A look at the impact of the coronavirus pandemic on Social Security. Witnesses before a house panel say recipient to rely on the income could be affected by a prolonged economic downturn. The subcommittee on Social Security will come to order. I want to welcome all of our witnesses and audience members, thank you for joining with us today as we bear up under covid19 and addressed technologically to coming together. We will begin with Opening Statements by myself and the Ranking Member. Testimony from our witnesses and the opportunity for each member to ask questions. We will dispense the practice of observing and instead go in order of seniority for questioning, alternating between minority and majority. Member will be responsible from youding and then muting themselves throughout the proceedings. Thank you all for your patience as we navigate this new technology in order to continue serving our country in this time of need. With that i would like to welcome everybody to the ways and means Social Security subcommittees virtual hearing on the impact of covid19 on Social Security and its beneficiaries. Again, let me add my thanks to the member and our witnesses who have joined us at the ways and means Social Security subcommittee hearing and i am glad also to see that we are joined by representatives more and representative tom rice for this hearing. Before we begin some of the preliminaries i would like to thank minority and minority staff Katherine Olson lisa walker, andrew and amy stewart for persevering through this very difficult time and before i begin i want to take a moment to remember our former Social Security chair sam johnson who passed away back in june. Sam, as all of you know, was an iconic american war hero who epitomized that stoic silence and toughness needed to persevere through his captivity, he was as decent and caring and humble in american as nobility was measured by his actions and not his words. Above the speakers rostrum, the house of representatives says that we may in our day in generation, perform Something Worthy to be remembered. Sam johnson lived up to that. He would look you in the eye, his word was his bond. He never sought the limelight. He always just thought to do what was right. I was honored to attend his funeral in june. The outpouring of love for him from his hometown community, and clearly demonstrated the impact he had on his community. Sam faithfully served the country for 50 years both in the military and in congress, launched a true lost a true Public Servant and his passing and im grateful for the time on the committee. Would also like before we begin to submit for the record written remarks from our colleague bill pascale. I spoke with him on the phone, he is recovering from surgery, we are joined by representative sanchez but she may have to leave, but submitting written remarks as her and representative davis at the rules committee. I want to thank representative gwen moore and john lewis and representative raul, for submitting remarks for the record, going through extraordinary. The Global Pandemic devastated the nation and the world that most of us never witnessed or seen. It caused an incredible collision between our health, our economy and our soul. The Nations Health both physical and economic are inextricably linked. Long before the outbreak of covid19 john lewis was pointing out the systemic inequality that existed within Social Security, leaving many behind in how this would become a civil rights focus. The virus has only further underscored the sense of urgency and the need to act now. This is the time to act, not kick the proverbial can down the road and renege on the responsibility that is uniquely ours, we have been on a pandemic roller coaster ride, we dont know how long we are dealing with this. Hospitalizations are exploding in texas, all 11,000 new cases in one day, florida almost 14,000 cases on wednesday. 11,000 new cases, 41 states, nationwide infections rose 21 . We miss prepare for the worst. The negative impacts will be with us for many years to come but as glaring as the statistics are they dont tell the whole story. We are talking about human beings, fellow citizens who need our help and need it now. I am proud that the focus on the impact of covid19 and real people, that makes Social Security more important, those most impacted by covid19, with people of disabilities whether they have suffered Health Effects from covid19, serve on the front line of the pandemic, those who lost their jobs due to the economic downturn. The virus has impacted people of color disproportionately. A hospitalization rate of 4. 7 times that of white persons and latinos have a hospitalization rate of 4. 6 times that of Nonhispanic White persons, black americans have contracted covid19 and 27,848 have died. 478,000 plus hispanic americans have contracted covid19 of which 20,000 plus have perished. We heard about the impact of the elderly particularly in Nursing Homes, 398,000 elderly americans, 60 years and above, have contracted covid19, of which 170,000 have been hospitalized, 97,000 have died. Women have been impacted by covid19, sufferers more likely to employ women like the child care industry, suffered heavy job losses, seeing impacts of the Unemployment Rate. Among women it is over 2 higher than it is among men and the difference is higher for workers over the age of 55. They rely most on Social Security benefits, retirement disabilities and suffered from years of systemic inequality. 5 Social Security beneficiaries live below the poverty line. It is an armed benefit. Workers pay into it with each and every paycheck. Social security already helps mitigate systemic inequality, but more must be done is the nations number one antipoverty program. We recently discovered as a result of the devastating impact of covid19, the nations economy, a serious, unintended and unless Congress Acts causing a harmful reduction in Social Security benefits by those born in 1960. This is a complicated technical issue and i am grateful to educate us so congress connect with the best information on the impact this will have on people, due to the covert induced recession aggregate wages are substantially lower, in 2020, with Social Security benefits calculated this will reduce Social Security benefits in their lifetimes for everyone born in 1960 creating a notch that is sharply lowering benefits for one group of retirees. It will affect 5 million americans including 54,000 in my home state of connecticut, for every District Across the country. In person, medium wages in 1960, between 1400, and 2000 a year for the rest of their lives compared to people born one year earlier, unless Congress Steps up and acts on the chairman, the Social Security subcommittee, i have introduced Social Security covid19 correction and equity act along with chairman yale and fellow ways and means for dire consequences. This will ensure the average wage index used for these benefit calculations never drops below the previous years level. It is crafted to avoid benefit cuts, where work closely with the chief actuary to make sure we put this together to achieve that goal. For example, the harmful drop in average wage index results in very small increases in future benefit levels for anyone who worked in 2020 including essential workers the Grocery Store this grocery clerks, hospital staff positions and nurses. They do not take away the small increase. They simply cannot afford the Social Security benefits. We had the opportunity to address the systemic, economic inequality is facing lower income individuals especially people of color and women in the same way the we have taken the opportunity to help working americans by including temporary paid family and medical leave policies and covid19 legislation. These would be temporary and for the donation of the virus. 42 million have lost their jobs or been furloughed due to the pandemic including black americans with the highest Unemployment Rate of 16 . We cannot further exacerbate the economic disparities that exist. We must underscore because i know everyone on this committee knows black lives matter, all lives matter and we must help black americans financially get through this. The covid19 correction and equity act will fix the notch and address the inequities with a temporary increase of benefits during this emergency. These benefits are targeted with those who need it the most and will go back into the economy, something all of us understand and now is needed in these Uncertain Times and something that all 435 Congressional Districts will benefit from. 65 million americans will be helped immediately. The bill will have increased benefits, 2 on average increases the minimum benefit of 125 of the poverty level, lifting more lifelong workers out of poverty, benefits for lower and middle income beneficiaries struggling to provide for themselves and their families, helping grandparents assist dependent students age 18 to 22 so they can get an education they need to get a job. So they can make ends meet and provide more help to the poorest of all by expanding eligibility for supplemental security income. It is imperative the house act before our august recess, to include a fix to prevent the covid19 notch cuts and perfect these inequities in the legislative package. Lastly and certainly not least, will impact the trust funds, Social Security never missed a payment that will survive this downturn as it has others. In 2009 they witnessed the Great Recession, their 401 k s become 101 ks. It is not the time to cut payroll taxes which would benefit the wealthy the most to deplete the trust fund. This is our responsibility. Is why we were elected. We cant kick the can down the road. It is time to act. These moneys come out of general revenues and create a temporary fix during the pandemic. It is my intention to pick up Social Security 2100 as this virus subsides and the economy rebounds to assure that benefits will not be cut in the future. One way to revive this economy is to make sure every Congressional District receive a stimulus which is what happens with Social Security checks. No one towards their Social Security check. It goes right back into the communities they all live in. All 435 Congressional Districts, we can hope for the best but we must prepare for the worst and we must act. Before we hear from our witnesses i would like to turn it over to Social Security recipients himself, and my good friend a republican leader on the Social Security subcommittee for his remarks. Thank you. For holding this hearing. Most importantly for taking that moment in time to recognize one of the religions of congress, dan johnson. We are both served with him. Know sam very well. You articulated it very well. Regarding the gentleman, the true American Hero that he was, provided many of us with Life Experience and dedication to serve the country, the fellow man and what he did on Social Security was legendary. He served on ways and means for 24 years. He led the Social Security subcommittee, each and every year an opportunity to choose whether he wanted to take a different leadership post. He always took Social Security because it was near and dear to his heart. I appreciate you taking time to recognize one of our great colleagues and it is inappropriate that we all do that today. His family is grieving but i think they can gain some solace in the we all loved sam, respected him on both sides of the island his daughters beverly and jenny and all his family, we continue to keep them in our thoughts and prayers. Moving from that, todays hearing on the impact of the covid19 pandemic we can agree this is an important topic. It is why we wrote to you and called for this hearing, the Economic Impact of covid19 pandemic will be secure. Given Social Securitys financial challenge, this pandemic will further affect Social Security. We know about the health risk, weve known our parents and grandparents were particularly at risk. They enacted a series of disastrous policy that directly led to the deaths of thousands of our state seniors but we cannot forget covid19 is an economic crisis. It is clear that covid19 will have some affect on Social Security with Many Americans unemployed due to mass shutdowns and workers taking pay cuts, their employer struggle to keep their business going in Social Security payroll revenue will be lower than expected in 2020. I look forward to hearing more from our panel about what we can do to help our parents and grandparents and ensure Social Security is strong for generations to come. Them have raised concerns that because of how they are calculated, people born in 1960 might be more affected by covid19s impact than other age groups. This is an appointed issue that we should examine closely. What we dont know is the full extent of the program. We have time to Work Together to get this right. The data wont be available till spring at the earliest. No one will have their benefits affected until february of 2022. Let me repeat that. No one will have their benefits affected until february of 2022, 18 months from now. Lets put ourselves on the clock and start working together. Im committed to working with you, mister chairman, and all members of the subcommittee to take a close look at this issue and make sure we get it right. As i said before Social Security reform will only be successful if it is done in a bipartisan fashion. What parents and grandparents dont know is partisan policies. That will get us nowhere and heard those most vulnerable. Working families of this nation deserve that are. If theres a problem we want to work with you to solve it, lets back to coordinating to determine what the scope of the issue is, as we do so we should keep the following in mind, the most important thing is to focus on mitigating fibrous, reopening our communities and getting our economy back on track, providing americans with the opportunity to safely return to their jobs, will have the greatest impact on the strength of Social Security and the economic wellbeing. Economic growth it must be the basis of any plan. The foundational principles are rewarding work and protecting the most vulnerable should underpin our work on Social Security. The lead framework on the republican side can and should serve as the checklist. We ask about given reform. There are several members of this committee that outlined immediate positive impact on our workforce and parents and grandparents. Our colleague jackie, my friend on the committee from indiana, legislation that will provide seniors who want or need to work from being penalized because they are above a certain amount. We can make a similar progress for our seniors, by strengthening Social Security. We can only happen if we commit to rolling up our sleeves, reviewing the data as it becomes available, working together and tackling complex issues before them and with that i yield back. I think the gentleman from new york and again welcome everyone. These are challenging times as we adapt to the use of technology. Im impressed as i look at the screen and see the great list of panelists that we were here in this order from stephen, the chief actuary of the Social Security administration, the president and ceo of Social Security and medicare. Melanie campbell, president and ceo of the National Coalition of black and civic participation and convener of the black womens roundtable. Maddie, senior fellow from fiscal policy and no stranger to this committee and senior fellow for the National Taxpayers union, abigail suborder, executive director of latinos for secure retirement. Our good friend sean kassel who has been before us many times, executive director for paralyzed veterans of america, and robert roach junior, president of the alliance of retired americans, welcome to all of you. We look forward to your comments. Let me recognize chief actuary of the Social Security administration, stephen goss. Thank you, chairman lawson and members of the committee for the opportunity to talk to you today about the effect of the covid19 pandemic on Social Security. The magnitude and duration of the effects from this pandemic on our society, the economy and Social Security are still very uncertain, that much most definitely now, the largest immediate effect for Social Security will be for payroll tax liability. 2020 earnings and payroll tax, for that for us. A substantial second wave of cases in this fall. Trust fund the pollution, in 20452034 but it is substantially reducing negative effects on status by trust funds that are considerably larger. Health implications for the National Average wage index in future benefit levels are a deck of significant concern, it is designed to maintain the benefit level replacement rate, that you have been typically earning over your career across generations by indexing the average wage level, it increased every single year, 1951, through the depth of the last recession declined for the first time in 2009 but the one. 5 , having relatively small effect on the benefit level for those eligible for benefits, at this point it is likely a much larger decline will occur in 2020 with affect on beneficiaries in 2022. Lets consider an illustrative scenario for 2020, 10 below the level projected and with a number of workers with earnings at any time during the year, with one compared to what was projected, it would grow by 9. One and been projected to weave the 5. 9 lower. A decline in this index was often too specific effect for future benefit levels. Chairman larson said the beneficiaries became newly eligible in 2022, receiving a benefit for life that is 5. 9 lower than the benefit for those becoming eligible year earlier. For medium earner born in 1960 the benefit would be reduced by 119 in this scenario. Compared to those eligible in 2021. At expected cost of about 21 billion through 2029 and an expected increase in cost through 2094 of about 90 billion in present value. A bill introduced on july 2 by senator kaine and senator cassidy would cost somewhat less because it would also a limited the expected small increase for beneficiaries who were working in 2020 but will not be eligible for sources good until after 2022. I should mention this as chairman larson did his bill includes an liberal additional provisions of additional provisions that would provide help to people in the year 2020. Because the implications because the implications of covid19 pandemic were not reflected in the 2020 Trustees Report a list of april we we have developed a simple illustrative scenario to analyze the potential effects of the current session. It is only one of a wide range of possible paths forward will it working between now and april with the trustees and their staffs to fully reflect the effects of the pandemic and recession and the 2021 Trustees Report and as mentioned by everybody was spoken so far, as yet we know not nearly enough and were quite uncertain picks a thank you gift for the opportunity to talk to today. I look forward to attempt to answer any questions you may have. Thank you very much. Thank thank you very much, s. Now will hear from Melanie Campbell. Good afternoon, chairman larson and members of the subcommittee. I nimbus Melanie Campbell and i am the president and ceo of the National Coalition on black civic participation and also the convener of the black womens roundtable. Women and girls empowerment arm of the National Coalition. As a former recipient of Social Security survivors benefits, i am keenly aware of how vital these benefits are to the economic wellbeing and stability of families. I remember how important it was for me to receive Survivor Benefits when my father passed away from a chronic respiratory illness one month after i i started college as a freshman at clark college, now Clark Atlanta university. I can remember how difficult it was for my mother who was a Public School teacher to figure out how to support me and two of my siblings who were also in college at the time. I also remember how difficult it was for me financially when i lost my Social SecuritySurvivor Benefits due to policy changes, and my federal student aid was reduced due to the current administrations decision to cut the federal pell grant funding. After i lost my Social Security benefits and much of my needbased financial aid, i had to get three jobs to stay in school. I know firsthand how important it is to extend Social Security, child benefits to College Students who need financial support. We are all in this together. It has been this nations rallying cry during his covid19 pandemic. While it is true that covid19 has affected everyone in some way, the magnitude and nature of the impact has been anything but universal. This pandemic has laid bare and exacerbated the racial and gender inequity in our nation that take a disproportionate toll on black women and men, and their families here while whitecollar workers who work from home and maintain their prepandemic incomes, a disproportionate number of black women and men who over index in lowwage jobs, black homes health aide, Grocery Store workers and delivery drivers continue to go to work and risk their lives on the frontline because of their considered essential employees. Many of these black workers succumbed to the ravaging effects of the coronavirus, or died as a result of the disproportionally high rate of preexisting Health Conditions. The surviving family members of these workers are now desperately trying to close the financial gap created by the death of their family member. For these families the ability to close that gap could be the difference in living comfortably, or being relegated to the throes of poverty. Lowwage workers in the restaurant and Retail Industries have been especially vulnerable to layoffs and furloughs during this time. There lost wages that it will impact of their Social SecurityRetirement Income in the future. Because of this pandemic these workers may never have an opportunity to retire or will have to work well into their retirement years to mitigate there lost income. When we get to the other side at this pandemic and i am optimistic that we will, black people will still expand economic and retirement injustices. This is especially true for black women who face unique challenges during our retirement years. Each year we have the black womens roundtable release our annual report on the status of black women in the United States. This year we reported that although black women are among the highest numbers in this nations workforce, work long hours, and rank highest among groups who go to college and get degrees, when it comes to faith we are consistently paid less than white men and women. The cumulative effect of this persistent racial and gender discrimination in our pay robs us of the wealth that we need for economic stability during our retirement years. As a result we as black women in our come into our retirement years economically insecure. Add to this Retirement Reality for black women, the fact of those who turn 60 this year will have even less Social Security income due to this years anticipated reduction in earnings caused a covid19 pandemic. If this notch is not addressed, the legislative fix, it will reduce the Social Security benefits of black women born in 1960 for the rest of their lives. For these reasons and more we support h. R. 7419, the Social Security covid19 correction act and equity act, and i think you, chairman, for this opportunity today. Thank you, melanie, for your testimony. Now the president and ceo of the National Committee to preserve Social Security and medicare, max richtman is recognized. Thank you. Can you hear me okay . Great. Thank you, chairman larson and Ranking Member reed. Thank you for holding this important and timely hearing and for inviting me to testify. Seniors, we just heard, particularly from communities of color are the hardest hit by the coronavirus pandemic. Eight out of ten deaths from covid in the u. S. Have been in adults 65 years or older. Nursing home, housing substantial number of black and latino residents have been twice as likely to get hit by the virus as Nursing Homes where the population is mostly white. In the best of times Medicare Beneficiaries spend an average of 24 of their Social Security check on outofpocket healthcare expenses, and half of them as we know live on incomes of less than 30,000 a year. Amid a pandemic like this, that disproportionately targets Older Americans, financial and Health Security is again stretched. Thats why, mr. Chairman, the National Committee supports your legislation, h. R. 7499, the Social Security covid corrections act your bill makes necessary technical corrections to a coronavirus related glitch in the current law which if unchecked would result in a sizable notch of Retirement Income for those born in 1960. And it it makes several benefit improvements that would help retirees and people with disabilities, especially during these tough times. But this notch and less corrected with mean that future Social Security beneficiaries turning 60 days you will be in for a very rude surprise. Their monthly benefits may be lower than those born in previous years, perhaps as much as 1400 a year, or about 120 a month for the rest of their lives. And let me tell you, if you are living only on Social Security or mainly on Social Security, that is a big hit. We know that tomorrows retirees will defend even more on Social Security then current generations of seniors. Normally, average wages rise from year to year but they should because of the pandemic, aggregate wages are likely to decline as much as 10 . 10 . Benefits for individuals who become 60 this year would be as much as 5. 9 lower than for workers who hit that milestone the year before. The problem created by this notch of workers turning 60 this year is really an unintended glitch in the Social Security administration of 1977. There is no way the drafters of that legislation could have anticipated that average wages would fall so dramatically from one year to another. Congress has to fix this unintended reduction for individuals turning 60 in 2020 before those workers begin climbing Social Security. Americans should not be deprived of tens of thousands of dollars in earned benefits and express benefits when they have done nothing wrong except being unfortunately born in the wrong year. The National Committee thank you, mr. Chairman, for bringing Social Security public correction and equity act fixes for those born in that year. Without cutting benefits for any other beneficiaries. In addition to repairing the notch, your bill makes some very important, very necessary improvements to Social Security benefits that would ease the financial pain of this covid crisis for retirees, people with disabilities, survivors, and dependence across the board for all by about 2 . The temporary benefit increase will be especially important for seniors, people with disabilities because we anticipate the upcoming cost of living adjustment, cola, is lower than anticipated by the trustees latest report. We support the other improvements, and i was to list them but you went through them so im not going to take the committees time with that in listing those improvements. They are all very necessary. Mr. Chairman, thank you again for introducing this legislatio legislation, h. R. 7499 would ensure that the earned benefits of individuals born in 1960 will not be cut, and it makes this correction without cutting benefits for other beneficiaries. And the temporary benefit improvements in this bill will give seniors some peace of mind to get through this crisis that is hit them harder than almost anyone. We look forward to helping you in any way possible. Thank you. Thank you, max, for your testimony. And now we recognize the senior fellow from fiscal policy at the National Taxpayers union, someone who has been before this committee in the past, mattie duppler. Thank you, mr. Chairman. Appreciate that. Thank you. Thank you, Ranking Member reed is will and the rest of the members of committee. Im delighted to be back with you even if it is from a social distance. I also want to thank you probably the string today to discuss covid19s impact on Social Security and its beneficiaries. As we have for my other colleagues on the panel like many aspects of todays fiscal environment the trends that would worsen before the pandemic have been accelerated by the unprecedented nature of todays crisis for its monthly the bipartisan problem solvers of this committee can address these pressures through thoughtful and deliberative action and its equipment to be a to share thoughts with you on that today. As you mention my name is mattie duppler, senior fellow for fiscal policy at the National Taxpayers union, the nations oldest Advocacy Firm that is dedicate a soldier defending the rights of taxpayers in the Nations Capital and in capitals across this country. The topic at entity the pandemics effect on Social Security is pressing because without it, robust economic recovery from covid19 the challenge of saving Social Security only becomes more steve pearce because Social Security as wood from other city is funded by dedicated payroll tax, the National Point situation is particularly pertinent to itself. As the committee considered the effects on Social Security, it should be mindful the pandemic still requires deliberate, targeted but temporary efforts to regain the countries economic footing. Legislation that addresses funding for all with permanent and damaging tax increases or uses the crisis as a pretax firstinning benefits program that already faces durable funding challenges would undermine our recovery. I want to emphasize the ways in which the health of the workforce and the health of Social Security are inextricably linked. First, downturns didnt increase depends on social programs at a time when revenues fall. This prevents dual pressures on solvency in the case of solstice could which relies on employment taxes this scenario can be eaten more worsen. Yesterday we got new unappointed claims deb fischer 32 Million People are still claiming some form of unemployment support which represents tens than they does not paying security taxes. Removing barriers from getting workers back to work than is key both from financial help of Social Security and for the financial help of workers. Data suggest retiree Household Income has risen twice as fast as it has a working age over the last 40 years. Covid19 could exacerbate this device if the crisis issues of policy prescriptions that increase employment burdens on workers. Secondly, the employment downturn affects the car choice of benefits. Average which index hours the fixed beneficiaries payments. The awi issue deceiving just a lot of attention this year but it is not you as was said the awi fell by 1. 5 . This notch probably exposes contradictory elements of Social Security which admit to be a safety net for retirees but also penalizes seniors and number of our returning circumstances. Retirees wishing to return to work or stay employed throughout the course of this crisis would be penalized by the retirement earnings tax which establishes a threshold for working seniors. The most vulnerable are the one shouldering the heaviest burdens, due to the economic pandemic. The Federal Reserve estimate 40 of the job loss from covid19 has been concentrated on households that make less than 40,000. As i explained in my first appears last spring this is the same population that is unduly burdened by increases in payroll taxes which had thousands to the cost of new college grads. Lastly, payroll taxes are disproportionately larger burdens on entrepreneurs and Small Businesses because they do not lower selfemployment tax liabilities. While businesses play half of the immigrant force yet this pandemic has demonstrated that the disparity between social safety nets for Small Businesses against the interests of corporations. Newer higher employment taxes would exacerbate this divide when American Workers can very least afford it. We are not yet through the challenges that covid presents to Public Health into the economy but the thoughtful consideration of what it will take to revive the American Economy is a test for which i know the members of this committee are fully prepared. I want to thank you once again for your thought leadership on how Social Security can be preserved particularly during these unique in unprecedented circumstances. A robust economy cannot solve all the challenges but it is a necessary and critical piece to any plan to secure for generations to. Thank you. Thank you. And now we will hear from Abigail Zapote whose executive director for latinos for secure retirement. Abigail, you are recognized. Thank you so much, chairman larson and Ranking Member reed and the rest of the subcommittee for inviting me to speak today. Again my name is abigail capote, im a executive latina for secure retirement. Our collection brings together some of the strong symbols, advocates for latinas in the country with the reach to 300,000 latina families and represent 58 million latinos in the u. S. Today i stand here with my colleagues asking for congress to do more to address the covid19 crisis as a whole and to address the need of our most vulnerable seniors. As they labor sometimes are forced out of the workforce. These seniors have to navigate had access their Social Security benefits alone as tools like wifi multiple device access that you and i take for granted are out of reach for these vulnerable elders. We can no longer wait and we need action now as covid19s has exacerbated many historical, socioeconomic and policy factors that have exploited communities of color for decades. Compared to the u. S. Population, latinas have been the hardest hit community by pay cuts, layoffs, and business shattering because of the Health Crisis affect on the economy. By april 2020 nearly one in five latinas were unemployed. Latinos have become more vulnerable to the covid19 crisis for the following reasons but not limited to latinas being more likely to do service work classified as essential, putting us at greater contact with people. At home latinas are more likely to live in close quarters with larger or extended families that make isolation and possible. Latinas high risk of death from the virus results from the greater presence of preexisting Health Conditions but not because we are born with them. Because Health Access is so hard to come by with communities that do not make enough money to be able to Purchase Health insurance. Also latinos are among the communities with the lowest access to nutrition and Health Care Services as i mentioned. The pandemic is also exacerbated in the challenges for vulnerable populations Access Services as manifested in the extraordinary drop in disability benefit applications. For example, access to local Government Agencies and other programs that traditionally provide support to vulnerable populations is further limited. Those who need in person access at ssa offices cant do business right now because they dont have access to those offices. Our partnership with the Community Legal services of philadelphia and other advocates who serve vulnerable population primarily low income people with disabilities find that people in vulnerable populations often have multiple complex issues to resolve that require expertise and knowledge of local information, programs and resources which cant be found using online tools alone. Our organization along with the National Council on aging help ensure access to Older American Services and programs which are absolutely necessary as our elders take parttime jobs to supplement their income and get by with and cant get by with Social Security checks alone especially during this difficult economic time. Additionally, older undocumented immigrants continue to work to make a living after retirement age because even though there may have spent decades contributing to the Social Security trust fund, they may never see this benefits but for their legal status. During this critical time these elders make up essential labor force by harvesting our food, disinfecting our schools and places of work and are the older adult gig workforce delivering our essentials to get us through time times like this pandemic. We cant ignore that our eldest documentaries that need a pathway to legalization. But today i sit before you today not just on behalf of latinos but with a tremendous responsibility to millions of americans who cant be here today. Congressman larson so security covid19 direction and equity act is a a great fix for the unattended benefit notch people shouldnt suffer a large public drop in their Social Security benefits just because they turned 60, become disabled or experienced the loss of a breadwinner around the start of pandemic or a deep recession. Policymakers should fix this unfair result because mimi could see a reduction of almost 1400, which in the latino community, Social Security benefits are amongst the lowest and even more critical for their livelihood. It would be catastrophic as many of our older friends and neighbors are already having to cut pills in half, skip meals or turn off their condition in the middle of summer in order to make ends meet each month. The notch is a big problem and this bill is desperately needed to prevent a large benefit reduction. However, this needs to be done very carefully as larson said the old does so as not to cut benefits for other workers in 2020. We will continue to advocate to ensure that only the notch issue is fixed by to ensure the provisions in this bill which will address inequities faced by communities of color are enacted as the next come as part of the next covid19 package. Thank you, and other 42 answering any questions you all may have. Thank you, abigail. And shaun castle, the deputy executive director of paralyzed veterans of america, you are recognized. Thank you, chairman larson, Ranking Member reed, and members of the subcommittee. Im shaun castle, deputy executive director for the paralyzed veterans of america. I want to thank you for giving me this opportunity to once again testify about the importance of Social Security to millions of veterans and people with disabilities like me, and offer some thoughts on the impact of the covid19 pandemic on Social Security and those who rely upon the system for the economic security. Like millions of our fellow americans is also pretty disciplined terms we have been placed under considerable strength during the covid pandemic. My written testimony presents to the experience of the members like stan brown, a quadriplegic who lives alone and relies on seven caregivers for nearly everything. From eating and dressing to running errands. He had to someone care giveaway when she showed up with a coffee and another caregiver tested positive for the coronavirus. He spent the following two weeks anxiously monitoring himself for symptoms afraid he had the virus because and that we tried, he was never able to get tested. Many of our members feel like tom. A Paralyzed Navy veteran and National Treasure for the paralyzed veterans of america. Trapped in homes and isolated, worried that covid19 covid19s will be a death sentence. Because of the viruses devastating impact on the already impaired lung function of those with spinal cord injuries. Besides our members health, they are worried about their ability to meet the basic needs. For example, our buckeye chapter in officers about 500 paralyzed Veterans Home about half of them live at or below the poverty line. Our office now received calls each week from veterans who need emergency food assistance. The covid crisis has posted a particular challenge for several pva location rehabilitation claims on Social SecurityDisability Insurance and trying to return to work despite the pandemic. Our Vocational Rehabilitation Program counsels report difficulties encountered by these veterans when the trident inform the Social Security administration that theyre then a job to avoid penalties and to follow proper protocols. We recognize Social Security administration need to close its offices and bring fuel Field Operations online because of covid19, we agree with the recommendations for improvements and that Social Security administrations Customer Service offered by the consortium for citizens with disabilities. U. S. Face every time of crisis the four covid19 because of the Many Americans who would been unable to save extensively for the retirement due to stagnant wage growth over the past several decades. Now there may be no cola benefits in 2020. Coupled with severe economic job losses from the devastating recession brought on by covid19 this virus mayors may result in any mark americans and had been previous anticipate. This is clearly the time to strengthen the system and to reject calls reducing benefits for creating a commission to propose cuts in Social Security. Since its introduction, pva special support for Social Security 2100 2100 act and itsy benefits improvement and wellbalanced measures to strengthen the social ecosystem for the longterm. We fail to understand white house hasnt acted upon the bill that urge the bill and urged the full committee and house leadership to take it up for a vote as soon as possible. In the meantime pva applauds the efforts to provide Immediate Health to Social Security beneficiaries of emergency Social Security benefits act. That bill would offer temporary benefit improvements that would take effect immediately and remain in full force until and hopefully the worst of the recession has passed. Additional steps to protect beneficiaries with disabilities will include a passage of legislation like the stop the weight act. Illuminating the fivemonth waiting period results is good Disability Insurance could help many people avoid losing their house. Another high and financial losses and doing away with one form of waiting period for medicare is particularly critical during this pandemic. Finally, pva pressure to the chairman efforts to address the covid notch. And a forcing cuts was of economic downturn that got dramatic and longlasting adverse effects on millions of Social Security beneficiaries. H. R. 7499 the Social Security covid correction and equity act would prevent a drop in benefits for those born in 1960 and do so without cutting benefits for anyone else compared to the current law. We Hope Congress will act quickly to address the situation. Thank you, mr. Chairman, Ranking Member reed, and members of the subcommittee for your attention this afternoon. Pva is always ready to work with you and your colleagues in advancing legislation to extend and it had Social Security. I am happy to respond to any questions you may have. Thank you, sean. And its now my great honor to ask robert roach, the presently alliance for retired americans. Robert, you are recognized. Thank you, mr. Chairman. That afternoon. I am robert roach impreza delights for retired americans. Think of it up at you represent the alliance for retired americans left for performing members as nation just with a very serious coronavirus pandemic. We appreciate this committee seniors and all those who depend on Social Security. Right now its important to remember social skidoo benefits are helping keep our communities of flickr our economy afloat. Seniors housing, food and medicine that puts 1 trillion into the economy every year. Thats spending on essential items doesnt stop even during a pandemic. Older americans are a critical part of the workforce, nearly a quarter of the workforce is fixed by the older. Some a some of us adjusted coros recession or still on the job risking their health. One of the answers to the crisis is Social Security expansion. We need it before the pandemic and we especially need it now. The wealthiest americans contribute the same percentage of income and assessments of what else you could increase the of current and future retirees and strengthen the systems solvency. That money will make ends meet and strengthen the economy. A notch issue. The pandemic has greeted a new Social Security issue for one particular group of Older Americans, those who turn 60 in 2020. 2020. Without congressional action everyone who was born in 1960 will receive 5. 9 lower so skidoo benefits when they retire and people born in 1959. This is been called the notch problem. Most americans know that the individual benefit amount reflects the earning history but millions have no idea benefits affected by National Economic indicators concluding the aggregate figure for total wages in a given year. Since the aggregate wages typically rise this is not a major issue with the number of jobs lost due to the virus, recession means these people will pay a steep price down the road and thats what the will have a harmful and permanent effect on these people regardless of whether they work lost their job or didnt work at all this year. That is simply not fair. We applaud chairman larson for recognize the serious issue and introducing legislation that addresses it. We have no time to waste. I want to be clear, we fully support h. R. 7499 and we are very closely with chairman larson and is colleagues to bring that across the finish line. I would also like to reiterate the words of Ranking Member reed to me that hes committed to ensuring Social Security to today, here tomorrow and here for generations to come. Racial and gender disparities make this crisis worse. All seniors, people with disabilities, people from impoverished committees that are predominately black and hispanic have been hit especially hard by covid19. They can earn less, work and essential jobs and are more likely of the underlying Health Conditions that increase the risk from the virus. Women are also at an increased risk from the virus because one in three jobs held by women are now designated as essential. Putting them in harms way. The sad reality is the very people are most susceptible to the virus are on the front lines of essential jobs. No one should have to choose between their income or their health, but they have to. The choice is only factor income today that will reduce the future so security benefits. That is because when a persons wages is decreased, social strata benefits later will be lower. Expanding sources could increase in benefits for all would help address this problem. We also need to think about the people with disabilities. Scientists and doctors dont know whether people contact covid19 suffer longterm Health Problems that could leave them unable to work. Today, Social Security benefits Social Security provides benefits to a. 5 billion disabled workers. That received by disabled workers in the United States is just over 12,000. That may sound like a lot of money, a lot, but these funds are essential. Expanding Social Security could mean all beneficiaries could continue to rely on their benefits that they earned over a lifetime of work. It is good policy an important part of the recovery of the pandemic. In conclusion, according to the National Institute from Social Security come for intention is one Social Security for the income and that number is expected to rise over the next decade. We owe it to the current and future retirees, that means fixing the notch come expanding benefits and future retirees. Thank you. I look forward to answering any questions you may have. Well, thank you, robert. And thanks to all of the panelists. These are incredible times that we living in. I thank you all for making the special sacrifice to be with and a part of the panel today and underscoring what i believe is an urgency. I dont think any of us are going to be able to say we have lived through a time when we had and International Pandemic colliding with all of its force and impact that its had on our essential economy. And then also laying and underscoring what john lewis was pointing out prior to the pandemic, that we faced a real civil rights issue or people of color and women with respect to the inequities that have been baked into a system. I respect my colleagues on the other side of the aisle and i welcome the comments. I certainly would welcome their plans as well, we are often told how we have to hold hands and jump together, which i hope and say believe can be achieved. But it certainly would be helpful if we had a plan or saw what they were actually proposing. Instead of wishing. Having said that, i have Great Respect for andrew biggs and someone who is written extensively. In fact, he was the one probably who should be credited with first sound the alarm as a relates to the potential impact and creation of a notch. Why he did propose a solution, and dissolution was about we steer away from the idea of the way we currently calculate Social Security benefits on the basis that we do currently, and instead, instead rely on indexing wages as opposed to using the average wage index. And so i wanted to ask the actuary, with that, if we went to calculating our rates, Social Security, by price indexing, with that result in benefit cuts . Thank you very much, chairman larson. I think what andrew biggs was getting at was theres a possibility that for this one year, 2020, at the cost of living adjustment will be larger than the change in average wage and that is likely to be the case. The latest Trustees Report estimated issues costofliving adjustment would be 2. 3 . It looks as though the data are suggesting might be somewhat less than the full percent, probably still positive. Much to be determined on that. Where as the average wage index series is expected to probably go down. However, im not sure of my good friend andrew biggs was recommended to him that just for the one year or doing it in deathly. If we were to change the benefit structure so that from one generation to the next the benefit structure increased by price levels instead of by the average wage, that would result in about a one, 1. 2 Slower Growth rate in benefit levels going four for all future generations. That would cost will refer to as the rates to decline over the two the rate 60 years now and would be about that in half from what it is scheduled under current law. So that would certainly reduce the cost of the system but by the result of six years from now people newly becoming eligible for benefits then come benefit levels would all be half of what is now scheduled and would be to a lesser degree from all years now between density then. Is at your understanding of what would happen if we went to price levels as opposed to the awi with the price indexing . You might have to unmute yourself, max. Okay. So i would never ever disagree with stephen goss that i think is exactly right. What we do know is that, the prices go up, less increase in a slower rate than wages. So by making the switch, and hes right, its very complicated, you would end up with a lower benefit Going Forward. Theres no question about that. I dont know if that is what andrew biggs intended but that would certainly be the result. So then its pretty clear that the awi over all, and with this adjustment and one that is needed and especially if we go back to, as the bill calls for, the previous year, but that would put us in excellent shape to address this issue. With regard to the importance of cola, again, max, let me ask you. Why is Social Security cola so important to your members . Well, you know, as you know i didnt hundred to townHall Meetings over the years with members of congress, democrats and republicans. And one of the questions that comes up invariably is what is the cola going to do . We know theres an announcement made in the fall. Seniors anticipate that very carefully. There benefit will change a little bit. Some years as you know cola has been zero. I think three years out of the last ten, because the formula for determining the cola is flawed and looks at the increase in inflation or a wage earner as opposed to measuring those goods and services at the senior relies on, that cola has been zero or has been substantially less than the actual impact of inflation on seniors. Its something that needs to be corrected. I know you are focused on it in your legislation, and we need to have an accurate measure. The purpose of a cola is that a Social Security, is so that a Social Security check will keep up with the cost of inflation. And if that is not met in the current formula does not accomplish that, you are not living up to provide an accurate inflation as it impacts the kind of things in a seniors life. Thank you, max. This is for both mr. Castle and ms. Campbell. You are part of a generation that is been heavily affected by the recession. First the Great Recession and now current pandemic. What does it mean to you personally as millennials to know that youre protected by Social Security . Thank you for the question, chairman larson. As i testified before in front of this committee i am someone who is a recipient of Social Security that came to me at a time when i was about to be homeless. At the time i was 28, had just had my second spinal cord surgery, was waiting on my the a benefits package to work its way through the system or as we all know that can take quite some time. And i was living on less than 800 a month even when my Social Security finally showed up to me. Having that at that moment in time meant i didnt have to be homeless, i didnt have to make choices on the medicine in whether not i would be able to take the Pain Medicine or not, or having to break the pills in half to make them last longer i didnt have to decide whether you eat that they or should i stretched those up for multiple days. Now being in this position it also cartons me and members represent to know that when i do get the chance to retire again, hopefully in my mid60s or early 70s again, that not only will have the financial benefit but i will have the Life Insurance benefits there that is not afforded to men women who have catastrophic injuries. You cannot find a private benefit or a private Insurance Company that will ensure somebody with a catastrophic injury. I know this but will because i went through every major Insurance Company in the country looking for Life Insurance to make sure that if something happened to become that my wife would be taken care of. The only one that i found was there for me was Social Security. So i do know and it does mean a lot, as a moment out of this benefit there for me, members of her organization and all men women who will need when the time comes. Thank you so much for that, shaun. Abigail. Thank you so much for that question. First and foremost i think i have a unique perspective to this. During the first recession i just turned 18, i was still undocumented. I was working at a fast food place and so i i was putting my money into Social Security, and was until i turned 21 that i finally had the ability to legalize my status through dreadful because my mom was a victim of abuse by her husband. But he do say that because while i didnt see the immediate effects of that recession, today it is evident how much it is hurting current millennials and gen xers. My partner was unemployed for about three months this year, and not on that but i actually see it with other folks and friends, family members that are also unemployed right now that lost their job. Because of that they dont have the ability to be able to save for any other using private retirement accounts or anything like that because it isnt money right now. A lot of these folks are using up their savings accounts right now, taking some of the money from their 401 k s that they have. Available to them through the cares act as well. But for me as someone who runs their own nonprofit, that testing to Social Security, its just nice to know that i will at least have Social Security at the end of my lifetime. Within the last ten years we had that recession, today we have recession, we dont know its going to happen in the next ten years, 20 years. I hope the economy does get better. I hope folks are able to increase their wages. I hope we are able to save. But until that happens im solely not solely relying on Social Security but i am happy to know that the program is still there and available for folks like me and my millennial cohort to know that there will be something for us and we retire. Think you, abigail. Now let me recognize my good friend tom reed. Thank you, mr. Chairman. Thank you to the witnesses for the testimony today. I want to just get in the technical aspects of the 1960 situation. Mr. Goss, you are best suited to highlight this issue. For those that were born in 1960, when will we know exactly what the effect on them will be and why cant we know it any sooner than then . Thank you very much. The problem is that we wont know with exactitude what the average wage index for the year 2020 will be intel late in the year 2021. The reason for that is because all the w2s that are submitted by employers for thatr employees, all the wage earners, come in early to mid in the following gear and it takes time to process them. The irs collects them and since into Social Security we process them so it will not be late into the 2021 we will actually know this. You are correct that there will not have whatever turns out to be, it will not have a real effect on benefits into we get into 2022. I would just like to add come by the way, its not just a matter of people born in 1960 that speaks to the people who will reach h60 two or Retirement Benefits in the year 2022 that we will have a large number of people also becoming first eligible for benefits and 2022 on the basis of the disability or being on a basis of being a survivor of a d ceased worker which occurred in the same year. So its not just retirees people who are younger at 8162012 also potentially also potentially result in providing benefits in 2022. But youre exactly right. We will not know this with certainty until late next year. And firsttime make taken i, that come just unclear, and clever people watching, that 2022 is when the potential impact will hit. Unless we do something, which is i think the sincere hope everyone here is to address that. So 2022 is the benefit window, okay. And then i want has this ever happened before, this type of impact to . My interest in it has happened and youre the expert so when did that happen before . As i mentioned in testimony, his average wage index never ever declined alternately starting back in 1951 until the very first a memo time so far was for the year 2009. They good news is that the reduction 2009 was only 1. 5 as it turned out it may be more important than that is that at the same point in time we are now compared to 2020, if we look back at the 2009 Trustees Report in may of that year, at the time the trustees were still protecting an increase in average which index of. 9 . And even and even in the following year by august of 2010, there was projected the only 0. 6 reduction. It turned out to be more than that. That speaks to the uncertainty but also speaks i think logic to the fact that can reduction is much more likely to be the case and is very likely to be much larger than they saw back in 2009. And the target address that in 2009 . What did congress do in 2009 to offset that impact . Congress did not make any changes at that time. We believe its probably largely because once it was realized it was only 1. 5 and we would have to go back to the records to see exactly what the motivation was at the time. At that time there was nothing done about it. But now theres another opportunity. I appreciate that, and that is an opportunity to look into further explore and would be interested in partnering with you, mr. Chairman, and others to see what we can do to address this unique situation. With that i yield back. Thank you. Thank you. Now dan kildee is recognized. First of all, thank you, mr. Chairman, for holding this really important hearing, and especially thank you for your leadership on the issue generally of Social Security. Theres a lot of conversation about Social Security and whether or not its going to be there in the long term. I think we all know that we have an obligation to act, but unlike some you have been willing to put forward real action, and i think people can tear that apart, but having a plan that solves the problem is really a necessary element of solving the problem, so thank you for your leadership on this, youve been remarkable. Obviously this coronavirus epidemic is an uncertain and unexpected wrinkle in a really difficult time. 90 of the covid19 deaths in my home state of michigan have been people aged 60 60 or more. So its fitting particularly hard Older Americans heating. Its core economic and Public Health crises that were facing the Social Security role, the role so secret place in providing certainty is more critical than ever, in a time of absolute uncertainty, the thing we want to be able to make sure is that Social Security beneficiaries know that Social Security will be there and it is giving them the promised benefits that they could plan for. I am concerned about this issue thats been raised, as part of this his testimony, is not issue that our witnesses have described today. The impact of covid19 on our economy if left unaddressed will cost a harmful Social Security benefit reduction for anybody born in the united 60 come at a time when we least can manage that. If no action is taken, 143,000 michiganders that burn less and not have the promise of Social Security meant for them the way they would have expected, just because they were born in the wrong year. But again, as i mentioned, mr. Larson, and i and many others have been willing to put a plant of the table, Social Security covid correction and equity act which provides a fix to the notch problem and also some improvements for all americans by expanding benefits on an emergency basis during this pandemic. Again, a critical benefit, at an absolutely critical time. So i wonder, mr. Richmond, if you might comment, and maybe just explain to us in clear terms what you think the consequences of congress not acting on this legislation might be, both in terms of the not issue but importantly the consequences for americans for trying to navigate this pandemic. I think we have to unmute you somehow. Can you hear me . We can. So i did think that even under the best of circumstances it is very difficult to bring an issue like this one into in a way that will lead to the enactment of legislation to solve a problem, and this is a problem. And its a problem that is so directly tied and waited to the color pandemic and covid recession that i think this is the time to act, and im not a sanguine person as some of the members of the committee are, that we can wait. This may not happen actual impact on benefits until 2022. When i hear the word notch i get nightmares because i remember the last time the congress and Court Organization dealt on sure some of you on the call remember that. And that was a notch that was also created, i think it was, mr. Goss would know this better, by changes in 1977, is either 77 or 73, in Social Security law that resulted in people born between 19171923 who received lower benefits. I think you are nodding, i see so you are aware of. It was a subject of so many town Hall Meetings with democrats and republicans, members of this committee and both sides of the aisle. We heard from witnesses that maybe the congress was just going to wait until we die. And isnt that what happened . Congress the oldest member of the notch baby category 103. 103. The youngest would be 97. Nothing happened and the same with the other party, and it was it was kind of a shell game and, but, complaints really wore out. This is a time to take advanta advantage thank you, max, and recognized. Could some could you mute your someones got their microphone on, getting a lot of feedback here, so thank you. Mr. Chairman, thank you for holding the hearing. Your sincere desire to work with republicans and anyone who is interested and equally sincere to have a longterm fix for benefits Social Security. And once again, something out there with the anticipation that there will be a shortfall bus of covid. Ive got to say, you know, leaders anticipate, they dont wait and we do too much around here, waiting and then raining cats and dogs. I commend you for that. Im going to continue to even if i disagree with the solutions, i have several questions. You know, this shortfall is ensurin ensuring, plugging that hole when we know how much its or even anticipate with some good policy to when it happens and being prepared before it happens. What about the and let me ask, we have a lot of retired and Public Employees who have, because of the windfall provision prior to that have had disparate treatment in terms. Amount of benefits theyre receiving inequitable to what they contributed. Let me ask you, you know, in order of magnitude, are the folks that have suffered inequitable payments in Social Security, the people have described firefighters, and et cetera, those who fall under that category. Is that to folks that were talking about from the related to the Wage Reduction . Well, thats a fascinating question. The effect of the socalled windfall elimination provision in Social Security is unfortunately very, very complicated and the degree to which it affects individuals depends tremendously on what portion of their career were they working in covered Social Security employment, what where they were working its all over the map. It would be true for many people who have worked in covered employment, the degree of reduction in their Social Security benefit as a result of the windfall elimination would be larger in a lifetime basis than wed be seeing from this covidinduced likelihood for 2020. I go he is moo i guess my point is, that has been hanging out and if there was a solution, i think a democratic or republican proposal, but that in order of magnitude is a greater problem because you are getting short changed. At the end im for not after looking for a bipartisan solution ultimately and im ready chairman larson, to go on that retreat and come out in three days with the grand solution and jump off the cliff together and say save the world. At least saving the world pursua pursuant, and im still confident that you and my friend tom can lead that. Now, in terms of and this is, i wont even ask i wont ask the panelists and i thank you for your time, to raise your hand and do all that stuff, but if i did ask, a question i would hike to ask if i had the time to get all of your responses, is are your Revenue Streams going down due to covid . And then, are you reducing the salaries of yourself and your employees and or are you laying off employees as a result . And i dont know what your answers would be, but i suspect that if youre a nonprofit, youre seeing a reduction in support. Well, here is the challenge for the panelists. I mean, our challenge is that every one of you all have mentioned, you know, having the need to get back to work, and opening up the economy and making sure we mitigate against this wage shortfall for those folks who need the earned benefits. Your time has expired. May i finish my point, mr. Chairman . Go ahead. Ill make it quick. Be brief. I just would say the fact that we all still get paid, including me, whether we open the economy or not, i think thats a real in our Decision Making model so i can hope we can act by our checks and our livelihood depend on. Mr. Chairman, youre very generous, thank you. Recognized. To my time, any time, if it means that you will consider, consider voting more with me on this side of the aisle. He doesnt have to respond to that, but i appreciate the friendship and the camaraderie that and not only with the previous members who spoke, but all of us on this subcommittee and i want to commend you, mr. Chairman, because at a time when unfortunately very few people in congress and in washington are talking about this looming problem, youre someone who has been consistent about pushing this issue and for all of us to solve it and god knows its needed so i just want to again publicly thank you. I want to focus on one specific aspect of this because i think t there are plenty of times we can talk about the overall funding issue that Social Security is facing. Our proposal Social Security 2100 which im proud to cosponsor, let me, since weve had other committees to focus on that and well have one in the future. Let me instead shift to one very specific aspect of this challenge and thats covids impact on ssi and ssbi and let me use my Home Community of philadelphia as an example. Theres been a significant dropoff in ssbi and ssi applications, which is pretty counter intuitive. Typically in an economic downturn and in a time in which unemployment is higher than it was during even the worst month of the Great Recession, typically you would see applications increase for ssi and ssbi. Instead the exact opposite. According to legal services, and Social Security works, theres been a 30 droopoff in ssdi applications in part one would assume because field offices are closed, but there might be other reasons as well. So i was wondering if and ill pose this to max richtman or to sean castle or both, to talk about potential solutions to address what is clearly i think a problem and something that we need to solve. Well, thank you for that question. Thank you congressman for the question. I would say thats absolutely correct. Youre going to see unfortunately because the field offices have closed, because of the now inordinate amount of time people have to spend on the phone to get to a Social Security administration, applications are going to go down. There needs to be an immediate shift in resources to the Social Security administration to set up more call centers, to set up the ability for someone to actually reach them with their claims. This is not something that our membership is immune to in any way, shape or form either. As i mentioned, this affects our paid members, who are men and women who are actually trying to go back to work during the pandemic and do the right thing, by reporting that they are either have a job or are looking for work and it can be harmful to them to lose part of the benefits they cant afford to lose because they couldnt get someone on the phone to properly report it. They need to shift resources back to areas where they were before and not currently use today a more modern approach i would say for Social Security in terms of setting up more call centers and having more people to be at the ready to file the claims as needed. As you know, as more people lose their jobs, as more people get injured during these time frames, Social Security needs will not stop, but the need for people to be there to answer the call when people call in or send the paperwork in and process will continue to grow. What im hearing is more resources and then specifically for call centers, max, i dont know if you wanted to agree, disagree or potentially add something to that in terms of thank you, congressman. I agree completely with what shaun just said and our concern is not just declines in these ssi and is. Sdi applications in pennsylvania, but across the country. Its not just unique to your district or to your state. And i know Social Security has been puzzling over this and trying to understand it. Certainly, a big part of it is the closure of so many Social Security offices, the reduction in hours that they serve their constituents and you know,s this has been exacerbated by the pandemic. Individuals especially in that situation, they depend on facetoface contact with someone in Social Security or at least someone they can talk to and i dont know if youve ever tried to call the 800 number, but if you have, youre going to be on hold for a very long time. So i think having more resources as you just pointed out or shaun mentioned, devoted to this would go a long way and also, i have heard recommendations that Social Security make an effort to partner with some nonprofits in the area to help in advising those who want to claim ssi and ssdi, how to maneuver. How to navigate the system and i hope those worth exploring. And i hope they will take that up as well. And congressman, ferguson is recognized. Thank you, mr. Chairman, and to Ranking Member reed, i want to thank you for your leadership. I think we all agree the worst thing that any of us could do is not to act on this issue. If you want to see real harm done to americans, lets not do anything and see what happens. Ill always commend both of you for your leadership in this space. You know, if we go through the opening of the economy and we see more for americans that are trying to get back to work in a safe and responsible way and that includes many of our seniors. And ive seen, matter of fact, ive talked to many seniors that have said that now that they are working remotely, theyre more willing to stay in the work force in some cases and they want to continue to work, but we happen to, you know, we tend to penalize our seniors that do go back to work. You know, right now the income makeover about 48,000 a year, you get penalized for that. And can you talk about how this may be unfair to a lot of our seniors, and when we need more people coming into the work force and certainly even did prepandemic, but certainly were going to see folks coming in post pandemic. Can you talk a little about that and the impact on the system and on making sure that many of our seniors have the work in their lives . Sure thing, congressman. As was mentioned by a couple of i think of my contemporaries and myself and my testimony. The requirement earnings has a feeling by which seniors are penalized working over a certain threshold depending how close to retirement age. In normal Economic Times that introduces an economic distortion, but in todays circumstances it really has a vast impact on seniors and not just because theyre trying to plan accordingly for their own retirements, but as you intimated, the circumstances that you may have anticipated at the end of the year are vastly different than where we find ourselves now, now that were halfway through 2020. So seniors who are looking to have who wanted to retire or not doing so because the circumstances changed or the retirement situation is more volatile and staying in the workplace and theyll be penalized with the retirement test. And many states toward the beginning of the pandemic really try to recruit seniors out of retirement to come back to work in industries such as health care. New york asking for retirees to rejoin the work force to deal with covid19. Those group of individuals would be penalized by the retirement earning task and creating a barrier for seniors looking for flex act and i think belies the point of Social Security which is to provide some kind of cons constancy in requirement. I think weve all seen seniors that want to continue to work and want to continue to stay active, that they feel like theyve got something to contribute to their profession or society. On a personal basis they simply dont want to become inactive and to go into a slide that we see, unfortunately see way too many people do when they hit retirement age. So, one of the things i would ask that you think would be helpful is the bill that my colleague, gentleman being jackie from indiana has and to raise that, is that helpful Going Forward . Congresswomans bill my organization is supportive up. We think it would help eliminate, particularly without covid19 is still uncertainty in the economy. Can you think of a good reason why we shouldnt encourage our seniors to work if they want to . I can certainly speaking as someone who is very extroverted and had a hard time with the social distancing and staying at home orders and i know that older folks with that more. And the more they engage in the community, the better. I agree. Mr. Chairman, i yield back, thank you again for holding this hearing. And brad snyder is recognized. Thank you, chairman. I thank you for holding this important hearing and i want to personally thank the witnesses for coming in and testifying on covid. Its a health and economic crisis for the country. However, the covid did not affect people equally. Many elderly, and manile who keep our essential services and businesses open and running for all of us. Furthermore, these populations are much more likely to be Social Security beneficiaries. That means its critical now more than ever that we ensure Social Security remains strong and its benefits are sufficient to provide an Effective Security blanket for vulnerable individuals. The idea of the payroll tax holiday would have a positive effect in the immediate crisis, but a longterm negative effect on Social Security. And thats why talk of a payroll holiday is troubling. Congre congress its never been at the expense of the individual. And payroll tax could have devastating effects on longterm. Could you discuss what a payroll tax holiday could mean on Social Security, what it would mean for beneficiaries who rely on this program . Well, as i think you know am i on now . I think you know the National Committee has all the opposed payroll tax holiday, not just when a republican president proposes it, but back when president obama had a delay in a payroll tax holiday was for a short period of time, we opposed it then. It was wrong then and wrong now. As you point out. It will do nothing for all of those millions of people who dont have jobs and are not paying payroll taxes. Its not going to help them one bit. What it will do is hurt the longterm solvency of the Social Security program. The trustees of Social Security have told us the program is able to pay full benefits, i think its its 2034 or 2035, and then the there will be a problem which needs to be addressed and the chairman payroll tax makes that even worse. It would bring that date much closer to the present. Cutting the payroll tax is a way of strangling the Social Security program, it has a dedicated source of revenue, only payroll taxes, and to me, it makes no sense. Now, during that Pandemic Program by deferring or cutting the payroll tax. We [inaudible] i think its on mute. Let me turn, if youve seen in your modeling what effect the payroll tax might have . Excellent question. I think theres a as is always the case and many of you are familiar, please specify with some precision what is being proposed here. As indicated back in 2010, 2011, 2012, there was a payroll tax holiday first for employees meant for employees, even though there was a reduction in the payroll taxes that individuals or employers were paying in the total amount of revenue transferred into the trust funds was not affected so Social Security was not in any way harmed. In addition from those particular renditions of the payroll tax holiday, there was no change in the amount of earnings that were credited to individuals for the purpose of the future benefit increase. So the real question, i guess, here, is if youre talking about a payroll tax reduction or holiday, is it a reduction that will be in effect, be reimbursed by the treasury or straightup reduction and less revenue coming into Social Security. If its the former, then it would not really have an effect. If its the latter, it would most definitely have a significant effect. I think that distinction is an important distinction. With that my time has expired and i yield back. Now ron is recognized. Thank you, mr. Chairman. And thank you to all of our witnesses for joining us today. You know, this committee has an opportunity to make some real meaningful reforms to Social Security. Reforms that ensure the program has better sustainability and protects future generations. As our country recovers from covid19. Its more important than ever that congress and the committee make this right. And were safely reopening our community and getting the economy back on track. You know, at this stage we dont know how covid19 will affect Social Security trust funds. We cant determine impact on cost of living adjustments. Making this guess without the data and facts as we develop new Social Security policy is a dangerous game. We know that successful reform can only be achieved with wellinformed bipartisan solutions. I have a great deal of respect for you chairman larson and i enjoy working with you on many of the prescient issues facing our nation. Unfortunately, this legislation while whelen had intended is rushed. Even though it presents a lower wage index used for benefit calculations and temporarily increases benefits for some beneficiaries it excludes the 1951 cohort. This could lead to unintended consequences down the road. Social security will have this due to the Health Crisis, this would be an unforced error. We dont know what the true data is. We can strengthen the program and treat equally. We can protect our program for future generations without devastating tax increases. All of this achieved with effective focused bipartisan policy. Let me ask a couple of questions. Mr. Goss, youve developed an illustrative scenario that helps us understand the impact of covid19 on the economy and Social Security. How confident are you with this scenario playing out. The old saying thank you very much that predictions are very difficult, especially about the future and theres no question that this is the case here. As little as just a few months ago back in april. We were at that time based on the Data Available then, anticipating a significantly larger potential reduction in the average wage index than we are estimating at this time. The good news since april the economy has functioned somewhat better, than we and many were anticipating at that time. At this point in time its a very, very open question, as you indicate. And the balance of this year, what exactly is going to happen with the pandemic, with the virus and our responses individually and by governments is completely up in the air. Were hoping that what we put forth, which is illustrative scenarios and thank you for citing. That its just an illustrating what happens if things play out this way. Its entire possible we could have more closure in the economy ap much bigger drops in the year. Or we might have a further opening, we could have a vaccine, well have less of a drop. So were hoping that this is sort of, you know, threads the needle and is kind of at a good position, but theres incredible uncertainty where well end up. Thats exactly right. Thank you. Miss butler, as representative reed pointed out, well have well over a year until anybodys Social Security is affected by a potential drop in wages. As mr. Goss pointed out, we dont know yet how 2020 is going to play out. Do you think that congress should address this or should wait until we have the actual data. I think that that congress should be doing what this committee is doing is discussing and negotiating the best since there is a problem. And twice in 10 years potentially a longterm durable solution rather than a oneterm fix that this is a problem that were going to see in the future. Right, thank you. And are there other things beside the benefit formula that might be affected by the average wages . Yes, and as was mentioned prior to this comment, i forget now who said it, disability and Survivor Benefits are also indexed using awi, the taxable maximum and thats obviously the earnings up to which Social Security taxes are appraised. Thats affected by awi, the bend points, thats affected by awi and i believe there are no probably six or seven other elements that are affected by this calculation as well. So certainly any kind of negotiation or discussion about what should be done with it this year, should affect the he ever tire program overall. Thank you, i yield back, mr. Chairman. All right, i thank the gentleman. I would just like to point out and i appreciate his sincerity, we would love to see a plan from the other side. Its been almost two years now and weve heard all of the conversation about the willingness, the love and concern to protect Social Security and i dont doubt that whatsoever. But when push comes to shove and were facing a crisis and we have a collision like this thats happening. We keep hearing, well, yeah, but not now. And if not now, when . And oh, by the way, when that when comes, what is the proposal . We have a proposal thats out there that were fully happy to debate and understand that there are differences of opinion, but the lack of any concrete plan or solution while americans are facing this unbelievable collision of an International Pandemic and the impact on the economy, 42 million americans unemployed, the longterm effects that thats going to have and shortterm effects on Social Security requires us not to wait until the very last minute, but in fact, to act now. And if theres a better plan out there, dear god, please put it forward so that we can have that discussion and debate. If theres better plans out there, if andrew bigs plan on indexing is better, put it forward. If theres a better way to achieve these things where people will feel secure that their Social Security is just going to be there for them, by all means, put it out there. But for the last two years, we havent seen anything from the other side. And we would welcome it. The and understand that there are differences and that we want to work bipartisanly, but its like one hand clapping. We can put out a plan and we can say that were for it, but if you say you are in favor of saving Social Security, know how important it is, but just dont like the plan thats out there, but dont have another solution. So, let me recognize senator sanchez. Thank you, mr. Chairman and i apologize ive beeen toggling back and forth. I know what a champion you are of increasing the solvency and making sure the program does what it needs to do. We have provided a senseless, unintended cut to benefits to certain beneficiaries. Theres no reason why someone should find their benefits dramatically reduced because they turned 60 this year and we wouldnt be confronting this issue this year if we werent in such a profound crisis. No other time in history has aggregate wages dropped so much, the only time it dropped was during the Great Recession and it wasnt enough to impact the beneficiary. Im not being melodramatic when i say that the magnitude this have crisis cannot be overstated. It is welcome past time to act to protect beneficiaries affected. And i believe we can come together in a bipartisan way to solve this unique issue if we truly have willing partners on the other side willing to meet us halfway. If we can do that, it stands to reason that we can find the will to do so much more for the People Living at the margin. Communities of color have been devastated by this pandemic and far too many are struggling just to survive. Im proud to cosponsor the Social Security and covid inequity act and my opportunity to give widows and widowers peace of mind. The loss of a spouse is even author difficu author more difficult when people are cut off from their loved ones. Making sure that they dont stand my proposal to receive 75 of what they had when both spouses were alive. And my questions, we know that latinos are at greater risk of contracting covid19. Can you elaborate the pressures that a latino family is under when a grand parent passes away and Social Security benefits are lost during this pandemic. Thank you for this question, congresswoman. I think first and foremost knowing that latinos are greatly impacted by covid19, not only because they are living in multigenerational homes, but specifically because when members of that family also go out and work, because they are essential workers, because only 16 of our community has the ability to work from home, that means our folks are at greater risk of bringing that virus home from infecting those vulnerable grandparent. And usually its the grant parent in the multigenerational home taking care of the kid inside the home. So, if unfortunately that grand parent falls ill and passes away, not only is that family having to do away with the Social Security benefits that are really helping those families pay their rent, pay for their food, theyre losing that family cohort. And not only that, but im just really excited and happy that you were able to bring that provision to add additional benefits for widowers and men that are also losing their wives through this pandemic because our community, along with the black community, are facing devastating deaths knowing our community is three times as likely to contract the virus, four times as likely to be hospitalized. It is really, really devastating and i can even say right now that the provisions are in this bill that would help for grand parent provide for dependent grand children if something happens to them, thats huge for families. In addition, students depending who unfortunately, because some of our families are going tout and risking themselves and their livelihood, they might be having to develop disabilities that will last for their entire lifetime to prevent them Getting Better jobs that pay better wages. Again, also being able to fix the eligibility for supplemental Social Security ip come, that really really does help people pay for health care, for medicine that they need and just really, just happy that these provisions are in this bill and all of the communities hurting during the economic state. Thank you. Mr. Chairman i had one more question, but im out of time. Thank you, ill yield back. Thank you so much. And recognized. Thank you for allowing me to weigh in on this important meeting. I do remember hearing about this and my mom was born in 1918 so i do recall the conversation about the lower benefits that learned about once she filed for Social Security, god rest her soul. I am so happy, mr. Larson, that you you that you brought this to our attention and proposed this fix. I guess my real question comes with the reluctance of our colleagues to fix this problem now. We already i have heard testimony from our actuary that were looking at about 5. 9 reduction so security benefits for those folks born in 1960 and to the extent that we can already anticipate that, im wondering why, with the brilliance of members op both side of the aisle in our exceptional staff on ways and Means Committee and our actuaries, why we cant write provisions within this bill so theyre adjustable once we get the exact measurements after 2021 . I guess i am not dd i think if we were to wait to start this process, my fear would be that there would be people who didnt know about it, like my mom didnt, would for nofault of their own find that they need to retire at 62 and maybe would have tried to hold out a little bit longer. I guess i am not clear and maybe i should address it to our actuary and maybe to max as well, what do you think that t the, that the delay would cause . What kind of complication would that cause . Well [inaudible] let me just briefly mention that my working with representatives of the subcommittee and all of your staff and were hopeful that you will definitely pass the legislation for this in timely fashion. I think the one comment making, the proposal that has been pushed forward by chairman larson and the proposal in the senate, neither one of them would actually have any effect. If it turns out in fact that the average wage index does not drop from 2019 to 2020. So, its in effect automatically adjustable and ent act that today and turns out we are wrong assuming that will drop 2019 to 22. It would have no effect. If the drop that were suggesting okay. Let me ask this, is there any consequence to the recipient if they start drawing their benefit and we dont do anything . Would it be more difficult to go back and make those adjustments than it would to have this law in place before these recipients start becoming eligible and drawing disability versus doing it now . Let me just speak again. If in fact you were to enact this legislation, but not until after we got into 2022, which is a long way off, then of course people would initially start to receive benefits that would be lower based on awi, assuming it goes down in 2020. But even if you were to enact it then. Its possible to go back and have the. Again not enough to start out to be elevated by the place. It would not be a permanent decrease in their abilities. Automatic, let me ask a quick question to mr. Roach. Why would a payroll tax cut fundamentally undermine Social Security . Because the payroll, at that cuts for Social Security. Medicare it seems its a back way to get something done to eliminate Social Security. That Social Security is solvent and we can work to keep it solvent. If we eliminate the payroll tax there would be no funds going into Social Security and some on the Silver Lining will say we dont have the money. And simultaneously, its caulked wi caulked talked about and youve heard im going to bankruptcy terminating and eliminating pension funds. Theres a lot of tension around the idea of eliminating the payroll tax. It will not help the economy and existing seniors would not be helped by the cuts. And quickly, max, theyre wrapping up about of my time expires. Im looking at the clock. You have the final question, go ahead. Thank you so much. Thank you, max. I just want to get back on the subject of this delay because we are being given the impression that we have all the time in the world to do this and i am wondering what your members are concerned about other than you already pointed out that this could be taken down the road and never stall. What are some of the other consequences you think among your membership . Oh, my. Can i not be heard . [inaudible] max . Okay. Mr. Chairman . Am i not being heard . No, i think max has got on mute. Okay. You know, it took mow longer to than to prepare my testimony. [laughter]. Can you hear me . We can hear you. You know, i was listening careful to your question, such a thoughtful question and mr. Goss made an important point. In my mind, a lot of members on both sides of the aisle can support the idea of fixing this and the question is why the urgency . Why dont we wait to see . This is a very modern fix, this is not putting a big number out there for those people born in 1960. This is more like insurance, in my mind. Let not reduce benefits or someone born in 1960 that are less than someone born in 1959. Thats pretty modest. Were not i dont think the chairmans proposal is asking for the moon and the fact that it can be adjusted easily. Again, this is insurance so that people are not hurt needlessly because of an un situati situation. Situation. Again, thank you, max, and i want to thank you for joining us and thank you for our students. I would like to give my good friend and colleague a chance because i interrupted him if he wanted to have a last word, et cetera before we again thank the witnesses, et cetera. I appreciate that opportunity, chairman, this is an important committee, its important for us as members of the ways and means to help folks how do we make Social Security sustainable Ongoing Program and you know, as a former state treasure erin a my background as an engineer, i deal a lot with data and facts and id rather make sure we have the right facts before us before we move forward with a solution that may not correct and may not work this all cases. So thank you very much for that opportunity to say that. Thank you. Thank you, again, sir, and i want to thank all the witnesses as well for your expert testimony. I appreciate you taking your time and let us all have our sleeves rolled up so to speak, ab shoulder to the wheel and let us hope that before we adjourn at all, provide the American People with a solution to concerns that have been raised here this afternoon during this hearing. Thank you so much. And with that, this meeting is adjourned. I just would like to remind everyone, the members will have two weeks to submit written questions to be answered later in writing. Those questions and your answers made a part of the formal hearing record. With that, the subcommittee on Social Security stands adjourned. Thank you. Thank you, mr. Chairman. Thank you, mr. Chairman. Cspan has unfiltered coverage from congress, the white house, the supreme court, and Public Policy events. You can watch all of cspans Public Affairs programming on television, online or listen on our free radio app and be a part of the conversation through washingtons program or social media. 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