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New Poverty Statistics Show Need for Bigger, Not Smaller, Social Security Benefits

New Census Bureau statistics on poverty show a shocking increase in the number of seniors below the poverty line, suggesting that this would be the worst time to add on benefit cuts to critical social insurance programs like Social Security and Medicare. Focusing on adequacy of those programs would make much more sense.

The Census release concerned its “supplemental poverty measure,” seen as a more specific and realistic measure of the actual number of people in poverty. Under that standard, the poverty rate is 16.1%, or close to 1 out of every 6 Americans. But the big news here is that the poverty rate for the elderly, seen as 8.7% under the old standard, ballooned to 15.1% in the supplemental figures.

This is true despite the fact that Social Security is seen as the most critical program – by a wide margin – to reducing the overall supplemental poverty rate. Social Security reduces poverty by over 8% of the population – the next closest program, refundable tax credits like the Earned Income Tax Credit, doesn’t even reach 4%. In addition, the single biggest category of expenses that increases the supplemental poverty rate are medical expenses, which directly impacts things like Medicare and Medicaid. As Dylan Matthews writes, the fact that Social Security is such a major contributor to poverty reduction, even while poverty among the elderly exploded in the supplemental statistics “suggests that even with that substantial safety net, the poverty problem among the elderly is much bigger than we thought.”

That would make this the absolute worst time to contemplate reducing Social Security benefits. It would clearly create far more elderly poverty, and even the current rate of Social Security benefits aren’t adequate enough to protect seniors from moving into the ranks of the poor. Similarly, with medical expenses the biggest contribution to poverty, this is the worst time in the world to consider anything that would increase strain on paying for health care, as cuts to Medicare and Medicaid benefits would.

And yet reduction in benefits, rather than increases, is essentially the conversation we’re having, if we’re having one at all. Shockingly, this Center for American Progress report on the poverty statistics and the lessons for the fiscal slope doesn’t mention Social Security, the biggest anti-poverty program in America, at all. Chris Van Hollen, the Democratic ranking member on the House Budget Committee, expressed openness to cutting Social Security and Medicare today. We already know that the President has contemplated it in the past. In fact, the only leading Democratic official who hasn’t used weasel words, at least relative to Social Security, is Harry Reid.

“I have made it very clear, I have told anyone that will listen — including everyone in the White House, including the president — that I am not going to be part of having Social Security as part of these talks relating to this deficit,” Senate Majority Leader Harry Reid (D-Nev.) told reporters at the Capitol.

At the same time, on the other side of the building, the top Democrat in the House of Representatives didn’t shut the door on Social Security in deficit talks.

“Our commitment as Democrats is that we believe Social Security and Medicare are pillars of economic and health security for America’s seniors,” House Minority Leader Nancy Pelosi (D-Calif.) said during a press conference. “They should not have cuts made to them in order to give tax cuts to the rich. Any adjustments we would make in them would be to make them stronger, as we did in the Affordable Care Act.”

Nancy Altman is co-chair of an advocacy group called Social Security Works, which opposes any effort by congressional leaders to include Social Security in budget talks. Altman deemed Pelosi’s remark a bit too wishy-washy.

“The comment is ambiguous,” Altman said. “Harry Reid’s statement is much more straightforward and clear: As he states plainly, Social Security should not be part of the budget talks.”

There’s a certain madness to focusing on safety net cuts and deficit reduction at all in the midst of a continued jobs crisis. That’s especially true if the long-term projections overstate the increase in health care spending, and therefore the problem of the deficit, which is entirely a health care problem over the long term.

But this poverty release shows that adequacy needs to be at the forefront of the debate. Under current Social Security and Medicare and Medicaid spending, far too many seniors live in poverty. Will cutting the programs reduce that somehow? Of course not. “Catfood commission” was a good metaphor. It’s really the case that cuts to these social insurance programs would consign an already poor subset of the population to more poverty.

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David Dayen

David Dayen