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

                  PROTECTING AND IMPROVING SOCIAL SECURITY:
                              BENEFIT ENHANCEMENTS

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

                                    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 13, 2019
                                   __________

                               Serial No. 116-13
                                   __________

             Printed for the use of the Committee on Ways and Means

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                        U.S. GOVERNMENT PUBLISHING OFFICE

    36-240                      WASHINGTON : 2020

                          COMMITTEE ON WAYS AND MEANS

                    RICHARD E. NEAL, Massachusetts, Chairman

    JOHN LEWIS, Georgia                  KEVIN BRADY, Texas, Ranking Member
    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 Andres, Minority Staff Director

                                     ______

                        SUBCOMMITTEE ON SOCIAL SECURITY

                     JOHN B. LARSON, Connecticut, Chairman

    BILL PASCRELL, JR., New Jersey

    LINDA SANCHEZ, California            TOM REED, New York, Ranking Member
    DAN KILDEE, Michigan                 JODEY ARRINGTON, Texas
    BRENDAN BOYLE, Pennsylvania          DREW FERGUSON, Georgia
    BRAD SCHNEIDER, Illinois             RON ESTES, Kansas
    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 6, 2019 announcing the hearing.................     2

                                   WITNESSES

    Max Richtman, President and CEO, National Committee to Preserve
      Social Security and Medicare...................................    88
    Bette Marafino, President, Connecticut Alliance for Retired
      Americans......................................................    97
    Abigail Zapote, Executive Director, Latinos for a Secure
      Retirement.....................................................   103
    Andrew Biggs, Resident Scholar, American Enterprise Institute....   112
    Joan Entmacher, Senior Fellow, National Academy of Social
      Insurance......................................................   129
    Donna Butts, Executive Director, Generations United..............   141

                       MEMBER SUBMISSIONS FOR THE RECORD

    Chairman Larson, Submission: Fed Notes on Wealth Recovery........   174
    Chairman Larson, Submission: National Academy of Social Insurance
      Survey.........................................................   181
    Chairman Larson, Submission: Sam Johnson's Social Security
      Proposal: H.R. 6489, the Social Security Reform Act of 2016....   250
    Chairman Larson, Submission: SSA Actuary Report on H.R. 6489.....   303

                       PUBLIC SUBMISSIONS FOR THE RECORD

    National Breast Cancer Coalition, statement......................   333
    Association of Mature American Citizens, statement...............   335
    Michael Binder, Center for Fiscal Equity, statement..............   345
    National Association of Police Organizations, Inc., statement....   348

                        PROTECTING AND IMPROVING SOCIAL
                         SECURITY: BENEFIT ENHANCEMENTS

                                  ----------

                           WEDNESDAY, MARCH 13, 2019

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

        The Subcommittee met, pursuant to notice, at 2:15 p.m., in
    Room 2020 Rayburn House Office Building, Hon. John Larson
    [Chairman of the Subcommittee] presiding.
        [The advisory announcing the hearing follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman LARSON. With that, I call the committee to order.
    This is a hearing of the Subcommittee on Social Security on
    Protecting and Improving Social Security: Benefit Enhancements.
        I want to thank everybody who was here yesterday for their
    participation, both those of you who were in the audience
    yesterday and the members who took part in the hearing. Today
    is the second hearing in a series on protecting and improving
    Social Security. Yesterday, we focused on the importance of
    Social Security and how it provides the middle class with
    economic security. Today, the focus is on how we can strengthen
    Social Security through benefit enhancements to meet the needs
    of today's beneficiaries and future generations.
        Social Security benefits are an essential lifeline for
    millions of Americans. Without Social Security, 43 percent of
    older women would be living in poverty. And, as we heard
    yesterday from Maya Rockeymoore Cummings, a small business
    owner, Social Security provides not only a safety net but
    actually it is a boon to entrepreneurship so that, providing
    the opportunity for business formation in this country,
    entrepreneurs are able to take risks because they know that
    Social Security will be there.
        That is why we need to act to strengthen Social Security
    and its benefits, because even with Social Security, seniors
    are struggling. According to a study done by an economist at
    the Federal Reserve, savings from private retirement plans are
    concentrated in the top 25 percent of the population. So, in
    other words, the data shows that 75 percent of Americans are,
    on average, not saving enough retirement income through private
    plans.
        After the great recession 10 years ago, many saw their
    retirement savings wiped out. And according to economists at
    the Federal Reserve, on average 90 percent of households have
    not regained the wealth they lost in the recession. But Social
    Security remains there for them. It is consistent. Or, as
    Chairman Neal often says, you can outlive an annuity but you
    cannot outlive Social Security.
        Social Security is the working person's retirement
    guarantee. Social Security 2100 Act, we believe, will
    strengthen this guarantee and allow seniors to retire with
    dignity by providing real benefits for them. It establishes a
    minimum benefit for Social Security that is 125 percent above
    the poverty level, ensuring no one that has worked their whole
    life will be able to retire into poverty.
        And unfortunately, for more than 5 million Americans, that
    is the current case and more than three million women, and
    especially women of color.
        It also takes into account seniors' actual needs when it
    comes to cost of living adjustments, commonly referred to as
    COLAs. The Social Security 2100 Act implements a COLA that is
    endorsed by the AARP, known as CPI-E, the E standing for
    elderly, and the actual costs that they incur. And whether that
    is heating and cooling your home, whether that is
    pharmaceuticals, whether that is doctor visits, whether it is
    physical therapy, these are all vitally important.
        At yesterday's hearing, there was a lot of talk about
    people wanting to strengthen Social Security and we welcome
    that. But it is important that we get into the substance as
    well.
        We are holding public hearings so that we can shine a
    bright light on all the proposals to secure Social Security
    that will help the American people. I want to thank
    Representative Rice yesterday for acknowledging that Chairman
    Johnson had a plan as well, and that Chairman Johnson, who we
    acknowledged yesterday for his distinguished service to his
    country, an iconic national hero, also had a proposal, a
    proposal that the chief actuaries also found was sufficiently
    solvent beyond 75 years. Of course, that bill was never heard.
    But it also cut benefits on average by 30 percent.
        And I want to thank again Congressman Rice again for
    pointing that out in the discussion, of which he said there has
    got to be a need for us to come together as a committee and
    discuss this issue. And I think we should. And so that when we
    put forward proposals, whether they are goals or standards,
    that we talk specifically about just what it is that we are
    going to do. And I hope that our panel can accomplish that
    today.
        Our solution on this side is Social Security 2100. This
    would boost benefits and reaches solvency and does so by a
    modest premium increase. Because, as President Roosevelt
    intended, everybody in this country has skin in the game.
    Everybody, every American, understands when they look at their
    paycheck and they see FICA that it stands for Federal Insurance
    Contribution Act. They understand that they take that money out
    of their paycheck each and every week, biweek or month, so that
    they can have an earned benefit by way of an insurance policy
    that not only serves as a retirement vehicle but, unlike any
    other policy or program in this great government of ours,
    provides a disability benefit, provides spousal and dependent
    coverage as well.
        The story of Social Security is replete, and we heard many
    good stories, including yesterday of the Republican leader's
    mother and what she had to endure in raising that great family
    that she did. And so we are pleased again today that we are
    going to be able to focus on this.
        And I just wanted to take a look at a couple of things,
    including I would ask to submit for the record Americans Make
    Hard Choices on Social Security, a Survey with Tradeoff
    Analysis.
        And this was done by the National Academy of Social
    Insurance.
        [The National Academy of Social Insurance information
    follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman LARSON. And I submit that for the record because,
    you know, what we find is that people have come to favor Social
    Security in this manner. A majority of the public does not mind
    paying for Social Security because it provides security and
    stability to millions of retired, disabled individuals,
    children and widows, spouses of deceased workers. And,
    according to the National Academy of Social Insurance, it is
    favored by Republicans by 72 percent, by independents by 81 and
    by Democrats by 87 percent. A majority of the public favors a
    proposal to increase Social Security benefits, including the
    Committee to Preserve Social Security and Medicare, Republicans
    by 66 percent, Independents by 70 percent and Democrats by 84
    percent.
        Americans are willing to pay a little bit more to
    strengthen Social Security. With the Social Security 2100 Act,
    the average working American would only have to pay about 50
    cents a week to make sure that Social Security is solvent
    beyond 75 years, provides a 2 percent overall increase for
    everyone, makes sure that no woman can retire into poverty or
    no working person can, to make sure that we have a COLA that
    actually reflects the real costs that the elderly incur, and to
    make sure that there is a tax cut--a tax cut--for more than 12
    million Americans who, because in 1983, the last time that we
    did anything significant with the program of Social Security
    was the last time that we altered this program in any
    significant or meaningful way.
        But by moving Social Security for the individual from being
    taxed on $24,000 if you are an individual and $32,000 if you
    are a married couple, by moving that to $50,000 and $100,000,
    12 million Americans will receive an immediate tax cut. And so
    we are here today again to talk about the need to expand the
    benefits and what great benefits that Social Security provides.
        And with that, I will recognize the Republican Leader, my
    good friend, Tom Reed.
        [The statement of Chairman Larson follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. REED. Well, thank you, Mr. Chairman. And to the
    witnesses, I welcome you. And I apologize for being tied up on
    the Floor with that vote.
        And, Mr. Chairman, I really do appreciate this second
    hearing today on Social Security. As we indicated yesterday, I
    am happy to join you on this issue that is so important to so
    many Americans that face the issue of Social Security
    insolvency in 2034. And this is an important topic and I am
    glad to see that we are focusing on this topic as opposed to
    some of those on the other side that are focused on the issue
    of impeachment and other issues of the President.
        Mr. Chairman, as I mentioned yesterday, and I shared with
    you and to those in this chamber the story of my mother, a
    widow raising 12 kids all by herself, who relied on Social
    Security, a military retirement benefit and a life insurance
    benefit, and recognizing those three legs of the stool, if you
    would, that were able to keep our family intact and brought a
    lot of security to our family in regards to knowing that we
    would have a roof over our heads and food on the table.
        And so we share the commitment to Social Security, I share
    the commitment, and I know my colleagues on this dais share the
    commitment to work with you and with our Democratic colleagues
    to achieve reform in Social Security that is going to ensure
    that Social Security is here, not only today, tomorrow, but for
    generations to come.
        And as I stated yesterday, the principles and the mission
    that we start this conversation with are clear. And because of
    their importance, I will state them again today. The mission of
    the Republicans on this subcommittee is to secure Social
    Security benefits without tax increases. The principles are
    simple. They are known as LEAP, the 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
    focused reforms.
        One of our principles is very much at the heart of today's
    hearing, protecting the most vulnerable people through focused
    reforms. As we heard in the story of my mother, she was a
    worker who held many jobs. And this is true for many people.
    Just yesterday, I heard from a constituent who retired but
    still wanted to work part time after claiming his earned Social
    Security benefits. However, this constituent had not reached
    his full retirement age. So that means those benefits are
    reduced if he earns too much. That is wrong and it does not
    reward work or help seniors who are trying to transition into
    retirement.
        As Mr. Biggs and others will testify, widows who have
    worked and earned their own Social Security benefits face a
    potentially devastating reduction in the household Social
    Security benefits upon the death of a spouse. That also does
    not reward work and it puts widows who have worked their entire
    lives at risk of poverty.
        And Chairman Larson's plan, Former Chairman Johnson's plan,
    as well as many others, seek to make sure that the long career
    low-wage worker has a minimum benefit that actually means
    something, because that is the right thing to do after years of
    hard work.
        These are just a few of the examples I hope we can talk
    about today. As all of our witnesses will share in their
    stories, Social Security does not always work well for workers
    and their families today. That is because much of the program
    we know today as Social Security was designed in the late
    1930s. A lot has changed since then.
        Today, more women are working, people start their families
    later and, in some cases, they are living longer. It is time to
    take a hard look, figure out what is working, what is not and
    then come together to find bipartisan solutions to address
    these problems.
        But as we heard yesterday from Joseph, efforts to address
    Social Security solvency strictly by raising taxes would be
    devastating to our job creators. Jobs are the cornerstone of
    Social Security. You earn Social Security benefits as a result
    of work. We must never hurt job creation and wage growth as we
    move forward. To do so would harm Social Security, not help it.
        Thanks to tax cuts, workers have more money in their
    pockets, companies are investing in their businesses and, as a
    result, our economy is booming. We should recognize this
    success and build off of it, to ensure those workers are
    rewarded for their hard work, not penalized.
        Mr. Chairman, we are in earnest in our desire to work with
    you and look forward to hearing from our witnesses today. I
    know we all came here to solve big problems and to help people,
    Democrats and Republicans. I cannot think of a more important
    problem to solve than Social Security solvency. This will
    guarantee Americans can count on the program now and for
    generations to come. And, as I have learned firsthand, being
    raised by that single mom, Betty, my greatest idol and
    inspiration, securing Social Security is a mission we must
    achieve.
        And with that, I yield back.
        [The Reed opening statement follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman LARSON. I thank the distinguished Republican
    Leader and we look forward to working with you. We look forward
    to seeing the specifics of your plan. Because I think without a
    plan or without a concept to demonstrate for witnesses and what
    people can actually take a look at, it is hard to talk about
    platitudes, however lofty and idyllic they are.
        And our panelists here today are here to discuss from their
    perspective the importance of benefits and what they mean to
    the public and we have, God bless them, they arrived early.
    And, I as I explained, we had a vote. But we will be hearing
    from Max Richtman, from Bette Marafino, from Abigail Zapote,
    from Mr. Andrew Biggs, from Joan Entmacher and finally from
    Donna Butts. Each of your statements will be made as part of
    the record in its entirety. I would ask that you summarize your
    testimony in five minutes or less.
        To help you with that time, there is a timing light on your
    table. When you have one minute left, the light will switch
    from green to yellow, and then finally to red when the five
    minutes is up.
        We will begin with Mr. Richtman.

             STATEMENT OF MAX RICHTMAN, PRESIDENT AND CEO,
      NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE

        Mr. RICHTMAN. Chairman Larson, Ranking Member Reed, members
    of this subcommittee, on behalf of the millions of members and
    supporters of the National Committee to Preserve Social
    Security and Medicare, thank you for holding this hearing and
    for inviting me to testify.
        Since the program's creation 84 years ago, Social Security
    has been and is an enormously successful program that is
    essential to the retirement security of a vast majority of
    Americans. While Social Security benefits are modest, averaging
    about $17,000 a year, Social Security is still the single
    largest source of income for retired Americans.
        To ensure the program's continued success, it is vitally
    important that long-term solvency be restored and that the
    Social Security benefits be improved to meet the needs of all
    Americans. We believe that it is essential that proposals to
    strengthen the adequacy of Social Security benefits for all
    effectively address the economic inequality disproportionately
    faced by women and communities of color as well.
        For example, women have been and continue to be subjected
    to persistent gender wage discrimination that leads to smaller
    Social Security benefits. Women often give up jobs and
    paychecks to care for children and elderly parents, also
    leading to reductions in Social Security benefits. Women are
    less likely to have a pension and, even if they do have a
    pension, it is usually less than what men receive. And finally,
    women live longer than men and consequently are more likely to
    outlive their retirement savings.
        Likewise, Social Security is extremely important to
    communities of color because African and Latino Americans tend
    to have lower earnings and less pension coverage than white
    Americans. For instance, almost 50 percent of African American
    beneficiaries, 52 percent of Latino beneficiaries, rely on
    Social Security for 90 percent or more of their income in
    retirement. This compares to about 40 percent of all races who
    depend on Social Security for 90 percent or more of their
    income.
        These facts led the National Committee's decision to
    prioritize retirement equity, supporting legislation that
    rights the economic wrongs threatening millions of Americans.
    To that end, we support several proposals that would improve
    benefits which are explained at length in my written testimony
    and I would just like to highlight a couple of our
    recommendations.
        First, we support improving Social Security's survivor
    benefits, to treat one-earner and two-earner couples more
    fairly and reduce the likelihood that survivors fall into
    poverty.
        We believe that Social Security credits should be given to
    caregivers of children and elderly family members.
        We also propose that future cost of living adjustments be
    based on a fully developed consumer price index for the elderly
    or CPI-E. CPI-E would more accurately measure the rising prices
    of goods and services paid by seniors than current urban and
    clerical worker index, that is what is currently used.
        Finally, seniors age 85 and older, and women in particular,
    are more likely to be financially vulnerable even with Social
    Security. To ensure additional security, we support a benefit,
    we call it a bump-up for all beneficiaries 20 years after
    retirement.
        To make these important proposals affordable and extend the
    program's long-term solvency the National Committee supports
    strengthening the financing of Social Security by first
    eliminating the cap on Social Security payroll contributions so
    that rich and poor and those in between pay at the same rate,
    and by gradually increasing the Social Security contribution
    rate.
        Mr. Chairman, Members of the Subcommittee, three decades of
    stagnant middle class wages and eroding retirement benefits
    threaten to put millions of retirees on a path to hardship.
    Women and communities of color are on a more troubling path
    because they face this retirement crisis and also bear the
    burden of years of economic inequality. The proposals I have
    discussed in my oral and written testimony will address Social
    Security inequality for women, communities of color and help
    ensure a livable retirement for more Americans.
        And we applaud you, Mr. Chairman, as well as Congressman
    DeFazio and Senators Blumenthal, Sanders, Casey, Van Hollen and
    others who have introduced many of these proposals as
    legislation. Finally, I urge the Ways and Means Committee to
    approve this legislation and ensure that all Americans can
    depend on Social Security to protect them against the growing
    need for economic security and retirement, disability and
    survivorship. Thank you very much.
        [The prepared statement of Mr. Richtman follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman LARSON. Thank you, Mr. Richtman.
        And now it is my great pleasure to recognize someone from
    my home state of Connecticut, a retired English professor and
    teacher who represents the Alliance for Americans, Bette
    Marafino.

    STATEMENT OF BETTE MARAFINO, PRESIDENT, CONNECTICUT ALLIANCE OF
                           RETIRED AMERICANS

        Ms. MARAFINO. Thank you, Congressman Larson and Ranking
    Member Reed and members of the Social Security Subcommittee. I
    am from West Hartford, Connecticut, and I am Bette Marafino,
    president of the Connecticut Alliance for Retired Americans, a
    grassroots advocacy organization of more than 57,000 people. We
    are an affiliate of the Alliance for Retired Americans, which
    has 4.4 million members and is fighting to protect the health
    and economic security of all older Americans.
        As part of our outreach, members of the alliance speak with
    and interview retirees all across the country. Health concerns
    and income security are common to most seniors. And many tell
    us their only income is their monthly Social Security check.
    Retirees fear what would happen to them if Social Security were
    cut and worry about the skyrocketing cost of prescription
    drugs.
        I would like to share a couple of stories we gathered that
    illustrate the challenges facing older Americans. David, from
    New Haven, Connecticut says, my wife and I retired and we both
    have several health problems. We live on 900 a month from
    Social Security. We are worried that if we lose Social Security
    through a benefit cut or have Medicare coverage reduced, we
    would be unable to pay for our health care.
        Mary of Essex, Connecticut says, I have crippling
    rheumatoid arthritis and get an infusion every six weeks. The
    cost for this procedure is $4,200. Without this treatment, I
    would be confined to a wheelchair. I worry that if Medicare is
    reduced, I would not be able to afford this treatment. I do not
    have a pension and receive 700 a month from Social Security.
    Every month, I take money out of my small bank account to
    supplement my Social Security check. I am 78 and hope I don't
    live a long life because I do not want to rely on my relatives
    to help me.
        On a personal note, my maternal grandmother, mother of six
    and a widow at age 50, often said how glad she was to receive
    my grandfather's Social Security check. Because that check, she
    said, kept her out of the poorhouse. At the time, Connecticut
    had poorhouses in many communities for those with little money.
    There was one not very far from my grandmother's house. And
    every week, she baked her babka and brought it to the poorhouse
    and sometimes I would visit with her. And the poorhouse was a
    very, very basic, bleak place. And I am concerned that if we
    have cuts to Social Security, we might wind up back in
    poorhouses. Fortunately, my grandmother was able to live in her
    modest home until she passed away at the age of 102.
        For decades, economists described the U.S. retirement
    system as a three-legged stool with a pension, Social Security
    and personal savings all supporting retirement. The pension leg
    of the stool has been gradually disappearing from the American
    workplaces, eroding retirement security for most Americans and
    making Social Security even more important.
        In addition, Americans pay the highest price for
    prescription drugs, putting extreme pressure on seniors'
    finances and making the need to increase Social Security
    benefits urgent. A recent KFF poll found that 23 percent of
    seniors find it difficult to afford their prescriptions and 29
    percent of all adults did not take their drugs as prescribed
    because of costs.
        To ensure all Americans have the dignified retirement they
    have earned through their lifetime of service, the Alliance for
    Retired Americans urges Congress to expand Social Security,
    increase earned benefits for current and future beneficiaries
    and expand the CPI-E. We must also help widows and widowers. We
    urge Congress to ensure that surviving spouses receive 75
    percent of the total household's Social Security benefits they
    received prior to their spouse's death.
        This change is particularly important to women. The poverty
    rate for women over 65 is almost twice that of men over 65. And
    more than half of elderly women in poverty are widows.
        To fund benefit increases and extend the solvency of the
    trust fund, the alliance supports lifting the payroll cap and
    requiring millionaires and billionaires to pay their fair share
    into the trust fund.
        I see my time is up, but may I just please close with one
    quick paragraph, Congressman?
        Chairman LARSON. You may.
        Ms. MARAFINO. I would like to close by reminding everyone
    that Social Security also protects people with disabilities and
    the surviving children of deceased parents. The president of
    the Arizona Alliance for Retired Americans' father died when he
    was a child and credits Social Security with keeping him, his
    mother and his siblings out of poverty.
        On behalf of the Alliance for Retired Americans, thank you.
        [The prepared statement of Ms. Marafino follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman LARSON. Thank you, Bette.
        Ms. Zapote, you are recognized. You may proceed.

    STATEMENT OF ABIGAIL ZAPOTE, EXECUTIVE DIRECTOR, LATINOS FOR A
                           SECURE RETIREMENT

        Ms. ZAPOTE. Thank you, Chairman Larson and Ranking Member
    Reed, for inviting me to speak today, as well as the rest of
    the committee. It truly is an honor to be here.
        My name is Abigail Zapote and I am the executive director
    of the Latinos for a Secure Retirement coalition. Our
    organizations represent the more than 58 million Latinos in the
    United States, nearly one out of five, and the fastest growing
    and youngest ethnic group in the United States. By 2060, our
    community is poised to become 30 percent of the American
    workforce, making it imperative to have a Social Security
    insurance program that is robust for future generations. Our
    strong cultural values of la familia, of caring for your
    parents, spouses and children, are exemplified by Social
    Security.
        I sit before you today on behalf of all Latinos to take a
    stand in protecting Social Security. First and foremost by
    saying no to proposals that would cut benefits, no to proposals
    calling for privatization, and no to proposals that would raise
    the full benefit age, as we know this results in lower benefits
    no matter at what age benefits are claimed. Secondly, to speak
    to the importance of four benefit enhancements that would
    improve Social Security and exponentially increase quality of
    life for beneficiaries.
        In 2018, the average annual benefit for seniors was roughly
    17,000. These benefits are far from generous. Yet, for Latinos,
    these benefits are lower and even more critical to their
    livelihood. The average benefit for Latino men was roughly
    15,000 and only 12,000 for Latina women. Without Social
    Security, the elderly poverty Latino rate would increase from
    roughly one out of six to one out of two.
        To put this into better context, I want to share a story
    from a Latina senior in California who faces issues that
    benefit enhancements could remedy. Mrs. Gonzalez knows it could
    be worse. She has diabetes but uses Medicare to help cover her
    health cost. She struggles to make ends meet but takes care of
    her nutrition needs through the use of supplemental security
    income. But for some of her friends and other Latino seniors,
    daily life is even more difficult.
        I have friends gone homeless. Their living expenses just
    got too high and have not found family members they can move in
    with. I am trying to find help for them but it is not easy.
        This is the reality that many Latino seniors face every
    day, relying on Social Security and community programs as
    lifelines to seeing a doctor, in finding housing and affording
    food. We can begin to resolve these issues by increasing
    funding to SSA's operating budget to better serve America's
    growing Social Security beneficiary population.
        Due to the increase in health care, housing and living
    expenses for seniors, adopting a consumer price index for the
    elderly is a top priority. This would ensure that the CPI-E
    reflects expenditures of the elderly and produce a higher COLA
    that truly keeps pace with inflation.
        In 2017, nearly one of five Latino workers were paid
    poverty wages that left them below the federal poverty line,
    even when they worked full time year round. Additionally,
    Latinos tend to work for employers who do not offer retirement
    accounts, which leaves them disproportionately unprepared for
    retirement. To protect long-service, low-wage workers and
    ensure benefit adequacy for all Americans, a special minimum
    benefit should be enacted to pay 25 percent above the poverty
    line for those who have worked 30 years and retire at the
    normal retirement age. Chairman Larson, I want to thank you for
    including both of these benefit enhancements in the Social
    Security 2100 Bill.
        We also urge a proposal that would provide benefits for
    students of deceased or disabled parents up to the age of 22.
    Latinos are more likely than the rest of the population to have
    a deceased or disabled parent due to employment in physically
    demanding jobs. College costs have skyrocketed and higher
    education has become even more essential to long-term labor
    market success. This change would help address college
    affordability for a disproportionately low-income group.
        Strong family values in the Latino community means workers
    also become primary caretakers for elderly relatives and
    children. We urge a proposal that would provide caregivers a
    Social Security earnings credit when they take unpaid time off
    from their work to provide care. The credit would be added to
    earnings to calculate future Social Security benefits for the
    caregiver's retirement.
        Lastly, the vast majority of working Americans will
    contribute to Social Security with every paycheck they earn.
    This includes even the lowest paid workers, those who earn the
    federal minimum wage of $7.25. We propose a gradual increase to
    the tax cap to again cover a larger percent of earnings and
    provide peace of mind to workers of all ages that they, too,
    can count on this program.
        Social Security is clearly a bedrock to our nation's
    retirement security and an indispensable lifeline for our
    nation's seniors, disabled, widows and orphans. Any attempts at
    reforming Social Security must recognize the importance of
    these benefit enhancements to secure Social Security for the
    future.
        Thank you for having me here. And I will be happy to answer
    any questions you may have.
        [The prepared statement of Ms. Zapote follows:]

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        Chairman LARSON. Thank you, Ms. Zapote.
        And now Mr. Biggs, you are recognized. Please proceed.

         STATEMENT OF ANDREW BIGGS, RESIDENT SCHOLAR, AMERICAN
                          ENTERPRISE INSTITUTE

        Mr. BIGGS. Thank you, Chairman Larson, Ranking Member Reed,
    and Members of the Committee.
        The title of my testimony today is the Need for Evidence-
    Based Policy on Social Security. Evidence-based policy means
    that we reform Social Security based upon the facts, not upon
    our fears. While those facts may call for increasing benefits
    for certain vulnerable populations, the data clearly do not
    indicate the need for broad-based, across-the-board benefit
    increases.
        According to Gallup, 80 percent of current retirees say
    they have enough money not just to get by but to, quote, live
    comfortably. While a majority of Americans told a Vanguard
    survey, they fear the country as a whole faces a retirement
    crisis, only 4 percent of current retirees described their own
    financial situation in those terms.
        In a 2019 multi-country survey by ING, only 9 percent of
    U.S. retirees described their incomes as severely inadequate,
    versus 33 percent in France and Germany, who spend roughly
    twice as much as the U.S. on their Social Security programs.
    Today, the median U.S. retiree has a disposable income on par
    with Switzerland and higher than in Sweden, Denmark or the
    Netherlands. How can this be?
        The answer is that Americans save much more for retirement
    than people in other countries. Of 70 countries for which the
    OECD gathered data, only five had higher levels of retirement
    plan assets than the United States. Moreover, U.S. retirement
    savings today are more than six times higher than when
    traditional defined benefit pensions were at their peak. More
    Americans participate in 401(k)s than ever had a traditional
    pension. And with 401(k)s, both employers and employees
    contribute, boosting savings versus traditional pensions where
    only employers contributed.
        The result is that U.S. retirement incomes are growing
    rapidly. From 1990 to 2012, the median retiree household's
    income grew by 32 percent above inflation, versus only 11
    percent income growth for near retirees aged 50 to 59. The
    faster growth in incomes is evident for both low and high-
    income retirees.
        Mr. Chairman, you mentioned the recent Federal Reserve
    study and the decline in household wealth since the great
    recession, which is mostly attributable to the popping of the
    housing bubble. In essence, the disappearance of wealth that
    never really existed. But those same Fed data show the incomes
    for median new retirees rose by 11 percent since the recession,
    while incomes for working-age households fell. Recent Census
    Bureau research show that typical retirees today have income
    equal to roughly 95 percent of their pre-retirement earnings,
    far above the 70 to 75 percent replacement rate that financial
    planners recommend.
        The poverty rate among retirees has fallen dramatically in
    the past two decades and is below that for working-age
    households. This is good news for Social Security and we should
    embrace it rather than denying it.
        While Social Security is significantly underfunded, there
    isn't a need to raise benefits for middle and upper-income
    households. Indeed, research concludes that middle and upper-
    income households would reduce their personal savings in
    response to higher expected Social Security benefits. You can
    see this around the world, where countries with more generous
    Social Security programs had lower levels of retirement
    savings. Lower saving would reduce long-term economic growth,
    as would the higher taxes needed to fund an across-the-board
    benefit increase. Economists differ on how much economic growth
    would decline, but there is no real debate on the direction of
    the change. Higher taxes and lower saving means slower economic
    growth.
        But we can fill the gaps in Social Security's safety net,
    which is not nearly as effective as it could be. I have
    personally argued for a true blanket guarantee against poverty
    in old age, something neither current law Social Security nor
    any of the current proposed benefit expansions would provide.
    But absent such a guarantee, we can target benefit increases to
    vulnerable groups, such as widows, low-wage earners and
    divorced individuals. Such targeted benefit increases have been
    included in reform proposals for members of both parties and
    could form the basis of bipartisan compromise. And bipartisan
    compromise is what the nation needs.
        Social Security reforms have never been passed on a
    partisan basis and attempts to do so today will almost surely
    fail. And failure is not a loss for a political party so much
    as a loss for the American people, who have seen Social
    Security's unfunded liabilities grow by the trillions while
    Congress has failed to act.
        This is the committee with the greatest responsibility for
    Social Security's future. Members have an obligation to know
    the program and to know the data on Americans' retirement
    savings and retirement incomes. But more importantly, they have
    an obligation to reach out to other members in a spirit of
    compromise to find ways to secure and to improve Social
    Security for future generations.
        Mr. Chairman, your suggestion of off-the-record
    discussions, question-and-answer periods where people can reach
    out to each other is precisely what is needed to move a
    bipartisan Social Security reform bill forward. Thank you very
    much.
        [The prepared statement of Mr. Biggs follows:]

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        Chairman LARSON. Thank you, Mr. Biggs.
        And we are now fortunate to be joined by Joan Entmacher.
    And you are now recognized and please proceed.

    STATEMENT OF JOAN ENTMACHER, SENIOR FELLOW, NATIONAL ACADEMY OF
                            SOCIAL INSURANCE

        Ms. ENTMACHER. Thank you. Chairman Larson, Ranking Member
    Reed, and Members of the Subcommittee, I really appreciate the
    opportunity to testify today on ways to enhance Social Security
    benefits. I am a member of the National Academy of Social
    Insurance and a senior fellow. But the views I express today
    are my own. Although my testimony focuses on women, all of the
    options I describe would be available on a gender-neutral basis
    and would benefit others, including communities of color who
    have been disadvantaged in the workplace and in other ways.
        Social Security's basic benefit structure has many features
    that are especially important to women but its benefits are
    modest. The average benefit for women 65 and older is less than
    $14,000 a year, about 80 percent of men's. Even so, women are
    more reliant than men on income from Social Security, making
    improvements especially important for them.
        I will briefly describe ways that Social Security could
    address four challenges to women's retirement security. Other
    witnesses have described them and my testimony does focus on
    retirement benefits.
        First, the gender wage gap. Benefits for women and others
    with low earnings could be improved by adjusting the regular
    benefit formula so that all workers, especially low and middle-
    income workers, receive a boost in their benefits. And/or
    reforming the special minimum benefit so that workers with
    substantial work histories but low earnings do not retire into
    poverty.
        However, women with very short work histories might not be
    brought out of poverty even by a reformed special minimum
    benefit, although they would be helped. So Congress should also
    consider improving the Supplemental Security Income program.
        The second challenge is unpaid caregiving as others have
    mentioned. Social Security could provide credit for caregiving
    work by counting some years of caregiving as years of coverage
    in a reformed special minimum benefit. It could also give
    earning credits for caregiving years in the regular benefit
    formula.
        The third challenge are changed family structures. Today,
    most married women are in the paid labor force and families
    rely much more on the earnings of both spouses. Also, an
    increasing share of women, especially black women, will be
    ineligible for benefits as a spouse or surviving spouse because
    they never married or divorced without a marriage that lasted
    10 years. So a package of reforms should include reforms to
    benefits that women earn both as workers and as spouses and
    surviving spouses.
        Currently, a surviving spouse can receive a benefit worth
    up to 100 percent of the deceased spouse's benefit or her own
    benefit, whichever is higher. This helps many widows but many
    are still in poverty and the design does not work well for
    today's dual-earner couples. A new alternative benefit would
    provide a surviving spouse a benefit equal to 75 percent of the
    sum of the spouses' combined worker benefits up to a certain
    limit. That would increase benefits for the surviving spouse in
    low and moderate-income couples and allow a surviving spouse to
    benefit from the contributions that both have made to Social
    Security.
        And the fourth challenge is longer life expectancy. Women,
    including women of color, face more years in retirement than
    men with fewer resources. Very few people know that both
    African American women and Latinas have longer life
    expectancies than white, non-Hispanic men. Their retirement
    security could be improved by adopting a cost of living
    adjustment like the CPI-E that accurately reflects the spending
    patterns of seniors and/or by providing a boost to benefits for
    long-term beneficiaries with lower benefits.
        In conclusion, although women today are working more and
    earning more than women in past generations, substantial
    equalities still remain. And the more troubling fact is that we
    are not making great progress in reducing those inequalities.
    The gender wage gap has remained stagnant for the last 10
    years. The participation of mothers in the workforce peaked
    several years ago. And that is because women still face
    incredible challenges combining work and family, the lack of
    family leave, the lack of schedules that work and the lack of
    affordable, good-quality child care. Women need enhanced Social
    Security benefits.
        And fortunately, as the bill introduced by Chairman Larson
    has proved, it is possible both to enhance benefits and to make
    Social Security secure for future generations. And I really
    look forward to the work of this committee on both of those
    important issues. Thank you.
        [The prepared statement of Ms. Entmacher follows:]

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        Chairman LARSON. Thank you very much, Ms. Entmacher.
        And now we recognize Ms. Donna Butts. Please proceed and
    comment.

       STATEMENT OF DONNA BUTTS, EXECUTIVE DIRECTOR, GENERATIONS
                                 UNITED

        Ms. BUTTS. Thank you, Chairman Larson, Ranking Member Reed,
    and Members of the Subcommittee for the opportunity to testify
    about one of the most important intergenerational family
    support and social insurance programs in America, Social
    Security. For more than 80 years, Social Security has been the
    premier example of a policy designed to secure and insure the
    wellbeing of individuals and their families.
        In addition to its well-known role in providing retirement
    security, the program provides many essential protections for
    people of all ages, including disability insurance and
    survivor's insurance. For many, it makes the difference between
    putting food on the table and deciding whether grandma or
    junior eats tonight.
        The impact of Social Security programs can be seen in every
    community in the country. Accepting his Oscar recently,
    director Spike Lee thanked his grandmother, a Spelman graduate
    and daughter of a slave, who saved 50 years of Social Security
    checks and used those to put her Spikey-Pooh through college.
        Another Social Security success is Congressman and former
    Speaker of the House Paul Ryan, who saved his Social Security
    survivor benefits that he began to get after his father died
    suddenly. Mr. Ryan used his Social Security savings to help pay
    for his own higher education.
        And, as with Mr. Reed, Social Security has a personal
    connection to my family as well. My husband's father died when
    he was seven years old. And while he does not remember which
    Social Security check paid his family's household bills, he
    does remember taking advantage of the student benefit before it
    was eliminated in 1981, allowing him and his sister to be the
    first in their family to earn college degrees. That extra
    little bit made it possible for him to graduate and begin his
    career with a degree, without incurring the overwhelming
    student debt so many students and their families are harnessed
    with today. Imagine the impact reinstating the student benefit
    could have, helping students access trade schools and four-year
    colleges and universities today.
        Social Security is a social insurance program that almost
    all workers pay into and, in return, qualify for and receive
    benefits. Social Security, whose framework was never meant to
    be set in stone, has been and should continue to be tweaked and
    strengthened, not dismantled or weakened. Social Security
    embodies an intergenerational compact. It lifts more children
    out of poverty than any other federal program. A 2016 study by
    the Center for Global Policy Solutions found the child poverty
    rate would increase by nearly 20 percentage points without
    Social Security benefits, both direct and indirect, from 25.5
    percent currently to almost 43 percent.
        Recently, Social Security has become even more important in
    light of the increase in the number of grandparents and
    relatives that are being called on to raise grandchildren,
    nieces and nephews because of the opioid epidemic. Twenty-six
    percent of grandparents who are raising grandchildren have a
    disability and even with Social Security, 19 percent live below
    the poverty line. Researchers from Penn State estimated that
    without Social Security, it would be closer to 59 percent.
    Grandparents and other relatives who step up and form a
    protective grandfamily around our country's children save our
    country more than $4 billion a year by keeping children out of
    the child welfare system. They deserve our respect and the
    critical financial support Social Security provides.
        On behalf of Generations United, I make the following
    recommendations for strengthening Social Security and the
    support it provides our country's families, children and older
    adults. Reinstate the student benefit for survivors up to age
    22 for youth who remain enrolled in college, to help today's
    students become the educated workforce our country's economy
    needs and lessen the overwhelming burden of student debt. Two,
    expand the eligibility for children being raised by
    grandparents and other relatives. Three, provide Social
    Security credits to caregivers. Four, protect and strengthen
    the program.
        Generations United supports a strong and solvent Social
    Security program that meets its obligations for current and
    future beneficiaries. As the dialogue about how to achieve
    long-term solvency for Social Security continues, policymakers
    must consider how reforms will affect vulnerable children,
    people with disabilities, spouses of deceased workers,
    retirees, and families as a whole. This is a time to protect,
    strengthen and expand this critically important family
    protection program.
        Robert Ball said Social Security is built on awareness that
    no one can go it alone. True generational equity means acting
    on that awareness so that those who come after us and who stand
    on our shoulders can see a little further and do a little
    better in their turn.
        Now it is our turn. There is no better example of a policy
    solution that supports intergenerational solidarity than Social
    Security. It is designed to value and weave generations,
    reinforcing our interdependence so that each is stronger while
    helping our families and communities thrive.
        Thank you again for the opportunity to speak on behalf of
    the vital income protections Social Security ensures for all
    generations.
        [The prepared statement of Ms. Butts follows:]

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        Chairman LARSON. Thank you, Ms. Butts. In fact, I thank all
    the panelists for your testimony and for your patience and
    perseverance. Intergeneration solidarity, I like that. It's a
    unique term.
        So now our questioning will begin of our panelists. And I'd
    like to start with Bette Marafino from my home state of
    Connecticut. And, Ms. Marafino, you talk to seniors all over
    the state of Connecticut. Do you think that the current
    benefits that they receive are sufficient and is getting the
    job done for them?
        Ms. MARAFINO. No.
        Chairman LARSON. Could you expand on that?
        Ms. MARAFINO. Yeah, in a word.
        Chairman LARSON. I do not think it was clear enough. Could
    you expand?
        Ms. MARAFINO. Yeah, I can. Last year, we did a health care
    study and we went and interviewed seniors and talked about
    their health care. Now, many of the seniors were living in low-
    income housing. And, to a person, they would say, I am scared
    to death that I am going to lose this. And what I have now is,
    you know, below the poverty line. And so they have a hard time.
        And what I notice, we very often go to community centers
    and senior centers where there is a meeting for seniors and
    there is free lunch. Those lunches are filled with people and
    they usually come an hour ahead of time to make sure they have
    a seat. And many tell us, this is our only meal of the day,
    decent meal of the day.
        And I live in Connecticut in an area that is a pretty
    prosperous area. But there are lots of people who need this.
    And so to enhance their Social Security would be a boon to
    them.
        Chairman LARSON. Thank you. I wanted to submit for the
    record also, and I appreciated what Mr. Biggs had to say about
    evidence-based information. And I think that is vitally
    important to the decisions we have to make, especially I wanted
    to submit these Fed notes on the wealthless recovery, asset
    ownership and the uneven recovery from the great recession, and
    the disappearing employer pensions contributing to rising
    wealth inequality, both submitted by the fed.
        [Rep. Larson--FEDS Notes follows:]

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        Chairman LARSON. And with that, I wanted to ask Mr.
    Richtman, in your vast experience as the head of the Committee
    to Preserve and Protect Social Security and Medicare, there is
    a sense, and I have nothing but respect for Mr. Biggs, but
    there is a sense that it is quite a rosy picture out there for
    seniors, they are doing quite well.
        I have to say, doing as many public forums as I have across
    the country, that has not been my experience. But I like to
    call on the experts. And would you agree with that position?
        Mr. RICHTMAN. I respect Mr. Biggs. I have heard him
    testify. But it would be good if he would go out to some town
    hall meetings and talk to some people and hear what people are
    actually saying. And he is right, facts are important. He does
    not have the only facts in his testimony.
        It is my understanding that the Pew Research Center, highly
    respected, has said that today's real average wage has lower
    purchasing power, lower purchasing power, than it did 40 years
    ago. The Kaiser Family Foundation found that over the next few
    decades, middle class wages are projected to be flat. Those are
    facts. They are as reputable as any I have seen.
        And the other thing I wanted to comment on Mr. Bigg's
    testimony, all of those people who thought that they were doing
    so well and had a comfortable life, I wonder how they would
    react if the law or the bill that Congressman Johnson
    introduced last year were passed and their Social Security
    benefits were cut by one third? Would they still be so
    optimistic? I do not think so.
        Chairman LARSON. And that is the other important thing that
    we have acknowledged right along, is that to do nothing, to do
    nothing, means that in 2034 that individuals will receive, with
    Congress doing nothing as it has since 1983, that individuals
    will receive a 21 percent, minimally, cut to their benefits.
    How would your constituents act to that, Ms. Zapote?
        Ms. ZAPOTE. I think when it comes to the Latino community,
    there is a vast disparity on how much we have saved in private
    accounts for Social Security. Right now, Latinos have $10,000
    saved while our white counterparts have about 60,000 saved into
    retirement accounts. Which means that having a robust Social
    Security system, it needs to be there for our community.
    Especially knowing that Latinos right now, the median age is
    28, my age. And so it is almost that much more important for
    younger Latinos as well to have this program. Because to quote
    a Generation Progress study, which is the millennial arm of the
    Center for American Progress, millennials right now spend more
    money on monthly student loan repayment than they do groceries.
    To put that into, you know, to really put that into context for
    everybody here, our generation does not have that expendable
    income or there are a lot of barriers to access retirement
    accounts. And so that is why that is more important to make
    sure that we have Social Security in the future.
        Chairman LARSON. Thank you so much. And let me recognize
    the Republican Leader, Tom Reed.
        Mr. REED. Well, thank you, Mr. Chairman, and thank you to
    the witnesses today and I truly appreciate your testimony and
    your recommendations. And one area that I think I want to focus
    just a little bit on are to get to focused reforms for benefit
    opportunities to improve.
        And Mr. Biggs, you talked about it in your testimony. And
    obviously, being raised by a single mom, passed when my dad was
    48 and she passed when she was 72, what are we looking at in
    regards to widows in your testimony, as to how? What are you
    recommending that benefit adjustment be?
        Mr. BIGGS. Well, the survivors and disability benefits
    provided by Social Security are a true insurance function. They
    pay benefits to the people who need them the most at the time
    they need them the most. And that is something which is real
    value added from Social Security.
        Widows can face a significant cut in their household
    benefits when they become a widow, when their spouse, and it is
    usually the husband, passes away. Depending upon sort of the
    relative earnings between the spouses, their total household
    benefit could be cut from one third to one half. Now, your cost
    of living falls a little bit when you become widowed, you are
    not feeding two people. But your cost of living does not fall
    by one third to one half. So that is pushing down their
    standard of living, at a time when they do not have the option
    of going back into the workforce, they might have spent down
    some of their savings because they are older.
        So various proposals looked at how do you protect widows.
    One that has been around for quite some time is to pay them 75
    percent of the household's previous total benefit. I know Ms.
    Entmacher has other ideas which are a little bit more nuanced
    on that. But again, the focus is get Social Security's money
    paid to the people who need it at the time they need it, of
    targeting these dollars more effectively. That way, we get more
    of a social insurance protection without having to throw money
    at everyone.
        Mr. REED. I appreciate that. And the mission of that
    benefit, what is the goal of that benefit?
        Mr. BIGGS. Of the widows' benefit? Well, it is essentially
    to replace lost income when the higher-earning spouse passes
    away.
        Mr. REED. Keep the family out of poverty.
        Mr. BIGGS. Sure. It is not explicitly poverty, but that is
    the idea. To keep them from falling into indigence, I guess,
    would be the word.
        Mr. REED. And I totally agree with that. And I think the
    heart of that promise of Social Security needs to be respected
    as we go through this conversation and as we go through this
    conversation and through the successful reform process, I know
    our chairman is going to lead to the finish line.
        And as we have this honest conversation, I do want to focus
    a little bit. Because I see in all of the testimony only one
    area, and it is Ms. Entmacher that talks about the length of
    life and the issue of longevity and how people are living
    longer. You are the only one who touched on that issue in your
    testimony, between all the testimony I read here today.
        And so you have heard numerous times on our side of the
    aisle or different folks that attack this issue, and some
    Democratic members, to their credit, have looked at the honest
    issue of longevity. People are living longer, generally,
    overall.
        So I am intrigued by your assumption in your testimony, Ms.
    Entmacher, and also in Chairman Larson's bill. There seems to
    be--because there is no adjustment in the age of retirement,
    the retirement age qualification. It is at 67, stays at 67. So
    the question for me is, what is the magic of 67 and why are you
    not advocating for a lower retirement age if you are trying to
    expand retirement benefits?
        Ms. ENTMACHER. Well, in effect, the proposals that are made
    in the Social Security 2100 Bill do provide some compensation
    for the benefit cut that is occurring because of that increase
    in the retirement age. That increase in the retirement age is a
    cut in benefits across the board that affects everybody.
        Mr. REED. So the 67?
        Ms. ENTMACHER. The 67, yeah.
        Mr. REED. So the 1983 reform?
        Ms. ENTMACHER. Cut benefits.
        Mr. REED. You are trying to compensate for that cut of
    benefits that occurred in 1983?
        Ms. ENTMACHER. That is part of it, absolutely.
        Mr. REED. So what is the magic of 67?
        Ms. ENTMACHER. In 1983, I think people looked at the
    numbers and tried to come up with some changes that would, you
    know, bring Social Security back into balance. And part of the
    way they did it were these benefit cuts. There was a delay in
    the COLA and there was also an increase in the retirement age.
        Mr. REED. Just so I get your testimony correct and you have
    spent a lot of time here. So 67 is an arbitrary number? It is
    not based on any type of analysis as to longevity at retirement
    age? We shouldn't be looking at it from an evidence or a
    background in data? We should just pick an arbitrary date or an
    arbitrary age?
        Ms. ENTMACHER. Well, I think actually you do need to look
    at data. And part of the data shows that the increase in
    longevity has mostly happened for people of higher
    socioeconomic status, particularly among men. It is interesting
    that, among women, even if they are lower income, they seem to
    live an extra long time. Which is why women of color face this
    problem of outliving their retirement income.
        Mr. REED. I understand the argument, I understand the
    position. I am just wondering if there is any evidence or data
    for the retirement age of 67. And that is why I am getting
    confused. If people are living longer and people qualify----
        Ms. ENTMACHER. Some people are living longer.
        Mr. REED [continuing]. Some people living longer, and we
    can have that debate back and forth. But some people. So even
    some people living longer. The retirement age debate itself, I
    think, is something we really need to have a conversation
    about, an honest conversation about. What are we trying to
    insure for that retirement period? If you have a retirement
    period, when does that period begin and when is it likely to
    end?
        And I guess that is the question I am intrigued by as we go
    through this testimony and as we go forward, Mr. Chairman, as
    to exactly getting this correct in regards to what is the best
    age for these benefits to kick in and the amount of risk we are
    trying to cover with the Social Security retirement insurance
    benefit.
        Chairman LARSON. We look forward to your plan to do that.
    Because we have put forward a plan. Mr. Johnson put forward a
    plan, as was recognized. So we like to--and I think that is a
    fair question. So let's turn the spotlight up on this and let's
    see what it actually is.
        Mr. REED. Right.
        Chairman LARSON. And let's see why people came to the
    conclusion that it was 62 and what that means. And what that
    means to struggling families all across this country. I think
    you are right in requesting that and that is what these
    hearings are all about. We want to cast as bright a light as we
    possibly can on what the current plight of American citizens is
    under the existing Social Security and how we remedy that.
        Mr. Pascrell is recognized.
        Mr. PASCRELL. Thank you, Mr. Chairman. I would like to look
    at that data as well on longevity. I was not here and you were
    not here in 1983, in the Congress, that is.
        Mr. REED. He might have been.
        Mr. PASCRELL. But at that time, I do remember reading about
    how they got to the--how they raised it two years and what the
    data was. And as the longevity charts, which would be different
    today than it would be then, I am certainly not convinced that
    raising the age is the area that we need to focus on. Because
    we do live in a different culture, somewhat, in terms of how
    long people worked at that time and how much they needed to
    save at that particular time. And that is the thing that I am
    looking at.
        Because even Mr. Biggs would have to agree that, in lower
    income groups, we are making a few more dollars. And just
    looking at the economy as a whole, they spend it, they spend
    it. And I think that is very, very, very critical to what we
    are talking about as far as the total economy is concerned,
    besides zeroing in with this.
        Mr. Richtman, thank you for your work over the years and
    the pain-in-the-neck questions you got from us. You did very
    well.
        I want to ask your opinion before I get into a few comments
    I have to make. Can you describe how the windfall elimination
    provision negatively impacts our first responders, that is
    police and fire, and do you support repealing the windfall
    elimination provision within the Social Security?
        Mr. RICHTMAN. We have supported repealing the WEP, as it's
    called, the windfall elimination provision.
        Mr. PASCRELL. Can you just give us a brief, brief, what is
    it and what does it do?
        Mr. RICHTMAN. The windfall elimination provision, it is
    commonly called the WEP----
        Mr. PASCRELL. Right.
        Mr. RICHTMAN [continuing]. Reduces Social Security benefits
    for public service workers, that is often firefighters, as you
    pointed out----
        Mr. PASCRELL. Right.
        Mr. RICHTMAN [continuing]. Teachers, nurses, and others,
    who have a work history that is partially covered by Social
    Security and partially not covered. When they, and this is
    really the heart of why we support eliminating that penalty,
    contribute all their quarters to Social Security, they are
    penalized because they have this other benefit. And that is
    wrong.
        I probably have testified 10 times before this committee
    and this subcommittee on this issue since the early 1990s and I
    think that almost every member of Congress hears about it at
    town hall meetings and talks about the need to repeal that
    penalty and it has not happened.
        If I could just make one other comment on the whole
    discussion about the fact that people are living longer, that
    is an important fact-based thing to consider. But are they
    working longer? Are they able to work longer? Are there jobs
    for them? That is a piece of the puzzle that I think has to be
    taken into account.
        Mr. PASCRELL. Thank you. A very important point.
        Chairman LARSON. Will the gentleman yield for just a
    second? I just wanted to, because I did this yesterday as well,
    to say that we are intending, and both Mr. Neal and Mr. Brady
    have collaborated in the past on a bill and that we will be
    having a committee hearing on that very issue and I just wanted
    for the record to make that comment.
        Mr. PASCRELL. So for older Americans, Mr. Chairman, just
    over four in five Social Security beneficiaries are 62 or over,
    older. The program provides 90 percent or more of the income
    for almost one in three seniors. Those benefits may be modest
    but they are vital to those who rely on them. We cannot be shy
    about working together to strengthen the program.
        The Social Security Trust Fund is only fully funded until
    2034. So revenue increases are needed to shore up the fund for
    the future. And let's be clear, real wages have about the same
    purchasing power it did 40 years ago. Think about that. They
    are stagnant. Last Congress's tax scam did not help. And hoping
    for wage growth is not the answer to the problem. Thankfully,
    many of today's panelists understand that, discuss specific
    proposals to protect the fund's future.
        I support the chairman's Social Security 2100 Act because
    it protects the promise we made to workers in a way that
    ensures no benefit cuts need to be made for at least the next
    75 years. Not bad. Also it expands benefits for current and
    future beneficiaries. No idea should be off the table but we
    must be honest about its potential impact to beneficiaries and
    we cannot retreat on the promises that we have made.
        And I yield back. Thank you, Mr. Chairman.
        Chairman LARSON. Right on time, Mr. Pascrell.
        Mr. PASCRELL. That is unusual.
        Chairman LARSON. Mr. Estes is recognized.
        Mr. ESTES. Thank you, Mr. Chairman. Thank you to all the
    panelists for being here today and talking with us about this
    very important issue.
        You know, following the effort over the last couple of
    years that the Ways and Means Committee and Congress has made
    to help get our economy going, to help get people more jobs,
    help increase wages, now we have got to turn to how do we
    protect retirement for those folks that are working. And that
    includes making sure that we have protected and preserved
    Social Security for current as well as future retirees.
        You know, with Social Security, our population changes from
    the Baby Boomers. And, you know, as we have different shifts in
    population over time, we cannot overlook the impact, the
    financial impact, on this very vital program.
        As mentioned earlier, if we do nothing, Social Security
    retirement fund is going to be out of funds by 2034, which will
    result in roughly a 21 percent cut in benefits and that is not
    something we want to see happen. So we need to act now to
    address this.
        You know, yesterday I mentioned in a hearing, and I will
    mention it again because I think it is important, that
    Republicans and Democrats both agree there is an issue and we
    need to work together to resolve this. However, we want to make
    sure that the solution does not involve some devastating tax
    increases that result in slowing the economy back down, which
    actually then puts a negative spin on the support for Social
    Security. Instead, we want to make sure that those changes help
    reward work and reward some of that growth in the economy, as
    well as the increase in benefits that tie along with those
    higher wages during your career.
        You know, I am the only former state treasurer serving in
    Congress and I know firsthand some of these retirement issues.
    Just because we had a problem in Kansas with our public
    employee retirement system. And that is one of the issues we
    had to address, is how do we make sure that the benefits were
    there for folks as they retired? And it took some leadership
    and some hard action and luckily the Legislature and the
    Governor at that time focused on that. And we need to do the
    same thing in Congress at the federal level for everybody in
    the nation.
        You know, there is a lot, we talked a lot about retirement
    today. Yesterday I mentioned the story of my aunt and uncle. My
    uncle passed away and my aunt had to raise my three cousins and
    Social Security was one of those benefits that helped through
    that. So it is more than just a retirement system. It was
    beneficial for my sister-in-law, who had a series of strokes
    before she turned 65. And again, that insurance portion helped
    with that. And so we want to make sure that Social Security is
    there to protect and provide that support for folks.
        Mr. Biggs, we have talked a lot about, you know, how we
    need to act now to address some of these issues with Social
    Security. You know, folks say that the longer we wait, the
    harder it is going to be. Can you talk a little bit about why
    that is important and what is critical about that?
        Mr. BIGGS. Sure. And the reason acting now makes solving
    the problem easier is it spreads the problem over a larger
    number of people, over more generations, so that they absorb a
    smaller change each, and it gives people more time to respond.
        If you think about the increase in the normal retirement
    age, it was legislated in 1983. It started increasing in 2000.
    It will not reach 67, I think, until 2022. That gives people a
    lot of time to adjust. As a result, people on average are
    retiring about two years later. They are leaving the workforce
    about two years later today than they did back in 1990. They
    are responding to it. But if we wait to the end and we have to
    do it all at once, you do not have any chance to respond.
    Somebody has already retired, you know, it is hard for them to
    go back to work. You cannot increase your savings.
        The sooner we act--we should have acted 20 years ago, 30
    years ago when we were first being warned about this. And the
    reason we do not is politics. People need to act so that
    everybody else has time to respond. If you do it, the problem
    works out. If you leave it to the end, it is very, very hard.
        Mr. ESTES. Thank you. I think there are lots of solutions
    that we talk about that Republicans and Democrats bring
    together in terms of different ideas of how to solve them. But
    I would agree that that issue is what we need to focus on.
    Let's get to work on it now, let's focus on it, making it as
    easy as possible to make that transition. And that the sooner
    we act, the better it is going to be in terms of making sure
    that people that have worked all their lives to accrue this
    benefit and earn this benefit, that they get that benefit that
    they have earned.
        So thank you for your time and, Mr. Chairman, I yield back.
        Chairman LARSON. Thank you, Mr. Estes. Ms. Sanchez.
        Ms. SANCHEZ. Thank you, Chairman Larson, for holding this
    important hearing and I want to thank all of our witnesses for
    your testimony and how we can protect and expand Social
    Security. Frequently, when I am back home and I speak to groups
    of seniors, I talk about how Social Security is really the
    bedrock of the American retirement system, that ensures after a
    lifetime of hard work and paying into a system, seniors can
    retire with some degree of financial security and some dignity.
        But sadly, more than ever, we see millions of retirees who
    depend mostly or entirely on their Social Security benefits.
    And although those benefits are great and they lift millions of
    Americans out of poverty, they are very modest and they have
    not kept pace with the cost of everything that continues to go
    up. So as daily necessities such as housing, prescription
    drugs, you know, on and on, become more expensive, seniors are
    having to make tougher and tougher choices between, gee, you
    know, do I put food on the table or do I pay for my much-needed
    medication. And we hear horror stories of people taking half
    doses, et cetera, because they just cannot stretch their
    retirement income to cover it all.
        Social Security, as a woman, is particularly important to
    women, who tend to make less than their male counterparts over
    their lifetime of work, and they also tend to outlive their
    spouses. And as a Latina, and I am sure probably Ms. Zapote
    would agree with me, because not only are we paid less than our
    male counterparts and we live longer, but I think I read a
    statistic, I think it is like 70 percent of Latina women work
    for employers who do not even provide any kind of retirement
    plan for them. So even if they chose to participate in
    something, they are working for employers that do not even
    offer that to them. So how are they expected then to really
    save the adequate amount for their retirement?
        I want to start with Ms. Entmacher. In your testimony, you
    noted that a one-person elderly household needs about 79
    percent of the income of a two-person household to maintain the
    same standard of living. Can you talk about the financial
    impact that losing a spouse has on the surviving spouse and how
    widows--widowers and widows fare in retirement?
        Ms. ENTMACHER. Yes, well, first of all, let me point out
    that, as Mr. Biggs said, and I agree with this, the household
    Social Security income declines sharply at widowhood from
    between 50 percent for a couple that had equal earnings, to
    about a third for couples where there was just one earner. And
    that is a loss.
        Another important factor is that not only does--I mean,
    some women, as we have heard from members of this panel, are
    widowed early. But in general, that occurs later in life.
    Assets have already been spent down. And particularly, if there
    has been a period of illness for the spouse who dies, expenses
    go up. And there are medical expenses, caregiving expenses, so
    that often exhausts whatever savings the family may have had.
        And then a widow faces years alone. And again, that can
    increase living costs because you do not have a spouse who can
    help care for you when you fall ill or need help being driven
    somewhere. You are on your own. And so both immediately upon
    widowhood, there is an economic shock, and in the years that
    follow. And many widows continue to live for a substantial
    period of time, relying on these benefits.
        And in my testimony, there is a chart that shows that both
    widowed men and widowed women have much higher rates of poverty
    than married couples do. For widowed men, it is a little less
    than twice as high as the poverty rate for married men. For
    widowed women, it is about three times the poverty rate. So
    this is a real issue for both men and women.
        And I am pleased to see that the reform that both Mr. Biggs
    and I have suggested would improve benefits for spouses and
    working couples for both men and women if they survive.
        Ms. SANCHEZ. Yeah, I have a bill that is called the
    Protecting Our Widow and Widowers in Retirement Act, the POWWR
    Act, which would create an alternative benefit of 75 percent of
    the combined benefits that the couple received when they were
    both alive. Do you think that that would be something that
    could address this weakened financial situation for widows and
    widowers?
        Ms. ENTMACHER. Yes, I do.
        Ms. SANCHEZ. Okay, great. Thank you so much. I yield back
    to the chairman.
        Chairman LARSON. Thank you, Congresswoman Sanchez. Mr.
    Arrington is recognized.
        Mr. ARRINGTON. Thank you, Mr. Chairman. And I appreciate
    your sincere desire to fix this broken system and this
    insolvent program that has been important to so many for so
    many years. And I think we can all agree we have to do
    something and we need to do it now. And, as I have said before,
    I think you and the Ranking Member have as good a shot as any
    to lead us to that bipartisan solution.
        And I think we have agreed, at least I have heard a lot of
    agreement, that whatever solution we do come up with for at
    least this generation of reforms to Social Security must be
    bipartisan or nothing will get done. I think that that is in
    general agreement up here. So I am going to put our witnesses
    to the test here and ask that they work to help us reach that
    bipartisan solution for the American people.
        So it is probably pretty evident to most in the room and
    those listening from wherever that Mr. Biggs probably leans
    more Republican, conservative. He has referenced Sam Johnson's
    reform legislation. So there is a Republican solution on the
    table. And then I am going to also be a little presumptuous but
    if I was a betting man, I would bet that the five other
    witnesses probably lean more Democrat and probably more
    favorable to Mr. Larson's, Chairman Larson's legislative reform
    initiative with respect to Social Security. Going out on a limb
    there, okay, but I am a Texas riverboat gambler, so I am going
    to do it.
        Let's start on this end with Ms. Butts. I don't want to
    know what you think about the wonderful piece of legislation
    that Chairman Larson has introduced. I want you to tell me what
    you think about Sam Johnson's legislation and what in those
    provisions would be acceptable to you? Because we are going to
    have to take some of one side and some of another side. So work
    to help me get to that bipartisan solution. Help us get there
    today.
        And I am going to work my way down the list, all the way to
    you, Mr. Richtman, so be thinking about it.
        Chairman LARSON. Would the gentleman yield for a second?
        Mr. ARRINGTON. Yes, sir.
        Chairman LARSON. It would be great if we had that
    legislation in front of them so they could see it.
        Mr. ARRINGTON. I should not assume they have read the
    Republican version of how we are going to fix this problem.
        Chairman LARSON. Please proceed. I just wanted to----
        Mr. ARRINGTON. [continuing] Well, let me say, of the
    recommendations you have heard from more along this side of the
    aisle's sort of philosophical view of government's role, et
    cetera, et cetera, some of the things you have heard from Mr.
    Biggs, maybe you have read something about Sam Johnson's
    legislation. What would be acceptable to you with respect to
    those initiatives that have been proposed?
        And, Mr. Biggs, I am going to ask you what would you accept
    if you were trying to work a deal to save this great program
    and be a great example to the rest of this country that we can
    actually work together to solve a problem.
        So, Ms. Butts, what would you do? What would you accept?
        Ms. BUTTS. Well, thank you, Mr. Arrington. I wanted to say
    first that Generations United, we are very proud of the fact
    that we work across the aisle and with both parties and all
    people to bring together a solution. And that to us, one of the
    most important frames as we are talking about this is that we
    must have that bipartisan solution.
        But the framework that works for all of us is family. Once
    we get outside of Washington, we do not talk about whether
    grandma gets Social Security or a child gets survivors or an
    educational investment. What we talk about the fact is, it is
    not a fight but it is a family.
        Mr. ARRINGTON. And I do not mean to interrupt. But give me
    one provision, because that is beautiful and I agree with you.
    But I have one minute now and I probably will not get through
    the rest of them. So can you give me one provision you would
    accept from the sort of Republican side of the table here? And
    just think about it. And we will come back to you.
        Ms. Entmacher, is there one provision you would accept?
        Ms. ENTMACHER. Well, I think Mr. Biggs's idea of focusing
    improvements on the people who need them is an important one.
        Mr. ARRINGTON. I think that is a reasonable----
        Ms. ENTMACHER. And that that is where the improvements that
    we make should be targeted. That's a priority.
        Mr. ARRINGTON. [continuing] Right.
        Ms. ENTMACHER. But I think that perhaps the difference----
        Mr. ARRINGTON. No, no, no buts. No, I am kidding, I am
    kidding. No, I appreciate that.
        Ms. ENTMACHER. [continuing] No, please, I would like to
    finish.
        Mr. ARRINGTON. Please do.
        Ms. ENTMACHER. But middle-income people really cannot
    afford benefit cuts. And the problem with relying on benefit
    cuts, particularly if we protect those at or in retirement as
    we need to, is that they fall most heavily on younger
    generations. And those are the millennials who are struggling
    with stagnant wages and with high student loan burdens. They
    are the people who entered the labor market when----
        Mr. ARRINGTON. Thank you. Mr. Chairman, my time has now
    expired. Are you sure you are not a senator, Ms. Entmacher?
        Ms. ENTMACHER [continuing]. Quite sure, and relieved that I
    am not.
        Mr. ARRINGTON. No, listen, I appreciate your comments. I
    would love to hear the comments from everybody else, including
    you, Mr. Biggs. But my time has expired. I yield back, Mr.
    Chairman.
        Chairman LARSON. Well, we hope there will be ample
    opportunity in the future to present side by each these
    proposals. And I think that will give both witnesses and
    members an opportunity to thoroughly go back and forth. And I
    think that is an important breakthrough and sign. Because, you
    know, there have not been hearings and there have not been
    specific proposals in front of people. Now there are, and that
    is testimony to both sides and to the witnesses.
        And with that, let me recognize Mr. Higgins.
        Mr. HIGGINS. Thank you, Mr. Chairman. Thank you for your
    leadership on this initiative again and I appreciate the
    ranking member's willingness to work in a cooperative manner
    toward the goal of preserving what we all want to preserve.
        First of all, you know, you have 62 million people
    receiving Social Security benefits each year; 41 million of
    them, it is a majority of their annual income. For 20 million,
    it is 90 percent or more of their annual income.
        Based on the facts, you know, Social Security benefits are
    spent. So for every dollar that you provide for Social Security
    benefits, you get $1.50 in economic output. That is a return on
    investment of 50 percent, which seems to be a pretty good deal
    when compared with other government spending.
        And also, this is not a giveaway. This is the Federal
    Insurance Contributions Act. People pay during their working
    years this retirement account from which they should expect
    reasonably to be able to take advantage of it.
        The question is, what can we do to make it better? What can
    we do to make it stronger? What can we do to help beneficiaries
    help in the growth of the economy?
        So most Social Security beneficiaries also have Medicare
    Part D. And they have that withheld from their Social Security,
    which is about $135 a month, a little bit more. That is $1,626
    each year. And if you reduce that amount from the average
    Social Security beneficiary's annual income that is $17,532,
    you are left with $15,906 after Medicare. In 48 states, poverty
    level is $12,140. So you are $3,700 each year away from
    poverty, or $313 a month, or $78 per week.
        Mr. Richtman, you have been at this for a long time. Mr.
    Larson has a proposal on the table which is designed to
    increase benefits and increase the stability long term of
    Social Security. Your thoughts about that and/or other ways
    that this committee can be looking at, toward the goal of
    achieving the multiple objectives, all of which are good for
    the individuals but, in the aggregate, it is good for the
    country as well, because added benefits adds to the growth of
    the country. And if these people, these individuals, 62 million
    people did not have Social Security, what would they do? They
    would be dependent on local, state and Federal Governmental
    programs.
        So this was, as originally conceived in 1935, a good
    investment, visionary, and it is today. And I think all of us
    are committed to trying to make this stronger moving forward.
    So, Mr. Richtman.
        Mr. RICHTMAN. Well, the organization I represent, the
    National Committee to Preserve Social Security and Medicare,
    has endorsed the chairman's bill. There are many pieces of it
    that we favor. I have referred to some of them in my written
    testimony and my oral testimony. But just let me, and I only
    have a minute here, comment on a couple things that are really
    important in light of the fact that there have been stagnant
    wages for so long and the fact that the cost of living
    adjustment has been inadequate, mainly because it was poorly
    designed in the first place. And Chairman Larson's bill would
    fix that by adding some money to the minimum benefit, I think
    it is about $70 a month. May not be a lot to people in this
    room but to many seniors it is a lot. And Ranking Member Reed,
    I think, would agree with that.
        And the COLA, you know, the COLA is so important. I am sure
    when you have your town hall meetings, everybody in the fall is
    waiting to hear what is the COLA going to be. In 2010, 2011 and
    2016, the COLA was zero. And seniors do not understand how
    people in Washington have determined that their cost of living
    did not go up in all those years. And that, as you know, the
    amount of the COLA is also important because it is computed
    like interest in a savings account. If you lose two years or
    three years, you are going to lose for many years to come.
        Now, on a personal note. I worked on the COLA issue for a
    long time. You are right, Congressman, I have been at this for
    a while. I was staff director of the Senate Aging Committee.
    And in 1987 and 1988, we tried to push through what the
    congressman has proposed, CPI-E, a way to measure inflation so
    that it will reflect what seniors are buying and put the proper
    weight on that market basket of goods and services that seniors
    rely on, like prescriptions, medicine, and less weight on the
    fact that they are not wage earners.
        The reason there was a zero COLA in those years is the
    price of gasoline plummeted. So much weight was put on that,
    that it brought down the COLA to zero in three years. And the
    fact is, seniors are not using gasoline as much, they are not
    driving to work and back every day, they are not dropping kids
    off at school and picking them up. So that is just one example
    of how the formula is flawed.
        So in 1987, when I started working on this, we tried to
    change it. The best we could do is get what is called an
    experimental CPI-E. The Bureau of Labor Statistics keeps track
    of this new formula. It has not been implemented. It would cost
    more money to have it fully analyzed and implemented.
        So I started working on this 32 years ago. It still is an
    experiment. And so I am not sure I have 32 years left to have
    it be implemented but we will see about that.
        Chairman LARSON. Mr. Ferguson is recognized.
        Mr. FERGUSON. Thank you, Mr. Chairman, and thank each of
    you for coming today. You know, as I listened to testimony, it
    was very compelling. And not just your testimony but probably
    more importantly the testimony of our constituents back home,
    the testimony of my parents every weekend when I go home. So I
    think it is good to have these discussions and, as I have said
    many times, I think having good, solid, honest and transparent
    discussions and allowing the members of this committee to work
    in a very bipartisan way to float ideas out there, to challenge
    one another's opinions in a very respectful way is really
    important.
        You know, one of the things that I have heard several
    times, Mr. Richtman, I think you have alluded to it, is the
    flat wage growth. And so I could not be more excited about
    where we are in the economy right now, with the fastest wage
    growth, particularly with those that are at the lowest
    quartile, the lowest earners and lowest incomes, and the medium
    income. That is where we are seeing the most rapid wage growth.
    So I am excited about that. Because I do think that rising
    wages is very, very important. I am excited about the fact that
    we now have more people in the workforce than we have ever had
    and we have the lowest unemployment across all socioeconomic
    groups. That is a great thing because it is a part of solving
    this equation. Not the only part, but it is a part of it.
        So another thing that I would like to touch on, a couple of
    topics very quickly, Mr. Biggs, you know, I want to go back to
    the conversation about seniors working. One of the things that
    I have found, and I saw this a lot with my patients in my
    dental practice, more of them started out with a few people
    working past retirement age. Then I saw a number of people
    continue to work past retirement age, not because they had to
    but because they wanted to. Can you speak a little bit about
    the dignity of work past retirement age and the importance of
    that?
        Mr. BIGGS. It is something that has become increasingly
    important. You know, in some cases, people are forced to work
    longer.
        Mr. FERGUSON. Sure.
        Mr. BIGGS. I understand that after the recession, if your
    401(k) dropped. But the interesting thing there was, following
    the recession, labor force participation fell in almost the
    entire segment of the age groups of the population, worst labor
    market in decades, except for retirees and near retirees. And
    they found jobs, they did not just find Walmart greeter jobs,
    they found decent paying jobs, they rebuilt their savings. And
    that is a pattern that has been increasing since the mid-1980s.
    We are retiring a little bit longer. Simply delaying retirement
    for a year can have a dramatic impact on your retirement
    income. You get a higher Social Security benefit, you have more
    savings, fewer years you have to finance.
        Mr. FERGUSON. Okay, thank you for that. Another question,
    you talk about the cost of living. And one of the things, I
    would just be interested in a very quick thought from you about
    do you think the COLA should be adjusted for urban areas versus
    rural areas?
        Mr. RICHTMAN. You know, I don't have enough background to
    answer that. I think it should be adjusted from clerical and
    urban wage earners, which is what it is based on now. I don't
    know if that is a good measure.
        Mr. FERGUSON. Just I look at what the difference is a lot
    of times between urban America and rural America. And I think
    before we just go across the board on this, we really ought to
    look at, you know, what those different areas mean and what
    living--what the living standards are there and that kind of
    thing.
        Mr. RICHTMAN. I agree.
        Mr. FERGUSON. I think before we jump onto that, I would
    just like for us to recognize that there may be a difference.
        Mr. RICHTMAN. I agree with you. The whole purpose of a
    COLA, at least for Social Security, is so beneficiaries do not
    fall behind because of inflation. And if the formula is flawed,
    it is not going to work.
        Mr. FERGUSON. Okay, real quickly. This is the lightning
    round. I am going to take Mr. Arrington's idea here very
    quickly. What is one thing out of Sam Johnson's plan that you
    could accept?
        Mr. RICHTMAN. I do not even need much time. The only thing
    I would say is when you bet on the composition of this panel,
    you are probably right. So I, you know, he would reduce the
    COLA----
        Mr. FERGUSON. No, no. What is the one thing that you could
    accept? Nothing?
        Mr. RICHTMAN. [continuing]. Nothing.
        Ms. MARAFINO. I do not really know the plan but, from what
    I am hearing, probably nothing.
        Chairman LARSON. I mean, I have to say, it is kind of
    unfair to these panelists. They do not have the plan. It has
    never been submitted. And you guys are asking them to answer a
    plan that has never been submitted?
        Mr. FERGUSON. Fair enough. I guess maybe I should ask that
    question a different way. But again, I want to make sure that
    we are getting as many ideas----
        Chairman LARSON. But I will say this to the gentleman. I am
    happy to bring Sam's plan out here. Let's lay it side by each
    and let's go through it. I mean, that is what a hearing process
    should all be about.
        Mr. RICHTMAN. Congressman, if I--we did some analysis. I do
    not have it in front of me but I would be happy to send it to
    you. And also, I want to thank you for cosponsoring the BOLD
    Act that deals with Alzheimer's disease and would go a long way
    to helping an awful lot of people.
        Mr. FERGUSON. [continuing] Okay, good. I yield back. I see
    my time has expired.
        Chairman LARSON. Mr. Schneider is recognized.
        Mr. SCHNEIDER. Thank you. And, again, Mr. Chairman, ranking
    member, thank you for having this hearing. The witnesses, thank
    you for your time here, making the time and preparation and
    also staying for all of us to ask our questions.
        We have touched on a lot of things. Yesterday, I emphasized
    that we do need to take the political posturing out, as my
    colleagues have said, and work together to try to come up with
    the solutions.
        I talked yesterday, others had mentioned, it was mentioned
    earlier, about why raising the retirement age would be unjust
    and unfair to people who are working backbreaking work, who are
    the lowest quintile, lowest 20 percent of the income score,
    have a life expectancy to 76, to raise their retirement age to
    70 is a burden in and of itself but would reduce their expected
    retirement by fully a third is something that we should not do.
        But what I would like to talk to today, and it is something
    I hear a lot about when I am home, and we have talked about it,
    is the windfall elimination provision that we touched on
    earlier. It is an arbitrary and regressive policy that most
    often hurts the workers serving in our communities. In
    particular, our teachers, government employees, first
    responders.
        And one particular story is a teacher, a person in my
    district, Sarah Stevens of Hainesville. She is 76 years old,
    she teaches English at our local community college, College of
    Lake County. And she worked many years as the director of
    communications for the American Concrete and Pavement
    Association. And she decided to take on a new career at the age
    of 60, went back, got her masters in written communications,
    graduated top in her class and then decided to go into teaching
    as a way to give back to the local community.
        What she did not realize at that time was the decision,
    because of the WEP, would cost her one-third of her hard-earned
    Social Security income from her previous life in corporate
    America as a communications director. As she says, I could have
    become almost anything and kept my benefits but I decided to
    become a teacher instead and that cost me. Now, at 76, she
    wants to retire but cannot, for fear of losing that Social
    Security.
        That is only one example. I hear about this all the time
    almost everywhere I go. So, Mr. Richtman, I will turn to you.
    Could you discuss the windfall elimination provision and how it
    affects low-income and public service employees and what
    options you think would best reform the problem.
        Mr. RICHTMAN. The best option would be to eliminate the
    penalty entirely. And I mentioned earlier that we have been
    lobbying on that for a long time. And it is many public service
    employees, first responders, firefighters, teachers, nurses in
    many states that are penalized up to, I think the example I
    have seen recently is between $450 and $500 a month because
    they have spent part of their work history in Social Security-
    covered employment and the other part in working for an entity
    that did not cover Social Security.
        So Congressman, I have been to your district with you and I
    have heard some of those same stories. The thing that really
    bothers people, even maybe as much as having a reduction, is
    they do not even know about it----
        Mr. SCHNEIDER. Right.
        Mr. RICHTMAN [continuing]. Until they are about 60 years
    old and they get a statement from Social Security. Because now,
    you know, we do not get all those statements. You get one at 60
    and it tells you what your benefit is going to be. And in very
    tiny print at the bottom, it tells you how you might be
    impacted by the WEP, by the windfall elimination provision. And
    they are shocked. Here they are, considering retiring in a
    couple of years, claiming Social Security, and they find out
    their benefits are going to be cut by $400 or $500. They did
    not know anything about it. That is wrong.
        Mr. SCHNEIDER. And I will put an exclamation point on that.
    Saturday, I was in a part of my district that is an
    economically struggling community. The schools have a hard time
    keeping teachers because they cannot afford to pay as much.
    They last year ran the entire year with three open spots.
        And then I think back to my kids' experience at their
    school, my experience going through school, and some of my best
    teachers. Dr. Mackie, my physics teacher, was someone who had a
    career in industry and had a passion for science and brought
    that passion to what we did. And it was in many ways because of
    Mr. Mackie, Dr. Mackie, that I went on to be an engineer in
    college. You know, changed the course of my life. We need more
    stories like that. But by having these penalties on these
    teachers, we are putting a burden on them.
        I want to create opportunities for people to make. We are
    working longer, we are living longer. Let's make that second
    career a career that strengthens our communities and I think
    this would be a way to fix that.
        With that, I went over my time. Thank you. I yield back.
        Chairman LARSON. I would thank the gentleman, and I would
    mention again, and you were out of the room when we said this
    before, and this came up at our last hearing as well, that we
    do intend, both Ranking Member Brady and Chairman Neal have
    introduced legislation, in fact introduced legislation in the
    past that actually did get a hearing. It was never taken up.
    But it is our intent to have a hearing on that issue, both WEP
    and GPO, as well. And to fully discuss and air that and then
    hopefully take that to a markup.
        And with that, we will recognize Mr. Boyle.
        Mr. BOYLE. Thank you, Mr. Chairman. This is a great
    continuation of what we started yesterday. As I mentioned
    yesterday, I believe that Social Security is the single most
    successful domestic program of the 20th century and it is our
    solemn obligation to preserve it and continue it and strengthen
    it for the 21st century. When we consider the relatively high
    percentage of seniors who lived in poverty up until the 1930s
    and now to consider that aged cohort has an 80 percent
    reduction in poverty from before Social Security existed, that
    is a remarkable achievement.
        I was sharing with my colleague, Mr. Larson, privately, I
    think, a week ago that, in addition to being a member of
    congress for the Commonwealth of Pennsylvania, I also have the
    important job as helping my dad as a retiree with his taxes and
    some of his finances. And I mentioned that my dad is one of
    those half of all Social Security beneficiaries for whom Social
    Security makes up the majority of his retirement income. Paid
    into Social Security, working over 50 years, mostly in blue-
    collar and very physically taxing jobs, and now is earning the
    benefit that he worked for and paid into. It is not merely a,
    quote, unquote, entitlement; it is an earned benefit.
        So I am so glad that we have a proposal here in front of us
    to strengthen this, to get us beyond 2034 and, indeed, even to
    the dawn of the 22nd century. I also appreciate the spirit of
    what Mr. Arrington, my friend from Texas, mentioned, trying to
    look at constructive ways that we can work together to try to
    save this system. I would certainly welcome any other proposal
    that is sound, that adds up, that could be forwarded. Because
    any time that you offer an idea to attempt to extend Social
    Security beyond 2034, it is going to be open to political hits.
    The easiest thing to do is to do nothing. But, as Chairman
    Larson pointed out, doing nothing means you are, de facto, in
    favor of 25 percent or at least 20 percent plus cuts come 2034.
    And those cuts would continue as we get later on into the
    century.
        So with that, I do want to address to the panel and would
    open up to anyone who wants to comment on it, because one of
    the questions that has come up previously is this notion that
    life expectancy is increasing, which clearly was the case for
    the bulk of the 20th century. I believe we have just had now a
    few straight years in which, unfortunately, life expectancy has
    actually declined in the United States.
        So I was wondering if any of you could actually add facts
    to the preconceived notion as it relates to life expectancy,
    number one. And number two, if you could specifically control
    for income. Because my understanding is, having pored over the
    statistics, there is a pretty massive difference when we are
    talking about a wealthier cohort, particularly those in the
    upper 20 percent of household income, versus everyone else as
    it relates to life expectancy.
        Ms. Butts. If I could, you are very right that just
    recently, new information has come out that shows that for the
    first time the life expectancy rate in this country is
    declining. And it is specifically because of opioids and
    substance abuse, the fact that people are becoming addicted and
    they are dying. It is also because of suicide. And we know that
    social isolation is huge among older adults as well as young
    people, because we have segregated people and segregated people
    by age. And there is also the issue of obesity, that we have
    not really kept our health up in the ways that we could. So we
    are in danger if we don't correct some of those things in the
    life expectancy continuing to decrease.
        There has, historically, been an increase. And the issue
    there is what we do with those years, the quality of life, the
    opportunities that people have because of age discrimination,
    because of opportunity, because of expectations that we have in
    older age. So those are some things that we need to consider.
        Mr. BOYLE. Did you want to mention something?
        Mr. BIGGS. There was a study, I am thinking 2014, from
    analysts at the Congressional Budget Office, which found that
    an individual in the top fifth in terms of income would live
    around six years past retirement longer than somebody who is
    the bottom fifth. For myself, this has made me rethink
    something like raising the retirement age, in the sense of you
    are essentially blaming low-income people for a problem they
    did not cause, they are not the ones living longer. At the same
    time though, it means that some of the proposals to increase
    benefits, including COLAs, including the general benefit
    increases you are looking at, would flow more to higher-income
    people, not because they are getting necessarily bigger dollar
    increases but because they are going to collect them for
    longer.
        Mr. BOYLE. I see that I am out of time. But I will just
    briefly conclude and urge this committee on both sides of the
    aisle to keep this in mind when the conversation of life
    expectancy comes up, number one. And, number two, to draw the
    distinction between those of us in white-collar jobs and those
    who are in blue-collar jobs. Sixty-seven for someone who has
    had a blue-collar job for 50, 60 years is a lot different, body
    wise, than someone who has had a white-collar job. Thank you.
        Chairman LARSON. The gentleman from South Carolina, Mr.
    Rice, is recognized.
        Mr. RICE. Thank you, Mr. Chairman. I just want to start by
    saying that, you know, Social Security is a promise that the
    government, our government made to our seniors. And everybody
    in this room, Republican or Democrat, recognizes that we have
    got to make that promise solid. But it is underfunded and it is
    going to cost money to do that. So we have to look at ways that
    we can accomplish that that will be the least painful among all
    of the groups involved.
        You know, when we are paying for people who are retired by
    people who are working, we are placing the burden on them. And
    I am looking at a self-employed individual, could be an artist,
    could be a truck driver, could be whatever, making $60,000,
    which is the median household income, his tax today for Social
    Security and Medicare is $9,180 out of his $60,000. To make
    Social Security solvent under Mr. Larson's plan, he would add
    another 2.4 percent, which would add to that $9,180 of
    liability another $1,440.
        Chairman LARSON. Will the gentleman yield?
        Mr. RICE. Sure.
        Chairman LARSON. Do you mean his liability or do you mean
    the employer's liability and his liability?
        Mr. RICE. This is for a self-employed. If it was for the
    employer----
        Chairman LARSON. For self-employed? Okay, all right. Just
    to be clear about that.
        Mr. RICE. [continuing]. And if it was for somebody who was
    a wage earner, he would pay half and his employer would pay
    half.
        Chairman LARSON. Because the 1 percent increase is paid by
    both sides.
        Mr. RICE. Please do not take all my time.
        Chairman LARSON. No, go ahead. I will give you a lot of
    latitude.
        Mr. RICE. Let me be perfectly clear here. You are taking my
    time?
        Chairman LARSON. No, go ahead. No, please, go ahead.
        Mr. RICE. The median household income is $60,000. A self-
    employed guy, could be an artist, like my brother, for example,
    could be a truck driver, could be an Uber driver, could be
    anybody. Could be a painter, could be a carpenter, could be
    anybody. If he makes $60,000 a year, his tax is $9,180 today.
    And under Mr. Larson's plan, which adds 2.4 percent, that is
    another $1,440.
        Chairman LARSON. Over how many years?
        Mr. RICE. You are taking all my time.
        Chairman LARSON. I will give you extra time.
        Mr. RICE. I have to----
        Chairman LARSON. I just want to make sure that we, you
    know, if we are going through the facts, we get them correct.
        Mr. RICE [continuing]. When fully implemented, it will be
    $1,440.
        Chairman LARSON. When fully implemented. Thank you. Over 24
    years.
        Mr. RICE. Okay.
        Chairman LARSON. It would be like 50 cents a week right
    now, that is what the bill says.
        Mr. RICE. $9,180 plus another $1,440 is my point. So it is
    not small change. And this is for a guy who is making the
    median household income.
        And if we look, when I--when I started working in 1982, the
    cap on Social Security, the most you had to pay tax on was
    $32,400. Today, you add $100,000 to that, it is about $132,000.
    So, you know, there has been a huge growth in this.
        I want to ask you, I am sorry, I cannot see your name,
    ma'am, in the red coat. Yes, ma'am, why was there a cap placed
    on the wage base when they put Social Security in place? Why
    did they do that?
        Ms. ENTMACHER. They put a cap because of the concern that,
    you know, they did not want benefits to be too high for high-
    income people and that is why there was a cap. The reason that
    it went up from 32,000 to about 132,000 today is that, over
    that period of time, average wages increased. They increased
    much more for people at the top but----
        Mr. RICE. Thank you, ma'am. And, Mr. Biggs, tell me your
    read on why there was a cap placed on Social Security wage
    base?
        Mr. BIGGS. The original what was called the Committee on
    Economic Security, which was put together by President
    Roosevelt, they proposed that people with earnings above the
    cap would not even participate in Social Security, that there
    would be no redistribution that way. The compromise in congress
    was to have the capped payroll tax. And what he was trying to
    do was--Roosevelt's quote was he wanted to differentiate Social
    Security from what they then called relief but what we would
    today call welfare.
        Mr. RICE. And really, you know, the way this has been
    pursued throughout the years was that you give us your money,
    it is kind of like your account, and we will give it back to
    you when you retire. But, in fact, if we remove the cap and
    just withhold on people and do not really give them any return,
    it is really not an insurance premium anymore.
        Mr. BIGGS. People said, people should pay in and would get
    the money back with some reasonable rate of interest. I am
    guessing, FDR would think negative is not reasonable.
        Mr. RICE. So what we are doing is we are actually
    converting this from a premium to a tax.
        Mr. BIGGS. Sure.
        Mr. RICE. So, you know, it is--everybody understands that
    we have got to make this promise solid. Nobody disputes that. I
    want to say, too, like Paul Ryan, my father died when I was 16
    years old. And his Social Security benefit sure as heck made it
    easier. I will not say it made it possible but it made it
    easier for me to get through college. And I absolutely
    appreciate Social Security. And also, my mom is a school
    teacher and she suffers from the prohibitions under the WEP. We
    have got to do something about that.
        But the question is how this thing gets paid for. And I
    think if you are talking about adding another $1,400 to the
    annual liability of a guy who is making 60 grand, on top of the
    9,200 he is already paying, that is a substantial, substantial
    cost. And if we totally eliminate the wage cap, we are
    absolutely converting this thing from a premium, which is the
    way that it has been sold to the American public for the last
    80 or 90 years, to a tax.
        And with that, Mr. Chairman, I yield back.
        Chairman LARSON. I thank the gentleman. And I think,
    because the gentleman has been outstanding in coming to these
    hearings even when you are not on the subcommittee, and I
    really do appreciate that because of your interest. But I do
    think we also have to make sure that when we are talking about
    this as well, it is not only how Roosevelt viewed this but just
    as important how Eisenhower viewed this.
        What Eisenhower thought was that he knew what these GIs
    were going through, he knew what they were coming home to. He
    knew that, in order for them to succeed in retirement, and
    especially having come through along with Roosevelt the Great
    Depression, that they had to come up with a formula. And so
    they came up with a system that everybody is aware of. It is
    called the Federal Insurance Contribution Act. Let me emphasize
    insurance contribution. Now, the gentleman said the other day,
    this is not insurance because you do not have a choice. You do
    not have a choice over automobile insurance in your state,
    either, or group insurance through people. But it is insurance.
        And clearly, as several have pointed out, social insurance
    because of the social inequity and vicissitudes of life that
    happen in an entrepreneurial, capitalistic society. And it was
    that balance that both, well, Roosevelt and Truman and the last
    president to do anything about it, Ronald Reagan.
        Let me again applaud, for the record, let me applaud
    President Trump for both having the temerity and the guts, in
    the heat of a presidential race, to stand up to 16 other
    Republicans who were trying to get him to say that it was an
    entitlement that needed to be cut. And he refused and said that
    it was a benefit that people earned. He will earn my respect
    forever for having done that.
        And I do think that this is the kind of conversation that
    we need to continue to have as we go forward.
        You wanted to say something, Mr. Reed. Go ahead.
        Mr. REED. Before we wrap up, Chairman, I just wanted to
    sincerely thank you for the hearings yesterday and today. And
    this is exactly the type of dialogue I think the American
    people want us to have.
        There is no secret, we have serious disagreements between
    your side of the aisle and our side. But we can work through
    those disagreements through this open dialogue. And you should
    be applauded, rightfully, for scheduling these hearings,
    dropping your bill. It comes with risks. That is, to our
    colleague from Pennsylvania, Mr. Boyle, when he talks about
    Social Security has always been described as that third rail of
    politics. But thank you.
        And thank you to Paul Ryan, our colleague on our side of
    the aisle, that raised the issues of Social Security and
    Medicare in a way so we can have, we need to have and will
    have, because of your leadership, these conversations.
        And over the last two days, I have seen broad agreement
    here, to be perfectly honest with you. I see a firm commitment
    from both sides of the aisle to solve this problem on a
    bipartisan basis. I see a recognition on the Republican side
    and the Democratic side that we are going to protect Social
    Security together in order to honor that promise that has been
    made. We saw together agreement in regards to targeted relief
    for widows. We should celebrate that common ground. Because
    once we achieve some common ground, then we can build off of
    that for further successes.
        So I just want to sincerely say, John, thank you.
        Chairman LARSON. And thank you, Tom. Those are very
    generous remarks.
        But let me also say that the last time this Congress did
    act, there was a Republican president. There was a Democratic
    Speaker of the House. There was a Republican Senate Majority
    Leader. That same situation exists today, although Tip had 266
    members and I believe that Mitch has one less than Howard Baker
    had currently. But having said that, I think it is that spirit.
        And, you know, what? Frankly, this is what the American
    people want. They are tired of the tastes-great-less-filling
    arguments and everybody going to their respective corners and
    nothing getting done. Because as we all acknowledge, and very
    personal experiences, I think that is one of the great things
    about a public hearing. I would have never known that about Tom
    Rice.
        But when you hear what people have actually gone through in
    their lives, when we hear the story of your mom, I mean, these
    are the things that move the American people.
        Are they perfect? Are our solutions perfect? No, they never
    quite are. But we understand at its core what we are trying to
    achieve here. And I think, what a great moment to say we were
    in Congress when it wasn't about Democrats or Republicans, it
    was about moving the nation forward and uplifting all of its
    people. I think that is what all of us are committed to do. And
    thank you so much. I appreciate it.
        And with that, this meeting is adjourned.
        [Whereupon, at 4:08 p.m., the Subcommittee was adjourned.]
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