As many people are aware, Congress will soon be making recommendations for a number of potential spending cuts designed to help reduce spending and lower the U.S. national debt. It’s quite possible, even likely, that these cuts could involve significant changes to Social Security benefit programs including Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
In early November, it was reported that both political parties were in agreement that the Social Security Administration should revise its method of calculating cost-of-living increases, and this alone would reduce the nation’s Social Security benefit payments by a total of $108 billion in the next 10 years. Additional changes to Social Security benefit programs could certainly be involved, however, including a potential overall reduction of benefits or an increase in the age of eligibility for Social Security old-age benefits.
Rural news website Daily Yonder recently published an in-depth analysis demonstrating how America’s rural areas will be the hardest hit if changes like these take place.
So would the proposed cuts to Social Security unfairly target those receiving disability benefits in rural areas?
Not exactly. Economists point to the fact that a larger percentage of those who live in rural areas rely on Social Security payments to make ends meet.
Social Security payments are available from three different programs: retirement, disability, and survivor’s benefits. Compared to a national average of 16.7 percent of the population receiving some type of Social Security payment in 2009, 23.6 percent of those residing in rural areas relied on one or more form of these benefits.
There are several reasons for this. Residents of rural areas are more likely to work in professions that are more physical in nature (such as agriculture, logging, or mining,) and thus have a higher chance of suffering a significant injury. This accounts for a higher number of these residents receiving Social Security disability benefits (in rural areas, approximately 20.8 percent of Social Security benefits are through the disability program). In addition, overall, the younger U.S. population tends to congregate in larger cities, while small towns and other rural areas tend to attract those at or near retirement age, which accounts for a higher percentage of retirement benefits being paid to rural residents.
In addition to the hardship that could be imposed on those who need this income to support their families, local rural businesses could also see significant negative effects. Some estimate that they could lose up to 10 percent of their sales as their customer base has less money to spend, and that this could likely result in many of them being forced to close their doors. In several rural Michigan counties, over one out of every five dollars of personal income comes from Social Security. These regions, along with counties in the Ozarks, Appalachia, and Hill Country, Texas, are expected to be among the hardest hit should these changes take place.
So, while the possible changes to the Social Security benefit programs don’t directly aim to target those in rural regions, should they go through they will surely have a significant impact on these areas. One can only hope that as the debate over the reform of Social Security Disability and Retirement continues to be a hot-button political issue, politicians and their supports will keep in mind the real impact that these reforms could have on some of our nation’s most disadvantaged citizens.