> And the threshold for it (SSA calls it “income disregards”) is so astonishingly low that I asked Ne’eman about it. He believes the number is a holdover from at least 1972, when SSI was created. SSI borrowed some of its numbers from a previous aid program for the blind, and didn’t index them for inflation. Fifty years later, they remain the same, despite a sevenfold increase in the consumer price index.
I haven't found concrete history here, but as far as I can tell, the income limit may have made sense in 1935.
Though, that legislation lists $30/mo, not the $85 listed in the article. Still, that's less than $700/mo today according to this sketchy-looking inflation calculator[1], not enough for rent in many places. Another sketchy data point[2]; average rent in 1933 was $18/mo (which kinda makes sense, as housing has been skyrocketing vs CPI).
They make sense to the voters. People are actually strongly in favor of reducing them further, despite the already-obscene nature of the system.
Reagan destroyed the American social system as we know it and neoliberal consensus politicians like Clinton finished the job. But people still demand further cuts and will continue to demand further cuts no matter how deep the cuts have gotten.
Yes, we spend a lot of money on social programs, and most of it goes to costly and ineffective end-of-care for seniors (i.e. people who vote) delivered at extreme cost by an incredibly inefficient privatized healthcare system. This continues to suck the air out of the room for any social spending for the living, because of the prevailing mindset that all future social spending must be offset by reductions in other programs.
Americans have become a cruel and callous people who are unconditionally opposed to helping others or even helping their own. Nobody cares about any problem until it affects them or their direct family personally. There’s not much more to say, every single time reform is proposed it’s slapped down with “welfare queens” and “muh tax dollars”. This is what the voters want and this is what they vote for.
As the article states, there are phaseouts in many of the programs involved. SSI does have an income-based phaseout, not a complete threshold - the $2k threshold is a wealth cap, there is a phaseout-based income cap as well.
> But SSI does this in an egregiously inefficient way. The loss of SSI is a fairly hefty penalty, and the loss of Medicaid is potentially much larger. Both can be triggered, all at once, by going a dollar above the $2,000 limit. This is an inefficient design , what welfare scholars call a “cliff.”
> SSI also has an income-based phaseout. Effectively, for every dollar you earn above a threshold, you lose 50 cents in benefits.
> But shockingly, that threshold is just $85 per month. So it’s like a 50 percent “tax” rate with a $85 per month standard deduction.
The problem is that congress thinks $85/mo is a good place to begin a steep phaseout of benefits. You can have a phaseout and still have the program be completely useless because of the phaseout threshold and steepness.
This isn't about phaseouts or not, it's about political unwillingness to do social spending (for anyone who’s not a senior citizen). The numbers were last adjusted in 1935, everyone knows they’re astoundingly low, but Americans don’t like social spending and actually mostly would prefer to reduce (or even eliminate) these programs.
You can't do that. It's important to redistribute inflation every year in the budget so that you explicitly "help" your target demography and newspapers can write about that. /cynical
When the bill was written, $1500 (the max benefit at the time) was about $8900. Not too shabby. Seems like not linking it to inflation was an oversight.
