Larson Opening Statement at Social Security Subcommittee Hearing on the Impact of COVID-19 on Social Security and its Beneficiaries

Jul 17, 2020
Press Release
(As prepared for delivery)
 
Thank you to the Members and witnesses who have joined us today at the Ways and Means Social Security Subcommittee hearing, The Impact of COVID-19 on Social Security and Its Beneficiaries.
 
I am glad to see Representatives Moore and Rice join us for this hearing.
 
I also want to thank the Subcommittee Majority and Minority Staff, Kathryn Olson, Elisa Walker, TJ Sutcliffe, Andrew Seddeghi and Amy Shuart, for their hard work during this difficult time.
 
Before we begin, I want to take a moment to remember former Social Security Chairman Sam Johnson who passed away recently.
 
Sam Johnson was an iconic American war hero. He epitomized the stoic silence and toughness needed to persevere through his captivity by the Viet Cong.
 
He was a decent, caring, and humble American whose nobility was measured by his actions, not his words.
 
Engraved above the Speaker’s rostrum in the House of Representatives it says, ‘that we may in our day and generation perform something worthy to be remembered.’
 
Sam Johnson lived up to that. He would look you in the eye and his word was his bond. He never sought the limelight; he always just sought to do what was right.
 
I was honored to attend his funeral in Plano, Texas in June. The outpouring of love for him from his hometown community was remarkable and showed how much he meant to them.
 
Sam Johnson faithfully served his country for over 50 years both in the military and in Congress.
 
We lost a true public servant in his passing and I’m grateful for the time I spent next to him on this Committee.
 
We are going through extraordinary times which most of us have never seen in our lives.
 
This pandemic has devastated the nation and the world.
 
And it has caused a collision in our country between our health, our economy and our soul. 
 
The nations’ health and economy are inextricably linked.
 
Long before the outbreak of COVID, John Lewis was pointing out the systemic inequality that existed within Social Security leaving many behind and how that would become a civil rights focus.  The virus further underscores the sense of urgency and the time to act is now.  This is the time to act not kick the proverbial can down the road and reneg on our responsibility. It is Congress’ responsibility.
 
We don’t know how long we will be dealing with the virus. 
 
Based on what we see in the news, cases and hospitalizations are exploding in Texas (11,000 new cases in one day), Florida (almost 14,000 new cases on Wednesday), California (11,126 new cases on Tuesday)– and 41 states have increasing cases. Nationwide, new infections rose by 21% last week – we can hope for the best, but must be prepared for the worst.
 
Public health officials and economists agree that the negative impacts will be with us for many years to come.
 
I want to focus today on the impact of COVID on real people, and why that makes Social Security all the more important. 
 
But as glaring as the statistics are, they don’t tell the whole story.  Statistics are important but we are talking about human beings, fellow citizens, who need our help and need it now.
 
We will hear today about those most impacted by COVID -- the elderly, people of color, women, veterans and people with disabilities -- whether they have suffered health effects from COVID, serve on the frontlines of the pandemic, or have been furloughed or lost their jobs due to the economic downturn.
 
According to the CDC, the virus has impacted people of color disproportionately.
 
Black persons have a hospitalization rate of approximately 4.7 times that of White persons, and Latinx persons have a hospitalization rate of approximately 4.6 times that of non-Hispanic White persons.
 
385,050 Black Americans have contracted COVID-19 and 27,848 have died;
 
478,119 Hispanic Americans have contracted COVID-19, of which 20,849 have died.
 
We have heard about the impact on the elderly, particularly in nursing homes: 398,554 elderly Americans (60+) have contracted COVID-19, of which 170,046 have been hospitalized and 97,455 have died.
 
Women have been especially economically impacted by Covid-19. As sectors that are more likely to employ women, like the childcare industry, suffer heavy job losses, we’re seeing the impacts in the unemployment rate. Among women, it’s is over 2% higher than it is among men and that difference is even higher for workers over the age of 55.
 
These are also the same populations that rely most on Social Security benefits – retirement, disability and survivors – and have suffered from years of systemic inequality. 
 
Five million Social Security beneficiaries already live below the poverty line. 
 
Social Security is an earned benefit.  Workers pay into it with each and every paycheck. 
 
Social Security already helps mitigate systemic inequalities but more must be done.
 
We have recently discovered that as a result of the devastating impact of COVID on the nation’s economy, a very serious yet unintended and unanticipated anomaly will occur unless Congress acts, causing a harmful reduction of Social Security benefits for those born in 1960.
 
This is a complicated technical issue and I am grateful we have Social Security’s Chief Actuary, Steve Goss, and others here today to educate us so that Congress can act with the best information on the impact this will have on people.
 
Due to the COVID-induced recession and job losses, aggregate wages are expected to be substantially lower in 2020 than they were in 2019.
 
Because of how Social Security benefits are calculated, this will reduce Social Security benefits for their lifetimes for everyone born in 1960, creating a “notch” – that is, sharply lowering benefits for one group of retirees.
 
This will affect five million Americans, including 54,000 in my home state of Connecticut.
 
A person earning medium wages born in 1960 could lose $1400-$2000 a year for the rest of their lives, compared to people born just one year earlier, unless Congress steps in to correct the problem.
 
As Chairman of the Ways and Means Social Security Subcommittee, I introduced the Social Security COVID Correction and Equity Act with Chairman Neal and fellow Ways and Means members to prevent these dire consequences.
 
To fix the notch, our bill ensures that the Average Wage Index as used for these benefit-calculation purposes never drops below the previous year’s level.
It is carefully crafted to avoid any benefit cuts and we worked closely with the Chief Actuary to put this together.
 
For example, the harmful drop in the average wage index also results in a very small increase in future benefit levels for everyone who worked at any point in 2020, including essential workers such as grocery clerks, first responders, EMTs, nursing home employees, hospital staff, physicians and nurses.
 
Our bill does not take away this small increase. These workers – and Americans overall –simply cannot afford any cuts in their hard-earned Social Security benefits.
 
We also have the opportunity to address some of the systemic economic inequalities facing lower-income individuals – especially people of color and women– in the same way that we have taken the opportunity to help working Americans by including temporary paid family and medical leave policies in COVID legislation. Albeit these would be temporary for the duration of the virus.
 
42 million have lost their jobs or been furloughed due to the pandemic including Black Americans with the highest unemployment rate of over 16%. 
 
We cannot further exacerbate the economic disparities that already exist – we must underscore that Black Lives Matter and help Black Americans financially too.
 
Our bill, the Social Security COVID Correction and Equity Act, HR 7499, will fix the notch and address the inequities with temporary increases in benefits during this emergency.  
 
These benefits are targeted to those who need it most and will go right back into the economy, something that is needed during these uncertain times.  
 
Under these benefit expansions 65 million Americans will be helped immediately!
 
The bill:
  • Increases benefits by 2% on average,
  • Increases the minimum benefit to 125% of the poverty level, lifting more life-long workers out of poverty,
  • Reduces taxation of benefits for lower-middle income beneficiaries who are struggling to provide for themselves and their families,
  • Helps grandparents provide for dependent grandchildren (Chairman Danny K. Davis’ proposal),
  • Assists dependent students ages 18-22 so that they can get the education they need to get a good job (Rep. Gwen Moore’s proposal),
  • Expands benefits for dependent widows/widowers so they can make ends meet, (Rep. Linda Sánchez’s proposal) and
  • Provides more help to the poorest of all, by expanding eligibility for Supplemental Security Income (Rep. Raúl Grijalva’s proposal).
 
It is imperative that the House acts before the August recess to include a fix to prevent the COVID notch cuts and correct these inequities in the next COVID legislative package.
 
Lastly and not least by any means, we will hear today how COVID will impact the Trust Funds.  Social Security has never missed a payment and will survive this downturn as it has others.  I often like to remind people that in 2009 401ks became 101ks and yet Social Security has never missed a payment.
 
It is not the time to cut payroll taxes, which would benefit the wealthy the most and will deplete the Trust Fund.
 
This is our responsibility. It is why we were elected. We can’t kick the can down the road. It is time to act. These monies come out of General Revenues and provide a temporary fix during the pandemic.
 
It is my intention to take up the Social Security 2100 Act as the virus subsides and the economy rebounds to ensure that benefits will not be cut in the future. 
 
One way to revive the economy is to make sure every Congressional district receives a stimulus which is what happens with Social Security checks. No one hoards their Social Security check. It goes right back into the communities they live in. All 435 congressional districts benefit.
 
We hope for the best, of course, but must prepare for the worst.
 
Before we hear from our witnesses, I would like to turn it over to a Social Security recipient, the Republican Leader on Social Security Subcommittee, Tom Reed, for his remarks.
 
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