Improving SSI

Finance, Social Security, Pensions, and Family Policy: Policy Options for Improving SSI, September 21, 2021

Social Security is inadequate. SSI is worse than inadequate. I invite any who disagree to limit their spending, including housing, to the amounts paid by either program. Anyone without family support - and even some with it - are entitled to the full range of welfare benefits. Obtaining these is above the capacity of most beneficiaries.  The social welfare system cannot pick up the slack. To enable the kind of support needed, the number of social workers in government agencies would have to at least double. 

With a higher minimum wage, all wages below the middle management level would go up. Some would not need SSI, although people with disabilities who cannot work would still not be helped. Please see the attachment for a deeper discussion on how a higher minimum wage will impact retirees and the disabled. Raising the wage, rather than enlarging the trust fund through cost savings should be a no-brainer.

My daughter has Aspergers Syndrome and Tourettes. Without a supportive work environment, she will require SSI to live independently, except SSI is inadequate to do so. Nor would work at the current minimum wage 0r any supportive work. She currently lives with her mother and, because I receive SSDI, she gets a monthly benefit. Once she graduates high school, if she requires SSI, she will receive less money.

Supportive social welfare benefits on top of SSI are not enough to live independently. This forces recipients to seek food from charitable donations, as well as housing and other assistance from private social welfare agencies like Catholic Charities and Lutheran Social Services. While I feel that these agencies may be better able to distribute government benefits, those benefits must still be adequate. The state should not have to rely on God to meet its financial requirements, especially as effective tax rates on the wealthiest among us have consistently fallen over the past several decades.

This brings us to the witness list. Catholic Charities, USA, Lutheran Social Services, the Red Cross, the Salvation Army  and other private providers should have been invited to present their views on this most important topic. They would certainly have something to say about the adequacy of benefits. 

The sad fact is that, because of our inadequate support structure, many Down’s Syndrome parents feel that they have little choice than to abort their children. Aside from inadequate support services, they have real and valid concerns about whether their children can live in dignity after they pass. As such, adequate benefits and adult support are a central pro-life issue. Those states, like Ohio, who wish to outlaw abortion of such children must take a hard look at the level of social services and financial support provided to those whose lives they would save. It is the height of cruelty to say not to abort such children out of one side of their mouths while calling adequate support for these children socialism with the other.

If such support is socialism, make the most of it.

The U.S. Conference of Catholic Bishops Office of Pro-Life Activties should also be invited as switnesses on this issue, although this is more to put them on record on how higher SSI bdenefits, childcare credits and the child tax credit are essential pro-life issues. There should be zero debate on this fact. Support for the measures sought by the President should be treated as pro-life and bipartisan. That they are not is the tragedy of our political system.

This brings us back to the minimum wage. It is not only essential for human dignity; it will also make it easy to fully fund Social Security without cutting benefits and raising tax rates. Again, as stated in the attachment, higher minimum wages and assumptions about the growth of other salaries will alter long-term projections of the viability of the system. Automatic cost of living increases for the minimum wage will make the future of Social Security, as well as budget balance as a whole, even more sustainable. It would also end the problem of a two-tiered economy.

SSI must go up. So should opportunities for training for recipients, both in terms of literacy and occupational therapy. Literacy includes both remedial education and English as a Second Language.

Participation in both kinds of training, which is already provided for in governmental budgets, must be expanded by increasing tuition reimbursements, but also paid. Participants must get a check for going and it should be at least at minimum wage levels. This both encourages participation (including meeting opportunity costs) and makes receipt of SSI (even at higher levels) not a ticket to long-term poverty.

There is a myth that deprivation is an essential incentive to work. This is true if you believe in slave labor. Civilized people do not. Studies have shown, again and again, that self improvement comes after people have an adequate income. Locking people in low wage jobs without paying their opportunity costs for something better should not be a feature of the strongest economy in the world. Paid training also solves the non-existent problem of people losing their jobs because the minimum wage increases. Any that are shaken out of the workforce should likely not have been working in the first place. We can fix that and neuter the argument against higher wages.

Just to be clear, remedial training, like basic elementary and secondary education, must be considered a civil right and should be delivered (and paid) regardless of immigration status.Not to do so can only be called racism. This sounds like an ad hominem attack. If it is, make the most of it. Opposing such matters is the sign of a guilty conscience and prior bad actions. This is a chance for conversion and restitution.

Families of participants should also be paid the Child Tax Credit. This payment should come with paid training and be in addition to any other benefits. CTC payment should also be an automatic part of Unemployment Insurance (as should Medicaid or no-premium coverage in a public option for health insurance).  Including more automatically is cheaper in terms of case work and a way to eliminate TANF and SNAP in favor of more dignified benefits.

Any concern that fraud will increase is shameful. We acknowledge there is fraud in the system now. Adequacy of benefits will not increase it. Rather, it will have the opposite effect. Fewer poor people reduce the need to defraud the government, especially in regard to selling Food Stamps to be able to buy toilet paper (at 50 cents on the dollar).

As previously mentioned, the President’s Budget and now the current Budget Resolution, feature a permanent increase in the Child Tax Credit, retaining the refundability added as part of the American Rescue Plan Act. The CTC is the ultimate in bipartisan legislation. Both Republicans and Democrats have added to it, although only now has it become refundable for smaller families. It is still not adequate.

Our tax reform plan (which we can provide if you do not already have a copy), specifically the Subtraction Value Added Tax, details how the Child Tax Credit can be paid out without turning the Internal Revenue Service to society’s pay master. Payments through the IRS are a temporary expedient, but this is likely too much government for Republican members to support on a permanent basis. Distributing benefits through other government payments, such as Social Security, Unemployment Insurance and TANF training stipends and through wages (as an offset to either the subtraction VAT or quarterly payments to the IRS) is more likely to stand the test of time.

Funding adequacy is also a concern. Disability Insurance, the Employer Contribution to FICA and Supplemental Security Insurance should be decoupled from wages and credited on an equal dollar basis. Our first attachment explains how this can be done through tax reform. Doing so could be funded by consumption taxes in three ways.  

Our (Credit) Invoice VAT will increase the competitiveness of our exports and protect worker jobs while decreasing employer costs. Our Subtraction (Net Business Receipts) VAT is useful if options include personal accounts holding employer voting and preferred stock (but in no cases should it be invested in the stock market). Our Asset VAT is appropriate for funding the repayment of the Social Security Trust Fund.

Each of these proposals (which can be used in tandem) burden the entire economy, as well as investors, who have had the benefit of worker productivity, especially that part of productivity which featured the destruction of unions and limiting pay and benefits for all but the top 10% of households. There are no caps to increase with these taxes and they can be adjusted more easily than payroll taxes (which are regressive).

Attachment - Raising the Minimum Wage to Raise Retirement Income