U.S.A

The fate of the pensioners

Reagan's social security cuts create fears despite assurances to the 'truly needy'

William Lowther August 3 1981
U.S.A

The fate of the pensioners

Reagan's social security cuts create fears despite assurances to the 'truly needy'

William Lowther August 3 1981

The fate of the pensioners

Reagan's social security cuts create fears despite assurances to the 'truly needy'

U.S.A

William Lowther

They tried to keep cool by fanning each other with hand-lettered placards reading, HANDS OFF SOCIAL SECURITY or IT’S A PROGRAM FOR ALL SEASONS. They waved their canes and rattled their walkers as Sen. Edward Kennedy strode onto the steps at the West Front of the Capitol and roared out what they wanted to hear. “Social Security is the best program ever created in this country—and we intend to keep it that way,” he said. But the 20,000 pensioners who braved Washington’s stifling summer heat last week to protest against President Ronald Reagan’s cuts might as well have stayed at home.

Although the House of Representatives took the opportunity to play politics and vote vague support for the principle, it was clear that the phenomenon known as “Reaganomics” is well on the way to achieving the first cuts—and they are substantial —in social security since the system became law in Roosevelt’s New Deal 46 years ago. By week’s end the Senate and House had agreed that as part of a $37-billion package of budget cuts, the social security mini-

mum benefit, $122 a month, will be eliminated after next February. And the Social Security Subcommittee of the House ways and means committee began to work on a revision of the entire Social Security Act.

About three million people now receive the minimum benefit, which was established for retired people who did

not contribute enough during their working years (because they had such low-paying jobs, were unemployed or disabled) to justify a payment that large. Reagan argues that the “truly needy” among those who will be cut off next year will get funds from welfare agencies, and that others receiving the benefits already have private pensions on which they are living comfortably. He reckons to save a billion dollars with the cuts. But one Democratic congressman, Dan Rostenkowski of Illinois, said the lifestyles of a great many would be affected. Old people would be forced to move in with their children or apply for public housing and food stamps simply to go on living.

The old-age minimum wasn’t the only benefit to suffer last week. Congress also agreed to increase to $256 from $228 the initial amount Medicare patients must pay before the federal government picks up a hospital bill. This will save $185 billion next year. By 1984, Medicare patients will have to pay $328, saving $360 million. In addition, the food stamp program will be limited to households with a gross monthly income at or below 130 per cent (i.e. $211.25) of the federally defined poverty level, which is $162.50 a week for a family of four. It is not yet certain how many people will be affected. But as Congressman Sam Gibbons, a Florida Democrat, put it: “A lot of poor people will be eating less hamburger and more beans.”

Reagan may go on TV this week to explain his cuts—on the grounds that the social security system will go bankrupt if they are not made. But if Con-

gress accepts this message—it is set to swallow still further cuts in retirement and disability benefits—the signs are that a growing constituency is opposing them. While the axe was falling on Capitol Hill, National Urban League President Vernon Jordan was warning 4,000 delegates of a “clear and present danger” to blacks as well as the poor. Said

Jordan: “We have been given the incredible assertion that the budget cuts hit all sections of the population; that while the working poor lose their food stamps, big energy companies lose their synfuels. The energy companies will survive their loss. I wonder whether the poor will.”