[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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    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:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

    [Public Submissions for the Record follow:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                 [all]