Dianne Feinstein (D)
Statement by U.S. Senator Dianne Feinstein on How Privatization of Social Security Would Adversely Affect Women
May 18, 2000
“I’d like to speak today about how women under Governor Bush’s plan get the short end of the stick. Social Security is not a 401K program, where what you pay in, you take out. It’s basically a social insurance program that provides a basic safety net, not only for the wage-owner, but for surviving spouses, children and the disabled.
What Governor Bush’s plan does is essentially increase risk, create winners and losers, destroy Social Security’s progressive benefit structure, and adversely affect women. Even the Governor himself concedes that recipients could receive a smaller benefit package under his plan then what they receive now.
Nearly 40 % of all the Social Security beneficiaries - roughly 17 million people - are receiving benefits not based on their own work history, but because of a disability, a spouse, or due to the death of a parent or a spouse. And the vast majority are women.
The bottom line is that women face greater economic challenges in retirement than men. First, women tend to live longer than men. A woman who is 65 years old today can expect to live to 85, while a 65 year old man can expect to live to 81.
Second, and I think most importantly, the majority of women’s Social Security benefits are based on their husband’s earnings record. The great bulk of women beneficiaries on Social Security-that’s 63% of all beneficiaries-receive benefits based on their husbands retirement and their husbands earnings. Only 1.2% of male Social Security beneficiaries depend on their wife’s earnings. Therefore any risk, effect, or impact will impact women much more strongly than men.
Today, one of America’s most vulnerable groups is elderly widows. For 40% of them, Social Security makes up 90% of their income. For 25% of them, Social Security is their sole source of income. So without Social Security, more than two thirds of all elderly widows would be in poverty.
Finally, women have lower lifetime earnings than men. Today, the average woman is working more and earning more than past generations. But, sadly, her lifetime earnings continue to be less than a man’s. So while more women will be receiving Social Security benefits based on their own work histories, actuaries project that in 60 years, 40% of women will still receive benefits based on their husband’s earning history.
And the earnings gap leads to an even bigger retirement gap. For the average woman retiring today, if she is one of the few to receive a pension at all, will receive only about half the pension benefits of the average man who retires today. So the point is that a woman’s reliance on Social Security is much greater than a man.
The conclusion is that it’s not necessary to privatize Social Security at this time. If we are prudent, and if we confine a tax cut to not more than $350 billion over the next ten years, we can extend the solvency of Social Security from 2034 to 2050.
The fact is that the Bush plan could cost the nation $1 trillion. And combined with a risky tax cut that could cost another $2 trillion, it could put the nation back into a spiral of debt. I think it is badly flawed and it is unnecessary to privatize the system. Put simply, if the system were privatized today the big losers would be women.