Transcripts For CSPAN3 Hearing On Coronavirus Pandemic Impact On Social Security Beneficiaries 20240712

Witnesses and audience members. Thank you everyone for joining with us today as we all bear up under covid19 and address technologically to coming together. We will begin with Opening Statements by myself and the Ranking Member. Follow the by testimony from our witnesses and the opportunity for each member to ask questions. We will dispense of our practice of observing givens rule and instead go to go in order of seniority for questions. Alternating between minority and majority. Members will be responsible for muting and unmuting themselves throughout the proceedings. I thank you all for your patience as we navigate this new technology in order to continue serving our country in this great time of need. With that, i would like to again welcome everybody to the ways and means social subcommittee virtual hearing on the impact of covid19 on Social Security and its beneficiaries. Again, let me add my thanks to the member and of course our witnesses who have joined us today at the ways an means Social Security subcommittee hearing and im glad also to see that were going to be joined by representative gwen moore and representative tom bryce for this hearing. Before we begin again, just some of the preliminaries. Id like to thank majority and minority staff catherine olson, alisa walker and tj sutcliff and andrew sadiqy and amy stewart for persevering through this very difficult time. And before i begin, i want to take a moment to remember our former Social Security chair sam johnson who passed away back in june. Sam, as all you know, was an iconic american war hero. He epitomized that stoic silence and toughness needed to persevere through his captivity by the vietcong. He was at decent and caring and humble american whose nobility was measured by his action and not his words. And above the speakers roster, in fact, 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, his word was his bond, he never sought the limelight. He 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 Home Town Community was remarkable and clearly demonstrated the impact he had on his community. As sam faithfully served this country for over 50 years, both in the military and in congress. We lost a true Public Servant in his passing and im grateful for the time that i spent with him on committee. I would also like, before we begin, to submit for the record written remarks from our colleague bill pascarell. We wish him well. I spoke with him on the phone and hes doing well and recovering from surgery. I see that we are now joined by representative sanchez but she may have to leave to go to a meeting. But is also submitting written remarks. As her and representative davis, i believe, will be at the rules committee. I want to thank representative gwen moore and john lewis and representative raul grew halva for submitting remarks for the record. Clearly were going through extraordinary times. Most of us, this Global Pandemic has devastated the nation and the world and it is something that most of us have never witnessed or seen. And it is caused an incredible collision in our country between our health, our economy, and our soul. The Nations Health of both physical and economic are inextricably linked. And long before the outbreak of covid, john lieu was pointing out the inequality existing within Social Security leaving many behind. Now this and how this would become a civil rightsk8j÷ focus. The virus has only further underscored the sense of urgency and the need to act now. This is the time to act, not kick the proverbial can down the road and renege on the responsibility that is uniquely ours and that of congress. America has been on a pandemic roller coaster ride and we dont know how long well be dealing with this 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 cases on wednesday. California, 11,000 new cases on tuesday. And 41 states have reported increased cases. Nationwide infections rose by 21 last week. We can hope for the best, but we must prepare for the worst. Public Health Officials and economists agree that the negative impacts will be with us for many years to come. But as glaring as the facts and the statistics are, they dont tell the whole story. Statistics are important. Were talking about human beings. Fellow citizens who need our help and need it now. That is why im proud that the focus today on the impact of covid and real people and why that makes Social Security all the more important. Well 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 front line 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 hospitalization rate of approximately 4. 7 times that of white persons. And latinos have a hospitalization rate of approximately 4. 6 times that of Nonhispanic White persons. 385,000 plus black americans have contracted covid19 and 27,848 have died. 478,000 plus hispanic americans have contracted covid19, of which 20,000 plus have perished. We have heard about the impact on the elderly, and particularly in Nursing Homes. 398,000 elderly americans, 60 years and above, have contracted covid19, of which 170,000 have been hospitalized and 97,000 have died. Women have especially economically been impacted by covid19. As sectors that are more likely to employ women like the childcare industry, suffer heavy job losses. Were seeing the impacts on the Unemployment Rate. Among women, it is over 2 higher than it is among men and the 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, survivors and have suffered from years of systemic inequality. 5 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 inequality but more must be done as we often note in this committee as the nations number one antipoverty program. Weve recently discovered that as a result of the devastating impact of covid, the nations economy, a very serious yet unintended and unanticipated anomaly will occur unless congress acts. Causing a harmful reduction in Social Security benefits for those born in 1960. This is a complicated issue and im grateful we have steve gaus and others here today to educate us so that congress could 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 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 5 million americans, including 54,000 in my home state of connecticut. And the stats are available for every District Across the country. A person earning medium wages born in 1960 could lose between 1,400 and 2,000 a year for the rest of their lives compared to people born one year earlier unless Congress Steps up and acts on the problem. As chairman of the Social Security subcommittee, i have introduced a social south America Covid correction and equity act along with chairman neil and fellow ways an marines members to prevent these dire consequences. To fix the notch, our bill will ensure that the average wage index is used for those benefit calculations when a person never drops below a previous years level. It is carefully crafted to avoid any benefit cuts and we were work closely with the chief actuary to put this together to achieve that goal. For example, the harmful drop in average wage index results in very small increases in future benefit levels for everyone who worked at any point in 2020, including essential workers such as grocery clerks, first responders, emt, nursing home employees, hospital staff and 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 haven the opportunity to help working americans by including temporary paid family and medical leave policies in covid legislation. Albeit that these would be temporary and for the duration of the virus. 42 million have lost their jobs or have 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, because i know everyone on this committee knows that black lives matter, all lives matter, and we must help black americans financially get through this as well. Our bill, the Social Security covid correction and inequity act, hr 7499 will fix the notch and address the inequities with a temporary increase in benefits during this emergency. These benefits are targeted with those who need it the most and will go right back into the economy. Something that all of us understand and know is needed in these uncertain times. And something that all 435 Congressional Districts will benefit from. Under these benefit expansions, 65 million americans will be helped immediately. The bill will have increased benefits 2 an average, increases the minimum benefit of 125 of the Poverty Level lifting more life long workers out of poverty, reduces taxation on benefits for lower and middle income beneficiaries struggling to provide for themselves and their families. Helps grandparents provide for depending grandchildren. Assisted dependent students age 18 to 22 so they could get an education they need and a good job. Expands benefits for dependent widows so they could make ends meet and provides more help to the poorest of all by expanding eligibility for supplemental security income. And it is imperative that the house act before our august recess to include a fix to prevent the covid notch cuts and correct these inequities in the next covid legislative package. Lastly, and certainly 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 remind people that back in 2009 they witnessed in the Great Recession their 401 k become 101k and during that time Social Security never missed a payment. It is not the time to cut payroll taxes which would benefit the wealthy the most. And it wont deplete our trust fund. This is our responsibility. It is why we were elected. We cant kick the can down the road. It is time to act. These monies come out of the general revenues and provide a temporary fix during this pandemic. It is my intention to take up Social Security 2100 again as this virus subsides and the economy recomes to ensure the benefits will not be cut in the future. One way to revive this 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 because it goes right back into the communities they all live in. All 435 Congressional Districts benefit. We can all hope for the best, but, of course, we must prepare for the worst and we must act. Before we hear from our witnesses, i would like to turn it over to our Social Security recipient himself, and my good friend the republican leader on the Social Security subcommittee tom reed for his remarks. Tom. Well, thank you, chairman, first of all, for holding this hearing but most importantly for taking those that moment in time to recognize truly one of our legends of congress and that was sam johnson. We all both served with sam. Know sam very well. And i think you articulated it very well in regards to the gentleman that he was, the true American Hero that he was. And the inspiration that he provided to many of us with his Life Experience and life dedication to serve country, to serving his mellfellow man and did he on Social Security was legendary. He served on ways and means for over 21 years, he led the subcommittee, each year he had an opportunity to choose whether or not he wanted to take a different leadership post and he always took Social Security because it was near and dear to his heart. I appreciate you taking the time to recognize one of our great colleagues and it is only just and appropriate that we all do that today. And i know his family is grieving. But i think they hopefully could gain some solace in that we all loved sam. We respected him on both sides of the aisle. And to his daughters beverly and jenny and all of his family, we continue to keep them in our thoughts and prayers. And now moving from that to the matter at hand. Todays hearing on the impact of covid19 pandemic on Social Security and its beneficiaries. We could agree, this is an important topic. It is why we wrote to you, mr. Chairman, this spring and called for this hearing. It is increasingly apparent the Economic Impacts of covid19 pandemic will be severe. Given Social Security financial challenge, when our economy was strong, we need to understand how this pandemic will further affect Social Security. We know about the health risks since the virus hit our shores we have known that our parents and grandparently were floridaly at risk and in my home of new york, Governor Cuomo enacted disastrous policies that led to the death of thousands of our state seniors. But we could not forget that covid19 is also an economic crisis. It is clear that covid19 will have some effect on Social Security with Many Americans unemployed due to mass shutdowns and workers taking pay cuts. Their employers struggle to businesses going. Social security payroll revenue will be lower than expected in 2020. I look forward to hearing more from our panel today about what we can do to help our parents and grandparents and ensure Social Security is strong for generations to come. Some have raised concerns about that because of how Social Security benefits are calculated, people born in 1960 might be more affected by covid19 impact on Social Security than other age groups. This is an important issue. And one we should examine closely. While we dont know, however, is the full extent of the problem. The good news is we have time to work together, mr. Chairman, and get this right. The data wont be available until spring 2021 at the earliest. No one will have their benefits affected until february 2022. Let me repeat that. No one will have their benefits affected until february 2022. That is 18 months from now. So lets put ourselves on the clock and start working together. Im committed to working with you, mr. Chairman and all members of the subcommittee to take a close look at the issue and make sure we get it right. As i said before, Social Security reform will only be successful if it is done in a bipartisan fashion. What our parents and grandparents dont need right now is rash partisan policies or devastating tax increases. That will get us nowhere and hurt those most vulnerable. The working families of our nation deserve better f. There is a problem, we wouldnt to work to solve it so lets get back to collaborating and coordinating and kplcommunicati with one other to determine the scope and whether appropriate measures should be taken. As we do so we should keep the following in mind. First the most important thing we could do is focus on mitigating this virus and safely reopening our community and getting our economy back on track providing americans with the opportunity to safely return to jobs will have the greatef impact right now on the strength of Social Security and this countrys economic well being. While Economic Growth alone wont solve social urk financing challenges it must be the basis of any plan. Second, the foundational principals of rewarding work and protecting the most vulnerable should continue to underpin our work on Social Security. As it has in the past, the republican side can and should serve as the checklist, we ask ourselves when considering a given reform. Finally there are several other proposals members of the committee have outlined that could have immediate positive impact on our workforce and our parents and grandparents. Jackie willarski my friend from indiana introduced legislation that would provide seniors who want or need to work relief from being penalized by Social Security just because they earn above a certain amount. Working together, i believe we could make similar progress for seniors and individuals with disabilities by strengthening and improving Social Security if we commit to rolling up our sleeves and reviewing the data and working together and tackling the complex issues before us. And with that, mr. Chairman, i yield back. I thank the gentleman from new york and again welcome everyone and these are challenging times for everybody and as we adopt to the use of technology but im very impressed as i look at this screen and see the great list of panelists that we have today. Were going to hear in this order from steven goss, from the Social Security administration, mack rich mond, the president and ceo of the nationally committee of the preserve Social Security and medicare. Melanie campbell, president and ceo of the National Coalition on black and civic participation and con seener of the black womens round table. Mattie dupler who is a senior fellow for fiscal policy and no stranger to this committee and for the senior fellow for the National Taxpayers union. Abigail sabota who is executive director of latinos for a secure retirement. Our good friend sean castle who has been before us many times, the deputily executive director for paralyzed veterans of america. And Robert Rhodes junior, president for retired americans. Welcome to all of you. We look forward to your comments and with that let me recognize chief actuary of the Social Security administration steven goss. Thank you, very much, chairman larsen and Ranking Member and members of the committee for the opportunity to talk to you today about the effects of covid19 pandemic on Social Security. The magnitude and duration of the effects from this pandemic on our society, the economy and Social Security are still very uncertain. That much is what we most definitely know. The largest immediate effects for Social Security will be from reduction of employment and earning and payroll Tax Liability in the near term as it is true for all economic recessions. At this time it appears that 2020 earning and payroll Tax Liability are on track to be about 10 lower than expected in the 2020 Trustees Report that came out in april. Assuming we do not have a substantial second wave of cases from the virus in this fall, with substantial closure of the economy for an extended period, trust Fund Depletion might be advanced by no more than one year in 2035 to 2034. But it is substantially reduced further the negative effects on the status of the combined trust funds could be considerably larger. So how about the implications for the National Average wage index, the nwi and the point of significant concern. The Social Security benefit formula is for the benefit level replacement rate, that is how much you have earned over your career, across generations by indexing benefits to the growth in the average wage level. The wi increased every single year from 1951 through 2008. However, due to the death of the last recession, the decline for the first time in 2009. But by only 1. 5 . Having a relatively small effect on the benefit level for those becoming newly eligible for benefits in 2011. At this point, however, it is likely that a much larger decline in the awi will occur in 2020. With the effects on beneficiaries becoming newly eligible in 2022. Lets consider the scenario with total wages for 2020 as a whole at 10 below the level projected in the 2020 Trustees Report and with a number of workers with any earning at any time during the year reduced by about 1 compared to what was projected. The awi for 2020 would then grow by 9. 1 less than had been projected in the Trustees Report and that would leave the 2020 awi actually 5. 9 lower than the level of the awi for 2019. Now, under current law, a decline in this index, the awi, for 2020, results in two specific effects on benefit levels. First, as mr. Morrison said, more than 5 million beneficiaries will become newly eligible in 2022 would receive a benefit for life that is 5. 9 lower than the benefit for those becoming eligible just a year earlier. For a medium earner born in 1960, the monthly retirement benefit would be reduced by about 119 given the scenario. Second, all workers with earnings in 2020 who would become eligible for benefits after 2022 would have an increase in their benefit level averaging only about. 15 higher on average, that would increase the monthly benefit for a medium earner by about 3 per month. Two recent bills have come forth that would address these effects. Section 3 of chairman larsens bill introduced on july 9 would void the potential 5. 9 drop in the benefit level for newly eligible beneficiaries in 2022 compared to nose eligible in 2021. At an expected cost of about 21 billion through 2029 and an expected increase in costs through 2094 and through a long range period of about 90 billion in present value. A bill introduced on july 2 by senators cain and cassidy would cost somewhat less because it would also eliminate the small increase for beneficiaries working in 2020 but will not be eligible for Social Security until after 2022. I sudden mention this as chairman larson did that his bill includes a number of additional provisions that would help provide help to the people in the year 2020. Because the implications the implications of the covid19 pandemic were not in the 2020 report, at least in april, we have developed a simple scenario to analyze the potential effects of occurrence, this is only one of a wide range of possible passes to work with between now and april with the trustees and staff to fully reflect the effects of the pandemic and recession in the 2021 Trustees Report and as mentioned by everyone who has spoken so far, as yet we know not nearly enough and we are quite uncertain. So thank you again for the opportunity to talk to you today. I look forward to attempting to answer any questions that you may have. Thank you very much. Thank you very much. Now well hear from Melanie Campbell. Good afternoon, chairman larson and members of the subcommittee. My name is Melanie Campbell and im the president and ceo of the National Coalition on black civic parms and convener of the black womens coalition, as a former recipient of Social Security survivors benefits, im keenly aware of how vital these benefits are through the economic well being and stability of families. I remember how important it was for me to receive Survivor Benefits when my father passed away from a chronic respiratory illness, one month after i started college as a freshman at clark college, now called atlanta university. I could remember how difficult it was for my mother who was a Public School teacher to figure out how to support me and two of my siblings who were also in college at the time. I also remember how difficult it was for me financially, when i lost my Social Security Survivor Benefits due to policy changes and my federal student aid was reduced due to the current administrations decision to cut the federal pell grant funding. After i lost my Social Security benefits, and much of my need base for natural aid, i had to get three jobs to stay in school. So i know firsthand how important it is to extend Social Security, job benefits to College Students who need financial support. Were all in this together. It has been this nations rallying cry during this covid19 pandemic. While it is true that covid19 has affected everyone in some way, the magnitude and nature of the impact has been anything but universal. This pandemic has laid bare and exacerbating the racial and gender inequities in our nation that take a disproportional toll on black women and men and their families. While whitecollar workers could work from home and maintain prepandemic incomes, a disproportionate amount of men and women like Grocery Store workers and delivery drivers continue to go to work and risk their lives on the front line because they are considered essential employees. Many of these black workers succumbed to the ravaging effects of the coronavirus or died as a result of the disproportionally high rate of preexisting health conditions. The surviving family members of these workers are desperately try close the financial gap created by the death of their family member. For these families, the ability to close that gap could be the difference in living comfortably or being relegated to the throws of poverty. Low wage workers and the restaurant and Retail Industries have been especially vulnerable to layoffs and furloughs doweriduring this time. The lost wages today will impact Social Security Retirement Income in the future. Because of this pandemic, these workers may never have an opportunity to retire or will have to work well into their retirement years to mitigate their lost income. When we get to the other side of this pandemic, and i am optimistic that we will, people will still experience economic and retirement injustices. This is especially true for black women who face unique challenges during our retirement years. Each year we have at the black womens round table release our annual report on the status of black women in the united states. This year, we reported that although black women were among the highest numbers in this nations workforce, work long hours and range highest among groups go to college and get degrees, when it comes to pay, were consistently paid less than white men and women. The cumulative effect of this persistent racial and gender discrimination in our pay robs us of the wealth we need for economic stability during our retirement years. As a result we as black women in our retire years economically are leftin secure. Add to this reality for black women, the fact that those who turn 60 years old this year will have less Social Security income due this this years unanticipated reduction in earnings caused by covid19 pandemic. If this notch is not addressed the legislative fix, it will reduce a Social Security benefits for black women born in 1960 for the rest of their lives. So for these reasons and more we support hr 7419 the correction and equity act and i thank you chairman larsen for the opportunity today. Thank you, melanie, for your testimony. And now the president and ceo of the National Committee to preserve Social Security and medicare Lance Richmond is recognized. Thank you. You could hear me okay . Great. Thank you chairman larsen and Ranking Member reed. Thank you for holding this important timely hearing and for inviting me to testify. Seniors, we just heard, particularly of communities of color, are the hardest hit by the coronavirus pandemic. Eight out of ten deaths from covid in the u. S. Have been in adults 65 years or older. Nursing home housing a substantial amount of black and latino residents have been twice as likely to get hit by the virus as Nursing Homes where the population is mostly white. And the best of times Medicare Beneficiaries spend an average of 24 of Social Security check on out of pocket Health Care Expenses and half of them as we know have incomes of less than 30,000 a year. And amid a pandemic, like this, that disproportionately targets Older Americans and their financial and Health Security is again stretched. That is why, mr. Chairman, the National Committee supports your legislation, hr 7499, the Social Security covid correction act. Your bill makes necessary technical corrections to a virus related glitch in the current law which if unchecked would result in a sizable notch of Retirement Income for those born in 1960. And it makes several benefit improvements that would help retirees and people with disabilities, especially during these tough times. This notch, unless corrected, would mean that future Social Security beneficiaries turning 60 this year will be in for a very rude surprise. The monthly benefits might be lower than those born in previous years, perhaps as much as 1,400 a year, or about 120 a month for the rest of their lives. And let me tell you, if youre living on only Social Security or mainly on Social Security, that is a big hit. We know that tomorrows retirees will depend even more on Social Security. Normally average wages rise from year to year but this year because of the pandemic aggregate wages are likely to decline as much as 10 . Benefits for individuals who become 60 this year would be as much as 5. 9 lower than workers who reached that milestone before. The problem created by this notch of workers turning 60 this year is really an unintended glitch in the Social Security administration of 1977. There is no way that the drafters of that legislation could have anticipated that average wages would fall to dramatically from one year to another. Congress has to fix this unintended reduction for individuals turning 60 in 2020 before those workers became begin claiming Social Security. Americans should not be deprived of tens of thousands of dollars in earned benefits and express benefits when theyve done nothing wrong except being unfortunately born in the wrong year. The nationally Committee Thanks you, mr. Chairman, for bringing the Social Security public correction and equity act to help fix the problem for those born in that year, without cutting benefits for any other beneficiaries. In addition, to repairing the notch, your bill makes some very important, very necessary improvements to Social Security benefits that would ease the financial pain of this covid crisis for retirees, people with disabilities, survivors and dependents across the board for all by 2 . The temporary benefit increase will be especially important for seniors, people are disabilities, because we anticipate the upcoming cost of living justment, cola, is lower than anticipated by trustees in the latest report. We support the other improvements and i was going to list them but you went through them so im not going to take the committees time with that, listing those improvements. Theyre all very necessary. Mr. Chairman thank you again for introducing this legislation, hr 7499 would ensure that the earned benefits of individuals born in 1960 will not be cut and it makes this correction without cutting benefits for other beneficiaries. And the temporary benefit improvements in this bill will give some peace of mind to get through this crisis that has hit them harder than almost anyone. We look forward to helping you in any way possible. Thank you. Thank you, max, for your testimony. And now we recognize the senior fellow from fiscal policy at the National Taxpayer Union Someone who has been before this committee in the past, mattie doppler. Mattie. Thank you, mr. Chairman. Appreciate that. Thank you. Thank you Ranking Member reed as well and the rest of the members of the committee. Im delighted to be back with you even if it is from a social distance. And i also want to thank you for holding this hearing today to discuss covid19s impact on Social Security and its beneficiaries. As we have heard from my other colleagues on the panel, like many aspects of the fiscal environment the trends that were worrisome before the pandemic has been accelerated by the nature of todays crisis. It is my belief that the bipartisan problem solvers of this community could address pressures through thoughtful and deliberate action and it is great privilege to be lear to share thoughts with you on that today. As you mentioned my name is mattie doppler from the National Taxpayers union, the oldest add volk acy firm dedicated to defending the right of taxpayers in the Nations Capital and in capitals across the country. The pandemics effect on Social Security is pressing because without a robust economic recovery from covid is becomes more steep. Because Social Security is funded by dedicated payroll tax it is pertinent to its health. It should be mindful of the pandemic still requires deliberate targeted by fall. This presents dual u pressures on solvency in the cases of Social Security which relies unemployment taxes, the scenario can be more worrisome. Yesterday, we got new data that showed 32 Million People are still claiming some form of unemployment support, which represents tens of millions of workers not paying Social Security taxes. Removing barriers for workers to get back to work is key for Social Security and the health of workers. Retiree Household Income has risen twice as fast as it has over last 40 years. Covid19 could exacerbate this divide if the crisis is used for policy descriptions that increase burdens on workers. Secondly, the employment du downturn affects the average wages, which affects beneficiarys payments. The awi receiving just a lot of attention this year, but it is not new. In 2009, the awi fell l by 1. 5 . This notch exposed elements of Social Security, which is meant to be a safety net for retirees, but u penl sizalizes seniors. For example, retirees wishing to return to work or stay employed throughout this crisis would be penalized by the retirement earnings tax which establishes a threshold on earnings for wo working seniors. Thirdly, the most vulnerable workers are the ones that shoulder the heaviest burdens. The Federal Reserve has estimated that 40 of the job loss from covid19 has been concentrated on households that make less than 40,000. As i explained last spring, this is the same population undually burdened by increases in payroll taxes, which add thousands to the costs of hiring new college glrads. Lastly, theyre larger burdens on entrepreneurs and smaller business because of liabilities. Small businesses employ nearly half of the american workforce, yet this pandemic has demonstrated theres a disparity between nets of Small Businesses and corporations. We are not yet through the challenges covid19 presents to Public Health and to the economy, but the thoughtful consideration of what it will take to revive the American Economy is a task for which i know the members of this committee are prepared. I want to thank you again for your thought u leadership on how Social Security can be sprepresd during these circumstances. A robust economy cannot heal all the challenges, but it is a necessary and critical piece to secure it for generations to come. Thank you. Thank you and now, we will hear from abigail whos the executive director for latinos for secure retirement. Abigail, youre recognized. Thank you so much, chairman larson, and Ranking Member reed and the rest of the subcommittee for inviting me to speak today. Again, my name is abigail. Im a executive director the tinos for retirement with a reach to 300,000 latino families and represent the 58 million in the u. S. Today, i stand here with my colleagues asking for congress to do more to address the covid19 crisis as a whole. And to address the need of our most vulnerable seniors. As they leave or sometimes are forced out of the workforce. These seniors have to navigate how to access their Social Security benefits alone as tools like wifi and multiple driss you and i take for granted are out of reach for these vulnerable elders. We can no longer wait and we need action now as covid19 remains historical, soes yal economic and policy factors that have exploited communities of color for decades. The hardest hit community by pay cuts, layoffs and business shutterings because of Health Crisis effect effects on the economy. By april 2020, nearly one in five latinos were unemployed. They have become more vulnerable to the covid19 crisis for the following reasons, but not limited to latinos being more likely to do service work classified as essential, putting us in greater contact with people. At home, latinos are more likely to live in close quarters with larger or extended families that mike isolation impossible. Latinos higher risk of death from the virus result us from the greater presence of preexisting health conditions, but not because were born with them. Because Health Access is so hard to come by with communities that do not make enough money u to be able to Purchase Health insurance. Also, latinos are among the communities with lowest access to nutrition and health care services, as i mentioned. The pandemic has also x exacerbated the challenges for vulnerable populations to Access Services as manifested in the extraordinary drop in disability benefit applications. For example, access to local Government Agencies and other programs that traditionally provide support to vulnerable populations is further limited. Those who need in person access at ssa offices cant do business right now because they dont have access to those offices. Our partnership with the Community Legal services of philadelphia and other advocates who serve vulnerable populations, primarily low income people with disabilities, find that people in vulnerable populations often have multiple complex issues to revolve that require expertise and knowledge of local information, programs and resources, which cant be found using online tools alone. Our organization along with the National Counsel on ageing help ensure access to older american sf services and programs which are absolutely necessary as our elders take part time jobs to supplement their income and cant get by with Social Security checks alone. Especially during this difficult economic time. Additionally, older u undocumented immigrants continue to work to make their living after retirement age because even though they may have spent decades contributing to the Social Security trust fund, they may never see those benefits but for their legal status. During this critical time, these elders make up the essential labor force by harvesting our food, disinfecting our schools and places of work and the older adult gig workforce delivering our essentials gthrough this pandemic. We cant ignore there are elders in our communities that need a pathway to legalization. But today, i sit before you today not just on behalf of latinos, but with the tremendous responsibility of millions of americans who cant be here today. The act is a great fix for the unintended benefit notch. People shouldnt suffer a large, permanent drop in their Social Security benefits just because they turn 60, become disabled or experience the loss of a breadwinner around the start of a pandemic or deep recession. Policymakers should fix this unfair result because many could see a reduction of almost 1400, which in the latino community, Social Security benefits are amongst the lowest and even more critical for their livelihood. It would be catastrophic as many of our older friends and neighbors are already having to cut pills in half, skip meals or turn off the airconditioning in the middle of summer in order to make ends meet each month. The notch is a big problem and larsons bill is needed to prevent a large benefit reduction. However, this needs to be done very carefully as larsons does so as not to cut benefits for other workers in 2020. Well continue to advocate to ensure that not only the notch issue is fixed, but to ensure that the provisions in the bill, which will address inequities faced by communities of color, are enact aed as part of the next covid19 package. Thank you and i look forward to answering any questions you may have. Thank you, abigail, and sean castle, the deputy executive director of paralyzed veterans of america, you are recognized. Thank you. I am deputy executive drirector for paralyzed veterans of america. I want to thank you for giving me this opportunity to testify about the importance of Social Security to millions of veterans and people with disabilities like me and a offer thoughts on the pandemic and Social Security and those who rely on the system. Like millions of their fellow americans, pva members have been placed under considerable strain during the pandemic. My testimony presents to you the experiences of members like stan brown. A quadriplegic who lives alone and relies on seven care givers for nearly everything. From eating and dressing to running errand as. He had to send one care giver away when she showed up with a cough and another tested positive for the coronavirus. He spent the following two weeks anxiously monitoring himself for siymptom symptoms, afraid he had the virus. Though he tried, he was never able to fete tested. Many of our members feel like tom. A National Treasurer for the paralyzed veterans of america. Trapped in their homes and isolated, worried that the covid19 diagnosis will be a death sentence. Because of the virus devastating impact on the already impaired lung function of those with spinal cord injuries. Besides our members mental health, theyre worried about the ability to meet their basic needs. For example, our buckeye chapter in ohio serves about 400 paralyzed veterans, about half of whom live at or below the poverty line. Our Office Receives calls each week from veterans who need emergency food assistance. The crisis has posed a particular assistance for several rehabilitation clients on Social Security Disability Insurance and trying to return to work despite the pandemic. Our Rehabilitation Program counselors report difficulties encountered by these veterans when they try to inform the administration that theyve tried to follow proper protocols. While we recognize the need to bring Field Operations online because of covid19, we agree with the recommendations for improvements and the Social Security administrations Customer Service offered by the consortium for citizens with disabilities. The u. S. Already faced a Retirement Crisis before covid19 because of the Many Americans who have been unable to save for their retirement due to stagnant wage growth over the past several decades. Now, there may be no benefits in 2020. Coupled with severe economic job loss from the devastation brought on by covid19, this virus may result in many more americans needing to rely on Social Security for their economic support than had been anticipated. This is clearly the time to strengthen the system and to reject calls for reducing benefits or creating a commission to propose cutting in Social Security. Since its introduction u, its been a Strong Security for the act and its many imt proouchl improvements and measures to strengthen the system. We failed under the houses not acted upon. The bill that urged, the bill and urged the full committee and house leadership to take it up for a vote as soon as possible. In the meantime, pba applauds the efforts to provide help to Social Security beneficiaries through the emergency Social Security benefits act. That would offer temporary improvements and take effect immediately and remain in full force until and hopefully the worst of the recession has pa passpas passed. Additional steps include a passage of legislation like the stop the wait act. Eliminating the five month waiting period could help many people avoid losing their housing. Another high and financial losses ain doing away with the 4 month waiting period is particularly critical during this pandemic. Finally, pba appreciates the chairmans efforts to address the covid notch. An unforeseen consequence that could have adverse effects on millions of Social Security beneficiaries. Hr 7499 would prevent a drop in benefits for those born in 1960 and do so without cutting benefits for anyone else compared to the current law. We hope the congress will act quickly to address this current situation. Thank you, mr. Chairman, Ranking Member reed and members of the subcommittee for your attention this afternoon. Pba is always ready to work with you and your colleagues in advancing legislation to extend and enhance Social Security. Im happy to respond to any questions you may have. Thank you, sean, and its now my great honor to ask robert roach to comment the alliance for retired americans. Robert, you are recognized. Thank you, mr. Chairman, good afternoon. Im robert roach. Thank you, mr. Chairman and Ranking Member reed. The opportunity to represent the alliance for retire d americans 4. 4 million members as nation deals with a very serious pandemic. This committee has kept the spotlight on the needs of seniors and those who need Social Security. Its important to remember Social Security benefits are helping keep our communities and economy afloat. Senior rs spend on food and medicine and that puts 1 million into the economy every year. That spending on essential items doesnt stop, even during a pandemic. Older american rs a critical part of the workforce. Nearly a quarter of the retail employees are 55 and older and 7 are over 65. Some have lost their jobs to coronavirus and recession or still on the job risking their health. One of the answers to the crisis is Social Security expansion. We need it before the pandemic and especially now. If the wealthiest of americans contribute the same percentage of their income as everyone else, we could increase the benefits for current and future retirees and strengthen the systems solvency. That will help make ends meet and strengthen the economy. The notch issue. The pandemic has created a new Social Security issue for one particular group of Older Americans. Those who turn 60 in 2020. Without congressional action, those born in 1960 will receive 5. 9 lower Social Security benefits when they retire than 1959. This has been called the notch problem. Most persamericans know their individual benefit amount reflects their earning history. Including an aggregate figure for total wages in a given year. Since the wages typically rise every year, this is not usually a major issue, but the number of jobs lost to the virus recession means these people will pay a steep price down u the road and that will have a harmful and permane permanent effect regardless whether they worked or lost their job. That is not fair. We applaud chairman larson for introducing legislation that addresses it. We have no time to waste. I want to be clear. We fully support hr 7499 and were very closely with larson and his colleagues to bring that across the finish line. I would like to it rarate the ws of Ranking Member to ensure Social Security is here today, tomorrow and for generations to come. Racial and gender disparities make this crisis worse. All senior, people with disabilities, people from impoverished communities that are predominantly black and hispanic have been hit hard by covid19. They tend to earn less, work in essential jobs and are more likely to have the Underlying Health conditions that increase the risk from the virus. Women are also at an increased risk from the virus because one in three jobs held by women are now designated as essential, putting them in harms way. The sad reality is that the very people most acceptable to the virus are on the front lines in essential jobs. No one should have to choose between their income and health, but they have to. And the choices not only affect their income today, but will reduce their future Social Security benefits. That is because when a persons wages decrease, the benefits will be lower, expanding Social Security for all. We also need to think about the people with disabilities, scientists and doctors dont know whether people contact covid19 suffer longterm Health Problems that will leave them unable to work. Today Social Security provides benefits to 8. 5 million dibbled workers. That is just over 12,000. That may sound like a lot, but these funds are essential. It would mean that all beneficiaries could continue to rely on their benefits they have learned over a lifetime of work. Its good policy and important part of recovering from the pandemic. Conclusion, according to the National Institute from time and security u, four in ten seniors rely on Social Security for their income and that number is expected to rise over the next decade. We owe it to the current and future retirees. That means ficking the notch, expanding benefits and future retirees. Thank you. I look forward to answering any questions you may have. Well, thank you, robert, and thank all the panelists. These are incredible times that were living in. I thank you all for making the special sacrifice to be with and a part of the panel today and underscoring what i believe is a, an urgency. I dont think any of us are going to be able to say weve lived through a time when we had a International Pandemic colliding with all of it force an impact that its had on our essential committee then also laying bear and underscoring what john lewis was pointing out prior to the pandemic. That we faced a real civil rights issue or people of color and woman with respect to the ineck quities that have been ba in to a system. I represent my colleagues on the other side of the aisle and i welcome their comments. I certainly would welcome their plans as well. Were often told how we have to dance and jump together, which i hope and still believe can be achieved but it sernlly would be helpful if we had a plan or so what they were actually proposing. Instead of wishing. Having said that, i have Great Respect for andrew biggs and someone who is written extensively. In fact, he was the one who should be credited with first sounding the alarm as it relates to the potential impact and creation of a notch. But he did propose a solution and his solution was that we steer away from the idea of the way we currently calculate Social Security benefits on the basis that we do currently and instead, instead, rely on indexing wages as opposed to using the average wage index. And so, i wanted to ask the actuary, would that, if we went to calculating our rates, Social Security by price indexing, would that result in benefit cuts . Thank you very much, chairman larson. I think what andrew was getting at was the possibility for this one year, 2020, was the cost of living adjustment would be larger than the change in the average wage and that is likely to be the case. The latest Trustees Report estimate d that the cost of living adjustment would be 2. 3 . At this point, it looks as though the day a ta are suggesting it might be less than a full percent. Probably still positive. Much to be determined on that. Where as the index series is expected to go down. However, if im not sure if andrew was recommending doing that just for the one year or doing it indefinitely. If we were to change the benefit structure so that from one generation to the next, the structure will increase by price levels instead of by the average wage, that will result in a 1 to 2 Slower Growth rate in benefit levels Going Forward for all future generations that will cause the rate to decline over time to the point where by 60 years from now, the affect aed benefit levels relative to your career earnings would be cut in half from what is scheduled around current law, so that would certainly reduce the cost of the system by the result of 60 years from now. People would become ineligible for benefits only half of whats now scheduled and to less degree. Is that your understanding of what would happen if we went away, we went to price levels as opposed to the awi . With the price indexing . You might have to unmute yourself, max. Okay. So i would never, ever disagree with steve. Prices go up less increase in a slower rate than wages. By making this switch and hes right. Its very complicated. You would end up with a lower benefit Going Forward. That would certainly be the result. Its pretty clear that the awi overall and with this adjustment and one u thats needed and especially if we go back to as the bill calls for the previous year, that that would put us in excellent shape to address this. This issue. With the importance to the cola, again, max, let me ask you, why is Social Security cola so important to your members . As you know, ive done hundreds of town halls over the years with members of congress, democrats and republicans, and one of the questions that comes up invariably is what is the announcement made in the fall, seniors anticipate that very carefully, their benefit will change and most a little bit. Some years its been zero. I think three years out of the last ten, the formula for determining is flawed and looks at the increase in inflation for a wage earner as opposed to measuring those goods and services that a senior relies on. Its been less than the actual impact of inflation on seniors. And its something that needs to be corrected. I know were focused on it in your legislation and we need to have an accurate measure. The purpose is that a Social Security check will keep up with the cost of inflation. And if that is not met and the current formula does not accomplish that, you are not living up to the providing an accurate inflation as it impacts the kinds of things a senior relies. This is for both mr. Cassel. Asth millennials, you are part a generation thats been heavily affected by the recession and now this current pandemic. What does it mean to you personally asthma ly millennial know youre protected by Social Security . Thank you for question. As ive testified before in front of this committee, im someone who is receiving Social Security that came to me at time when i was about to be homeless. At the time, i was 28 years old. Just had my second spinal cord surgery, was waiting on my va benefits package to work its way through the system. That can take quite some time. And i was living on less than 80 o a month even when my Social Security finally showed up to me. Having that at that moment in time meant that i didnt have to be homeless. That i didnt have to make choices on my medicine and whether or not i was going to be able to take the Pain Medicine or not or having to break the pills in half to make them last longer. Didnt have to decide whether i was going to be able to eat that day or stretch those out for multiple days. Now being this this position, it also heartens me and members that i represent, to know that when i do get the chance to retire again, hopefully, you know, in my mid 60s or early 70s, again, that not only will i have the financial benefit there, that i hawill have the le insurance benefit there that is not afforded to men and womenin. You cannot find a private benefit or Insurance Company that will ensure somebody with a catastrophic injury. I know this well because i went to every major Insurance Company in the country looking for Life Insurance to make sure that if something happened to me, that my wife would be taken care of and the only one i found that was there for me was Social Security. So i do know and it does mean a lot, as a millenniamillennial. To have this benefit for me and all men and women, who will need it when the time comes. Thank you for that. Abigail. Thank you so much for that question. I think first and foremost, i think i bring a unique perspective to this. During the first reregistration, i just turned 18. Still undocumented. I was working at a fast food place and so, you know, i was putting my money into Social Security and it wasnt until i turned 21 years old that i finally had the ability to legalize my status through vowa, actually, because unfortunately, you know, my mom was a victim of abuse by her husband. But i do say that because while i didnt see the immediate effects of that recession today, it is so evident how much it is hurting current ma lillennials genxors. My partner was unemployed by about three months this year and not only that, but i actually see it with other folks in friends, family members, that are also unemployed right now, that lost their jobs and you know, because of that, they dont have the ability to be able to save for any other, using private requiremetirement accounts because there isnt money right now and a lot of these folks are using up their savings accounts right now. Taking some of the money from their 401 k s that they have you know available to them through the cares act as well. But for me, as someone who runs their own nonprofit, that does you know, pay into Social Security, its just nice to know that i will at least have Social Security at the end of my lifetime. It is you know, within the last ten years we had the recession. We dont know whats going to happen in the next ten year, 20 years. I hope that folks are able to increase their wages and we are able to save, but until that happens, im solely, not solely relying on Social Security, but im happy to know that program is still there and available for folks like me and my millennial cohort to know that there will be something for us when we do retire. Thank you. And now let me recognize my good friend tom reed. Thank you to the witnesses for testimony today. I want to get in the technical aspects of the 1960 situation. Youre best suited to highlight this issue. For those that were born in 1960, when will we know exactly what the effect on them will be and why cant we know it any sooner than then . Thank you very much. The problem is we wont know with exactitude what the index for 2020 will be until late in the year 2021. The reason for that is because all the w2s submitted for wage earners come in early to mid in the fol e llo following year. It wont be until late in 2021 that well actually do this. Youre correct. That well not have whatever it turns out to be, it will not have a real effect on benefits until we get into 2022. I would just like to add by the way, its not just a matter of people born in 1960 that speaks to the people who will reach age 62 for Retirement Benefits in year 2022, but well have a large number of people also becoming first eligible for benefits in 2022 on the basis of dibbsability or on the basis of being a survivor of a deceased worker, which occurred in the same year. So its not just retirees at age 60. People who are younger than age 60 in 2020 will also potentially result in providing benefits in 2022. But youre exactly right. We will not know this th with certainly until next year. Just so im clear and clear for people watching, that 2022 is when that potential impact will hit. Much benefits unless we do something. Which is i think the sincere hope for everyone here is to address that. So 2022 is the benefit window. Has this ever happened before, this time of impact . By understanding is it has happened. When did that happen before . This average wage index never, ever declined starting back to 1951 until the first and only time so far was for the year 2009. The good news is that the reduction in 2009 was only 1. 5 as it turned out, but maybe more important than that is that at the same point in time we are now compared to 2020, if we look back at the 2009 Trustees Report in may of that year, at that time, the trustees were still projecting an increase in the average wage increase of. 9 . Even in the following year. It turned out to be more than that. Also largely more likely to be is very likely to be much larger than we saw in 2009. Congress did not make any changes at that time, we believe its largely because once it was realized, it was 1. 5 . There was nothing done about it but now theres another opportunity. I appreciate that. And that is enough. I think were looking fo further explore and would be interested in partnering with you to address this unique option born in 1960. With that, i yield back. Thank you. Dan kildee is recognized. Fr first of all, thank you, mr. Chairman, for holding this really important hearing and thank you for your leadership on the issue generally of Social Security. Theres a will the of con vlot conversation about Social Security and whether its going to be there in the listeniongt. I think we know we have an obligation the act, but unlike some, you have been willing to put forward real action and i think people can tear that apart, but having a plan that solves the problem is a necessary element of solve iinge problems. Obviously this coronavirus epidemic is an unexpected wrinkle in a really difficult time. 90 of the covid19 deaths in my home state of michigan have been people aged 60 or more, so its hitting particularly hard Older Americans. Its clear that our current economic and Public Health, the Social Security roll, the role Social Security plays in providing certainty is more critical than ever. In the time of absolute uncertainty, the thing we want to make sure is that Social Security beneficiaries know its going to be there and giving them the promised benefits they could plan for. I am concerned about this issue thats been raised, this testimony, this notch issue our witnesses have raised today. The impact of koefd on our economy, if left unaddressed, will cause a harmful Social Security benefit reduction at, for anybody born in the year 1960. At a time when we least can manage that. If no action is taken, 143,000 michigananders could earn less and not have the promise of Social Security meant for them the way they would have expected just because they were born. But again, as i mentioned, mr. Larson and i and others have been wanting to put a plan on the table. The act provides a fix to the natch problem and some improvements for all americans by expanding benefits on an emergency basis during this pandemic. Again, a critical benefit coming at an absolutely critical time. I wonder if you might comment and just explain to us in clear terms what you think the consequences of congress not acting on this legislation might be. Both in terms of the notch issue, but importantly, the consequences for americans trying to navigate this pandemic. I think weve got to unmute you somehow. Okay. Can you hear me . I think under the best of circumstances, it is very difficult to bring an issue like this into in a way that will lead to enacting legislation to solve a problem and this is a problem. Its so tied to the recession that i think this is the time to act and im not a san begin. Soquinn. Some members of the committee are, that we can wait. This may not have an impact on benefits. Until 2022. The word notch, i remember the last time the congress and our organization. Im sure some of the, some of you on the call remember that. And that was a notch that was also created. I think mr. Goss would know this better. By changes in 1977. Either 77 or 73, in Social Security law. That resulted in people born between 1917 and 1923 who received lower benefits. I think youre nodding. Youre aware of. Of so many town hall meetings. With democrats and republicans, members of this committee on both sides o of the al and we heard from witnesses that that maybe the congress was just going wait until we die. And isnt that a what happened . The congress did the oldest member of that notch category, three. The youngest would be 97. So there arent too many of them around. What i worry about is you put this on and we go through some kind of experience where ive heard and im here to say this. But where i i we were here, democrats blame Republican Leadership [ inaudible ] zpl there were hundreds of members but nothing happened. And the same with the other party. It was kind of a we dont want to see that happen. This is the time to take advantage of this. Thank you, max, and jodi is recognized. Could you mute your, someones got their microphone or whatever, getting a lot of feedback here. So, thank you. Mr. Chairman, thank you for holding the hearing. Your sincere desire to work with republicans and anyone whos interested actuequally sincere have a longterm fix for our seniors who will earn benefits, Social Security. And to throw something out there with a shortfall because of covid. Ive got to say, leaders anticipate. We dont wait and we too too much, we intend to fix a leaky roof when its raining cats and dogs. So i commend you for that. Even if i disagree with the solution, i have several questions this shortfall is shoring that up or plugging that hole, when we know how much it is or even if we can anticipate when it happens. What about and mr. Goss, let me ask this. Im from texas and we have a lot of retirees and other republican voices who have because of the prior o that, in equitable to what theyve contributed. So in order of magnitude, are the folks who have suffered with the equitable payments from Social Security, the people i described from texas et cetera, and those who fall under the left category. The effect of the socalled windfall elimination period in Social Security is unfortunately very, very complicated and the degree to which it affects individuals depend ts tremendously. What portion of their career were they in. What portion of their career were they working in government noncovered, so it varies all over the map. So its true that for many people, the degree of reduction in their Social Security benefit as a result of the windfall e m elimination would be larger on a lifetime basis than we would be seeing here from this, those who are covid induced. So i guess my point is that inequity has been hanging out there for 20 years. My understanding is that we had a bipartisan solution to it on the last congress. I think theres a democrat republican proposal, but that order of magnitude is even greater problem for those who are getting shortchanged for benefits. Again, im for not changing anything for our seniors and im for looking for a a a bipartisan solution ultimately and im ready, chairman larson, to go on that retreat and come out in three days with the grand solution and jump off together and save the world for seniors who are counting on us and im still confident that we and my friend, tom, can lead that effort. Im still at the to come with. Now, in terms of, and this is, i wont even ask the question, the analysts and i thank you for your time to raise your hands and do all that stuff. If i did ask and get a response, a question i would like to ask if i had the time to get all your responses, are your revenue strains going down as a result of covid and then are you reducing the salaries of yourself and your employees and or are you laying off employees as a result and i dont know what your answers would be, but i suspect that if youre a nonprofit, youre seeing a reduction in support. Heres the challenge to the panelists. Our challenge. Is that every one of yall had mentioned having the need to get back to work. Even for seniors. Even opening the economy this range shortfall for those who need this earned benefit. The time is expired. May i finish my point, please, mr. Chairman. Go ahead. Ill make it quit. Be brief. I just would say the fact that we all still get paid, including me, whether we open the economy or not or whether we had barriers to open or not, i thinkperverseness in our Decision Making model. I hope we can act at least like our checks and our livelihoods depend on it. Back to you. Boyle is recognized. He can eat into my time anytime if it means hell consider voting more with me on this side of the al. He doesnt have to respond to that, but i appreciate the friendship and the comradery that he had not only with the previous member, but all of us on this sub e committee. I also just want to commend you, mr. Chairman, because at a time when unfortunately, very few people in congress and in washington are talking about the looming problem, youre someone whos been consistent about pushing this issue and for all of us to solve it, and god knows its needed. So i just want the again publicly thank you. I want to focus on one specific aspect of this because i think there are plenty of times when we can talk about the overall funding issues that Social Security is facing. And 2100, which im proud to cosponsor. Weve had other Committee Hearings that focus on that and i know well have ones in the future, let me shift to one specific aspect of this challenge and thats covids impact on ssi and ssdi. And let me use my Home Community of philadelphia as an example. Theres been a significant drop off in ssdi and ssi applications, which is pretty counterintuitive. Typically in an economic downturn and in a time in which unemployment is now u higher than it was during even the worst month of the Great Recession, typically, you would see applications increase for ssi and ssdi. Instead, weve seen the exact opposite. There has been according to Community Legal services, as well as according to Social Security workses, theres been a 30 drop off in ssdi applications in part, one would assume its because field offices are closed, but there might be other reasons as well. So i was wondering if and ill pose this to max or sean both, to talk about potential solutions to address what is clearly i think a problem anded something that we need to solve. Thank you. Thats correct. Youre going to see because the field offices have closed, because of the now inordinant amount of time people have to spend on the phone, the applications are going to go down. As i mentioned in my testimony, there needs to be an immediate shift of resources back to the Social Security administration to set up more call centers. So et up the ability for people to reach someone, to help them with their claims. This is not something our membership is immune to in any way, shape or form either. This affects our paying members who are our men and women who are trying to go back to work during the pandemic and do the right thing by reporting that they are either have a job or are looking for work and it could be harmful for them to longterm lose part of a benefit they didnt need to lose because they didnt get someone on the phone to properly report it. So one of the main things is to properly shift resources back from the areas where they were used before but theyre not being currently used to a more modern approach to setting up more call centers and having people at the ready to answer the questions and to be able the file the claims as needed. Because as you know, as more people lose their jobs, as more people get injured during these time frames, Social Securitys need will not stop, but the need for people there to answer the call when they call in or send the paperwork in to process it and file it will continue to grow. So what im hearing is more resources and then specifically for call centers, max, i dont know if you wanted to agree, disagree or potentially add something to that in terms of yes. Thank you, congressman. I agree completely with what sean just said and our concern is not just the cliedeclines in ssi and ssdi applications in pennsylvania, but all across the country. Its not unique to your district or your state. And i know Social Security has been puzzling. Certainly, a big part of it is the closure of so many Social Security offices. The reduction in hours. They serve the constituents. And this has been exacerbated by the pandemic. Individuals especially in that situati situation, they depend on facetoface contact with someone at Social Security or at least someone they can talk to. And i dont know if youve ever tried to call the 800 number, but if you have, youre going to be on hold for a very long time. So, i think having more resources as sean mentioned, devoted to this, would go a long way. Also, i have heard recomme recommendations of Social Security to partner with some nonprofits in the area to help in advising those who want to claim ssi, ssdii h, how to maneuver, how to navigate the system. I hope theyll take that up as well. And congressman, mr. Ferguson is recognized. Thank you, mr. Chairman, and Ranking Member reed, i want to thank you for your leadership. I think we all agree the worst thing that any of us could do is not to act on this issue. If you want to see real harm done to americans, lets not do anything and see what happens. So i always want to commend both of you for your leadership in this space. As we go through reopening of the economy, we see more and more americans that are trying to get back to work in a safe and responsible way and that includes many of our seniors and ive seen matter of fact, ive talked to many seniors that have said now that theyre working remote remotely, theyre more willing to stay in the workforce. They want to continue to work. We tend to penalize our seniors that do goc back to work. Right now, the income makeover about 48,000 a year, you get penalized for that. Can you talk about how this may be unfair and businesses to work and when we need more people coming into the workforce, and we did prepandemic, but certain ly were going to need folks coming in post pandemic. Can you talk about that and on the system and making sure many of our seniors maintain dignity of working their lives. Sure, thank you, congressman. As mentioned by myself and any testimony, the retirement earnings creates a ceiling by which seniors are penl size ali working over threshold depending honon how close they are to retirement anyone. So in normal economic time, that introduces an economic distortion, but in todays circumstances, it really has a vast impact on seniors. Not just because theyre trying to plan accordingly for retirements, but the circumstances you may have anticipated the beginning of the year are vastly different than where we find ourselves now and now that were halfway through 020. Seniors who wanted to retire arent doing so either because their working circumstances have changed or because their retirement situation seems more volatile, theyd like to stay in the workplace. Theyll be penalized by the test. But secondly, we saw many states throughout the course throughout the beginning of the pandemic really trying to e recruit seniors out of retirement to come back to work in industries such as health care. New york is famous for this. Asking for retirees to rejoin the workforce in order to deal with the influx of patients due to covid19. Those would be another group who would be penalized and why its creating a barrier for seniors looking for flexibility which belies the entire point of Social Security. Im glad to hear you say that and i agree with you. I think weve all seen seniors that want to continue to work. They want to continue to stay k active. That they feel like theyve got something to contribute to their profession and to society. But just on a personal basis, they simply dont want to go, to become inactive and to go into a slide that we see, unfortunately, way too many people do when they hit that retirement age. One of the things i would ask if you think would be helpful is a bill that my colleague, jack, from indiana has, that would raise that threshold up to 737,000. Do you believe that would be helpful Going Forward . Congresswomans bill is a bill that my organization is supportive of because we think it would help eliminate some of those distorkss, particularly while covid19 is still an uncertainty in the economy. Thank you. Can you think of a good reason why we shouldnt encourage our seniors to work if they want to . I can certainly speaking as someone who is very exproverted, has had a hard time with the staying at home orders, i know older folks are struggling with that more so the more they can stay engaged in their communities, the better. I agree. I yield back and thank you again for hosting this. Brad schneider is recognized. Thank you, chairman larson. I want to thank you for holding this important hearing and i want to personally thank our witnesses for coming before our subcommittee today, sharing your thoughtful system on the pandemic and its impact on Social Security beneficiaries. Covid has created both Unprecedented Health and economic crisis for our country. However, the pandemic does not affect our population equally. The elderly, people with dibb disabilities, people of color, women, are disproportionately achkt aed. Theyre keeping the businesses open and running for all of us. That means its critical now u more than ever that we ensure Social Security remains strong and that its benefits are sufficient to security remains strong and that it is an Effective Security blanket for vulnerable individuals. There will be a positive effect in the immediate crisis but a long term effect. What we in congress have done Great Lengths to snauf that businesses can stay afloat has never been at the extent of the individual. But businesses large and small could have devastating effects on the Social Security longterm viability. If i could turn to you, can you discuss what a payroll tax holiday could mean for Social Security and for the beneficiaries that rely on the program . I think as you know, am i on now . As i think you know the National Committee has always opposed a payroll tax holiday. Not only when a republican proposed it, but back when president obama approached a payroll tax holiday. As you point out it will do nothing for those that are paying payroll taxes. The trustees told us that the program is able to pay full benefits, i think it is 2016 it is 2034 or 2035 and then there will be a problem. And the environment knows that the payroll tax makes it even worse. Cutting the payroll tax is a way of strangling it, it has a dedicates source of revenue. Now in this pan domeic program by deferring i think i was on mute. Have you seen in your modelling what effect they have on payroll . Excellent question. I think there is, as is always the case, please specify here, there was a payroll tax holiday and there was a reduction in the payroll tax rates, so there was a reduction until the total amount of revenue that was transferred in was not effective. In addition from those particular renditions, there was no change in the amount of earnings that were credited to the purpose of the future benefit increase. So if youre talking about a payroll tax or holiday, will it be reimbursed by the general fund of the treasury or just a straight up production in the tax and less revenue coming into Social Security. If it is the former it would not have an effect. On the latter it would have a level of revenue for security benefits. I think that is an important distinction and with that my time is expired and i yield back. Now ron estes is recognized. We have an opportunity to make real meaningful sustainability. As we recover, it is critical now more than ever that dock and this committee make reforms in the right way. At this stage we dont know how covid19 will effect trust funds. We cant derm the cost of living adjustments making guesses without the data and the facts is a dangerous game. We know that successful reform can only be achieved with well numbered bipartisan solutions. Enjoy working with you on many of the issues. It is rushed, it prevents a lower wage index, it excludes the 1951 ko hort from these consequences. Security will needs changes too. We wont know until february of 2021 what the true w 2 date is. We can improve the program. We can find solutions that help the most vulnerable and great the Public Servants equally. We can protect our program. All of this is achievable with effective, focused, bipartisan policy. Let many ask, you have developed a scenario that helps us understand the impact, how confident are you with this scenario playing out . There is the old saying thank you very much. Predictions are very difficult especially about the future and there is no question that that is the case here. As little as a few months ago in april we were anticipating a larger reduction in the wage index than we are estimating at this time. Since april the economy has functioned better than we and many were anticipating at that time. At this point in time it is a very, very open question. Because for the blast of this year, what is going to happen in our response individually and by governments, were hoping we would put forward a scenario. It is entirely possible that we could have a closure and a bigger drop or that we might have further opening. So were hoping that this is threading the needle. There is an incredible amount of uncertainty about where it will end up. As respective green points out well have well over a year before anyones security is paskted by a potential drop in average ages. Do you they congress should act now or should address this or should we wait until we have actual data. I think congress should do what this community is doing which is discussing the responsible solutions baud of the run way on this problem. Also now that were seeing this problem twice in ten years, if this is a problem that were going to see in the future. Right, thank you. Is there other things other than the benefit formula that might be affected by the wages . Yes, disability and Survivor Benefits are benefits. Those are the earnings up to which they are appraised. The bend points that contribute to the Monthly Payments are affected, and i think there is probably six or seven other elements affected by this population as well. So any negotiation about what should be done for the notch this year should be for the entire business overall. I would like to just point out and i appreciate his sincerity we would love to see a plan from the other side. We have spent nearly two years now hearing all of the conversation about the love and the security and i dont doubt that whatsoever. But when were facing a crisis. And by the way when that when comes what is the proposal. We understand there are differences of opinion, but the lack of any concrete plan or solution, while americans are facing this unbelievable collision of International Pandemic and the impact on the economy. 42 million americans unemployed. The long term effects and shortterm effects requires us not to way until the last minute and to act now. If there is a better plan out there, please put it forward so we can, as mr. Duffler says, has that discussion and debate. If there is better plans out there then put it forward. If there is a better way to achieve these things where people will feel secure that theyre Social Security will be there for them by all means put it out there. For the last two years we want to talk about being bipartisan. We want to say were fore it, but if you say youre in favor of saving Social Security and you know how important it is, but just dont like the plan that is out there, but dont have another solution. So let me recognize linda sanchez. Thank you, and i apologize i have been toggling back and forth. Thank you for holding this critical hearing. To protect Social Security i know what a champion you are from increasing the sol again solvency. And there is no reason why anyone should find their benefits dramatically reduced. And we would not be addressing this if we were not in such a profound crisis. It was not a large enough impact to impact sbish years. The magnitude of this crisis cot be overstated. It is well past time to talk to beneficiaries. I believe that we can come together if we have willing partners on the other side willing to meet us halfway. If we can do that it stands to reason that we can find the will to do so much more for the people who are living at the margins. Communities of color have been devastated by this pandemic and far too many are struggling just to survive. Im proud to be part of the covid inequity act. The loss of a spouse is even more difficult in this crisis when patients are cut off from their loved ones. The least that we can do is make sure theyre not facing down financial ruin. We want widowers to keep 75 of the benefits they received when both spouses were alive. I want to now transition into my questions. We know theyre at greatest risk of contracting covid19. Can you talk about all of the pressures a latino family is under in this kind of pan determine snick. Thank you for that. First and fore most knowing that latinos are greatly exacted by covid19 not only because they are living in multigenerational homes, but specifically because when members of that family also go out and work because they are essential workers. That means that folks are at a greater risk of bringing that virus home. From infecting those vulnerable grandparents. And usually it is those grandparents taking care of the kids inside the home. So if that grandparent falls ill and passes away, not only is that family having to do away with the security benefits that are really helping those families pay for their rent and their food, theyre losing that family cohort. And not only that but im really excited and happy that you were able to bring that provision to add additional benefits for widowers and men also losing their wives. Knowing that our communities are three times as likely to be able to on contract the virus. Were four times more likely to be hospitalized. It is really, really, really devastating. The provisions that would help parents provide for their grandchildren is huge for families. Assisting dependent students that unfortunately because some of our families are going out and risking themselves and their livelihood, they may have to develop disability thats will last for their entire lifetime that will prevent phlegm actuth actually going out and Getting Better wages. We know that that really, really does help get folks to help them pay for their health care. For medicine that they need. And im just really happy that these provisions were included in this bill because it is really going to be able to help all of our communities who are really, really hurts in this economic state. Thank you, i yield back. Thank you, mrs. Sanchez. Thank you so much for allowing me to weigh in on this very, very important meeting, and of course i do remember hearing about this and my mom was born in 1918. So i do recall the conversation about about the benefits that you filed about security. And im so happy mr. Larson that you that you brought this to our attention and proposed this fix. I guess my real connection it is about a 9 reduction for those born in 1960. And to the extent that we can all right anticipate that, im wondering why with the brilliance of the members on both sides of the aisle and our exceptional staff, and our actuaries why we cant write provisions in this bill so theyre adjustable once we get the impact measures after 2021. I think that if we were to wait to start this process my fear would be that there would be people that didnt know about it. Like my mom, my mom who through no fault of her own fault fighting out they needed to retire. I guess im not clear and maybe i should address it to our actuary and maybe to max as well, what do you think that the will be . Let me just briefly mention that i, you know, we love working with the Sub Committee and all of your staff, and were confident and hopeful that you will definitely pass what the legislation deems appropriate for this untimely fashion. I think the comment worth making is the proposal that has been put forth by chairman larson, in the proposal put forth, neither one of them would have any effect. If it turns out in fact that the average wage index does not drop from 2019 to 2020. So it, in effect, automatically adjusts. So if were wrong in assuming that the average will drop it would simply have no effect. If it turns out that the drop is much more than that possibility, it would have a larger effect. Let me ask this. Is there any consequence to the recipient if they start drawing their benefit and we dont do anything . Would it be more difficult to go back and make those adjustments before these recipients become eligible or start drawing disability . For us to do it now . Let me speak very briefly. If, in fact, you were to enact this legislation but not until after we got into 2022 then people would initially start to receive benefits that would be lowered on the awi. But if you were able to enact it then, it is possible to go back and it would not start out with either of the elevated benefits. So would that be a permanent decrease in their benefits . I mean let and she a quick question to mr. Roeach. Why would a payroll tax cut undermine security. It seems to me that it is just a back door way to try to get something done. We should work to keep it solvent and if we eliminate the payroll tax there will be no thoughts and somewhere down the line theyre going to say well, we dont have the money. So our members are concerned about that because multily were talking about payroll tax cuts. They are terminating and eliminating pension funds. There is a great deal of anxiety around the payroll tax and it will not help the economy any bit and existing seniors will not be helped. Very quick, max, theyre wrapping up for me before my time expires. Im looking at the clock. You can ask the final question. Thank you so much. Thank you. I just want to get back on the subject of this delay because we are being given the impresh that we have all of the time in the world to do this and im wondering what your members are concerned about oernl this getting kicked down the road. I have 85,000 people oh my, can i not be heard . Max . Mr. Chairman . Am i not being heard . No, i think max has it on mute. You know it took me longer to figure out how to do this than to prepare my testimony. I hope you can hear you, so i was listening very carefully and it is such a thoughtful question and there is a lot of members on both side and the question is, what is the urgency . Why now . This is a very modest fix. This is not putting a big number out there for those people born in 1960. Lets not reduty gints for someone born in 1960 less than someone born in 1959. I dont think the chairmans proposal is asking for the moon. And the fact that it can be adjusted easily. I think this is insurance so that people are not hurt needlesser lessly and it makes so much sense. Again, thank you max, and i want to thank gwen for joining us. Thank you for your amendment on service. I would like to give our friend a chance because i interrupted him. If he want today have a last word, et cetera, before we begin thank the witnesses, et cetera. I appreciate that opportunity, chiermt. This is an important committee, it is important to focus on how do we make it a sustainable outgoing program. As a former state treasurer i deal a lot with data and facts. I would rather make sure we have the facts before us before we move forward with a solution that may not correct or work in all cases. Thank you for the opportunity to say that. Thank you again, sir. Thank you to all of the witnesses as well. I appreciate you taking your time and and let us all have our sleeves rolls up, shoulders to the gill, let us focus on that and with that this meeting is adjourned. I would like to remind everyone that the members will have time later to be made part of the formal hearing record. Security stands adjourned. Thank you, mr. Chairman. Thank you, mr. Chairman. Thank you, mr. Chairman. Elliott engle lost his reelection bid. Congressman engel was defeated in new york by a middle School Principal from younkers. There is no republican candidate running in that district. He will face the conservative Party Candidate in november. Tonight on American History tv our series landmark cases produced in cooperation with al explore some of the people involved in the biggest cases in our nations history. From a 1961 case protecting against unreasonable searches and seizures. And from baker versus carr establishing how they apportion seats is a cushional question, not a political question and it could be decided by federal courts. Watch landmark cases tonight on cspan three and any time on cspan. Org. In the summer months, reach out with the congressional directory. It has all of the Contact Information you need to stay in touch. Order your copy online today at cspon store. Org. Next a hearing on the health and safety of Migrant Children involving two medical experts. And an official from the Government Accountability office. The committee on Homeland Security will come to order. Meeting today to receive testimony on children in custody, camexamining deaths, medical care procedures, and improper spending. The committee is convening today to visit three deeply troubling issues. Young children in custody and