The Institute for Women’s Policy Research (IWPR) is launching a periodic e-mail Alert on Women and Social Security. The Alert will provide women-oriented information on and analysis of proposed changes in Social Security, up-to-date developments in the debate, and current research and statistics. The Alert will also include announcements of key activities on Social Security, especially those of special interest to women. This e-mail Alert is part of IWPR’s mission to keep women’s concerns at the center of current policy debates.

Please visit IWPR’s new website on this topic: womenandsocialsecurity.org to download reports and fact sheets and try out the Social Security Privatization Calculator—which provides an estimate of how much you would lose if Social Security were privatized. The website will also post all issues of this Alert.

ARCHIVED WomenSSA ALERTS

June 3 , 2005
WomenSSA (No. 10)
May 6, 2005
WomenSSA (No. 9)
April 19, 2005
WomenSSA (No. 8)
April 14, 2005
WomenSSA (No. 7)
March 24, 2005
WomenSSA (No. 6)
March 10, 2005
WomenSSA (No. 5)
February 25, 2005
WomenSSA (No. 4)
February 11, 2005
WomenSSA (No. 3)
February 7, 2005
WomenSSA (No. 2)
January 28, 2005
WomenSSA (No. 1)

Items in this Alert

On the positive side, leading media, including the Washington Post (see Outlook, January 23, 2005) and the New York Times (see the Sunday Magazine story by Roger Lowenstein, January 16, 2005), seem to be getting the message that the Social Security system is not in crisis financially and can, if no changes are made to present law, continue to pay substantial benefits indefinitely. Even after 2042, when the Social Security actuaries estimate (under very conservative economic assumptions of slow economic growth) that the Trust Fund will be used up, the system will still be able to pay 73 percent of benefits, an amount that would make the average benefit in 2043 and beyond higher than today’s benefit in real, inflation adjusted dollars. On the negative side, the articles referenced fail to make any mention of the differential impact Social Security privatization would have on women.

Moreover, the past few weeks have seen one think tank after another hosting panels on Social Security privatization, but whether progressive, balanced, or conservative, they generally have one thing in common, a lack of analysis about the likely impact on women of privatization proposals. A glaring oversight perhaps, given that nearly 60 percent of all Social Security recipients (of all ages) are women, and women depend on the system disproportionately.

A couple of panels did include a few relevant remarks. At a Brookings Institution panel on January 13, John Rother, AARP, said that increasing the benefit for the surviving spouse (usually the widow) to 75 percent of the couple’s joint benefit (rather than 100 percent of the higher earner’s benefit alone) should be considered; he also suggested that technical fixes in measuring inflation that may result in a lower COLA (cost of living adjustment) should be considered. At a Center for American Progress forum on January 10, Dean Baker, Center for Economic and Policy Research, in responding to a question pointed out that any reductions in the cost of living adjustment, a feature common to several solvency proposals on the liberal side, will disproportionately hurt women, because they live longer than men. He argued against any decreases in the cost of living adjustment.

Another bright spot, at a press conference on January 14, 2005, organized by the National Committee to Preserve Social Security and Medicare (NCPSSM), Joan Entmacher, National Women’s Law Center, presented an excellent overview of why privatization would make women worse off rather than better off as claimed by its proponents. Congratulations to Barbara Kennelly, head of NCPSSM, for understanding how key women’s issues are to the Social Security debate.

Finally, Democratic Leaders in Congress, including Rep. Nancy Pelosi, Sen. Debbie Stabenow, and Sen. Harry Reid, have been hosting meetings of advocacy groups, including meetings of women’s groups, to share information and strategies about how to strengthen Social Security and defeat privatization proposals that would reduce benefits.

Action Item—Let Representative Thomas Know What You Think

Representative Bill Thomas, Chair of the Ways and Means Committee in the U.S. House of Representative and arguably the member of Congress with the most power to affect the outcome of the Social Security debate, has recently stated that it would be a good idea to consider "gender adjusting Social Security” benefits (Washington Post, January 19, 2005, Page A11).

He didn’t say what he meant, whether they should be adjusted downward because women live longer (and therefore get more benefits than men, on average, for the same dollars paid in) or upward because they earn less and therefore have lower benefits. The National Council of Women’s Organizations’ (NCWO) Task Force on Women and Social Security issued a news release, citing IWPR’s work, that advised Rep. Thomas on how he could adjust the benefits upward to repair the damage done to women by wage discrimination and by taking time out of the labor market to provide family care. The NCWO Task Force news release and a transcript of Rep. Thomas’s remarks on Meet the Press on January 23 can be found on IWPR’s new website, womenandsocialsecurity.org.

If you want to let Rep. Thomas (R-CA) know what you think about his gender adjustment ideas, you can contact him via 1-202-225-2915, or at Bill.Thomas@mail.house.gov or by fax at 1-202-225-8798 or 1-202-225-2610.

Why the Current Social Security System Is Crucial for Women’s Retirement Security

The current Social Security program, which provides benefits to 27 million women, is an important base for women’s financial security. Through survivor, disability, and retirement benefits, it frequently makes the difference between a decent standard of living and poverty. The Bush Administration’s proposal to privatize Social Security claims that the current program discriminates against women and minorities, and that privatization would give them a far better deal in retirement. On the contrary, privatization will bring tremendous retirement insecurity to many Americans, especially to women.

For retirees, Social Security provides guaranteed basic income that is protected against inflation, the risk of outliving assets, and financial market fluctuations. It also provides progressive, more generous benefits for low earners—a key feature for women who are mostly at the low end of the earnings distribution. A Social Security system that is privatized, even partially, will place all of these key benefit features at risk. According to recent news reports, the Bush plan would involve deep cuts in future guaranteed benefits—up to 50 percent, all to enable workers to move some of their Social Security tax payments into privatized accounts.

For both women and men aged 65 and older, Social Security is their largest source of retirement income (48 percent for women and 34 percent for men). Women are the majority of beneficiaries and they rely more heavily on Social Security for their retirement income than do men.

Please click the link to read or download the full paper: http://www.iwpr.org/pdf/D455.pdf

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MEDIA CONTACT
To interview one of IWPR’s experts or for other media questions, please contact Erica Williams at (202) 785-5100 or williams@iwpr.org.

IWPR EXPERTS ON SOCIAL SECURITY ISSUES
Heidi Hartmann, Ph.D.
President and MacArthur Fellow
Sunhwa Lee, Ph.D.
Study Director
Lois Shaw, Ph.D.
Senior Consulting Economist