Don’t Forget Blacks in the Deficit Struggle

Proposed cuts to entitlements will hit African Americans especially hard.

US President Barack Obama speaks during

Republicans have linked the issue of raising the debt ceiling to the deficit and are using the debt issue as a hammer to repeal three important social entitlement programs to which several conservative Republicans have been ideologically opposed from their inception. Since these programs became law in 1965, many of those Republicans have disliked the government-run social insurance system (Medicare) and the government-run program for people and families with low incomes and resources (Medicaid). Since the administration of George H.W. Bush, Republicans have also wanted to “privatize” Social Security.

It’s very important to understand the disproportionate impact that proposed cuts to these entitlement programs will have on African Americans. Even though Social Security is supposed to be one piece in a retirement plan or strategy, it is the sole source of retirement income for too many African Americans because of a lack of income from pensions and other assets.

According to the National Committee to Save Social Security and Medicare (link), “71% of African-American beneficiaries rely on Social Security for at least half their income, compared to less than two-thirds (64%) of all beneficiaries. 47% of African-American beneficiaries rely on Social Security for 90% or more of their income and 40% of African-American beneficiaries rely on Social Security for all of their income.” Social Security can pay benefits for the next 25 years at current funding levels; it has nothing to do with the debt or deficit.

A disproportionate number of poor African Americans rely on these benefits. According to the Kaiser Foundation (link), of the estimated 41.8 million Medicare beneficiaries in 2002, 33.1 million were white and 3.9 million were African American. But of those African Americans, 64 percent had incomes below 150 percent of the federal poverty level (FPL), as compared with 32 percent of white beneficiaries.

These disparities in Social Security and other entitlements are compounded by the even larger chasm of wealth disparity. Wealth is defined as tangible assets (home, stocks, cash, etc.) minus debts. According to the most recent Pew Research Center report (link), based on 2009 data, “The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households.” These are the largest disparities since Pew began publishing the data more than 25 years ago.