month, this is too much of a risk.”
The value of Social Security survivors and disability insurance policies to the average young family might catch many people, of any age, by surprise. The report describes a worker who is age 25 or 35 this year, and has a spouse and child. If her earnings were $20,000 in 1999, according to the Social Security Administration, and she were to become disabled, her family’s monthly disability benefit would be $1,261; at $30,000 it would be $1,661 and at $40,000 it would be $2,028. Were she to die, her family’s monthly survivors benefits would be $300-400 higher at each income level.
“Seniors cannot sit by while young people are placed in harms way as a result of Social Security privatization,” said Mike Burgess, Executive Director of the Statewide Senior Action Council. “Social Security is an intergenerational compact that is also the most effective safety net for those in need. We are not going to ‘trade a safety net’ to ‘modernize Social Security’. It’s our duty to protect this important legacy for future generations, to make sure that the politicians make the right decisions for Social Security. Privatization will put Social Security’s guaranteed benefits below the poverty line, and that’s just wrong.”
“It is important to point out that Social Security is a program that benefits many New Yorkers under the age of 40 who have lost a spouse or a parent or who are disabled,” said Kathy McCormack, FPI Director of External Relations. “The needs of these young New Yorkers should be a crucial part of the current debate over the future of the Social Security system. Young families in New York have an incredible stake in the debate over Social Security. The downsides of privatizing Social Security have not been discussed at all, but they are serious. We need a full accounting of how privatizers could avoid cutting disability and survivors benefits in New York. With the whole surplus going to a tax cut under Bush’s plan, the numbers point in one direction – cuts.”
The 2030 report shows that, in total, 2.9 million people collect Social Security in New York. This total includes 2.1 million retirees, over 431,000 disabled workers and family members, and close to 430,000 survivors and family members. There are about 67,000 New Yorkers age 18-39 who are collecting Social Security, and an additional 186,000 beneficiaries age 17 and under. The numbers come from Social Security Administration tables.