Subcommittee on social sushlg held a hearing on the impact of coronavirus on Social Security. Several raised concerns about a payroll tax cut which they said would reduce funding for the program. The subcommittee on Social Security will come to order. I want to welcome all of our 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 followed by testimony from our witnesses, and the opportunity for each member to ask questions. Well dispense of the practice observing givens rule and instead go in order of seniority for questioning. 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 Security subchitty 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 and 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 subcommittee majority and minority staff catherine olsen, alisa walker, tj sutcliff, andrew sadiqy and amy stuart for persevering through this very difficult times. 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 of 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 as decent and caring and humble american whose nobility was measured by his actions and not his words. And, above the speakers, in the house of representatives it said that we may in our day in 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 always just sought to do what was right. I was honored to attend his funeral in plano, texas, in june. The outpouring of love for him from his Home Town Community was remarkable and clearly demonstrated the impact he had on his community. Sam bravely served this country for over 50 years in both the military and in congress. We lost a true Public Servant in his passing and im grateful for the time i spent with him on the committee. Would also like, before we begin, to submit for the record written remarks from our colleague bill pascarell who cant be with us. We wish him well. I spoke with him on the phone. 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 also want to thank representative gwen moore and john lewis and representative Raul Grijalva 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 is something that most of us have never witnessed or seen. And it has caused an incredible collision in our country between our health, our economy and our soul. Nations health of both physical and economic are inextricably linked. And long before the outbreak of covid, john lewis was pointing out the systemic inequality that existed within Social Security leaving many behind. Now this and how this would be a civil rights 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. We will hear today about those most impacted by covid. The elderly, people of color, women, veterans, and people with disabilities. Whether they have suffered Health Effects from covid, serve on the 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 hospital race of 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 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 a been economically impacted by covid19. A sector that are more likely to employ women like childcare industry suffer heavy job losses, were seeing the impact on the Unemployment Rate. Among women, it is over 2 higher than it is amongst 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 inequalities but more must be done as we often note in this committee as the nations number one antipoverty program. We have recently discovered that as a result of the devastating impact of covid, the nations economy and a serious and un unintended anomaly will occur unless congress acs causing reduction in Social Security benefits for those born in 1960. This is a complicated technical issue and im grateful we have Social Security chief actuary steve goss 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 expected to be substantially lower in 2020 than they were in 2019. Because of how Social Security benefits are calculated this will reduce Social Security benefits for their lifetimes, for everyone born in 1960, creating a notch that is sharply lowering benefits for one group of retirees. This will affect 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 and compared to people born just one year earlier unless Congress Steps up and acts on the problem. As chairman of the ways and means Social Security subcommittee, i have introduced a Social Security covid correction and equity act along with chairman neil and fellow ways an means members to provent these dire consequences. To fix the notch, our bill will ensure that the average wage index used for the benefit calculation for purposes never dropped below the previous years level. It is carefully crafted to avoid any benefit cuts and we work closely with the chief actuary to make sure we put this together to achieve that goal. For example, the harmful drop in an average wage index also resulted 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, emts, nursing home employees, hospital staff, physicians and nurses. Our bill does not take away this small increase. These workers and americans overall simply cannot afford any cuts in their hardearned Social Security benefits. We have the opportunity to address some of the systemic, economic inequalities facing lower income individuals, especially people of color and women in the same way that we have taken the opportunity to help working americans by including temporary paid family and medical leave policies in covid legislation. Albeit 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 inequitable. Hr 7499, will fix the notch and address the inequities with a temporary increase in benefits during this emergency. The 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 on average and 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 who are struggling to provide themselves and their families. Helps grandparents provide for depending grandchildren, assist dependentent students ages 18 to 22 so they could get the education they need and a good job. Expands benefits for dependent widows so they could make ends meet and provides more help for 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 would deplete our trust fund. This is our responsibility. It is dwhy we were elected. He 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 in country, to serving his fellow man and what did he on Social Security was legendary. He served on ways an means for over 24 years. He led the Social Security subcommittee each and every year that he had an opportunity to choose whether or not he wanted to take a different leadership post. He always took Social Security because of it being near and dear to his heart. So i appreciate you taking the time to recognize one of our colleagues an it is justifying doing that today. And i know his family is grieving but i hope they 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. And todays hearing on the impact of covid19 pandemic on Social Security and the beneficiaries. We could agree, this is an important topic. It is one we wrote to you, mr. Chairman, earlier 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 grandparents were particularly at risk. In my home state of new york, Governor Cuomo enacted a series of disastrous policies that directly led to the death of thousands of our state seniors. But we cannot forget that covid19 is also an kpeconomic crisis. It is clear that koifd will have some effect on Social Security with many unemployed due to massive shut downs and employees struggling to keep businesses going. Social security revenue will be lower than expected in 2020. I look forward to hearing from the panel about what we do to help our parents and grandparents for generations to come. Some have raised concerns because of how Social Security benefits are calculated, people born in 1960 might be more effected by covid19 impact on Social Security than other age groups. This is an important issue and one we should examine closely. What 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 of 22. That is 18 months from now. So lets put ourselves on the clock and start working together. I know, i am committed to working with you, mr. Chairman, and all members of this subcommittee to take a close look at this 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 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. If there is a problem, we want to work with you to solve it, so lets get back to collaborating and coordinating and communicating 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 their jobs, will have the greatest impact right now on the strength of Social Security and this countrys economic wellbeing. While Economic Growth alone wont solve Social Security 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. For example, our colleague 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 as it becomes available, 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 stephen goss, the chief actuary of the Social Security administration, max richtman, 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 convener of the black womens roundtable. Mattie duppler, 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 zapote who is executive director of latinos for a secure retirement our good friend shaun castle who has been before us many times, the deputy executive director for paralyzed veterans of america. And robert roach jr. , 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 Social Security administration, stephen goss. Thank you, very much, chairman larsen and Ranking Member reed 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 designed to maintain the benefit level replacement rate that is the ratio of your benefit to how much you typically have been earning over your career across generations by indexing benefits to the growth in the average wage level. The awi 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 a purely illustrative scenario for 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 chairman larsson 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 avoid the potential 5. 9 drop in the benefit level for newly eligible beneficiaries in 2022 compared to those 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 should mention as chairman larsson did that his bill includes a number of additional provisions that would provide help to people in the year 2020. Because the implications the implications of the covid19 pandemic were not reflected in the 2020 report released in april, we have developed a simple illustrative scenario to analyze the potential effects of the current recession, this is only one of a wide range of possible paths forward to work between now and april with the trustees and their staffs to fully address the effects of the pandemic recession in the 2021 Trustees Report and as mentioned by everybody 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 participation and also the convener of the black womens roundtable, women and girls empowerment arm of the National 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 Clark Atlanta university. I can 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 SecuritySurvivor 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, child 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 exacerbated 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 women in low wage jobs lack home health aids, 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 trying to 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 throes of poverty. Low wage workers and the restaurant and Retail Industries have been especially vulnerable to layoffs and furloughs during this time. The lost wages today will impact Social SecurityRetirement 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, black 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 rank 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 insecure. Add to this dismal Retirement Reality for black women, the fact that those who turn 60 years old this year will have even less Social Security income due to 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 to testify today. Thank you, melanie, for your testimony. And now the president and ceo of the National Committee to preserve Social Security and medicare, max richtman, is recognized. Thank you. Can you hear me okay . Great, thank you, chairman larsson 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 earned benefits when theyve done nothing wrong except being unfortunately born in the wrong year. The National 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 adjustment, cola, is lower than anticipated by the 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 seniors 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 TaxpayerUnion Someone who has been before this committee in the past, mattie duppler. 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 duppler, from the National Taxpayers union, the oldest add Advocacy 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, the challenge becomes more steep. Because Social Security is funded by dedicated payroll tax it is pertinent to its health. As the Committee Considers covid covid19s esecretaries on Social Security, it should be mindful of the pandemic still requires deliberate, targeted but temporary efforts to regain the countrys economic footing. I want to emphasize the ways in which the help of the workforce and the help of Social Security are linked. First, downturns tend to increase dependence on social programs at a time when revenues fall. This presents dual pressures on solvency. In the case of Social Security, which relies on unemployment taxes, the scenario can be more worrisome. Yesterday we got new unemployment claims which showed 32 Million People are still claiming some form of unemployment support, which means tens of millions of workers not paying Social Security taxes. Removing barrier for getting workers back to work then is key, both for the Financial Health of Social Security and the Financial Health of workers. Data suggests that income has risen twice as fast as it has over the last 40 years. Secondly, the employment downturn affects the calculation benefits as we have heard through Social Security average wage index which affects beneficiaries payment. The awi receiving just a lot of attention this year but it is not new. In 2009 it fell by 1. 51 . This notch problem exposes contradictory elements of Social Security, which is meant to be a safety net for retirees, but also penalizes seniors in a number of arbitrary circumstances. For example, retirees wishing the return to work or stay employed throughout the course of this unprecedented crisis would be penalized by the retirement earnings task which establishes a threshold on earnings for working seniors. The most vulnerable workers are the ones shouldering the heaviest burdens, duty, economic pandemic, the Federal Reserve estimated that 40 of the job loss from covid19 have been concentrated in households that make less than 40,000. As i plained to my first appearance, this is the same population that is unduly burdened by increases in payroll taxes. Lastly payroll taxes are larger burdens on entrepreneurs and Small Businesses because they do not lower selfemployment, income tax liabilities. Small businesses employ half of the million workforce, this pandemic has demonstrated there is a disparity between social safety nets for Small Businesses, against the interests of corporations. Newer higher employment taxes would further exacerbate this divide when American Workers can very least afford it. We are not yet through the challenges that 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 fully prepared. I want to thank you for your thought leadership on how Social Security can be preserved beyond its current outlook, particularly during these unique and unprecedented circumstances. A robot economy cannot solve all the challenges Social Security funding faces, but it is a necessary and critical piece of any plan to secure it for generations to come. Thank you. Thank you and now, we will hear from an distill zapote 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 abigal zapote. Im a executive director of latinos 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 device access which 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. Compared to the u. S. Population, latinos have been the hardest hit community by pay cuts, layoffs and business shutterings because of the Health Crisis 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 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 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 resolve 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 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 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 through 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 enacted as part of the next covid19 package. Thank you and i look forward to answering any questions you may have. Thank you, abigail. And shaun castle, the deputy executive director of paralyzed veterans of america, you are recognized. Thank you. I am deputy executive director 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 for their economic security. 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 errands. 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 symptoms, afraid he had the virus and could spread it to other caregivers. Though he tried, he was never able to get 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 500 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 challenge for several rehabilitation clients on Social SecurityDisability 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 taken a job to avoid penalties and 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, its been a Strong Security for the act and its many benefit 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 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 in doing away with the 24 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, shaun, and its been my great honor to ask robert roach to comment, the president for 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 retired 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. Seniors 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, everyone who is born in 1960 who received 5. 9 lower Social Security benefits when they retire than people born in 1959. This has been called the notch problem. Most americans 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 the road and that will have a harmful and permanent effect regardless whether they worked or lost their job or didnt work at all this year. 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 we work very closely with larson and his colleagues to bring that across the finish line. I would like to reiterate the words 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 seniors, 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 disabled workers. That is just over 12,000. That may sound like a lot, but these funds are essential. Strengthening and expanding Social Security means that all beneficiaries could rely on their benefits that they have earned 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, 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. To strengthen retirement security, that means fixing 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 inequities that have been baked 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 certainly would be helpful if we had a plan or saw 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 estimated that the cost of living adjustment would be 2. 3 . At this point, it looks as though the data is 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 1. 2 Slower Growth rage 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 affected 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 we take you live to the white house for a briefing with press secretary kayleigh mcenany. The first duty of government is to protect the safety of our citizens. Thats what attorney general barr said when he was athe