Call out the fifes, sound the bugles, strike on the drums. With the State of the Union behind us, the Battle for Social Security now officially begins–again. The President’s cynical distortions are fully engaged–“crisis” and “bankruptcy” having replaced “weapons of mass destruction” in his fearmongering rhetoric. The right-wing propaganda machine assumes relentless repetition of the big lies will carry the day this time. But we doubt it. Those of us who understand the true condition of Social Security–and why Republicans wish to dismantle this essential and durable system of social insurance–are fairly confident that truth can prevail. It helps that a coalition of progressive groups are making Social Security their top priority and that most major news organizations (the same ones Bush snookered on Iraq) have belatedly discovered the President’s factual manipulations on Social Security (it would be disrespectful to call them lies). In any case, until this fight is won, no one can back away.
Bush’s cruelest distortion lies in forcing the political system to confront the wrong problem. The crisis is not Social Security. It is retirement security in general–Medicare most obviously, but also the medley of employee pension plans shrinking in value and the collapsed private savings of American households. All three are far more imperiled than Social Security, with its relatively minor and distant problems. All three will require densely complicated policy solutions and deep shifts in economic thinking.
Social Security, it is important to remember, is the bedrock guarantee that keeps millions of elderly people from destitution in their old age–the basic floor people can build on, not a ticket to golden-age affluence. Social Security is the only income for one-fifth of retirees, and it is the principal source of income for two out of three retired Americans. When the other pillars of retirement security are weakening, it is especially irresponsible to tamper with it.
Democrats, or progressives at large if Democrats lack the nerve, should force a public debate to address all the elements of retirement security and should begin advocating solutions. Indeed, this is an opportunity for inventive social thinking that might restore the Democrats’ faded reputation as the party of reform. Defending sound, long-established government programs is honorable work, but Democrats must go on the offense with their own perceptions of social and economic vulnerabilities and their own visionary solutions.
Any discussion of the crisis appropriately starts with medical care. Medicare and its less popular stepsister, Medicaid, for the poor, both face impending financial shortfalls, driven mainly by relentless healthcare inflation. A rational analysis would observe that the two important aspects of healthcare financing–for the poor and the elderly–are now managed by government. It’s time to take a deep breath and advocate a universal healthcare system that can confront the rising costs and wasted resources embedded in the entire system. The insurance industry was given its chance to do this in the 1990s and failed utterly, despite its intrusive regulation of doctors and patients. Symbolic half-measures by government will fail too. Americans at large are ready for real answers.
The pension crisis is more complex and also calls for big ideas. The deteriorating condition of corporate pensions is an almost daily political scandal–though usually reported only in the business pages–as companies dump retirees and workers. Unions have typically traded wage increases for better retirement benefits in contract bargaining, but when companies renege on the deal, the federal government is stuck with the tab–an ominously expanding list of bailouts.
The supposed replacement for defined-benefit plans–the matched employee-company contributions to 401(k) accounts–looks increasingly like a busted promise, too. The 401(k) approach sounded great during the fantastic run-up of stock prices in the 1980s and ’90s, but that fantasy is over–and ended badly for small investors. Many baby boomers are discovering their battered 401(k) portfolios won’t support retirement.