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April 5 2011

With Social Security, Women are ALREADY Losing

Sabrina Schaeffer

Washington is all-abuzz about Republican efforts to slash the budget and the possibility of a government shutdown. Not surprisingly feminist groups like the National Women's Law Center have made this an opportunity to criticize the GOP for threatening important government services, jobs, and outlays.

At the top of their list: Social Security. According to the NWLC [emphasis added]:

H.R. 1 cuts funding for the Social Security Administration by hundreds of millions of dollars.  These cuts will force thousands of layoffs and furloughs in offices across the country, which means as many as 400,000 people could have their retirement, survivors, and Medicare applications substantially delayed.  The bill also cuts funding for a range of supports for elderly people, including employment services, meals, and housing.  Women are a majority of Social Security and Medicare recipients and more than two-thirds of the elderly poor - so they will be disproportionately harmed by these cuts. Women are a majority of Social Security and Medicare recipients and more than two-thirds of the elderly poor - so they will be disproportionately harmed by these cuts.

Social Security's benefit structure has remained largely unchanged since it was established in 1935; the same cannot be said for women's roles in society. As a result, the problems for women are countless, but I'll begin with the fact that the current benefit structure remains highly regressive

Social Security was designed to fit the needs of the 1935-family: namely, a single-earner marriage in which one spouse (usually the husband) was the sole bread-winner. At the time of retirement, the husband would receive 100 percent of his earned benefit, and his spouse would receive an additional "spousal benefit" of 50 percent of her husband's benefit - this, despite the fact that she did not actually contribute financially to the Social Security system. Today, however, single-earner families tend to be wealthier than families in which both spouses work outside of the home.  Nevertheless, dual-earning marriages continue to subsidize this spousal subsidy (for wealthier families).

What about divorce? In 1935, divorce was far less common than it is today. Divorced women then and now must have been married for 10 years in order to receive Social Security benefits based on her former-husband's earnings. That may have seemed generous back then, but today millions of women are hurt by this plan.

And widows? A woman who loses her husband has a choice to receive the greater of either her husband's benefit or her own. While in 1935, few women may have been contributing to the workforce, the situation is, not surprisingly, again far different today. Many women will find their income cut dramatically despite years of two-spouses contributing to the system.

It's always surprised me that women's groups are so uniformly committed to Social Security. The NWLC is right that women "are a majority of Social Security" recipients, and they're right that women would be hurt by proposed cuts. What they seem to ignore is that women are already suffering under this massive entitlement program.

The solution for women is not more of the same; rather, women need a retirement plan that reflects the changing roles of women and the American family.  As in all other areas of life, women would benefit from the freedom to save and invest in a way that reflects the needs of her family and their lifestyle.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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