[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]





 
               PROTECTING AND IMPROVING SOCIAL SECURITY:

                      ENHANCING SOCIAL SECURITY TO

                      STRENGTHEN THE MIDDLE CLASS

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 12, 2019

                               __________

                           Serial No. 116-11

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
         
         
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]         



                            ______

             U.S. GOVERNMENT PUBLISHING OFFICE 
 36-239                WASHINGTON : 2020
         
         
         


                      COMMITTEE ON WAYS AND MEANS

                RICHARD E. NEAL, Massachusetts, Chairman

JOHN LEWIS, Georgia                  KEVIN BRADY, Texas
LLOYD DOGGETT, Texas                 DEVIN NUNES, California
MIKE THOMPSON, California            VERN BUCHANAN, Florida
JOHN B. LARSON, Connecticut          ADRIAN SMITH, Nebraska
EARL BLUMENAUER, Oregon              KENNY MARCHANT, Texas
RON KIND, Wisconsin                  TOM REED, New York
BILL PASCRELL, JR., New Jersey       MIKE KELLY, Pennsylvania
JOSEPH CROWLEY, New York             GEORGE HOLDING, North Carolina
DANNY K. DAVIS, Illinois             JASON SMITH, Missouri
LINDA SANCHEZ, California            TOM RICE, South Carolina
BRIAN HIGGINS, New York              DAVID SCHWEIKERT, Arizona
TERRI A. SEWELL, Alabama             JACKIE WALORSKI, Indiana
SUZAN DELBENE, Washington            DARIN LAHOOD, Illinois
JUDY CHU, California                 BRAD R. WENSTRUP, Ohio
GWEN MOORE, Wisconsin                JODEY ARRINGTON, Texas
DAN KILDEE, Michigan                 DREW FERGUSON, Georgia
BRENDAN BOYLE, Pennsylvania          RON ESTES, Kansas
DON BEYER, Virginia
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
TOM SUOZZI, New York
JIMMY PANETTA, California
STEPHANIE MURPHY, Florida
JIMMY GOMEZ, California
STEVEN HORSFORD, Nevada

                     Brandon Casey, Staff Director

                 Gary J. Andres, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON SOCIAL SECURITY

                 JOHN B. LARSON, Connecticut, Chairman

BILL PASCRELL, JR., New Jersey       TOM REED, New York
LINDA SANCHEZ, California            JODEY ARRINGTON, Texas
DAN KILDEE, Michigan                 DREW FERGUSON, Georgia
BRENDAN BOYLE, Pennsylvania          RON ESTES, Kansas
BRAD SCHNEIDER, Illinois
BRIAN HIGGINS, New York

               Kathryn Olson, Subcommittee Staff Director

            Amy Shuart, Minority Subcommittee Staff Director


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of March 5, 2019, announcing the hearing................     2

                               WITNESSES

Joan Ruff, Chair, Board of Directors, American Association of 
  Retired Persons (AARP).........................................     7
Kate C. Farrar, Executive Director, Connecticut Women's Education 
  and Legal Fund.................................................    17
Maya Rockeymoore Cummings, President and Chief Executive Officer, 
  Global Policy Solutions........................................    26
Joseph Semprevivo, President and Chief Executive Officer, 
  Joseph's Lite Cookies..........................................    38
Yanira Cruz, President and Chief Executive Officer, National 
  Hispanic Council on Aging......................................    42
Ilana Boivie, Research Economist, International Association of 
  Machinists and Aerospace Workers and American Federation of 
  Labor and Congress of Industrial Organizations (AFL-CIO).......    49

                        QUESTION FOR THE RECORD

Question from Representative Jodey Arrington to Joan Ruff, Chair, 
  Board of Directors, American Association of Retired Persons 
  (AARP).........................................................    72

                       SUBMISSIONS FOR THE RECORD

John B. Larson, Chairman, Subcommittee on Social Security, SSA 
  Actuary Report on H.R. 860, the Social Security 2100 Act.......    74
The Senior Citizens League (TSCL)................................    99
Michael G. Bindner, Center for Fiscal Equity.....................   104


                        PROTECTING AND IMPROVING

                            SOCIAL SECURITY:

                      ENHANCING SOCIAL SECURITY TO

                      STRENGTHEN THE MIDDLE CLASS

                              ----------                              


                        TUESDAY, MARCH 12, 2019

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 2020, Rayburn House Office Building, Hon. John B. Larson 
[Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]
    
    

ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Tuesday, March 5, 2019
SS-1

              Social Security Subcommittee Chairman Larson

                  Announces a Subcommittee Hearing on

               Protecting and Improving Social Security:

                      Enhancing Social Security to

                      Strengthen the Middle Class

    House Ways and Means Social Security Subcommittee Chairman John B. 
Larson (D-CT), announced today that the Subcommittee is beginning a 
hearing series on ``Protecting and Improving Social Security.'' The 
first hearing in the series, ``Protecting and Improving Social 
Security: Enhancing Social Security to Strengthen the Middle Class,'' 
will take place on Tuesday, March 12, 2019, at 10:00 a.m., in room 2020 
of the Rayburn House Office Building.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
written comments for the hearing record must follow the appropriate 
link on the hearing page of the Committee website and complete the 
informational forms. From the Committee homepage, http://
waysandmeans.house.gov, select ``Hearings.'' Select the hearing for 
which you would like to make a submission, and click on the link 
entitled, ``Click here to provide a submission for the record.'' Once 
you have followed the online instructions, submit all requested 
information. ATTACH your submission as a Word document, in compliance 
with the formatting requirements listed below, by the close of business 
on Tuesday, March 26, 2019. For questions, or if you encounter 
technical problems, please call (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but reserves the right to 
format it according to guidelines. Any submission provided to the 
Committee by a witness, any materials submitted for the printed record, 
and any written comments in response to a request for written comments 
must conform to the guidelines listed below. Any submission not in 
compliance with these guidelines will not be printed, but will be 
maintained in the Committee files for review and use by the Committee.
      
    All submissions and supplementary materials must be submitted in a 
single document via email, provided in Word format and must not exceed 
a total of 10 pages. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.
      
    All submissions must include a list of all clients, persons and/or 
organizations on whose behalf the witness appears. The name, company, 
address, telephone, and fax numbers of each witness must be included in 
the body of the email. Please exclude any personal identifiable 
information in the attached submission.
      
    Failure to follow the formatting requirements may result in the 
exclusion of a submission. All submissions for the record are final.

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you require special accommodations, please call 
(202) 225-3625 in advance of the event (four business days' notice is 
requested). Questions regarding special accommodation needs in general 
(including availability of Committee materials in alternative formats) 
may be directed to the Committee as noted above.
      
    Note: All Committee advisories and news releases are available at
    http://www.waysandmeans.house.gov/

                                 

    Chairman LARSON. The Social Security Subcommittee of the 
Ways and Means Committee will come to order, please.
    I want to thank everybody for joining us this morning, and 
I especially feel honored to be here this morning in the Sam 
Johnson room. Having had the opportunity to serve with Mr. 
Johnson was something I will always treasure. Such an iconic 
American hero, who I don't think enough Americans knew about 
his sacrifice in Vietnam and his stay in the Hanoi Hilton, and 
also, the very decency of the man in the way that he always 
conducted himself, both in this Committee and out of office. 
What a great debt of gratitude that we owe to Sam Johnson. And 
I think only fitting that this room is named after him.
    I know the Republican Leader will have something to say 
about Mr. Johnson as well before we begin our opening remarks. 
And did you want to----
    Mr. REED. Mr. Chairman, if you would yield.
    Chairman LARSON. I certainly will.
    Mr. REED. Mr. Chairman, thank you for recognizing our 
colleague Sam Johnson on the Republican side. As the Chairman 
indicated, he is truly a gentleman, truly a hero to generations 
of Americans given his experience in Vietnam. And Shirley and 
him, you know, obviously were a pair of true American leaders, 
American citizens. And so we appreciate your recognition, and 
we join you in recognizing the service of Sam Johnson. And 
being here in his Committee room, named in his honor, I think 
is rightfully recognized in the work he did, and as you said, 
he did it in a way that is the way it should be done. So I look 
forward to that tradition. And I thank you, Mr. Chairman, for 
recognizing our colleague.
    Chairman LARSON. Thank you, Tom, I really appreciate it.
    Well, today is the first hearing in a series of hearings 
that we are going to have on how to protect and enhance Social 
Security. This is, I would say, a historic moment. Why would I 
say that? The last time Social Security was seriously taken up 
by this Subcommittee was 1983. That was 36 years ago. It has 
been 36 years and a long time, at least 8 years since we had 
any significant hearing on looking at Social Security in both 
enhancing it and moving it forward into the next century. It is 
long overdue.
    But I am honored and delighted both to be serving with Tom 
Reed, a person who cares as deeply as I do, and all the Members 
on this dais, about making sure that Social Security is there 
for us in the future. I think we share a common bond, and I 
think what you can expect from this Subcommittee is that we 
will roll up our sleeves and begin to do the work that needs to 
be done.
    We care deeply about a program that everybody recognizes is 
the Nation's premier insurance program. What I found when I 
went out across the Nation, and I have been to about 36 States 
or so doing this, I found that most Americans today, and I 
think this is true in talking to our colleagues on both sides 
of the aisle, would really like to see Congress be involved 
with solutions. They are tired of the rhetoric, they are tired 
of people going to their separate corners and digging in and 
not getting anything done. That simply cannot stand anymore. 
What I see in this group here, the people on this dais, is a 
group that is prepared to roll up their sleeves and get after a 
solution to a problem that we all know exists.
    I want to give the President of the United States credit. 
He stood on a stage with 16 other Republicans who tried to get 
him to say that this was an entitlement plan, and he would not. 
He had written about it and he had spoken clearly about it. He 
said it was an earned benefit and that he would not cut it. He 
understood how important it was to future generations. What we 
are addressing in these hearings is that Congress hasn't paid 
enough attention to Social Security to make sure it's 
actuarially sound. First and foremost, that is our obligation.
    And as soon as 2034, we know that Social Security, about 15 
years away, would face severe cuts. More than 62 million 
Americans are already receiving Social Security benefits. We 
have a responsibility to act and strengthen the program. Not to 
act, to do nothing is not an alternative here. It would amount 
to a 25 percent benefit cut to people in 2034. In other words, 
for a person who was making $50,000 a year throughout their 
working career, they would actually be living at a poverty 
level in terms of benefits they would receive from Social 
Security after those cuts.
    The choice is simple. We need to act bipartisanly, but we 
need to act. We have come to this endeavor to put our shoulders 
to the wheel and move the Nation and its people forward. Social 
Security is not an entitlement. It is the insurance that people 
have paid for. People know this and can check it out by just 
looking at their pay stub. They know that FICA stands for the 
Federal Insurance Contribution Act. Whose contribution? Theirs. 
They understand that they have paid into this throughout a 
lifetime.
    It is not their fault that the Congress hasn't acted to 
make sure that Social Security is actuarially strong. It has 
been Congress' lack of attention that has put us in this place 
where we are. Nobody's getting rich off of Social Security. 
They are using these benefits to pay for essentials. This money 
goes straight back into the economy.
    Consider a 2013 study commissioned by the AARP, which shows 
that Social Security benefit payments support more than 9 
million jobs and add almost $1.4 trillion in output to the 
overall American economy. For every dollar Social Security 
benefits generate, in return there is about $2 in economic 
output. If we were to let the 25 percent reduction happen in 
2034 because we didn't do anything to strengthen the program, 
it could cost the economy about 2.3 million jobs and $349 
billion in economic output. Doing nothing doesn't only impact 
beneficiaries; it would impact the entire economy.
    Not only do we need to work to protect the program, but we 
need a solution to make the program, as actuaries say, 
``sustainably solvent;'' in other words, making sure Social 
Security remains strong throughout this century, not just for 
seniors, but for millennials too. Nowhere on the private 
insurance market can you find a plan like Social Security that 
offers a pension plan, disability insurance, and life insurance 
for spouses and dependents. This is the working American's 
retirement guarantee. It is why we say that Social Security has 
the full faith and credit of the United States Government.
    For nearly two-thirds of beneficiaries, Social Security 
represents the majority of their income. For more than one-
third, it represents more than 90 percent of their income. Our 
seniors are not a burden. I have heard so many people say to 
me, well, you know, I want to see this change, but I just don't 
want to be a burden on my family. None of us on this dais or 
out in this audience will look at any of their parents, their 
aunts, their sisters and say, you are a burden. In fact, they 
have been an inspiration. And one with that kind of courage and 
that kind of determination, oh, I don't want to burden my 
family, my son or my daughter, the one that lives in Montana or 
Texas, they send me what they can, but I don't want to be a 
burden. They are not a burden. They are citizens of the United 
States who have paid into a system that is Congress' 
responsibility to make sure is actuarially sound, and this 
Committee will do that.
    Without Social Security, the senior poverty rate would be 
nearly 40 percent, but because of Social Security, the senior 
poverty rate is less than 10 percent. It isn't just the 10,000 
baby boomers a day, according to economists at the Federal 
Reserve, on average--and if we could throw up that slide--
households have not recovered. And this is an important issue 
for us. Households have not been able to recover the wealth 
they lost during the Great Recession 10 years ago.
    Those 50 to 64 years old are worried about their immediate 
retirement. Social Security is a lifeline that people rely on. 
This should be a daunting statistic for all of us. When 90 
percent of American families, working families, still find 
themselves underwater, on average, after the Great Recession, 
we have to make sure we are doubling down on our efforts to 
make sure the only guarantee, the only certainty they know that 
will be there for them is Social Security. And it is our 
responsibility to make sure that has happened.
    As I discussed with both the Republican Leader and the 
Members here, we are going to have hearings. Someone suggested 
that we do a lot of informal bipartisan briefings as well. I 
think those are all good and constructive ideas. We are going 
to work together to come up with a product and a solution. And 
hopefully, we are able to work together to arrive at a solution 
and take action. But not to act is not an option. Hopefully, we 
are able to act together. But whether together or alone, this 
Committee will act to move Social Security forward.
    And with that, I recognize my good friend and Republican 
Leader, Tom Reed.
    Mr. REED. Thank you, Mr. Chairman. And thank you for those 
words and that commentary. I think my comments today will echo 
much of what you said.
    So, Mr. Chairman, I thank you for holding this hearing 
today on a topic we can all agree upon, strengthening and 
protecting Social Security. This is an important topic to all 
Americans and more helpful to the average American than efforts 
by many on the other side of the aisle to rush to impeach the 
President.
    Mr. Chairman, today I want to tell you the story of Betty. 
Her picture is up on the--we will give the technical people an 
opportunity to pull that up.
    To tell you the story of Betty, at age 14, Betty was 
diagnosed with rheumatic fever and told she would not live a 
long life and would never have children. But she grew strong, 
healthy, and married a decorated World War II veteran--also 
depicted here today.
    Chairman LARSON. She looks a lot like you, Tom.
    Mr. REED. I think she does, but with hair.
    He was a career military officer who received the Silver 
Star medal after being wounded saving the lives of his platoon 
pinned down by Nazi machine gun fire with only a sidearm 
pistol.
    Together, Betty and her husband, Thomas, had 12 beautiful 
and healthy children, but tragedy struck when Thomas was only 
48. He died when their youngest child was just 2 years old, 
leaving Betty to raise all 12 kids on her own. How did Betty 
have the confidence that she would not have to raise her 
children on the streets? Social Security.
    But that was just a piece of the puzzle. She also relied on 
her husband's military retirement and life insurance death 
benefit. Betty worked with what she had to put food on the 
table, a roof over her children's head, and clothes on their 
back. Using a part of the life insurance proceeds she bought a 
neighborhood house she could rent out to generate extra monthly 
income, because she recognized the Social Security check was 
not going to be enough to provide the quality of life she 
wanted for her children.
    To further provide for her family, she went to work in the 
local vineyards and babysat for many families in the area, I 
believe relying on under-the-table cash payments for day wages, 
because she could not afford to pay the taxes on the income or 
lose those benefits. She also brought her youngest son along 
with her to work, because that was the only form of daycare she 
could afford.
    Mr. Chairman, that youngest son was me, Tom Reed. Betty 
Barr Reed was my mother. And like my family, many Americans 
rely on earned Social Security benefits when a family member 
reaches retirement age, faces a work-limiting disability, or 
passes away.
    As we sit here today, it is without a doubt, as the 
Republican Leader of Social Security, I care deeply about 
ensuring Social Security is here today, here tomorrow, and here 
for generations to come. And I guarantee my fellow Republicans 
on this Subcommittee, Mr. Chairman, are also committed to 
Social Security and ensuring the program is solvent for every 
generation. The difference, however, with the Majority is we 
can secure these benefits without tax increases.
    Our principles in this mission are simple: Long-term 
economic growth by encouraging work, not penalizing it; equal 
treatment for public servants; acting now to defend those 
future generations' benefits; and protecting the most 
vulnerable people through focus reforms.
    Mr. Chairman, you might have noticed our principles spell 
out the acronym LEAP. That is because Republicans want to leap 
with you on a bipartisan basis so we can all make sure 
Americans can count on Social Security to be there for them, 
for their children, and their many grandchildren to come.
    And as we know from history, successful Social Security 
reform only has a fair chance to succeed if it is done on a 
bipartisan basis. And we agree with you, Mr. Chairman, we 
cannot wait until the brink of the crisis as Congress did in 
1983 to act because the abyss will be too deep at that point to 
overcome. The time to act is now.
    So, Mr. Chairman, let's leap together today to answer this 
historic call for leadership in a town often lacking such 
courage, even when it is so clearly needed. We do this so all 
Americans will have the peace of mind knowing they can count on 
Social Security to provide the security it did for that little 
girl, that young lady who became my idol and we lost too early 
at the age of 72, and my greatest inspiration, Betty Barr Reed.
    Thank you, Mr. Chairman, and we stand ready to get to work.
    Chairman LARSON. I thank the Republican Leader, and it is 
going to be our endeavor to make sure that Betty is proud of 
what this Committee and Subcommittee does.
    And this is a historic moment. The last time this Committee 
acted was in 1983. Ronald Reagan was the President of the 
United States. Tip O'Neill was Speaker. The Republicans 
controlled the Senate, the Democrats controlled the House, the 
Republicans controlled the Presidency. It was no different than 
it is today, except Ronald Reagan was adamantly opposed to 
advancing Social Security. He was convinced by leaders like Tom 
Reed and others that this was the right thing to do for the 
American people, and they did.
    President Trump, to his credit, has already made that 
statement. Now what we have to do is bring everybody together, 
so that mothers in a similar situation to that of Betty are 
able to do that. And we have a panel that has been assembled 
that are capable of doing just that, and we are anxious to hear 
their testimony and get on with the questions. I am going to 
introduce all of them and then start.
    First, I would like to welcome Joan Ruff of the AARP. Next 
is Kate Farrar of Connecticut's Women's Education and Legal 
Fund, from my home State of Connecticut. After that, we have 
Dr. Maya Rockeymoore Cummings, no stranger to this Committee, 
no stranger to the Nation, who is in charge of Global Policy 
Solutions. Then we have Joseph Semprevivo--did I pronounce it 
right?
    Mr. SEMPREVIVO. Yeah, that is close enough.
    Chairman LARSON. Mr. Semprevivo is with Joseph's Lite 
Cookies. Next is Yanira Cruz of the National Hispanic Council 
on Aging. And finally, Ilana Boivie, of the International 
Association of Machinists and Aerospace Workers, representing 
the AFL-CIO.
    Ms. Ruff, would you begin.

  STATEMENT OF JOAN RUFF, CHAIR, BOARD OF DIRECTORS, AMERICAN 
             ASSOCIATION OF RETIRED PERSONS (AARP)

    Ms. RUFF. Thank you.
    Good morning. On behalf of AARP's 38 million members and 
all Americans age 50 and over, we thank you, Chairman Larson, 
you, Ranking Member Reed, and all Members of this Subcommittee, 
for this opportunity to testify today on the importance of 
Social Security, not only to retirees, but also disabled 
workers, families, and the American economy. AARP has members 
in every State and every American territory, including, Mr. 
Chairman, over 115,000 members in your congressional district 
and, Ranking Member Reed, more than 114,000 members in your 
23rd Congressional District of New York.
    As was pointed out, the last time that major amendments to 
Social Security were made was in 1983. Since then, we have to 
recognize that the availability of defined benefit pensions 
offered to workers has declined by more than 70 percent. And as 
I am sure you know, today, most workers who have a workplace 
retirement plan are in a 401(k) or similar type of plan and 
are, therefore, subject to vagaries of the market. And half of 
all employees have jobs that offer absolutely no retirement 
plan at all.
    Social Security is the only lifetime, inflation-protected, 
guaranteed source of retirement income that most Americans 
have. I want to share with you what Lottie Prushinski, who is 
an AARP member from Southington, Connecticut, told us about how 
important Social Security is to her. And this reflects the 
sentiments of millions of Americans.
    ``During my working years, which started when I was 16, I 
paid into the Social Security system until I retired. Being at 
the very low end of the middle class, without my Social 
Security benefits, my income would be below the poverty level. 
I want to continue to live with dignity and financial 
independence and not rely on others. My current Social Security 
benefits allow me to do that.''
    Without Social Security, nearly four in ten Americans 65 
and older, like Lottie, would be living in poverty. Nearly one 
in four women ages 65 and older are part of families that 
receive at least 90 percent of their income from Social 
Security. The reliance on this program in minority communities 
is even more pronounced.
    It is no wonder that in an AARP poll that we conducted last 
year, respondents across three generations overwhelmingly said 
that Social Security is very important to their retirement; 64 
percent of millennials, 79 percent of Gen Xers, and 90 percent 
of baby boomers.
    In addition to anchoring the income of older Americans, 
Social Security provides economic security for families who 
face a loss of income because of disability or the death of a 
wage earner. It is extremely important to AARP's members that 
Social Security provide adequate benefits, not only for them, 
but also for their children and grandchildren.
    The Social Security trustees have made it very clear, and 
AARP will continue to stress that Social Security has enough 
funding to pay 100 percent of benefits until 2034. It is also 
true, unless Congress acts, benefits will be reduced by 21 
percent, beginning in 2034 and through the end of the century. 
A cut this deep would result in severe hardships for millions 
of Americans, especially considering how modest benefits are 
now today.
    Older Americans believe Congress and the White House need 
to take action so that hard-working Americans receive the full 
benefits they have earned and that Social Security will 
continue to be there for our children and grandchildren. That 
is why AARP consistently asks candidates and lawmakers to share 
their plans for the future of Social Security. Our members' 
enthusiasm to hear from candidates and lawmakers on this topic 
is strong.
    During the 2016 election cycle alone, we collected 1.4 
million petitions, had phone calls with 2.5 million members, 
and nearly 26 million people took action on social media. 
Clearly, AARP members want to engage on this very critical 
topic.
    Social Security has evolved over more than 80 years to 
address emerging needs and to adapt to new realities. We see 
today's hearing as an important opportunity to start a 
constructive and expansive dialogue on the future of Social 
Security and how best to update the program so that it better 
reflects changes in demographics, longevity, pensions, work 
patterns, health, and technology.
    And we commend you, Mr. Chairman, for your leadership in 
developing a detailed proposal to strengthen Social Security 
for the next 75 years. And we hope all Committee Members will 
share their ideas for the program's future with our members and 
the American public. AARP recognizes that your challenge lies 
not only in identifying the most effective policies to improve 
the lives of Americans, but also to secure the kind of 
bipartisan consensus and public support that long-lasting 
solutions demand. We at AARP offer our support as you engage 
the public and develop that consensus. And we commit to you 
that we will have an open dialogue with our members on this 
vital topic.
    Again, thank you, Chairman Larson and Ranking Member Reed, 
for inviting us to share our views.
    [The prepared statement of Ms. Ruff follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    

                                 
    Chairman LARSON. Thank you, Ms. Ruff.
    I should have also noted at the start that each of your 
statements will be part of the record in its entirety. I would 
ask that you summarize your testimony in 5 minutes or less. To 
help you with that, there is a timing light on your table. When 
you have 1 minute left, the light will switch from green to 
yellow, and finally to red when the 5 minutes are up.
    But I thank you, Ms. Ruff, for your testimony.
    And with that, Ms. Farrar, would you begin.

 STATEMENT OF KATE C. FARRAR, EXECUTIVE DIRECTOR, CONNECTICUT 
                WOMEN'S EDUCATION AND LEGAL FUND

    Ms. FARRAR. Good morning. Thank you, Mr. Chairman, Ranking 
Member Reed, and all Members of the Subcommittee, for this 
opportunity to testify today. I am Kate Farrar, Executive 
Director of the Connecticut Women's Education and Legal Fund. 
We are a statewide nonprofit organization that advocates for 
and empowers women and girls across Connecticut, especially 
those who are marginalized and underserved.
    At CWEALF, we hear from women every single day who struggle 
financially and often rely on Social Security to make ends 
meet. Maggie, a 63-year-old retiree with several chronic health 
conditions from New Britain, Connecticut, says that she relies 
on her Social Security income to put food on the table. She 
says: I get scared when legislators talk about doing away with 
or privatizing Social Security. Please do not take away my 
Social Security.
    Corella, a woman from Hartford, Connecticut, who suffers 
from epileptic seizures on daily medication says: I am afraid 
that if Medicare is reduced and I have to pay more for my 
medications, I just wouldn't be able to afford it. My only 
income is Social Security.
    Social Security benefits are critical to support our 
Nation's women and keep them out of poverty. In 2016, nearly 
two-thirds of all people in poverty age 65 and older were 
women. Without the protection and expansion of Social Security, 
long-term economic stability is just unachievable for women.
    According to the Institute for Women's Policy Research, a 
single elder without a mortgage living in Hartford County in 
Connecticut can expect to pay at least $2,046 every month for 
basic living expenses. Yet the average Social Security benefit 
just in January 2019 was only $1,461, nearly $600 less than the 
retiree's necessary monthly living expenses.
    While the protections of Social Security benefit men and 
women of all racial backgrounds and income levels, the program 
is particularly important for women, especially women of color, 
because women face many barriers in the workplace that hinder 
their ability to make a living wage and save for retirement. 
Despite impressive strides by women in the workplace, the 
gender wage gap is still 20 percent, with women earning only 80 
percent of what men earn. The gender pay gap is even more 
significant for women of color. Plus, there are more than 15.3 
million low-wage female workers who work without access to 
benefits such as leave and pensions. Also, women take leave or 
engage in part-time work more than men, disproportionately 
shouldering caregiving responsibilities.
    According to the Bureau of Labor Statistics, nearly twice 
as many women as men work part time, which typically means 
juggling child care, elder care, and other homefront duties.
    One of the greatest factors contributing to financial 
hardship for women over 65 is the reality that many will spend 
at least a portion of their retirement years alone. Female life 
expectancy is currently 4.9 years longer than for males. The 
traditional three-pronged model for retirement of payments from 
Social Security, pensions, and private savings is unrealistic 
for most women. Women's economic security throughout retirement 
depends largely and oftentimes solely on Social Security 
benefits. Pensions and private savings are often unavailable 
and inadequate for women and their particular worklife 
patterns.
    When Ida May Fuller received the first monthly recurring 
Social Security check in 1940, she could not have foreseen that 
the generations of women after her depend on Social Security to 
make ends meet. Now is the time for Congress to make sure that 
Social Security is protected and strengthened for years to 
come.
    Thank you for the opportunity to testify today and elevate 
the voices of priorities of our Nation's and Connecticut's 
women. Thank you, Mr. Chairman.
    [The prepared statement of Ms. Farrar follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
      
                            
    Chairman LARSON. Thank you, Ms. Farrar.
    Now, Dr. Rockeymoore Cummings, if you would testify.

  STATEMENT OF MAYA ROCKEYMOORE CUMMINGS, PRESIDENT AND CHIEF 
               EXECUTIVE OFFICER, GLOBAL POLICY 
                           SOLUTIONS

    Ms. CUMMINGS. Good morning, Chairman Larson, Ranking Member 
Reed, and Members of the Ways and Means Committee, Social 
Security Subcommittee. I am delighted to speak to you today on 
an issue that is so important for all Americans of all 
backgrounds and at every stage in life.
    Social Security is our Nation's ultimate family-values 
program, providing income protections for people at every stage 
of life, including those who have retired after a lifetime of 
hard work, adults who have become disabled in their prime 
working years, dependents of deceased workers, and the 
dependent family members of seniors and disabled workers.
    I would like to place a laser focus on how Social Security 
especially helps vulnerable groups whose opportunities for 
economic success have been diminished by longstanding racial 
and ethnic, economic and health disparities that stem from a 
legacy of social, economic, and political discrimination in our 
country.
    African American retirees, for example, have significantly 
less wealth and lower incomes than White retirees. Eighty-three 
percent of African American seniors lack the retirement assets 
they need to last the remainder of their lifetimes. 
Additionally, more than two-thirds of the African Americans are 
liquid asset poor, meaning that their combined assets alone are 
not enough to make ends meet.
    So Social Security becomes an essential component of their 
retirement, with over 46 percent of African American seniors 
age 65 and over relying on Social Security for at least 90 
percent of their income, compared to only 30 or 35 percent for 
Whites.
    Well-documented health disparities also contribute to 
disproportionately greater incidents of disability, as well as 
shorter life expectancies for African Americans. So Social 
Security's disability and survivor benefits become an essential 
tool for helping African American families make ends meet when 
faced with these life-altering events.
    Case in point, disability insurance benefits made up about 
75 percent of personal income for 50 percent of African 
Americans receiving them in 2013. And while 28 percent of 
African Americans receiving disability insurance benefits in 
that year lived in poverty, that number would have jumped to 57 
percent if they didn't have Social Security disability 
benefits.
    Social Security is also essential for African American 
children and their families. A 2016 study conducted by my 
organization found that Social Security made up 39 percent of 
the annual income for White families with children, but 
accounted for almost half the income, 45.6 percent of African 
American families with children in 2014. For African American 
child beneficiaries, the poverty rate would increase from 40 
percent to 58 percent without Social Security.
    I would like to end by focusing on widely discussed 
proposals for reining in Social Security's costs. Despite lofty 
rhetoric touting the need for deficit reduction and claims of 
saving Social Security for our children, these so-called 
entitlement reforms are a covert form of racial economic 
exclusion that will have the effect of undermining the already 
economically insecure state of families of color, who are a 
growing share, by the way, of our Nation's population.
    For those who believe that race has nothing to do with 
Social Security, think again. Although the programs benefit 
formula is race neutral on its face, in reality, Social 
Security effects groups of people in different ways because of 
the interplay between program rules and demographic factors. 
For example, benefits are calculated based on years of work and 
amount of earnings, marital status, number of dependents, and 
state of health, but each racial and ethnic group has a 
different average work history, earnings pattern, health 
status, and life expectancy profile due to the long shadow of 
racial inequality in our country. African Americans, for 
example, are more likely than Whites to have suffered 
unemployment, to be in lower paying jobs, to be in physically 
demanding jobs, to have poor health, and to have shorter life 
expectancies.
    As a result of these socioeconomic disparities, proposals 
for reforming Social Security can create winners and losers 
based on race, ethnicity, class, and gender. For example, 
raising the retirement age disadvantages those with shorter 
lifespans, a group that is blacker, browner, poorer, more male, 
and more blue collar than those who live longer.
    So there is a fairer way to reform Social Security, and I 
will be happy to talk about that in the questions and answers. 
Our plan focuses on boosting benefits across the board by 
raising the cap on payroll taxes and offering coverage to all 
newly hired State and local workers, as well as increasing the 
payroll tax by a fraction of a percentage over a 20-year 
period.
    Mr. Chairman and Ranking Member, thank you for giving me 
the chance to share my views today.
    [The prepared statement of Ms. Cummings follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
     

                                 
    Chairman LARSON. Thank you, Dr. Rockeymoore.
    And now, Mr. Semprevivo.

 STATEMENT OF JOSEPH SEMPREVIVO, PRESIDENT AND CHIEF EXECUTIVE 
                 OFFICER, JOSEPH'S LITE COOKIES

    Mr. SEMPREVIVO. Thank you, Chairman Larson, Ranking Member 
Reed, and all Members of the Subcommittee. I am Joseph 
Semprevivo, owner of Joseph's Lite Cookies. We make sugar-free 
cookies and pancake syrup to share with diabetics across the 
country. We are based out of Florida. I am also here 
representing 30 million small business owners and the 60 
million people they employ. So thank you for inviting me to 
speak about the impact of Representative Larson's proposed tax 
increase on small business and their middle-class workers.
    Representative Larson, your proposal to raise the payroll 
tax over a number of years to 2.4 percent up to 14.8 percent 
and apply that to all earned income would hurt American small 
businesses, the middle class, and entrepreneurs. And these are 
the very people that we are trying to protect.
    While the plan calls for a doughnut-hole exemption between 
the current cap of $132,900 and $400,000 of earnings, the 
ceiling is not indexed to inflation, meaning that within a 
couple of decades, all employees, no matter their income level, 
would be subject to it. So eventually, an employee at a company 
like mine that is earning $200,000 a year, that is an 
additional tax for the employer of $2,400.
    Let's consider the impact on a business employing 50 
employees at $50,000 a year, so $2.5 million in gross payroll. 
Their payroll tax will go up by $30,000 a year to $185,000. 
That is just the employer's portion of that contribution. The 
sad part of it is the individuals that could be hired with that 
additional $30,000, the raises that could be given from that 
$30,000, or the expansion that could happen for a small 
business. This payroll tax would be funded by holding off on 
potential hiring or raises or even companies having to layoff, 
because it is an additional liability that they have to incur.
    The tax increase also directly tax wages and wage 
increases, which is peculiar public policy, a strategy given 
out by the bipartisan push, to increase the wages of ordinary 
Americans. Every time I consider raising an employee's wages, I 
would then have to factor in the increased tax obligation to 
see if that raise still makes financial sense.
    For some small business owners that operate on super tiny 
profits, let's look at the restaurant industry as an example, 
their margins pivot around 3 percent. Labor makes up about one-
third of their expenses. So raising their labor cost by 1.2 
percent or eventually 2.4 percent could be enough to put some 
of them out of business. What I don't understand is how does it 
help Social Security when restaurants close down and employees 
lose their job? It just simply doesn't.
    And those negatively affected by this tax increase would be 
sole proprietors, which make up the vast majority, as we all 
know, of taxpayers in this country. Sole proprietors, though, 
pay both sides of the tax, equaling this 14.8 percent. So a 
sole proprietor making $100,000 a year would be paying $14,800 
out of their pocket, which would be an increase of $2,400 a 
year from what they are currently paying now.
    And I notice on this very distinguished panel you have 
assembled here today that there are no other small businesses, 
and I do know at the onset you said you were going to be doing 
more hearings. So if we look at ordinary Americans, middle-
class taxpayers on a panel like this, it could be really 
critical for this discussion and very important before moving 
forward with this tax increase. And I think you will find going 
across America and asking these middle-class taxpayers how do 
you feel about another tax increase, they would tell you that 
we are taxed enough already.
    Thank you, Mr. Chairman and Mr. Ranking Member.
    [The prepared statement of Mr. Semprevivo follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
   

                                
    Chairman LARSON. Thank you, Mr. Semprevivo.
    Mr. SEMPREVIVO. Yes, sir.
    Chairman LARSON. Thank you.
    Dr. Cruz.

    STATEMENT OF YANIRA CRUZ, PRESIDENT AND CHIEF EXECUTIVE 
          OFFICER, NATIONAL HISPANIC COUNCIL ON AGING

    Ms. CRUZ. Thank you, Mr. Chairman, and thank you, Ranking 
Member Reed, for holding this hearing today. At the outset, I 
want to just say that Social Security affects every American.
    Hispanics rely on Social Security for more of their 
retirement income over a longer time period due to their life 
expectancy. In addition, Hispanics comprise the Nation's 
largest ethnic minority group, with a population of 
approximately 57 million. Many Hispanics are among the working 
poor and depend on Social Security to ensure their economic 
security after a lifetime of hard work. A large number of 
Hispanics tend to work jobs that pay lower wages and are less 
likely to have pension coverage.
    More than 75 percent of Latinos rely on Social Security for 
at least half of their income. About 45 percent rely on Social 
Security for 90 percent or more of their income, and about 38 
percent rely on it for all of their income. Nearly 22 percent 
of Hispanic older adults ages 65 and over live below the 
Federal poverty level. And without Social Security, many more 
Hispanic older adults and their families would be living below 
the Federal poverty level.
    Hispanics face many healthcare related challenges upon 
retirement. Any threat to their Social Security benefits would 
further challenge and complicate their ability to stay healthy. 
Threats to Social Security could force Hispanics to make tough 
choices between healthcare, buying groceries, and paying their 
rent. Hispanics have the highest uninsured rate of any other 
group. Social Security benefits provide peace of mind.
    Social Security keeps Hispanic women from living in poverty 
in their golden years. Although many Hispanic women have 
overcome difficulties, attended college, and achieved many 
leadership positions, a larger number continue to experience 
severe inequities in pay. Hispanic women tend to sacrifice by 
taking flexible, low-end jobs, ensuring their ability to care 
for their families and provide caregiving. These jobs generally 
do not provide healthcare benefits or pension plans. Because 
Latinas earn less, they also save less. Latinas are also three 
times more likely to live in poverty than non-Hispanic White 
women. Twenty-five percent of Latinas age 65 years or older 
live in poverty. Only 26 percent of Hispanic women receive 
pension coverage, compared to 39 percent of both African 
American and non-Hispanic White women. Only 33 percent of 
Latinas have retirement income from savings or assets.
    As a result, Social Security makes up the bulk of Hispanic 
women's retirement income. And without Social Security, 60 
percent of Latinas over the age of 65 would live in poverty. 
Social Security remains the sole source of income for nearly 40 
percent of unmarried Latinas. Eighty-one percent of unmarried 
Latinas depend on Social Security for the majority of their 
retirement income. Latinas need a better plan for a secure 
retirement and not a reduction in benefits.
    Let me tell you about one of the people we work with every 
day. Berta Roque is an American citizen who naturalized from El 
Salvador. She immigrated to the United States in 1981 when she 
was 38 years old. Berta worked for 27 years in the cleaning and 
maintenance industry. She formally retired in 2008 when she 
turned 65 years old, but continued to work until 2017. Now, 
Berta is 75 years old and lives at Casa Iris, a housing 
facility for low-income older adults here in D.C. Casa Iris is 
owned and operated by the National Hispanic Council on Aging.
    After almost 40 years of work in the United States, Berta's 
sole source of income comes from Social Security. Berta's 
annual income from Social Security is $10,800, or $900 a month. 
When asked about her Social Security benefits, Berta told us 
Social Security's modest benefits are more important than ever 
to guarantee our economic security in the event of retirement 
or disability. She went on to say, if it wasn't for this 
benefit, I would be living out in the streets and eating from 
shelters, with no possibility to afford my medicines.
    Berta's monthly budget includes $275 a month for rent, 
about $250 for food, $150 for medicine, and $150 for car 
insurance and gas. After those expenses, Berta is left with $75 
for the entire month to pay for her basic necessities, and 
little luxuries like getting her hair cut.
    Berta asked me to convey the following message to you 
regarding the looming cuts to Social Security benefits. She 
says: We need to stay together in this battle. Reduced benefits 
from Social Security would be a slap in the face for all of 
those who have helped to build this country. It would put 
millions of Americans at risk of poverty.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Cruz follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
    Chairman LARSON. Thank you, Dr. Cruz.
    Ms. Boivie, will you comment.

 STATEMENT OF ILANA BOIVIE, RESEARCH ECONOMIST, INTERNATIONAL 
 ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS AND AMERICAN 
 FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS 
                           (AFL-CIO)

    Ms. BOIVIE. Thank you, Chairman Larson, Ranking Member 
Reed, and Members of the Committee. My name is Ilana Boivie. I 
am a research economist for the International Association of 
Machinists and Aerospace Workers. As someone who has devoted 
more than 10 years to researching retirement security for 
working Americans, I am pleased to have this opportunity to 
testify on the importance of Social Security in today's economy 
and to add the labor movement's voice to the increasingly 
louder call for benefit expansion.
    I am here today on behalf of both the IAM and labor's 
umbrella organization, the AFL-CIO. The IAM represents some 
600,000 active and retired members and is also a member of the 
AFL-CIO, which includes 54 other unions. Together, we represent 
some 12.5 million American workers.
    Workers' ability to achieve retirement income security has 
long been premised on a system of mutual responsibility, also 
known as the three-legged stool: Social Security, employer-
provided pensions, and personal savings. But as has already 
been noted by other panelists, that second leg of the stool, 
that traditional pension plan, has become quite shaky in recent 
years.
    I am proud to say that union members generally have been 
better off than their nonunion counterparts when it comes to 
pensions because of the power of collective bargaining. 
However, in recent years, private employers in both the union 
and nonunion context have largely backed away from defined 
benefit pensions in favor of defined contribution plans like 
401(k)s that shift significant financial risk onto working 
people. This has made American workers' retirement outlook 
increasingly precarious.
    The labor movement firmly believes, and substantial 
research shows, that an individual retirement savings plan is 
not an adequate substitute for the guaranteed benefit that a 
pension provides. With fewer workers having access to 
traditional pensions, Social Security is becoming increasingly 
important to working families because it offers many of the 
features of a pension, including lifetime retirement income and 
valuable survivor and disability protections. Also, Social 
Security benefits are completely portable from job to job and 
benefits keep pace with inflation through an automatic cost-of-
living adjustment.
    And Americans rely on Social Security. One out of every 
four American households includes a Social Security recipient. 
Social Security accounts for 90 percent or more of household 
income for one in five married couples and about 44 percent of 
household income for unmarried people. Given its importance and 
popularity, the most valid criticism that can be levied against 
Social Security is that its benefits are actually too modest. 
With retirement benefits averaging just about $17,000 per year, 
the labor movement believes, and surveys show, that Americans 
overwhelmingly agree that benefits should be expanded.
    And yet let us not forget that as a result of those changes 
enacted in 1983, Social Security benefits have already been 
cut. Under current law, the age to receive one's full benefit 
is already increasing from 65 to 67. That means that 
beneficiaries will receive fewer months of benefits and, 
therefore, a reduction in total lifetime benefits.
    AFL-CIO unions unanimously agree that working people cannot 
afford another back-door benefit cut by increasing the 
retirement age. First, for whom would another increase in the 
retirement age affect? Generation Xers like me, younger 
millennials, generation Z? These younger workers have already 
been saddled with soaring student loan debt and high housing 
costs. They are paying a higher share of healthcare expenses, 
and very few have employer-provided pensions. Over half of 
workers aged 25 to 34 have no assets in a retirement account 
whatsoever. Among those aged 35 to 44, the median retirement 
account balance is just $3,000.
    Do those who want to raise the retirement age really think 
that the generations behind them will have such abundant 
retirement assets as to need less from Social Security?
    Second, the notion used to justify increasing the age--that 
we are all living longer--is incorrect. The gap between the 
life expectancy of high earners and most other Americans is 
widening. And life expectancy has not, in fact, increased for 
the lowest income Americans at all.
    Moreover, many workers with physically demanding jobs must 
limit the amount of time they are in the workforce. The IAM has 
members who are skilled welders, working for General Dynamics 
in Maine and Huntington Ingalls in Mississippi, proudly 
building the Arleigh Burke-class destroyers for the U.S. Navy. 
Yet due to their physically demanding work, often on their 
hands and knees, many of them develop severe muscular skeletal 
problems and are physically worn out by the time they are in 
their fifties or very early sixties. Are we going to tell these 
workers that they must work until 70 or older before they can 
get full benefits?
    Some have proposed a carve-out from a retirement age 
increase for those with physically demanding jobs, but this is 
more complex than it seems. Millions of service workers have 
jobs that wear their bodies out, too. It would be extremely 
difficult to identify the specific categories of workers who 
must retire early, let alone track all of the different jobs 
that people have throughout their careers.
    Social Security is the most effective antipoverty program 
in our Nation's history, our most important family income and 
disability protection program, and the cornerstone of 
retirement security. Its modest shortfall can and should be 
addressed without additional benefit cuts. Instead, because 
more and more Americans are entering retirement with less 
financial security, benefits should be improved.
    I thank the Chairman for holding this hearing and for his 
leadership on this issue, and I would be happy to answer any 
questions.
    [The prepared statement of Ms. Boivie follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]      
 
                                
    Chairman LARSON. Thank you, Ms. Boivie.
    And I want to thank all the panelists for your expert 
testimony. And now we are going to turn to questions that the 
Members of the Committee have, and I get to lead off.
    And I would like to start by thanking Kate Farrar from my 
home State of Connecticut for being here today. And I am 
wondering if you could expound on the numerous stories that you 
had about women especially and the problems they face as we 
currently go through this crisis and the looming prospect of 
major cuts to Social Security in 2034.
    Ms. FARRAR. Yes. Thank you, Mr. Chairman. Unfortunately, as 
you commented, the stories I shared and others before you are 
just too common. And in the instance I shared initially about 
the wage gap in our country and particularly in Connecticut, 
the wage gap for women does not discriminate. The wage gap 
crosses sectors, it crosses education levels, it crosses income 
levels. And as I also shared, you know, too many women, twice 
as many women as men, actually work part time in our country to 
really shoulder disproportionately the caregiving 
responsibilities. And in our State of Connecticut women of 
color especially are vulnerable to poverty in retirement 
because of their greater significant wage gap and often those 
lower wage jobs that don't have savings or pensions.
    And therefore, when we talk about protecting and expanding 
Social Security, these are the women we are speaking to and 
these are the women we need to keep in mind.
    Chairman LARSON. Thank you.
    Dr. Rockeymoore, you in your testimony today, and several 
people have talked about this, but you talked about how raising 
Social Security's retirement age is a benefit cut. Can you 
explain why it is a cut?
    Ms. CUMMINGS. Right. I mean, it is a cut because, you know, 
when we did the estimates in terms of the Bowles-Simpson plan 
that raises the retirement age to 69, it was discovered that it 
would be a cut of approximately 14 percent per month for 
beneficiaries. It is a cut because there are less people who 
are actually able to take advantage of the Social Security 
benefit because they are dying sooner. And so with that, you 
have a situation where the benefits would be reduced over time. 
Fewer people would have access to it. And then Social Security, 
of course, would have an opportunity to actually, I guess, 
preserve more money because less people are getting the 
resources.
    I think it is important to understand that African 
Americans, blue collar workers, Latinos, people of color 
generally would have a harsher time when they are--if there was 
a benefit cut. And so with that, I think it is important that 
we pay attention to the fact that half the income distribution 
is living longer, the other half is not. And so we have to pay 
attention to how that impacts proposals for Social Security.
    Chairman LARSON. Thank you, Dr. Rockeymoore.
    Mr. Semprevivo--did I get it right?
    Mr. SEMPREVIVO. Yes, sir, you did.
    Chairman LARSON. Well, listen, thank you for your 
testimony. And you seem like a pretty regular guy, an 
entrepreneur. I was wondering, are you saying, though, that we 
should do nothing with Social Security?
    Mr. SEMPREVIVO. Well, I am not a Social Security solvency 
expert. I did read the 270 pages from the Social Security 
Administration, their analysis and their report. And, no, I am 
not saying do nothing. I am saying let's find middle-class 
Americans and people that are, say, for example, Mr. Chairman, 
1099ers, which 48.2 million of those----
    Chairman LARSON. What is it you are saying we should do 
then, if you are finding 1099ers to----
    Mr. SEMPREVIVO. They are going to be paying--under your 
proposal, under H.R. 860, they are going to be paying--they 
have to pay all 14.8 percent.
    Chairman LARSON. Well, do they really?
    Mr. SEMPREVIVO. They do, they do.
    Chairman LARSON. I mean, even when you talk about the tax 
deduction that is available to them?
    Mr. SEMPREVIVO. That is not applicable, because this is a 
Social Security tax for the FICA. They have to pay that.
    Chairman LARSON. You can write off the portion on the 
business side. I mean----
    Mr. SEMPREVIVO. Okay. So let's entertain that.
    Chairman LARSON. Let's be honest about it. We start with an 
increase for the worker and the employer. The employer gets the 
writeoff, the worker gets a benefit, right? You are calling it 
a tax.
    Do you know of any other taxes where you get a disability 
benefit, you get spousal coverage, you get dependent coverage, 
and with that you have a pension?
    Mr. SEMPREVIVO. Mr. Chairman, would you allow me to answer?
    Chairman LARSON. Sure.
    Mr. SEMPREVIVO. I will be happy to, sir. Thank you so much.
    Let's talk about a 1099er, an Uber driver, a Lyft driver, a 
realtor, an insurance person. We have plenty of insurance 
people out of Connecticut, right?
    Chairman LARSON. Absolutely.
    Mr. SEMPREVIVO. So they are all 1099ers. Whatever wages 
they make, they don't have an employer per se, they are the 
employer.
    Chairman LARSON. Right.
    Mr. SEMPREVIVO. So they get that 1099. Now, they are 
responsible for their Social Security contribution. So we 
increase by 2.4 percent, that becomes a tax, they have to get 
14.8 percent. So I will just use a number----
    Chairman LARSON. It is not an insurance premium?
    Mr. SEMPREVIVO. No, it is----
    Chairman LARSON. They don't get any insurance for that?
    Mr. SEMPREVIVO. Well, with insurance, they have the 
flexibility and an opportunity to shop for it, right? This is--
--
    Chairman LARSON. Do insurances have a guarantee, a lifetime 
guarantee? Is an annuity something you could outlive? Or what 
happened to those poor people that had 401(k)s and, as we 
showed up here, found themselves in 2008 with a 101(k) instead 
of a 401(k)? The difference is that you have the full faith and 
credit of the United States Government here, and that is what 
allows the guarantee to your employees and other employers as 
well. It is an insurance plan.
    Mr. SEMPREVIVO. Well, I think what matters to most middle-
class Americans that have to file a 1099, 48.2 million of them, 
when you ask them would you like to have a plan 40 years from 
now or would you like to feed your children now, the answer is 
obvious. The average wage, and I just want to extrapolate on 
this, the average wage of a realtor in the United States, 1.3 
million of them, is $60,000. So they are middle-class America. 
They are the meat and potatoes of America. It is the same with 
insurance agents, Uber drivers, and Lyft drivers. You are now 
telling those individuals don't feed your children, because you 
are going to have to come up with an additional 2.4 percent.
    Chairman LARSON. No one is saying don't feed your children. 
Come on.
    Mr. SEMPREVIVO. When you take money out of their hands----
    Chairman LARSON. With all due respect, no one is saying 
don't feed your children. Come on.
    Mr. SEMPREVIVO. Well, when you talk to them and you are 
telling them----
    Chairman LARSON. You seem like a pretty reasonable guy, but 
you know that is not the case.
    Mr. SEMPREVIVO. I am. I am. I know people that are--plenty 
of people that are making----
    Chairman LARSON. Dr. Rockeymoore, is that your experience 
with middle-class people?
    Ms. CUMMINGS. No, absolutely not. Not only that, but, you 
know, the fact of the matter is, people do want protection. 
Those 1099 workers are part-time workers. And the fact of the 
matter is, they are willing to actually incur that cost knowing 
that on the back end they have access to retirement benefits, 
disability benefits, or even survivor benefits. They are not 
able--they may not be able to pay out-of-pocket for private 
life insurance benefits or for private disability benefits or 
even for a private annuity, but Social Security is there for 
them. And that is why investing in it is important for 
entrepreneurs and important for workers, whether they are 1099 
or full time.
    Mr. SEMPREVIVO. So would you say there is a priority, food 
versus insurance 30 years from now? Are you saying they are 
sacrificing food now and waiting 30 years from now?
    Ms. CUMMINGS. No. Food and shelter are absolutely a 
priority.
    Mr. SEMPREVIVO. Right.
    Ms. CUMMINGS. But so is actually having a safety net to 
rely on in the case of a crisis. And so, you know, I am just 
saying that 
this is just as important to 1099 workers as it is to full-
time workers.
    Chairman LARSON. Let me recognize Mr. Reed for any 
questions he may have.
    Mr. REED. Well, thank you, Mr. Chairman.
    And, Mr. Semprevivo, let me jump in here a little bit, 
because I think you are articulating something that needs to be 
highlighted. And that is, one, when we go into Social Security 
and when we go into Social Security disability, the common 
denominator of entry into that program is it is an earned 
benefit, as the Chairman said. So in order for it to be an 
earned benefit, that means what? You have to have a what?
    Mr. SEMPREVIVO. You have to have individuals contributing 
to that to be an earned benefit.
    Mr. REED. And when they go to work, we call that a what?
    Mr. SEMPREVIVO. A job.
    Mr. REED. A job. Right. So they have to have a job in order 
to qualify for the benefits. And so what your voice represents 
on this dais today is the voice of that job creator, that 
individual that owns the business, and/or that 1099 sole 
proprietor who is out there trying to take care of his own 
livelihood and his family.
    So when you talk about a tax increase, like what we are 
potentially discussing here in order to take care of Social 
Security, and you talk about that $2,400, and you talk about 
that number, are you talking about the cash flow today that 
people are suffering from, and that maybe Dr. Rockeymoore isn't 
understanding what I am hearing you say? Is what you are saying 
is that the entrepreneur or that sole proprietor, that business 
owner, that employee is going to have to pay that tax increase 
too, because that is cash flow to them? That goes to their 
household today, right?
    You are saying that we should take into consideration, as a 
body discussing reforms here to protect Social Security, we 
should take into consideration how that cash flow may 
jeopardize that job. Is that correct?
    Mr. SEMPREVIVO. It does. And I think there is kind of two 
separate issues. We are looking at sole proprietors, right? We 
are just lumping them into magical businesses being businesses. 
But oftentimes, you have a person, like a Lyft driver. He 
doesn't have a corporate employer that is making that 12.4 
percent contribution on his behalf.
    Mr. REED. So when he loses that 12.4 percent, that is real 
cash out of his pocket----
    Mr. SEMPREVIVO. That is gas.
    Mr. REED. That is gas, rent, and food.
    Mr. SEMPREVIVO. And food. Absolutely.
    Mr. REED. That is day-to-day living expenses.
    Mr. SEMPREVIVO. Yes, sir. That is the real world.
    Mr. REED. And I think what you are articulating and what 
your testimony to me represents is that we should take that 
impact into consideration as we discuss Social Security reform. 
Is that your testimony?
    Mr. SEMPREVIVO. Absolutely, sir.
    Mr. REED. Okay. And then let me also understand, when you 
calculate your Social Security retirement benefit, that 
calculation is based on--do you know what it is based on?
    Mr. SEMPREVIVO. Yeah. It was just gross wages up to a 
threshold of $132,900.
    Mr. REED. So it is 35 years worth of your work history, 
right?
    Mr. SEMPREVIVO. Right.
    Mr. REED. So if your work history--if we start off and we 
grow, and you are an entrepreneur and you are getting 
opportunities to invest in your business, and I think the tax 
cut bill led to some investment in your business that expanded 
your business. You hired new people. So if you start with those 
new employees with higher wages, maybe that is the common 
ground here. If there is higher wages at the onset of that 35-
year work period, would that not increase your benefits at the 
time of retirement under Social Security?
    Mr. SEMPREVIVO. Without a doubt. The more----
    Mr. REED. Is that true, Dr. Rockeymoore?
    Ms. CUMMINGS. In terms of higher wages at the beginning?
    Mr. REED. At the beginning and throughout the 35-year work 
history.
    Ms. CUMMINGS. I mean, it would actually lead to a higher 
benefit in the end if you had it.
    Mr. REED. And so as we have articulated in our testimony on 
our side, one of the things we are focused on is economic 
growth, as we said, in the LEAP--the L of the LEAP principles 
that we are trying to articulate as, I think, an area of common 
ground that we can grow. So if we increase job opportunity, if 
we increase wages in America, that would have a corresponding 
impact, in a positive way, on Social Security retirement. Would 
anybody on this dais disagree with that?
    Ms. CUMMINGS. I would just like to say that----
    Mr. REED. The response is silence, so therefore, I will 
note for the record that no one disagreed.
    Ms. CUMMINGS. I actually disagree.
    Mr. REED. You disagree that jobs growth and wage increase 
will hurt retirement benefit calculations for Social Security 
recipients?
    Ms. CUMMINGS. I argue that Social Security is actually a 
boon for job growth and entrepreneurship in this country.
    Mr. REED. I am not disagreeing with that. I get that.
    Ms. CUMMINGS. Okay. Great.
    Mr. REED. But the underlying principle is that increased 
wages and more job opportunity--because in order to qualify for 
Social Security retirement and disability it requires a job--
would increase the stability for folks receiving Social 
Security down the road, and the benefit would be increased by 
wages. Do you disagree with that?
    Ms. CUMMINGS. No, I don't disagree with that.
    Mr. REED. So hopefully, we have articulated here today, Mr. 
Chairman, one of our principles where there is common ground, I 
believe, from the whole entire panel that economic growth could 
be a part of this solution as we go forward. And with that, I 
yield back.
    Chairman LARSON. Mr. Pascrell is recognized.
    Mr. PASCRELL. Thank you. Thank you. Thank you, Mr. 
Chairman. Thank you, Mr. Ranking Member.
    We had a massive tax cut voted upon in December of 2017. 
And when we look at the results of that tax cut, we don't see 
the increase in wages that this body was committed to. So I 
don't know if growth is the answer to our system. Every time we 
have a problem, it is economic growth that will solve all of 
our problems. We have a financial problem. We have a budget 
problem in this country, and there has been a lot of talk of 
how we are going to cut back on the benefits for those Social 
Security recipients.
    Many of those Social Security recipients, you heard the 
numbers, they are in some of your testimonies I have read, but 
the reason why we have tremendous anxiety is that people don't 
know whether Social Security is going to be here in another 15, 
20 years, so they are not spending their money. Lower-income, 
lower- to middle-income are those people that spend money when 
they have it in their pocket. And what those people are doing 
right now is saving their money just in case, and here is one 
of the elements, Social Security is not going to be around when 
I get there, when I get to that point. That is a fact of 
economics.
    And, Mr. Chairman, I would hold that is a major part of why 
we are seeing an economy which is basically stagnant with 
regard to wages, although we have seen a little uptick in the 
last 2 months. So I am glad the Social Security Subcommittee is 
focusing on the importance of this earned benefit and improving 
benefits for its first and second hearing. And, Mr. Chairman, I 
must commend you for pointing out this is not an entitlement. 
We pay into it. It is an insurance policy, and that is very 
different than an entitlement.
    Social Security plays an important role in ensuring 
economic security for Americans, from seniors, to women, to 
people of color, to younger workers. Today's witnesses make it 
clear that benefits need to be secured and improved, not 
reduced. Is there anybody on the panel that believes that 
benefits should be reduced? Anybody?
    These benefits may be modest, but they are vital to the 63 
million people who rely on them. Social Security is one of the 
most powerful anti-poverty programs we have. The traditional 
three-legged stool of pension, Social Security, and private 
savings for retirement security is no longer intact. Workers 
continue to move from job to job with undefined benefit 
packages that may be inadequate or not transferable. So nearly 
half of the private sector employees, about 55 million, do not 
have a retirement plan offered by an employer, contributing to 
a retirement crisis in America. We have a crisis. We are 
talking about 55 million people.
    That is why it is critically important to ensure the 
comprehensive sweep of protections that Social Security offers 
remain intact. We all know the Social Security Trust Fund is 
fully funded until 2034, but there could be a shortfall beyond 
that if we do not act. Thankfully, there are several proposals.
    I support the Chairman's proposal, the 2100 Act, because it 
secures the Trust Fund in a way that ensures no benefit cuts 
need to be made for at least the next 75 years. Also, it 
expands benefits for current and future beneficiaries. You 
know, in 1983, somebody mentioned it before, 1983 was probably 
one of the great years in American history because in that 
year, Democrats and Republicans came together in a bipartisan 
way and acted on Social Security. And just a few years later, 
they got together again. Tip and Ronald Reagan got together. 
They weren't exactly bedfellows, and we had real tax reform. We 
had real comprehensive tax reform. Jack Kemp was a major part 
of that deal.
    It can be done if we put our minds to it. If we don't, then 
we are going to have a real catastrophe here. And so those 
people who saved money, those people we are talking about here 
for the Majority, who saved money, it is not going to be very 
useful at that particular time if Social Security is not here.
    Thank you, Mr. Chairman.
    Chairman LARSON. Thank you.
    Mr. Estes is recognized.
    Mr. ESTES. Thank you, Mr. Chairman. And thank you to all of 
our witnesses for joining us today.
    You know, as we meet today, our economy is booming at 
historic levels. In fact, for the first time in history, we 
have more job openings than we have people seeking jobs. And in 
actuality, we have seen wages grow by 3.2 percent, which is the 
highest amount in over a decade. Following the progress that 
the Ways and Means Committee and Congress made in the last 2 
years to help jump-start our economy, we can now look at how do 
we help people prepare for their retirement after their careers 
are over with. And this includes protecting and preserving 
Social Security for our current as well as future generations 
of retirees.
    You know, for Social Security, a change in economy and 
population shifts due to baby boomers entering retirement means 
we can't overlook some of those serious, long-term financial 
challenges in this vital program. If we do nothing, it is 
estimated that the Social Security Trust Fund for retirement 
and disability will be depleted by 2034, which we have talked 
about earlier would result in a 21 percent cut in benefits, and 
we don't want that. We need to act now.
    This is a serious call to action, and I think Republicans 
and Democrats can work together to strengthen and improve 
Social Security for our hard-working Americans. However, we 
must make sure that the solution doesn't include devastating 
tax increases that will harm our economy and dole out benefits 
in a haphazard way. Instead, we should target benefit increases 
to make sure that we most reward work and modernization of the 
program to help today's workforce.
    Today I believe the real opportunity to work in a 
bipartisan way will strengthen and improve Social Security so 
that Americans can receive the real retirement security they 
deserve.
    You know, as the only former State Treasurer serving in the 
House, I know firsthand about the importance of working on 
retirement security for the future. In Kansas, I helped with 
the reform that we did for our pension system when we were in a 
financial crisis and on a path to be insolvent, and we wanted 
to make sure we protected that. And that is the kind of 
leadership we need now.
    I have a personal story from my own family. My uncle died 
when my cousins were young, and my aunt relied on Social 
Security to help raise my three cousins. It was an important 
part of their life in terms of helping to maintain their 
quality of life. And, you know, Social Security was there when 
my aunt needed it the most, and now we need to make sure that 
we have it preserved for future generations.
    Ms. Ruff, thank you for being here, a fellow Kansan. We 
appreciate that. You know, Social Security is an important part 
of that three-legged stool that provides retirement security 
for millions of Americans. And recently, AARP had this ``You've 
Earned a Say'' campaign, folks, you know, making sure Social 
Security is there for future generations.
    Can you speak a little bit more about how important it is 
to act now instead of continuing to kick the can down the road 
for Social Security?
    Ms. RUFF. Certainly. I would be very glad to. First of all, 
as we have all heard, it has been made clear that we have full 
funding until 2034, but then we will have benefit reductions if 
nothing is done. So if we wait and do nothing, we risk cutting 
benefits. We risk making it more and more difficult for people 
who are on Social Security, and we have not solved the issue. 
The longer we wait to agree to any solutions, the tougher those 
solutions are going to be. They are going to be more drastic.
    We have, in the past as a country, come together when there 
are critical issues to really think through for the long term. 
How do we make everything much better? So from that standpoint, 
also, if we wait, and this was referred to by one of the other 
panelists, people get worried. They think there may not be any 
Social Security in the future because they don't see progress 
being made.
    What we saw with our ``You've Earned a Say'' campaign is 
that our members rely on Social Security. They know it is a 
benefit for their children and grandchildren as well. So as we 
have talked with them and listened to comments they have made, 
they recognize that they want to make sure it is a long-term 
solution that in effect is a multigenerational solution, so 
that is why we can't kick the can down the road.
    Mr. ESTES. Thank you. You know, Social Security was never 
intended to be that sole source of retirement income.
    Ms. RUFF. Correct.
    Mr. ESTES. You know, we want to make sure we maintain this 
valuable resource so that, along with retirement savings and 
private assets, retirees can enjoy the quality of life that 
they deserve, that they have earned throughout their working 
life. So, you know, the sooner we act, the easier and more 
likely it is going to be to make sure we protect this valuable 
asset that retirees deserve.
    So with that, Mr. Chairman, I will yield back.
    Chairman LARSON. Thank you, Mr. Estes.
    Mr. Boyle is recognized.
    Mr. BOYLE. Thank you, Mr. Chairman.
    First, let me say, Mr. Semprevivo, your argument would be a 
little more convincing to me had you brought for us some of 
Joseph's Lite Cookies. I know that certainly would have helped 
with a number of Members on this panel on both sides of the 
aisle.
    Let me thank and commend the Chairman of this Committee. 
For the first time since I have been here as a Member of 
Congress, 5 years now, are we even talking about, in a 
meaningful way, what we are going to do in approximately 15 
years from now when the dramatic shortfall hits the Social 
Security Trust Fund. And the fact that this is the first time, 
apparently since 1983, that a congressional committee is even 
taking up this issue is, indeed, quite extraordinary. So I want 
to commend him.
    I also want to stress for all of us on both sides of the 
aisle to seriously and definitively deal with this issue in 
this Congress just because, while approximately 15 years from 
now seems like a long way off, it isn't. And, as we know, that 
current target date of 2034 is always a moving target. If we 
were to face a recession or slower economic growth than 
expected, what is projected to be 2034 could actually be much 
sooner than current projections.
    I come at this issue with a couple of different 
perspectives. First, as the son of someone who worked hard in 
blue collar jobs for over 50 years, who now gets more than half 
of his income in retirement from Social Security, I know from 
personal experience, family experience, that it is not just a 
statistic to say there is for many millions of Americans the 
reality that Social Security makes up the majority of their 
income. It is one of the reasons why I believe that Social 
Security is the greatest domestic policy achievement of the 
20th century.
    I also come at it from the perspective of someone who is 
working and paying in to Social Security and would like it to 
be there decades from now when I retire and need it. I was just 
calculating this as the hearing was going on, but I have been 
paying into Social Security for exactly 25 years in the 
workforce and will hit full retirement age in exactly 25 years.
    Whenever I am doing a townhall, and this has happened at 
every single townhall I have done, whether it is in a wealthier 
area or a lower-income area in my district, every single time, 
I get the question, typically from someone my age or in their 
forties and fifties, will Social Security be there for me when 
I retire? I am doing a townhall tonight and I am sure the 
question will again come up. Most people preface that question 
stating the belief that they just assume Social Security will 
not be there for them when they retire.
    So when I am able to talk to them about Social Security 
2100--and I know we will get more into potential solutions 
tomorrow--but when I tell them there actually is today existing 
in Congress one piece of legislation, I believe so far only 
one, that would address the insolvency issue and extend the 
Trust Fund lifetime for the rest of the century, people are 
pleasantly surprised. And people are far more pragmatic about 
the potential solutions than we sometimes believe they are here 
in Washington, D.C.
    One of those solutions clearly, to me, has to be revenue 
increase. I would love it if we could magically grow our way 
out of this problem. I would also love it if one day I could 
play in the NBA. I sincerely doubt that either of those things 
are going to happen.
    Mr. REED. Not true.
    Mr. BOYLE. Thank you. The Ranking Member has much more 
confidence in my basketball ability than I have.
    The idea that we could simply project that magically we are 
going to grow our way out of this issue is just fantastical. 
Talking about ways in which we can ensure that those making 
over $400,000 a year pay more into the system is a legitimate 
avenue to explore. Making more than $400,000 a year is about 10 
times what the average worker in America makes. That is a 
legitimate place to look when we are talking about trying to 
extend and save the greatest domestic policy achievement in 
government of the 20th century.
    And I see I am out of time, so I will yield back.
    Chairman LARSON. Thank you, Mr. Boyle.
    And we will now recognize Mr. Ferguson.
    Mr. FERGUSON. Thank you, Mr. Chairman, and to the Ranking 
Member. I want to thank you, Mr. Doyle. I share your dream of 
playing in the NBA.
    Mr. BOYLE. It is Boyle.
    Mr. FERGUSON. Mr. Boyle. I said Doyle. Excuse me. But 
anyway, playing in the NBA, I think we will be on the same team 
at the exact same time.
    But, Mr. Chairman, you know, you have been mighty kind to 
allow us opportunities to meet to talk about different ideas, 
different philosophies. I thank you for your openness in those 
conversations.
    To the Ranking Member, Mr. Reed, thank you for the same. I 
think there have been a lot of really good conversations around 
this so far.
    You know, one thought that crossed my mind as I sat here 
today and listened to the testimony, was it was pretty 
remarkable. As a practicing dentist in a small rural community, 
every story that you told is exactly the way I see it. A single 
elderly lady whose husband passed away that is struggling to 
make ends meet, African Americans that struggled in poverty 
before we created jobs that moved people from poverty into the 
middle class, workers in our local foundry that have worked 
extremely hard over the years that may not be able to do the 
physical labor at 67 that they could at age 55. So I am 
thrilled that each of you see it the way I do, that we have a 
diversity. We have a lot of different things going on in our 
communities. But I also get this feeling that every part of 
that conversation really revolved around what appeared and what 
certainly feels like, from a rhetoric standpoint, a cut.
    I have said in just about every single townhall and 
community meeting I have held over the last 2 years that we 
have to have an honest conversation about this. And one of the 
things I find, and I find it is pretty remarkable, is that 
every time we start this conversation, what happens is that 
someone on the left side of the aisle will stand up and say, we 
have to talk about Social Security. What does our side do? We 
basically tear them down because of it. Let a Republican stand 
up and talk about this issue, and what happens from the other 
side of the aisle? There is a buzz saw coming at us. It is not 
intellectually honest to continue to do that.
    This is going to be a very interesting conversation. And we 
quite candidly need, as both Republicans and Democrats, the 
political cover to have these conversations in a very honest 
way to reach a compromise position that is the right thing for 
this Nation, for our seniors, and for future generations.
    So I would encourage each of you, as we have these 
conversations, to not be either overt or quietly covert with 
threats of cuts and how the language goes. You can see it in 
the panels. You can hear it in the questions. We see it in the 
posturing. We have to be able to have those honest 
conversations that probably get to a point where it is a 
combination of a lot of things that we are talking about, 
reforms to the program, which all too often get called cuts, 
but also I think that revenue is an important component of 
this, however we get to that point. I just ask that the outside 
groups allow Members of the Committee to have these 
conversations without being so demonizing to either side, and I 
say that on both sides of the aisle.
    As a small business owner, some of the comments that you 
made I fully agree with, and the perspective that you have from 
operating a small business is one that I had. I don't care what 
else you say. When you have money that comes out of your 
business that goes to the Federal Government for whatever 
program, it is a tax. I mean, sure, there is an earned benefit 
that comes from it, but it is a tax. It is not an insurance 
premium, because an insurance premium is many times something 
that you have the option of buying. This is not an option. It 
is a tax.
    I don't have many people saying that they are not willing 
to consider changes to both the program and to the revenue 
side, but we have to be honest about what it is. It is a tax, 
because it is coming from my business going to the Federal 
Government, and it does affect our ability to hire future 
employees. And as we have all said, every single one of us 
recognizes that job creation is an important part of saving 
Social Security.
    With that, Mr. Chairman, I yield back.
    Chairman LARSON. I want to thank the gentleman.
    We now will recognize Mr. Schneider.
    Mr. SCHNEIDER. Thank you, Mr. Chairman.
    I want to thank the Chairman and the Ranking Member for 
having this hearing today. And in particular, I want to thank 
all of our witnesses for your participation and for sharing 
your views, experiences, and perspectives. I think it is 
critically important.
    All of you here have offered different views and 
perspectives. You have touched on how the changes to Social 
Security can disproportionately affect one population versus 
another, and different populations are affected in different 
ways.
    We had a hearing earlier this year on Social Security, and 
I touched on the fact--and I want to commend my colleague from 
Georgia and say thank you. I do think we need to be able to 
talk together. I will come to that in a second. I will go 
there.
    I think as we talk about ensuring future generations have a 
secure and dignified retirement, it is important that we get 
away from the posturing and the positions and get to the 
issues. And one we talk a lot about, and I did mention this at 
the last hearing, is this idea of raising the retirement age. 
And as many of you touched on, for many people, especially 
people of lower income working in more physically demanding 
careers, they already start with a lower life expectancy. There 
are all kinds of data that link income to life expectancy for a 
lot of reasons, and we don't need to go into those here. But if 
you take the typical 55-year-old in the lowest 20 percentile in 
income, they have a life expectancy of 76. I say this all the 
time. Those at the highest 20 percentile in income are at 88. 
Raising the retirement age to 70 would reduce the retirement 
period for those at the lowest income range by fully a third, 
and this is difficult.
    And, Dr. Rockeymoore, I would like to turn to you in the 
time I have left and talk about this. Because as we talked 
about these different communities, one of the things that 
drives our economy, and, Mr. Semprevivo, you touched on this, 
is the creation of small businesses, small businesses and 
entrepreneurs. But as people make the decision whether to 
venture out on their own, and especially in more economically 
challenged communities, having the confidence of a future 
retirement can play into that, and Social Security, I think, 
plays a role.
    So I would be curious from your perspective of what role, 
if any, Social Security has in helping promote small business 
development entrepreneurship in minority communities as they 
are making their decision to venture on their own.
    Ms. CUMMINGS. It plays a huge role. And I am speaking from 
experience, and I am also speaking from a larger statistical 
perspective. I had a sole proprietorship and I have had an LLC. 
Sole proprietorship, it was just me. LLC, I had up to 20 
employees, including some 1099s and interns.
    And so when I was a sole proprietor, what I was able to do 
was get a payroll service, paychecks and then later ADP, where 
I was able to pay my taxes through, you know, the deduction 
that comes through the payroll service. Even though I could not 
offer HR benefits, I couldn't offer a 401(k) when I first got 
started, I couldn't offer a private life insurance benefit or a 
private disability benefit, I knew I had Social Security there 
for me because I was paying for it through my payroll service 
and I was making sure I was taking care of my future even while 
I was investing in my business idea.
    Once I got more employees and I wanted to attract and make 
sure that I was able to retain employees, I actually did create 
a 401(k), and I did get--you know, I did offer a disability 
benefit that was in addition to Social Security. But guess 
what? Many, many, many, many, particularly startups, don't have 
that ability for quite a long time. So the role Social Security 
plays is it provides not only a safety net, but it is actually 
a boon to entrepreneurship, and it is a boon to business 
formation in this country by providing a subsidy, basically, 
for business creation. And so many entrepreneurs are able to 
take advantage of this and not lose out on their critical 
retirement in the process.
    And then, by the way, we always like to think that 
businesses will be successful. But what if businesses fail? And 
so the fact of the matter is that Social Security provides a 
failsafe that, you know, if a business idea is not successful, 
they don't lose out in the long term.
    Mr. SCHNEIDER. Thank you. And I will yield back the few 
seconds I have left, but thank you. And again, I want to thank 
the witnesses for your time here today.
    Chairman LARSON. Thank you, Mr. Schneider.
    Mr. Arrington is recognized.
    Mr. ARRINGTON. Thank you. Thank you, Mr. Chairman and 
Ranking Member, and I appreciate the spirit by which you 
approach this, you and the Ranking Member. If there were ever 
two congenial, patriotic, and practical people who could get it 
done in a partnership that was bipartisan, it is going to be 
you two. That is just my--in the short time I have known you 
two, I really believe that. And I hope we are able--I hope 
those words are from my mouth to God's ears and to your hearts 
and into the doing and the acting and execution of this 
Committee, because we really can't wait. And that is one of the 
principles that the Ranking Member and I share, and I know you 
do too, and that is we can't kick the can down the road, and it 
is just going to get worse if we do, as Ms. Ruff has stated.
    And so I just want you to know I am open to finding a 
solution that will be probably equally painful for both sides. 
If it is not, I don't see us getting anywhere.
    I am concerned about the taxes, and I am concerned that as 
we work together to solve this problem, we are clear about the 
facts surrounding the current economic growth. Growth in this 
economy is a part of the equation. It is not going to solve it, 
but it is a part. We can't grow out of this, like we can't grow 
out of the $22 trillion in debt that we as a Nation are in, 
which is really a deferred tax, if we are going to talk about 
taxes on our children and grandchildren. But it is an important 
factor, as well as jobs and people working. And you have 7 
million surplus jobs, and you have the same number of able-
bodied male adults who are not working, age 25 to 50. That is 
deeply disconcerting.
    So I think the facts, we have to at least put them on the 
table. Wages and income have grown. They have grown almost 3\1/
2\ percent, and they are growing at the fastest rate since 
2009. Income is up, wages are up, more jobs are coming online, 
and coming back to this country, and we have a 50-year low in 
unemployment. That is powerful. Let's just acknowledge that 
things are happening in a very positive way, and we are moving 
in the right direction since tax cuts, since we have relieved 
some of the job creators from the burden that they feel, among 
other things. We have not relieved them since Obamacare of the 
high cost of healthcare. I am not saying Republicans have come 
up with a solution that has passed and effectuated the change 
that we all desire which is more affordable healthcare, but I 
am saying that healthcare costs are crushing the small 
businessmen and women in this country. So we put them in a real 
pinch when we talk about even a relatively small tax increase. 
You get the response like we have heard from Mr. Semprevivo.
    Let me ask you, just from a practical level, has the Tax 
Cuts and Jobs Act and the relief that you have experienced 
along with other small businesses who are the engine of job 
creation around the country, has that helped you? Has that 
given you some breathing room? Are you thinking more positive 
about your future? And are you investing in your company and 
growing? Just a quick response.
    Mr. SEMPREVIVO. Absolutely. We hired more people in my 
company. We issued raises of up to $5,250 per person.
    Mr. ARRINGTON. So we don't want to go backward. We have 
five out of eight people living paycheck to paycheck. Sixty 
percent of the American people have less than $1,000 in their 
cash on hand. So let's be careful in how we solve this. It will 
be tough, and we have to be open on both sides if we are going 
to do it.
    One thing that I think, Mr. Chairman, I may propose today 
as the easiest bipartisan solution is with respect to the 
principle of making sure that we have equal treatment for all 
public servants. The WEP, the Windfall Elimination Provision, 
has affected my State as much as any, because we have a lot of 
teachers and firefighters that are working, that pay into their 
State retirement but also have covered income that goes through 
the Social Security system.
    Now, the WEP was to get to parity. It didn't quite get 
there. We need to go all the way because we know how to do it, 
but let me ask you this: How do we fix that provision whereby 
people get their--at 60, they get the information about what 
their retirement income is going to look like, and it doesn't 
include the WEP? It is without it, so they think it is actually 
more, in many cases, and that is creating chaos and confusion 
and deep, deep concern. That seems like an easy fix.
    I know I am out of time, Mr. Chairman. Would you allow Ms. 
Ruff to just talk about a solution to that that we could 
consider?
    Chairman LARSON. I will say this. We are going to have 
specific hearings on that alone, and as you are probably aware, 
both Mr. Brady and Mr. Neal have introduced legislation with 
respect to that. And we fully intend to have a hearing on that 
and to raise that issue.
    Mr. ARRINGTON. I have gone over my time, and I thank you 
for the indulgence. I yield back.
    Chairman LARSON. With that, I will recognize Mr. Higgins.
    Mr. HIGGINS. Thank you, Mr. Chairman. Thank you for your 
leadership, particularly on Social Security 2021, your 
longstanding commitment to recognizing the value of Social 
Security for keeping people out of poverty, but also as an 
engine for economic growth in America.
    Keeping people out of poverty, economic independence, 
economic self-sufficiency is very, very good public policy. 
Social Security has kept 22 million Americans out of poverty, 
including 1 million kids, 6 million adults under the age of 65, 
and 15 million adults over the age of 65.
    My colleagues on the other side, who I believe are sincere, 
point to the tax cut, the corporate tax cut. According to the 
President's budget that was released yesterday, it will cost 
this government $1.7 trillion over a 10-year period. We have 
now reached, because of that, trillion dollar annual deficits 
for the foreseeable future, at least for the next 4 years.
    Corporate taxes don't pay for themselves. There is not a 
corporate tax in human history that has ever paid for itself. 
For every dollar that you give away in a corporate tax cut, you 
can hope, best-case scenario, to collect, to retain $0.32. That 
is a 68 percent loss on investment to the American people.
    My colleague talked about the job creators. The job 
creators are the American people. We have the strongest economy 
in the history of the world. The American economy is 70 percent 
consumption. When people have money, they spend it. When they 
spend it, they create aggregate demand. When you have aggregate 
demand, you have high growth rates. In the last 20 years, we 
have had economic growth hovering at about 2 percent. We are 
underperforming significantly as the American economy. The last 
time we had 4 percent sustained growth over 20 years ago, we 
didn't have budgetary deficits. We had budgetary surpluses of 
$300 billion.
    So when you look at the return on investment of Social 
Security benefits, according to most economists, for every 
dollar that you spend in Social Security benefits, that money 
is spent. Those people aren't putting that in savings accounts. 
It produces $1 in economic growth. So in terms of return on 
investment, if you are going to compare a $1.7 trillion tax 
cut, I would rather have $1.7 trillion for Social Security. 
Why? Because it will double. Your return on investment is 100 
percent.
    The proposed budget, $4.75 trillion, is about 22.5 percent 
of the entire American economy. I just think that we have to 
begin to treat the American taxpayer much more respectfully in 
terms of how important the Federal Government budget is. It 
pays for scientific research. It carries the greatest burden 
for things like drug development. Private companies that make a 
bundle for these big blockbuster drugs don't do any of the 
basic science. The Federal Government does.
    You know, every innovation in your smartphone, touch-screen 
technology, global positioning satellite, the Internet, these 
all came from government research dollars. And when, as 
economists say, they come down the cost curve and Steve Jobs 
takes all this and makes a billion smartphones in China, it 
doesn't benefit our economy. But American taxpayers have a 
huge, huge investment and are major, major job creators in this 
country.
    So I would just say, respectfully and particularly in 
deference to the Chairman's bill on Social Security 2021, let's 
look at getting a greater return for our government spending. 
There is a lot of waste in government, but we have in this 
economy the greatest public-private partnership in the history 
of the world. And without government research, basic research, 
we are never going to get the commercial products and the 
commercial growth that is essential to the long-term fiscal 
stability of this country. And Social Security and investing 
more in it is a good investment in the growth of the American 
economy because it keeps people out of poverty.
    With that, I will yield back, sir.
    Chairman LARSON. I thank the gentleman from New York.
    And it will always be the policy of this Chair when we are 
joined by Members of the Committee of the whole on the 
Subcommittee that they have an opportunity to question as well, 
and so we are honored to have Mr. Rice from South Carolina. I 
recognize him.
    Mr. RICE. Thank you, Mr. Chairman.
    I have been in Congress now for 6 years, and I really 
believe that my whole focus is on making America competitive. 
And if we could just solve about--there is really not that 
many--five or six major problems that we face, we could unleash 
the American economy and the American workforce, and a lot of 
these problems become a whole lot simpler.
    One of these problems is Social Security is out of balance, 
and that is probably one of the easier ones to fix, actually, 
in terms of the math. Medicare is much harder. But we have to 
deal with these entitlements, and they are political hot 
potatoes, as everybody said. It is very difficult. Nothing is 
going to happen here if it is not bipartisan. Absolutely 
nothing is going to happen, and everybody has to come to that 
realization. So we have to get together and come up with a 
solution. And there is really not that many levers to pull. I 
mean, you can either increase taxes or you can cut benefits. 
There are different ways you can do that, all factor in.
    So Sam Johnson introduced a plan that would balance Social 
Security for 75 years without raising one cent of taxes. It all 
has to do with raising the retirement age, cutting the initial 
benefit and reducing the COLA, the annual benefit cuts. Our 
Chairman here has introduced an alternate plan that does it 
purely with raising taxes, and never the twain shall meet.
    But what I will tell you is this: If we don't come up with 
a compromise solution that takes into account both those 
things, this problem is not going to get fixed. Because even if 
the House passed it, and that won't happen with the Chairman's 
plan. But even if the House passed it, it is not going any 
further than that.
    So, you know, it sounds attractive. A cup of Starbucks and 
raise the taxes on those guys over there, the ones who make 
over $400,000, put a 15 percent increase in their taxes, but 
think about the practicality of it. When fully in place, it 
raises the Social Security tax from 6.2 percent on each side, 
12.4 to 14.8 percent. That is another 2.4 percent. Okay. You 
have your Uber driver, he makes $40,000 a year. That 2.4 
percent is a thousand dollars a year. And who doesn't think 
that is not a hard thing for that Uber driver who is making 
$40,000 a year to pay an extra thousand dollars a year in 
Social Security taxes?
    And I will tell you, that guy, you know--somebody was 
mentioning that people 25 to 35 don't have any retirement 
savings. If you polled them, do you think that those 25- to 35-
year-olds would think they would rather keep that thousand 
dollars and not worry about Social Security? Because I will 
tell you this, I bet 80 percent of them don't believe they will 
ever get Social Security.
    So that being said, you know, I totally agree that this is 
a promise that we made to our seniors, and we have to make it 
whole. And it is irresponsible that it hasn't been done until 
now. We have to make this thing golden. I think everybody in 
this room would agree with that. There have been a couple of 
alternate plans that have already been submitted. Republicans 
and Democrats submitted plans.
    Ms. Ruff, with AARP, what's your plan?
    Ms. RUFF. What we propose is that a lot of the points that 
have been raised here, they are all incredibly important to the 
discussion on Social Security. We do need a bipartisan bill. 
That is the only way we can have long-lasting solutions.
    So our proposal is we have policies on many of the 
different areas, but the fact is they are all levers that need 
to be looked at together. What we propose----
    Mr. RICE. But you don't have a plan, do you?
    Ms. RUFF. No.
    Mr. RICE. You don't have a specific plan to fix Social 
Security?
    Ms. RUFF. No. What we do is we talk to our members. We get 
information from the members and we, in fact, want to help in 
this discussion so that people do understand what the pros and 
cons are of each approach, and then----
    Mr. RICE. Thank you, ma'am. Thank you.
    Ms. RUFF. That is where we are.
    Mr. RICE. So I was looking at--somebody said before that 
life expectancies haven't risen for minorities, but I was 
actually looking at the tables a little while ago. And since 
the last time Social Security was fixed in 1982 or 1983, I 
think, when Ronald Reagan and Tip O'Neill got together--and 
what they did was a mix of tax increases and benefit cuts, 
basically. They increased the retirement age from 65 to 67, and 
they raised the cap. I think the cap at that time was about 
$30,000. Now it is $130,000.
    So, you know, in the end, that is what is going to end up 
having to happen here. And the truth is that across all 
demographics, since 1980, the life expectancy has increased 
about 5 years for everybody. So--it has. I just looked at the 
tables.
    So in the end, what we are going to end up having to do is 
something similar to what they did, and everything is going to 
have to be on the table, and everything is going to have to be 
included if we want to actually reach a solution. I mean, we 
can argue and make points and tear each other down or we can 
try to find a solution to the problem.
    I yield back, Mr. Chairman.
    Chairman LARSON. Well, I thank the gentleman.
    And I would just point out, we had a lot of talk about Uber 
drivers today, and I would just say, when that Uber driver gets 
involved in an accident and finds himself disabled and is 
looking around to make sure that he takes care of his children 
and his family, he is going to be awful glad that the only 
thing he had and the only guarantee that was there for him was 
Social Security.
    And so I do think this has been informative. I want to 
thank the panelists, and I want to thank you for your patience. 
I hope in the future--and we intend to have a lot of followup 
where we are just going to have briefings too, because a number 
of Members have requested that, where we can go back and have a 
little more give and take, both in terms of panelists, but also 
in briefings and followups so that where there is a dispute on 
data or information, we can further jaw through that and 
ultimately come to a solution.
    But I thank everybody for being here this afternoon, and--
well, this morning and almost afternoon, and I look forward to 
our hearing tomorrow at 2 o'clock.
    And with that, the Subcommittee stands adjourned.
    [Whereupon, at 11:49 a.m., the Subcommittee was adjourned.]
    [Questions for the Record follow:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
        


    [Submissions for the Record follow:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]