Poor by Any Measure: How Does Cutting Social Security Benefits Impact Poverty Incidence among the Elderly?

Yanyuan Wu, Boston College

Social Security is fac¬ing a long-term financing shortfall, and if no action is taken, the program would be able to pay only about 75 percent of scheduled benefits after 2033. Using the Current Population Survey (CPS), this project explores how cutting Social Security benefits will impact the poverty incidence, and in turn, the geographic distribution of poverty, among the elderly under both the official poverty measure and the Supplementary Poverty Measure (SPM). Further, the project projects the poverty rate among the elderly in 2033 under these two poverty measures. The results of this project will help policymakers evaluate the impact of potential benefits cut on the elderly economic well-being, and measure changes in the flow of federal dollars to the states should the SPM be instituted as the new official poverty measure.