Social Security provides retirement security as well as assistance to millions of people with disabilities. The program also supports widows, widowers and their children. Critics of Social Security say the program is fiscally unsustainable, but supporters point out it’s funded by the payroll tax and does not contribute to the deficit. Senate Majority Leader Harry Reid, a Democrat from Nevada, was among those who celebrated the program’s success.
Despite the high level of popularity that Social Security enjoys, the program’s future remains more precarious than ever. President Obama has shied away from his 2008 campaign promise to defend Social Security. This year, he’s failed to stand behind his four-year-old opposition to cuts. Instead, Obama has suggested he’s possibly receptive to lowering benefits by changing how they’re calculated.
Meanwhile, Republican presidential contender Mitt Romney has signaled he wants to go even further by beginning the process of privatizing Social Security. He also would gradually increase the retirement age to 68 or 69. And his newly picked running mate, Paul Ryan, is on the forefront of efforts to dismantle the program by putting seniors’ savings into risky Wall Street investments. Over the years, Ryan has not only pushed for privatizing Social Security but also dismantling Medicare and slashing funding for Medicaid.
Paul Ryan has become a Tea Party favorite for pushing a controversial budget and economic vision, marked by deep cutbacks to the social safety net coupled with lower tax rates. Ryan has also proposed cutting food stamps for as many as 10 million Americans, cutting funds for programs likes Meals on Wheels, eliminating Pell Grants for more than a million students. On the tax front, Ryan has proposed a plan to slash taxes for the wealthiest Americans while raising taxes on some of the poor. The New York Times reports, by one statistical count, Ryan is the most conservative vice-presidential nominee in more than a hundred years.
Ryan’s vision is for America is to look at what the CBO (Congressional Budget Office) said would happen in 2050, where essentially, in 2050, there would be virtually no more federal government, outside of Social Security, Medicare, Medicaid and defense. No more. It’s Grover Norquist’s vision for shrinking the size of our federal government down to the size where you could drown it in a bathtub. So, no more Federal Aviation, no more investments in transportation, roads, consumer protection—essentially, eliminating the federal government. The idea that we would have that at the top of our presidential ticket is quite astonishing.
Eric Laursen talking:
Under Romney-Ryan, Social Security would be well on its way to being either phased out or reduced to to irrelevancy. Social Security right now is—just for perspective, is not an overly generous program. It keeps 20 million people out of poverty every year, including children, survivors, widows, as well as retired workers. It’s actually one of the least generous national old-age income systems in the industrialized world, but it’s absolutely vital to keeping millions of people out of poverty.
Now, what Ryan and Romney, Romney and Ryan, are proposing is several things. One of them is to raise the retirement age. Another is to means test Social Security, meaning that if you are an upper-income or somewhat more affluent person, your benefits would be reduced. They’ve also talked a little bit about what they call targeting benefits more closely to low-income people. Now, this is Republican code, meaning turning—excuse me—Social Security into more of a welfare-type program. Right now Social Security is what’s known as a social insurance system, which means that individuals pay into it, receive benefits—excuse me—based on the contributions they make to the system. It’s something that we own. It’s something that belongs to us as workers. Turning Social Security into more of a means-tested system means turning into welfare, which, as we know, in the post-Reagan era, which I write about in my book, that means that it’s something that can be cut, reduced and turned into something that’s much less relevant in terms of keeping people out of poverty.
Now, who is this going to affect? It’s going to affect everybody. If the Republican ticket gets its way, Social Security will be much, much less effective for current retirees and for people who are nearing retirement age, but the cuts would be most severe for younger workers, people in their twenties, thirties and forties today, who are faced with collapsing home equity, the loss of private pensions, the inability to save due to stagnating wages. These people are actually going to be more dependent on Social Security in the future than current retirees or older workers today stand to be. And the cuts that Romney and Ryan are talking about, the changes in the program, will affect them—will take effect increasingly over the next few decades when those people are getting ready to retire. If you’re a younger worker today, you should be, if anything, more concerned about Romney and Ryan than your parents are.
Social Security is not broke. Social Security has a trust fund that’s over $2 trillion in size. Their projections, that the Social Security Administration makes, say that it will—the trust fund will run out in 2033. Now, what does that mean? That means that Social Security will only have the payroll tax receipts that are coming in at that time to pay for benefits. But there’s lots of things that can be done to prevent that from happening. Congress can simply vote more money to put into the program. The Social Security payroll tax could be raised gradually across the board over a period of decades in a way that would not cut into anybody’s purchasing power, and that could be done in a slow—as a slow process. That’s the way Social Security’s books have been balanced in the past, and there’s no reason why that can’t be done in the future. The only thing standing in the way of doing it, which is the sensible thing, is the fact that, in Washington today, Republicans basically get the flu every time the subject of taxes comes up.
The other larger issue, though, is: can we afford Social Security in the future as a society? Now, the Social Security Administration gives us some very useful numbers to talk about this, as well. Social Security today costs about 4.5 percent of GDP, which means that about 4.5 percent of the entire economy goes to funding Social Security and all the things that it does. The projections are that that number will rise to about—if nothing else is done, that number will rise to about 6 to 6.5 percent by about 2050. That’s a significant rise. But again, it’s something that’s sustainable without anybody losing their purchasing power—the point being that it’s a small price to pay, 6 percent to 6.5 percent of the entire economy. For all the things Social Security does for us, at a time when the population is aging, it’s a small price to pay. And it, I think, makes a very dramatic point that Social Security is not unaffordable. It’s not something that needs to be cut for the nation not to go bankrupt or something like that.
– source democracynow.org
Eric Laursen, independent journalist, author of the book The People’s Pension: The Struggle to Defend Social Security Since Reagan.
Heather McGhee, vice president of policy and outreach at the progressive policy group Demos and co-author of a chapter on retirement insecurity in the book Inequality Matters: The Growing Economic Divide in America and its Poisonous Consequences.