Impact of proposed Social Security cut on blacks and Hispanics, take 2
A number of commentators, including my colleague Algernon Austin, have pointed out that a proposed cut in the Social Security cost-of-living adjustment (COLA) would disproportionately affect blacks and Hispanics. Proponents have countered that blacks and Hispanics are more likely to qualify for Supplemental Security Income (SSI), a means-tested program managed by the Social Security Administration that could be exempted from the COLA cut.
While it’s true that blacks and Hispanics are more likely to qualify for SSI benefits, exempting SSI from the COLA cut wouldn’t change the fact that blacks and Hispanics still rely on Social Security for a larger share of their incomes than whites. SSI, while a critical lifeline for some, is a much smaller program, representing just 17 percent of the benefits blacks and Hispanics receive from both Social Security and SSI together (calculations are based on tables 3.C7A and 3.C8 in the 2011 Social Security Administration’s Annual Statistical Supplement, which exclude children under 15).
Not only does Social Security represent a greater share of black and Hispanic income, but black and Hispanic beneficiaries tend to be younger than white beneficiaries, with a greater likelihood of receiving disability and survivor benefits (see previously cited tables and this Social Security Administration fact sheet). Disabled beneficiaries and others receiving benefits over long periods face the steepest cuts from the proposed COLA cut. Among retirees, the worst hit will be women across racial and ethnic groups as well as Hispanics, due to longer life expectancies.