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The overlooked constant

By Staff | Nov 4, 2016

Wouldn’t it be great to live in nation where candidates and the media alike discuss and revisit Social Security again, and again, and again … with the same consistency with which it is deducted from our pay during our working years and with the very same certainty with which it is received each month by those who depend upon it?

Updating Social Security – to allow it to pay adequate benefits for generations to come – can be accomplished with leadership from our next president and with real support from our next Congress. The days are few, the dollars are many, and the stakes are high for residents of the Granite State.

The challenges facing this most cherished program are well-documented. Unless the next president of the United States and next Congress take decisive action, current retirees will face a 25 percent benefit cut come the year 2034. Put another way, such a cut could mean between $4,000 and $10,000 less in benefits each year for the typical Granite Stater. Those cuts will reverberate throughout the economy.

Our state’s beneficiaries would collectively experience a loss of $1.1 billion dollars of income annually. But that’s not all. When that money is spent, it kick-starts a chain of economic activity that creates a "multiplier effect" in the economy that equates to $1.9 billion less in economic activity and the potential loss of over 11,000 jobs. And, beyond less money and fewer jobs, we’ll have some tough decisions to make as a result. It’s important to consider some context and realities.

Older Americans will be forced to make hard economic choices with such a loss of income – the average New Hampshire family will lose $4,700 per year forcing choices between cutting food, utilities, and/or health care expenses.

If Granite Staters are politically frustrated now, imagine how unhappy they will be when they find themselves increasingly hungry, cold and sick (come 2034) because the leaders we elected and trusted to represent us failed to act soon enough to forestall the foreseeable.

To be clear, acting now will ensure the needed changes to safeguard the Social Security program can be done gradually in an economically prudent way, not at the last minute with 2034 looming. Governing by crisis is not acceptable – not with a key component of American financial security.

Updating Social Security is a math problem. And, like any math problem, it is solvable. But like the leaking pipe we ignore, the worn tires we don’t replace, the funny noise in our car or home furnace we don’t investigate, ignoring the problems and symptoms usually does not make for a good outcome.

Over time, we all tend to pay for our inaction. And as surely as Social Security gets deducted from our paychecks, this problem will most certainly not go away without action now. This is not child’s play. Americans are aging and generally not saving enough as it is.

To be sure, Social Security wasn’t intended to be – nor can it be – all-sustaining to those in retirement. But this income is critical to thousands of our friends and neighbors. About 96 percent of those over 65 in New Hampshire receive it (around 180,000 people), and it’s the only source of income for 3 out of 10 of us.

The next president should commit to addressing Social Security within the first hundred days of the new administration. Social Security lifts millions out of poverty (about 68,000 in New Hampshire alone) and allows millions more to enjoy life in their golden years.

In our working years, we rely upon the program’s promise of future income; in our later years, the reliance shifts from expectations to income as we begin receiving benefits earned during our working years. How can this not be a national priority?

We’re very close to electing our next leaders to represent us in Washington. It’s both critical and fair that we expect them to act swiftly – across the aisle and otherwise – to prevent preventable cuts. While we may all be a bit tired of the lack of substance in this election, we’re probably not yet too hungry, too sick or too cold to demand that our leaders address Social Security.

Hopefully, we never see that day in our nation. Solving this problem starts with leadership from our next president and with the support of the four leaders we choose to represent the Granite State, three of whom we will be choosing in a few days.

We must ask the candidates these fair questions on Social Security, weigh their answers, and, once in office, hold them accountable so that they act swiftly to safeguard a critical constant of American financial security.

Todd Fahey is state director of AARP New Hampshire.

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