Social Security Reform

Overview

Social Security provides financial support to retirees, survivors of deceased workers, and workers who become disabled and members of their families. In 2018, it is projected that Social Security will begin to pay out more than it will generate in tax revenues. This projected shortfall is due mainly to an increasing number of beneficiaries retiring and collecting their Social Security benefits, and a decreasing number of workers paying into the system. If the system is not brought into balance, the federal government will have to borrow from the Social Security trust fund in order to continue to pay benefits. It is projected by the Social Security Administration that by 2042, the trust fund will be depleted and Social Security will only be able to meet obligations of 73 cents on the dollar. Social Security will be forced either to cut benefits or raise taxes.

Several proposals are on the table to address Social Security’s future and to bring the system into long-term actuarial balance. Some call for privatizing the system with individual accounts, while others favor shoring up the program’s current structure and thereby maintaining Social Security as it currently exists.

Latinos in particular tend to be concentrated in low-paying jobs that typically do not offer pensions; they experience high poverty and relatively high unemployment. As a result, they are less able to save and invest for retirement, making them considerably more reliant on Social Security than most other Americans. In 2004, 41% of Latino seniors relied solely on Social Security benefits for their retirement support, compared to only 22% of the elderly population overall. Moreover, Latinos tend to have longer life expectancies. Hispanic men live nearly three years longer than their White counterparts, and Hispanic women live more than two and a half years longer than their White counterparts, which makes the lifetime defined benefit that Social Security provides important for Latinos who qualify. Thus, a major change to the current system’s structure could have serious implications for Latino retirees who are highly dependent on Social Security for retirement income.

NCLR Position

Given the importance of Social Security to Latino workers and retirees, NCLR recognizes the critical stake Latinos have in Social Security’s future. Thus, we will be participating vigorously in all discussions pertaining to Social Security’s future. We will not automatically accept or dismiss any particular element of any serious reform plan based on ideological considerations. Rather, we will hold all proposals to a single, fact-based standard: Is it fair to the nation’s 40 million Americans of Hispanic descent?

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