Fighting Attacks Social Security
As winter arrives this month, progressives are stepping up efforts to fight Capitol Hill’s chilling attack on Social Security, and areas such as Greater Peoria are especially vulnerable to a loss of government’s popular and successful program for older Americans, disabled people and survivors of working people.
The Peoria area has a higher percentage of its population receiving retirement and survivor benefits from Social Security than Illinois or the United States, according to data from the Bureau for Economic Analysis and the Social Security Administration analyzed by the Southern Rural Development Center at Mississippi State University.
That’s typical of counties with small cities and rural areas, which depend more on Social Security than urban areas, researchers found. In large cities, about 5 percent of total personal income comes from Social Security. In rural counties, an average of 9.3 percent of personal income arrives in the form of a Social Security check.
In Washington, Congress is considering ways to limit government programs such as Social Security. Some suggest raising the retirement age beyond 62 or changing Social Security’s cost-of-living adjustment to slow the rate that monthly checks increase with inflation – making them smaller than forecast.
If such limits are enacted, economists say the effects will be felt most strongly in small cities and rural America.
“In many rural places, Social Security is a very critical element of the local economic base,” said Peter Nelson, a geographer at Middlebury College in Vermont. “It’s less important to a place like Los Angeles because there is so much additional economic activity going on there.
“Cuts would have a bigger negative impact on rural places, absolutely,” he continued. “They are more dependent on Social Security.”
Social Security payments come in three forms: an “old-age” pension to help retirement, a survivor benefit, or a disability check. Nationally, 16.7 percent of the population received some form of monthly Social Security payments in 2009, the most recent year for which complete data are available.
The percentage of all Americans who receive some Social Security benefit, then, is 16.7; in Illinois, it’s 15.4; in Peoria it’s 18.5; in Tazewell it’s 20.1; in Woodford it’s 17.8.
The percentage of all American recipients who receive old-age benefits is 69.4; in Illinois, it’s 70.9; in Peoria 71.5; in Tazewell 74.5; in Woodford 76.0.
The percentage of all American recipients who receive survivor benefits is 12.1; in Illinois, it’s 12.7; in Peoria 13.1; in Tazewell 12.8; in Woodford 12.9.
Peoria, Tazewell and Woodford counties all have less of a percentage receiving Social Security disability benefits than either Illinois or the nation as a whole. The percentage of all American recipients who receive disability benefits is 18.5; in Illinois, it’s 16.4; in Peoria 15.3; in Tazewell 12.7; in Woodford 11.2.
In large U.S. cities, Social Security income per resident in 2009 was $2,055. In Peoria County, Social Security income per resident was $2,547; in Tazewell it was $2,823; in Woodford $2.528.
Social Security is vital to entire communities as well as individuals – particularly to small cities and rural areas, because the money is mostly spent in those communities.
“The seniors who get these payments are primarily going to spend their money locally,” said Mark Partridge, an Ohio State University economist. “And they are a key reason why some communities are still viable. If this money dried up, there wouldn’t be a lot of these small towns.”
Another economist links Social Security payments to the viability of small businesses, too.
“We find that Social Security income can be the difference between success and failure for some local businesses,” said Judith Stallmann of the University of Missouri. “If you took away, say, 10 percent of the demand, would that local business be able to remain open? Often it’s that 10 percent that keeps them going. Social Security is providing that margin.”
Politicians too often tie the national debt or budget deficits to Social Security, which confuses the facts. Social Security is not part of the federal budget. It’s separately funded by a dedicated wage tax, the Federal Insurance Contributions Act (FICA). Workers are supposed to pay 6.2 percent of all wages up to $106,800 and employers an equal amount, for a total contribution of 12.4 percent. (This year, however, this payroll tax was cut by the Tax Relief Act of 2010 to 4.2 percent, reducing contributions to 8.4 percent.) Social Security funds are invested in government securities and backed by the full faith of the U.S. government.
The total amount of Social Security coming in to the Tri-County area is substantial. In 2009, Peoria County received $473 million – 6.1 percent of all personal income; Tazewell $373 million – 7.3 percent of all personal income; Woodford $98 million – 6.3 percent of all personal income.
A reduction due to decreasing the number of people eligible or cutting the cost-of-living adjustment in monthly checks could be devastating to communities, small businesses and the eligible beneficiaries who count on the checks they were promised.
So progressive groups – from AARP and the AFL-CIO to the NAACP and the National Christian Leadership Conference – are organizing resistance to another Right-wing attack on Social Security. Such progressive actions could include rallies, leafleting, phone banking and lobbying elected officials, but also could extend through next year’s election, according to AFL-CIO president Richard Trumka.
“It would be very difficult for us to support, or mobilize for, any candidate at any level” who supported cuts to Social Security, Medicare or Medicaid, Trumka told Press Associates Inc.
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