Letter to Rick Santorum: Elderly Are Not the Wealthiest Americans

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Written by Dean Baker   
Thursday, 12 January 2012 15:20
The Honorable Rick Santorum
PO Box 37
Verona, PA 15147

Dear Senator Santorum,

While campaigning recently, you said that the nation must act immediately to save Social Security. You suggested, among other things, raising the normal age of retirement for Social Security. In defending your statements, you asserted that ”… Americans over the age of 65 were society’s poorest age group in 1937, when Social Security was created. Now that group is the wealthiest.”

In fact, there is no need for immediate cuts to Social Security. Both CBO projections and the reports of the Social Security trustees show that the Social Security trust fund will be able to pay full benefits for the next 25 years. And even if Congress makes no changes whatsoever to the program, it will still be able to pay about 80 percent of full benefits from then on. As it stands, the normal retirement age for Social Security is scheduled to gradually increase to 67. Needlessly raising it further would result in significant cuts in benefits (raising the normal retirement age by an additional year amounts to roughly a 6 percent cut per year).

Also in contrast to your claim that Americans of 65 are now the wealthiest age group in the nation, the collapse of the housing bubble led to an enormous loss of household wealth for current and near retirees, leaving most with little other than their Social Security benefits to depend on in their retirement. The government’s supplemental poverty calculations, which include the value of government non-cash benefits, show that the elderly have a somewhat higher poverty rate than the adult population as a whole.   

As your campaign for the Republican presidential nomination continues and you speak to potential voters about Social Security, I hope that you will have the opportunity to review the finances of this vital program. If I can provide you with further information or background on this, I would be happy to do so.