142nd APHA Annual Meeting and Exposition

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312267
Social Security Benefit Reform: Preempting the Deficit Hawks to Assure Long-Term Financing

142nd APHA Annual Meeting and Exposition (November 15 - November 19, 2014): http://www.apha.org/events-and-meetings/annual
Monday, November 17, 2014

William P. Brandon, PhD, MPH, CPH , Department of Political Science & Public Administration, University of North Carolina Charlotte, Charlotte, NC
Zachary Mohr, PhD , Department of Political Science and Public Administration, University of North Carolina Charlotte, Charlotte, NC
Patricia M. Alt, PhD , Office of Collaborative Programs, Towson University, Towson, MD
Social Security provides 50% or more of income for most beneficiaries (72% of singles and 52% of couples).  Sufficient income is necessary for the health of seniors. Consequently, the long-term deficit that threatens Social Security with insolvency in the fourth decade of the century constitutes a health and public health issue. Although not an immediate crisis, advocates for public health and elders need to attend to the underlying problem to forestall its use by demagogues and Social Security opponents.

A flashpoint in discussions of reducing benefits is proposals to change the index used annually to calculate the cost-of-living allowance (COLA).  This paper analyzes the proposal to adopt a chained index.  After reviewing the alternative consumer price indexes (CPI) that have become available since Social Security benefits were indexed to inflation and explaining CPI chaining, it assesses the impact of the proposed chained CPI on benefits of recipients.

This analysis results in a proposed modification that will reduce the negative impact of chaining on the oldest seniors, while still achieving substantial reductions in the overall annual cost of COLAs.

The discussion section highlights the political importance of defending Social Security and argues that the overall solution of long-term insolvency, like the historic compromise of 1983, must involve shared sacrifice by all stakeholders, not just beneficiaries.  However, proposals to means-test the benefit need to be strongly resisted, because that redistribution is already accomplished indirectly, equitably and efficiently by taxing the benefit.  (Those taxes, however, could be increased by two modifications.)

Learning Areas:

Public health or related public policy

Learning Objectives:
Describe technical modifications of the consumer price index (CPI) that have been proposed to reduce the cost of living allowance (COLA) increases of Social Security beneficiaries; Differentiate the alternative indexes for calculating the COLA; Evaluate the magnitude of reduction as beneficiaries age; Formulate a modification in the proposal to overcome the hardship caused by those suffering the greatest harm; Analyze why supporters of Social Security must be open to reasonable modifications of Social Security to insure its long-term survival and strength; Demonstrate the masterful overall design of the Social Security program to better assess how the entire program functions.

Keyword(s): Aging, Public Policy

Presenting author's disclosure statement:

Qualified on the content I am responsible for because: • Taught gerontology master’s course on Aging & Public Policy for over 10 years; • Published a number of book chapters (coauthored by Patricia M. Alt) on aging and health policy that address issues of income maintenance including Social Security and chapters and peer-reviewed journal articles on financing long-term care.
Any relevant financial relationships? No

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.

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