Social Security changes could hurt Blacks most
Maya Rhodan | 5/13/2013, 3:53 a.m.
WASHINGTON (NNPA) – Social Security changes proposed by President Barack Obama could hurt African Americans more than other groups, a new report by the Center for Global Policy Solutions finds.
In the fiscal year 2014 budget, Obama proposes switching the way benefit programs such as Social Security and civil service retirement adjust for inflation to the chained consumer price index, which calculates inflation differently from the consumer price index, the current yardstick. The move would save approximately $230 billion, according to the president’s budget.
“The chained CPI significantly reduces the purchasing power of those who rely on benefits issued by the federal government, and especially disadvantages retirees and the long-term disabled because it fails to take into account the higher costs they shoulder as a result of their increased need for health care services and related products,” the report reads.
It finds that the changes may cause particular harm to older African Americans; many depend on Social Security for the majority of their retirement income.
Nearly half of African American beneficiaries rely on Social Security for 90 percent or more of their income, compared to 35 percent of all beneficiaries. Of Black retirees, 2 out of 5 over 65 depend on Social Security for their entire income.
The report shows that 18 percent of Black adults over 65 had an income below the federal poverty level; without Social Security benefits, 53 percent of older African Americans would be living in poverty according to the AARP.
The changes to COLA will also impact the 1 in 5 Black children receiving disability benefits. Black children are twice as likely to receive survivor benefits as well.
“Chained CPI is also a poor policy considering that Social Security does not contribute to our annual deficit, and the trust will run a surplus of more than $2.7 trillion until the 2030s,” Rep. John Conyers, D-Mich., said in a statement. “I am disappointed then that President Obama would consider burdening those who are most in need of our support.”
The changes proposed by the president did not fare well with the constituents they will affect the most. In April, AARP released a poll that showed that 70 percent of older voters are not in favor of using chained CPI for the Social Security cost-of-living adjustment and 78 percent are opposed to using the adjustment for veteran benefits.
“This cut to Social Security would break the promise to seniors and hurt veterans who’ve sacrificed so much for this great country,” AARP Executive Vice President Nancy LeaMond said in a statement.
According to AARP, those who rely on Social Security for the majority of their income, which includes 47 percent of African American beneficiaries, would experience an 8 percent cut to their income after 30 years using chained CPI.
According to the report, the coming reductions will result in about $3 lost for every $1,000 in benefits. That amounts to a lot for the African Americans over 65 who receive about $13,000 a year in benefits.
Although Obama has proposed to protect “the most vulnerable Americans,” including those over 76 and beneficiaries who receive benefits for longer periods of time, Mikki Waid, AARP senior strategic policy advisor, says older African Americans won’t reap the benefits of being protected.