WASHINGTON — Raising the Social Security retirement age would disproportionately hurt low-income workers and minorities, and increase disability claims by older people unable to work, government auditors told Congress.
The projected spike in disability claims could harm Social Security's finances because disability benefits typically are higher than early retirement payments, the Government Accountability Office concluded.
The report, obtained by the Associated Press ahead of its scheduled release today, provides fodder for those opposed to raising the eligibility age for benefits, as proposed by the leaders of President Barack Obama's deficit commission.
"There's more to consider than simply how much money the program would save by raising the retirement age," said Sen. Herb Kohl, D-Wis., chairman of the Senate Special Committee on Aging.
The report shows an unequal effect on certain groups of people, he said Thursday, and many of them "would have little choice but to turn to the broken disability program."
Under current law, people can start drawing reduced, early retirement benefits from Social Security at age 62. Full benefits are available at 66, a threshold gradually increasing to 67 for people who were born in 1960 or later.
The deficit commission's leaders, Democrat Erskine Bowles and Republican Alan Simpson, last week proposed a gradual increase in the full retirement age, to 69 in about 2075. The early retirement age would go to 64 the same year.
AARP criticized the recommendations and House Speaker Nancy Pelosi, D-Calif., called them "unacceptable." Experts, however, warn that Social Security is on a financially unsustainable path that will worsen as people live longer and collect more benefits.
Reducing early retirement payments or delaying eligibility "could create a financial hardship for those who cannot continue to work because of poor health or demanding workplace conditions," the report said.
The report, requested by Kohl's committee, found that about one-fourth of workers age 60 and 61 — just under the early retirement age — reported a health condition that limited their ability to work. Among those older workers, blacks and Hispanics were much more likely to report fair or poor health than whites, according to the report.
Less healthy older workers had lower incomes, less accumulated wealth and were much less likely to have attended college.
"Some people just can't continue to work beyond age 62 for either health reasons or they're just not able to find jobs," said David Certner, legislative policy director for AARP. "Just because we tell people they should work longer doesn't mean that there are employers out there willing to hire people."
Nearly 54 million retirees, disabled workers, surviving spouses and children now get Social Security. Payments for retired workers average $1,020 a month; disability benefits average $929 a month.
In 75 years, 122 million people, or one-fourth of the population, will be drawing benefits.
On its current path, Social Security is projected to run out of money by 2037, largely because of aging baby boomers reaching retirement. The longer action is delayed, the harder it will get to shore up the program.