Social Security: A New Paradigm for Reducing American Poverty
38 Pages Posted: 15 Aug 2011
Date Written: August 15, 2011
Although not characterized as a program designed to address the problems of poverty, Social Security, the linchpin of America’s social welfare enterprise, impacts poverty more significantly than most of the usually identified anti-poverty programs. For examples, more children receive Social Security benefits than those on welfare, and Social Security payments are modified to provide low income earners with proportionately higher benefits than their higher earning counterparts.
Affirming the validity of Social Security the recent National Commission on Fiscal Responsibility and Reform represents a changed environment for Social Security policy development, and it has proposed several Social Security initiatives that would expand its reach more deeply into the jungle of poverty.
Recognizing the limitations of existing social welfare anti-poverty programs, collapsing the cash assistance functions of these programs into Social Security would contribute significantly to reducing poverty in the United States. Such an endeavor, however, would not only require a realignment of America’s social welfare programs, but would increase the fiscal burdens born by Social Security. Such proposals could reduce the poverty rate by 3 percent or more, but they also call further attention to the failure of the payroll tax to sustain not only current Social Security commitments, let alone satisfy any further obligations Social Security might assume by virtue of its expanded role.
This paper provides the gateway for further study of the poverty reducing potential of Social Security.
Keywords: Social Security, poverty, social welfare, taxes, benefits
JEL Classification: H53, H55, H41, H49
Suggested Citation: Suggested Citation