*a copy of this letter was also sent to the Senate
January 29, 2021
U.S. House of Representatives
Washington, D.C. 20515
On behalf of the National Committee to Preserve Social Security and Medicare’s millions of members and supporters, I am writing to urge you and your colleagues to prioritize the needs of America’s seniors as you consider emergency COVID relief legislation during the early days of the 117th Congress.
Seniors are the hardest hit by the coronavirus pandemic. Eight out of 10 deaths from COVID in the U.S. have been in adults 65 years old and older. Whether as part of a separate COVID relief bill or a budget reconciliation package, we urge you to include the following urgently needed relief for seniors:
Fix the “notch” in Social Security, averting dramatic cuts in future benefits
As a result of the devastating impact COVID-19 has inflicted on the nation’s economy, aggregate wages are expected to be substantially lower in 2020 than they were in 2019. A recent letter by the Congressional Budget Office estimates the Average Wage Index, which is the foundation for calculating Social Security’s initial benefits, could be a negative 0.5 percent, representing the first time average wages declined from one year to the next in a decade. According to the Chief Actuary of Social Security, this will result in a reduction in benefits for everyone born in 1960 compared to the benefits received by people born just one year earlier, creating an effect known as a “notch”. The benefit cut to these workers is through no fault of their own, is completely unrelated to the benefits they earned through their working years and will result in significantly lower benefits for the rest of their lives.
Congress must correct this problem by enacting a bill introduced by Representative John Larson and Senator Mazie Hirono, the “Social Security COVID Correction and Equity Act”. Their bill fixes the notch for individuals born in 1960 and 1961 without cutting benefits for any other beneficiaries. In addition, the temporary benefit improvements in this legislation would greatly enhance income security for older adults when they need it the most during the current pandemic.
Provide a “bump” in Social Security benefits to help seniors stay safe during the pandemic
The COVID-19 pandemic has been devastating to older Americans who are especially vulnerable to the disease. Even before the pandemic, many seniors struggled to keep up with ever-rising health care and prescription drug costs, as they are the most significant expense most seniors face. During this pandemic, they have also confronted increased costs for the personal protective equipment and cleaning supplies essential to help keep them safe, as well as increased costs for food deliveries and out-of-pocket costs for COVID-19 treatments if they do become infected. More than half of seniors receive over one-half of their income from Social Security, and it provides at least 90 percent of income for more than one-in-five seniors. These seniors are dependent on a reasonable Cost of Living Adjustment (COLA) to maintain even a modest standard of living in retirement.
On January 1, 2021, Social Security beneficiaries received a COLA of 1.3 percent, one of the lowest inflation increases in the programs’ history. This has resulted in an increase of only about $20 per month for the typical beneficiary, 20 percent of which was erased by increasing premiums for Medicare. As you consider the need to provide expanded unemployment benefits and stimulus checks to workers, we urge you not to forget the needs of America’s seniors. Including a benefit increase of 3 percent monthly, as proposed by Representative Peter DeFazio in the Emergency Social Security COLA for 2021 Act, or a flat $250 increase monthly will help millions of seniors survive this deadly time while providing an invaluable boost to the nation’s economy.
Provide Automatic Waivers for Overpayments of Social Security benefits
When a Social Security or Supplemental Security Income (SSI) beneficiary’s circumstances change, Social Security Administration (SSA) reduces or cuts off benefits if required by the programs’ rules. Due to the pandemic, SSA suspended overpayment notification and collection and temporarily stopped most work related to reducing or cutting off benefits. As a result, some beneficiaries have been receiving extra benefits through no fault of their own, which SSA previously signaled it would again begin collecting.
The law allows SSA to waive repayment of overpaid benefits if the individual is without fault and cannot afford to repay them. During the previous Administration, the agency began streamlining the process for granting overpayment waivers but in practice this has had serious shortcomings. The National Committee urges you to include the Fairness for Seniors and People with Disabilities During COVID-19 Act, introduced by Representative Danny Davis and Senator Sherrod Brown, in any COVID relief legislation. This legislation would provide automatic waivers for beneficiaries who receive overpayments through no fault of their own through permanent legislation rather than relying on the priorities of future Administrations.
Strengthen and Restore the Supplemental Security Income (SSI) program
The Supplemental Security Income (SSI) program provides vital and much needed economic security for 8.1 million low-income seniors and people with disabilities, including children with marked and severe functional limitations. Unfortunately, Congress has failed to keep the SSI program up-to-date for our nation’s most vulnerable Americans who depend on SSI to meet their basic needs. And, the pandemic has laid bare the inadequacy of this safety net program. That’s why the National Committee urges you to make long-overdue improvements to SSI by including the Supplemental Security Income Restoration Act, introduced by Representative Raul Grijalva and Senator Sherrod Brown, in budget reconciliation legislation. Their bill would raise the general income exclusion to about $110 per month and the earned income exclusion to at least $360 per month; increase the asset limit to $10,000 for an individual and $15,000 for an eligible couple; and eliminate the reduction in benefits for in-kind support.
Increase general funding to Medicaid
Medicaid needs to be bolstered to meet the needs of vulnerable seniors and people with disabilities who have been disproportionately hurt by the pandemic. Medicaid accounts for approximately half of all long-term care spending. Congress has already authorized a 6.2 percent increase to the federal match rate to assist states during the emergency, but additional funding is needed to support states. We ask that you boost the share of federal Medicaid funding known as the Federal Medical Assistance Percentage (FMAP) to a total of 14 percent through the end of the public health emergency.
Provide dedicated Medicaid funding for Home and Community Based Services
Further, additional dedicated Medicaid funding is needed to support seniors staying in their homes. We have long known that seniors are best off in their homes, but the pandemic has underscored that home and community-based services provide a safer alternative for seniors whose needs can be met outside of institutional care. We ask Congress to increase FMAP for home- and community-based services (HCBS) by an additional 10 percentage points through the end of the public health emergency to support activities that strengthen state HCBS benefits.
Increase production of Personal Protective Equipment (PPE)
We urge you to work with the Biden Administration to use the Defense Production Act to ramp up production of masks, face shields, and other Personal Protective Equipment (PPE).
Protect multiemployer pension plans
Multiemployer pension plans are defined benefit plans maintained by multiple companies and a labor union that pool together their pension assets to cover all workers and retirees in the plan. The multiemployer system currently includes roughly 1,400 plans covering over 10 million participants. Most of these plans are in good shape financially, but about 124 of them are projected to become insolvent soon, pulling the rug out from under 1.4 million workers and retirees. The pandemic has only exacerbated the problem. These workers planned for their retirement, year after year choosing to contribute to their pensions instead of taking wage increases to ensure a secure retirement. Through no fault of their own, they are now facing drastic pension cuts of up to 90 percent at a time when most are unable to go back to work. We urge Congress to include relief for multiemployer plans in any reconciliation package and preserve the retirement benefits of these hard-working Americans, their families, and their communities.
The coronavirus public health crisis is both a health and an economic threat to older Americans, people with disabilities and survivors. Millions of vulnerable Americans need a more targeted response to ensure their economic and health security. I urge you to include the National Committee’s priorities in a separate COVID relief bill or a budget reconciliation package.
President and CEO