- Nebraska's values give state economic edge (2/20/19)
- California solar panel mandate bears watching (2/19/19)
- Proposed small change could have big long-term results (2/12/19)
- Take the long view on your tax returns (2/11/19)
- It's a good time to catch up on those classics you missed (2/7/19)
- Effort aims to keep more food dollars in state (2/6/19)
- Fort McPherson National Cemetery holds special place (2/5/19)
Washington's debates on Social Security can have real local impact
Despite its reputation as the political "third rail," there's a good chance Social Security will have to be changed if there's any hope of bringing the federal deficit under control.
Why? Because, as bank robber Willie Sutton was supposed to have said, "that's where the money is."
According to the Congressional Budget Office, 20 percent of 2010 federal spending, $701 billion, was expected to be spent in Social Security benefits. That's almost the same as the Defense Department, and $92 billion less than Medicare and Medicaid combines. Other mandatory spending is $416 billion, or 12 percent of the total budget, leaving only $660 billion, or 19 percent of the federal budget, under quick, direct control of Congress and the president.
It doesn't take an economist to see the problem with the federal budget -- the government planned to spend $3.456 trillion in 2010, but only expected income of $2.182 trillion in tax receipts, the rest added to the federal deficit.
It's easy to talk about radical changes to the system -- in fact, it will take serious changes to fix the problem -- but consider the possible effects, right here in Red Willow County.
According to Bill Bishop and Roberto Gallardo of "The Daily Yonder" rural website, if Red Willow County residents didn't receive their monthly payments from the Social Security Administration, 8.1 percent of the total personal income in the county would be lost, for a total of $31.637 million in 2009.
With a high number of retired residents, Red Willow County is more dependent on Social Security than the rest of the country, where 5.5 percent of total personal income in 2009 came from Social Security, the same rate as Nebraska as a whole.
In our county, 2,485 people received some form of Social Security payment, either in the form of an old age pension, in survivor benefits or a disability check, according to the Social Security Administration and the Bureau of Economic Analysis. Social Security beneficiaries represent 23.3 percent of the total county population.
Social Security payments in Red Willow County amounted to $2,970 per person in 2009, compared to a national average of $2,199 per person and$2,203 in Nebraska.
And it's a growing trend. Social Security payments amounted to 5.3 percent of total income in 1970, 6.7 percent in 1980, 7.6 percent in 1990, 8.4 percent in 2000 and 8.1 percent in 2009.
Bishop and Gallardo pointed out how important Social Security payments are to the economies of small communities as a whole, because most of the money is spent locally.
"The seniors who get these payments are primarily going to spend their money locally," said Mark Partridge, a rural economist at Ohio State University. "And they are a key reason why some communities are still viable. If this money dried up, there wouldn't be a lot of these small towns."
So pay attention to the debate on Capitol Hill when it comes to Social Security and other "entitlements." Even if you're not yet receiving such benefits, the paycheck you earn may be affected.