I'm not categorically opposed to Social Security adjustments -- longer phase-in period for benefits, slightly higher retirement age -- but, as the Center on Budget and Policy priorities notes, we should remember that Social Security is actually a pretty modest program:
In December 2010, the average benefit for the three principal groups of Social Security beneficiaries — retired workers, disabled workers, and aged widows and widowers — was only about $1,100 a month, or $14,000 a year. That’s less than 30 percent over the poverty level. These modest average benefit levels help to explain why, although the poverty rate is lower for the elderly than for other age groups, many older people are near-poor.
While there is no explicit dollar cap on Social Security benefits, top benefits are modest as well. This is because Social Security caps the amount of earnings on which workers pay taxes and accrue credit toward future benefits, and because the program’s progressive benefit formula replaces a greater share of past earnings for low-paid workers than high-paid ones. In December 2010, 95 percent of retired workers — and even larger percentages of disabled workers and aged widow(er)s — received monthly benefits of less than $2,000.
Moreover, most beneficiaries have little additional income and lack pension benefits. This might not be obvious to Beltway observers -- who won't be dependent on Social Security benefits to survive in their golden years -- but even modest reductions could have the effect of plunging many seniors into poverty. The simple fact is that the American welfare state isn't particularly strong, and insofar that we need to account for its growth, there really should be a weight toward higher taxes, not benefit cuts.
-- Jamelle Bouie
