Elders' Advocates Worry Politics May Push Vital Programs off 'Fiscal Cliff'
Special to Informer | , Paul Kleyman | 11/14/2012, 12:19 p.m.
The question now is whether Democrats will protect these programs, or put them on the chopping block in an attempt to reach a compromise with Republicans.
In the long term, Polivka said, there are several factors pointing in the Democrats' favor.
Polivka said not only do Democrats have a significant diversity edge over Republicans, but "Democrats can reach out to working whites, who are worried to death about their retirement. They could get to parity with the GOP with those voters by 2016, even with working white males who don't have a college education. Along with women and minorities, they could lock in the party's majority status for the long term."
But in the short term, Democrats may be forced to compromise. Even a seemingly modest compromise on Social Security, such as changing the formula for calculating the annual cost of living adjustment (COLA), would have a troubling impact on seniors struggling to make ends meet.
"For minorities, the change in the COLA would mean major reductions in Social Security over time for the vast majority of them," said Polivka, who has been a consultant to federal and state agencies.
An analysis by the Congressional Budget Office has shown that under the proposed change, by age 75, the average Social Security recipient, who now receives a modest $14,000 pension per year, would lose the equivalent of $560. By age 85, when elders need the income the most, they would receive almost $1,000 less.
Polivka noted a new analysis of retirement savings by the Center for Retirement Research at Boston College. The study found that from 2007 to 2010, the percentage of those at risk of having a financially insecure retirement jumped significantly.
"As of 2010," says the Boston College study, "more than half of today's households will not have enough retirement income to maintain their pre-retirement standard of living."
Source: New America Media