Transcript: Dr. Heidi Hartmann on proposed reforms to improve Social Security benefits for women & same-sex couples
Remarks by Dr. Heidi Hartmann, President of the Institute for Women’s Policy Research, on the NCPSSM’s proposed reforms to improve Social Security benefits for women (May 11, 2012):
“The women’s movement, as Terry [O’Neill] will talk about, has been talking about ways to modernize and improve Social Security for a very long time.
“I see some young people in the audience so I want you to know that the – of course you know that you are entitled to benefits as a worker. But as Carroll [Estes] explained, you are also entitled to benefits as a spouse. In the old days, it used to be that men always earned more than women so that it was mostly women who took advantage of the spousal benefits. But as we are hearing in the news, there are some women who out-earn men so men may actually be taking advantage of spousal benefits in the future if your wife or former wife has out-earned you.
“And if you do marry, I would urge you not to get divorced for 10 years no matter what else happens.[Laughter]
“Because you do not know what will happen in the future, perhaps that ex that you really can’t stand now may wind up doing very well economically and you may have an economic problem, and then you will have the insurance of having benefits from the former spouse. So keep that in mind.
“And you can’t divorce them, make up, re-marry. No. It has to be 10 years at a time. If you re-marry, the second time has to be for 10 years. These are very important life lessons that I’d like everyone to know these things. It’s the most important thing you can know about Social Security.[Laughter]
“So for women and men, you do have access to these benefits in two ways.
“For most women today who are retired, they took advantage of the spousal benefit – that’s equal to 50% of their husbands’ benefit. He’s retired, he’s getting 100% of his benefits, whatever it is. Let’s say it’s $2,000 a month. That means she’s getting $1,000 a month in retirement benefits. Now, when he dies, she can take his full benefit but she has to give up her spousal benefit. So now, she’ll be living on $2,000 a month whereas before together they were living on $3,000.
“And so, our first benefit improvement proposal – I’ll be talking about our proposals for improvements – is to say that the surviving spouse should have 75% of what the couple had together. You can see from my example that that surviving spouse would have lost 33% of the couple’s income. If we go to a rule of 75% of a couple’s income, then the most any spouse will lose is 25% when the former spouse dies. And this applies to divorced spouses as well. If you had a 10-year marriage…Let’s say you had several 10-year marriages, say, to several different men if you’re a woman, when you retire, you can pick the one that earned the most and you’ll get those benefits. Now, you can’t pick all three, I mean, that’s a problem.[Laughter]
“But you can get the benefit from the one that earns the most. So this applies to a divorced woman whose ex-spouse dies.
“And if you are a dual-earner, which is more and more the case, you – let’s say – were each earning $2,000 in Social Security benefits based on a long lifetime of work and one dies, instead of having $4,000 together you would only have $2,000 to live on. And the research shows you need about 80% of what you had together.
“So with this proposal, 75% of the joint benefits, you would be able to keep more of what you’re former spouse or current spouse was getting in benefits as well as yourself.
“We didn’t maximize it – put a cap on it though for average earnings so my example of very high recipients, they wouldn’t get quite that much.
“But in general for people who are low to moderate income, they would be able to keep 75% of the joint benefits. So that’s a very important improvement for all people who either are married at the time of retirement or formerly married for a 10-year marriage.
“One of the reasons spousal benefits are so important to women is that it’s based on – the benefit is based on 35 years of work. The highest 35 years of earnings. That’s a lot of years of work, especially for women who have taken time out to raise families. And so that’s one reason why that spousal benefit is so important to women.
“One of the things we want to do then in our second benefit improvement is improve your work credits if you are a caregiver.
“So let’s say you are married and you do take a lot of time out of the workforce because of raising children or for elder care and now your own work record is now depleted because you aren’t even earning or you’re earning less because you are caregiving, so our proposal here is to assign an amount of money to your earnings record – half the median wage, which would be about $22,000 in 2011, $22,000 which is half the median wage – and you would be given five years of that earnings on your earnings record. It’s something that will be put on there. This is called a caregiving credit. And it could also be done for those who cared for the disabled or those who cared for the elderly who need special attention – frail elderly.
“And this would help a man or a woman who does caregiving to build up their own work or credit even though they weren’t able to work as much as they would have had they not been doing caregiving.
“Now this would help not only married workers but single women. Many women have children now without the benefit of marriage or the disadvantage of marriage. Sometimes it can be one or the other, you never know which often when you first get into it. And so this would help single women as well as married women and men as well as women.
“This is a very far-reaching proposal. Some of these things sound a little pointy-headed but really they’re quite far-reaching and this is one of those that is especially far-reaching because it’s a new alternative.
“Now, there’s also a special minimum and this was designed to help very low-wage workers. If you worked a very low-wage all your life, your benefits might be very, very small. So if you earn at least $12,000 a year for 30 years, you can get a fabulous benefit of $795 a month now. And that’s not even the poverty level.
“So our proposal is to increase that minimum benefit up to about $1,400 a month. So we would be almost doubling it and you have to have 30 years to get that full value, but with 10 years you would get something.
“To this minimum we also want to add caregiving benefit years and we would add 10 years. This would mean that if you have no work history at all but you did provide caregiving for 10 years, you would be able to get this minimum benefit – it would be about $400 a month. And that could be very, very important to some retired people who have no other access to benefits.
“So this again is far-reaching. It’s an improvement of an existing system by making it more generous and adding caregiving credits. We’re really adding something new to that provision and that wasn’t there before.
“We would also…have a number of proposals for disabled people – the equalizing rules for disabled widows. This is actually about homemakers who become disabled. Again, a woman or a man who has no earning records of their own currently is entitled to disability benefits if you did some caregiving of a minor child for a deceased earner or if you turn age 50 within seven years of when your deceased earner died. So these are restrictions that keep certain homemakers from qualifying even though they became disabled. So we would suggest removing all of the restrictions – no having to become disabled within 7 years of some qualifying event, no having to reach age 50, and also no reduction in benefits for taking benefits earlier.
“When you become disabled, you don’t have a reduction based on the age of when you became disabled if you’re a disabled worker. So this would apply basically the rules to disabled workers to disabled homemakers.
“We also have something similar for widows about benefit equality. Right now, if you take your widow benefit at whatever age, if your husband who pre-deceased you had retired early, you’re going to suffer a penalty for his having retired early even if you kept working until 65, 66, 70. If his benefit is still greater than yours, you will suffer the penalty that is due to the fact that he retired early. So we would like to eliminate that penalty from widows. And all of these things that are for widows will be for divorced spouses with that qualifying 10-year marriage.
“The next one is something for everybody – strengthening the COLAs [cost of living adjustment]. We’ve heard a lot in recent years about how much the increase is in health care costs are taking out of the pockets, especially of the elderly who have more health care costs.
“Our normal CPI [consumer price index] – our normal COLA which is based on the normal CPI – does not adjust enough for the fact that medical care is an extra large portion of the basket of goods that older people buy. And the CPI-e price inflator that adjusts the elderly and their basket of goods is a little bit higher. So we would propose that the COLA, the annual cost of living adjustment, in Social Security be tagged to the CPI-e rather than to the normal price inflator.
“Our next benefit is restoring student benefits. These benefits existed until the early 1980s. They were cut in 1981. If you have a disabled or a parent who died and you are a student up through age 19 and in high school, you will receive a child benefit through Social Security. It would actually be equal ordinarily to half of what your deceased parents was entitled to. And that benefit used to extend through the college years through age 22. So we would like to restore that to those students who are in college or another post-secondary program, and this would be for those students whose parents have died or become disabled. That benefit would be extended. That can be a very, very important benefit.
“Obviously it will be very important to male and female student but it will be particularly important to the surviving spouse who now will be able to save more for their own retirement and be able to give a little less to their student in school because the student will be getting benefits of the deceased parent. So that’s a very important one. It’s usually the women who are more often the survivor in that case – the woman parent.
“We would also like to improve the basic benefit for all current and future beneficiaries.
“We have had the worst recession since the 1930s. Lots of people have lost a lot of assets. Income from assets is virtually zero if you invest in very safe assets – it’s pretty much zero right now. The effect of this recession is going to last a very long time in terms of people’s income. So we would say now is a very good time to increase the basic benefit. The amount that we’re suggesting here is about $55 a month for everyone starting today. Of course, it could be any amount. But anything, I think, that would increase the basic benefit because there has been a falling behind because of the COLA not adjusting for medical expenses and because of this tremendous shock, really, to the well-being of so many older people through this last recession. They lost home equity, they lost asset value, and they lost asset income. So it’s – and many of them have also lost earnings. Many retired people work part-time and many of those jobs have disappeared or become lower in pay.
“Another new benefit – equal benefits for same-sex married couples and partners. This couldn’t be more timely, as Carol [Estes] said, given the President’s announcement in the last couple of days. And I think that’s pretty self-explanatory. There are couples who are not able to marry, but in states that recognize marriage – same-sex marriage or civil union – those partners that are recognized by their states should be able to receive Social Security benefits, and of course it will be very valuable to their children as well should one of those parents become disabled or died.
“I think our last benefit proposal is increasing benefits for disabled young people. This is very important to parents of disabled children as well as to the disabled adults themselves. If they become disabled before age 22, they are able to get benefits based on the parents’ work records. And right now, there are some penalties for them that they can’t get it if they divorced and have no spouse supporting them, they can’t get back this benefit based on their parents’ records. We’d like to see that be restored. And also, their benefits are subject to a family maximum, but many of these disabled adult children live on their own and they shouldn’t be subject to that family maximum.
“So that I believe is our last benefit…
“I need to turn to the pay-fors. Everybody in Washington these days is, ‘Well, how can you afford all that? There’s no way to pay for it.’
“And actually, there are many ways to pay for it, and we’re not endorsing any particular pay-for in this report but we list three and all of those are the type of things that have been discussed by many people. These and many other pay-fors could be found to pay for this package of benefits as well as to make our overall system reach that magic 75-year solvency. We know we’re not at that now. We’re at about, I forget, 20, 25 years? So we need a few more years to get up to 75. So we need some more revenues coming into this system.
“One way – very popular – scrap the cap. Did you know there is a cap on earnings in terms of how much you pay Social Security on those earnings? It’s capped at $110,000 right now – and you pay 6.2% on that and your employer pays the same amount. That means if you earn more than that, you’re not paying anything on that money above that amount. That’s not true of Medicare – you pay on the whole salary. So we’d like to see Social Security be treated the same way as Medicare and have everyone pay no matter their earnings. So this is really for Bill Gates. I want Bill Gates to pay his share, and he can do this if we remove the cap. But there are many people above that level as our society has become…[Video feed offline]
“…401k and tributary systems, you do pay Social Security on that money that you put aside. But if you put aside money for child care or health care expenses, other things in flexible spending accounts that are allowed by the law, you’re not putting Social Security away on that money. So this would restore all of those earnings that you receive but that you put into special categories, restore all of those to being covered by Social Security.
“So that’s our last potential pay-for.
“I think our overall message, as Max [Richtman] and Carroll [Estes] said, it’s time to increase benefits and we can afford it.
- C-Span.org: Video of the NCPSSM’s press briefing on women and Social Security held on May 11, 2012
- Transcript: Max Richtman’s remarks on the National Committee to Preserve Social Security & Medicare’s report on women & Social Security
- Transcript: Rep. Eleanor Holmes Norton on the NCPSSM’s proposals for Social Security reforms
- Transcript: Dr. Carroll Estes calls on Congress to improve Social Security benefits for women
- Transcript: NOW President Terry O’Neill on the NCPSSM’s report on gender inequality and Social Security reforms
- Transcript: Press briefing Q&A on the National Committee to Protect Social Security & Medicare’s proposals to improve Social Security benefits for women
- National Committee to Preserve Social Security & Medicare: Breaking the Social Security Glass Ceiling: A Proposal to Modernize Women’s Benefits – May 2012 (PDF)
- National Committee to Preserve Social Security & Medicare: National Coalition Urges Congress to Consider Sweeping Social Security Proposals for Women, Caregivers and Same-Sex Couples
- National Organization for Women’s website
- Institute for Women’s Policy Research’s website
- Congresswoman Eleanor Norton Holme’s website
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