The Financial Impact of Social Security on the NY 23rd Congressional District!

The following Table shows the amount of Social Security benefits paid to residents of the NY 23rd Congressional District in December, 2013.

SocSecCardsPlease note: 1) The money paid for Social Security benefits is not a handout. Workers and their employers pay into the Social Security system to be able to get benefits 2) The data on the Table shows the amount for one month. Multiple the amount by 12 to get an approximate amount for a year.

An New NY 23rd earlier article provided the number of people who received the benefits for the same month.

SS $ Impact

Social Security pumps more than $210.5 million into our congressional district in one month. That becomes $2.5 billion in a year. That is a lot of money.

AARP created a research report, “Social Security’s Impact on the National Economy” , looking at the data from 2012. They point out that Social Security benefits has a “ripple effect” on the state and local economy (and therefore the federal economy). The report states:

Social Security has a much greater impact on the economy than just the dollar amount of its benefit payments. When Social Security beneficiaries spend their monthly benefit checks, the effects ripple through the economy. When economists study this outcome, they use an economic model to calculate a “multiplier,” which represents the cumulative effect of these payments as they move through the economy.

Most of the Social Security benefits are spent right away (with in a month). Some may be saved to be spent later.  The spending increases employment, sparks more manufacturing, and creates income taxes and increases sale taxes.  The multiplier-rates varies  in each state. They range from a low of 1.55 in Wyoming to 2.21 in California. New York’s multiplier is 1.93.  For more details about the economics behind AARP’s research can be found in their report, which can be accessed here.

Our congressman, Rep. Tom Reed has warned us that Social Security Disabilities Insurance will be able to pay only  80% their benefits beginning in  August of 2016. Rep. Reed’s proposed House rule change, which was adopted in January, permits Social Security to only  raise taxes or cut benefits to keep the disability program solvent. Congress frowns on raising taxes; their goal is  to reduce the benefits that Social Security provides.

Rep. Reed has stated that he would like to reduce disability insurance to cover only the undefined “catastrophically disabled” and create a different program for the temporarily  and the partially disabled. The Social Security system definition of disability:

“Disability” under Social Security is based on your inability to work. We consider you disabled under Social Security rules if:

  • You cannot do work that you did before;
  • We decide that you cannot adjust to other work because of your medical condition(s); and
  • Your disability has lasted or is expected to last for at least one year or to result in death.

Social Security has strict disability guidelines. Their approval rate has been constantly hovering around 34% of those who apply.

There are many different ways to strengthened Social Security. Some have been discussed in a recent New NY 23rd article which can be accessed here. One proposed method would be to raise (or eliminate) the pay-roll tax cap (I guess that would be raising taxes). Another proposal, which has occurred eleven times since 1978, is to adjust how the salary deductions are allocated between the Old Age and Disability funds, which was prohibited by Reed’s rule change amendment. If  Congress does not change in the way Social Security operates by August, 2016, then the Disability benefits will be reduced  by 20%.

The following table shows the break down of Disability benefits by counties. The first column of data tell how much was paid to the residents of each county in December 2013. The second column of data shows how the Ripple Effect Multiplier effects each county. The third column shows how much each county will lose if there is no change in the law.  The fourth column shows how much that lost amount would affect the economy of the county taking considering the Ripple Effect Multiplier.

SSDI Impact LOST

As you can see, if the Disability funds are allowed to be reduced in August of 2016, it would have a major negative affect on the economy of each of eleven NY 23rd Counties. Our district will loose $13.5 million dollars of purchase power PER MONTH. That’s $162,000,000 a year.

Rep. Reed is saying that we can not afford paying the benefits to the disabled. We need to remind him that this is the WORKER’s money to begin with. What he is really saying is that the employers do not want to pay their fair share.  He is protecting the profits, sometimes very  high profits, of the corporations that donates to his campaign.

He is not representing his constituents. With cuts to Disability benefits, he is ultimately jeopardizing the district’s economy.

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About pystew

Retired Teacher, political science geek, village trustee. I lean a little left, but like a good political discussion. My blog, the New NY 23rd (http://newny23rd) is about discussing the issues facing the people of our new congressional district. Let's hear all sides of the issues, not just what the candidates want us to hear.
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2 Responses to The Financial Impact of Social Security on the NY 23rd Congressional District!

  1. josephurban says:

    Great points. We sometimes forget that SS money gets pumped right back onto the economy, creating jobs locally. Not to many folks send it to the Cayman Islands.

  2. whungerford says:

    When Rep. Reed says we can’t afford disability benefits, he means he doesn’t wish to afford them. We can afford to provide for seniors and the disabled if we make it a priority. It isn’t only today’s seniors who benefit from Social Security, everyone benefits directly or indirectly, and everyone will be a senior sooner or later.

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