Because It Works

Because It Works

Bush wants to break Social Security.

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The problem with Social Security is that it isn’t broken, which is precisely why the President is so eager to destroy it. It is the continued success, rather than failure, of the program that irks him.

As George W. Bush continues to flail at Social Security, even in the face of increased public opposition, you have to wonder: “Why?”

The most successful safety net program in human history is currently sitting on $1.7 trillion in reserve funds and faces a possible shortfall decades from now, which minor corrections to the program could prevent. Yet our President has been running around like Chicken Little telling us the sky is falling.

So, what gives? Is this like a kid at a party whacking a piñata in the hope that wondrous prizes will suddenly pour out–such as millions in fees for Wall Street and campaign donations for Republicans? Or is this just a fit of rage at a target that was heretofore an unquestioned triumph of liberal society? Perhaps it is just a devilishly clever distraction from the larger failures of the administration’s woeful domestic policies, like the burgeoning debt and stagnant wages.

But as unpalatable as those explanations may be, I believe the real answer is much more disturbing: The country is being led by a group of ideologues who fanatically reject the notion that government has a role to play in ameliorating the harshest aspects of capitalism.

For them, the mantra is “privatization,” in any and all corners of society.

In fact, what the President advocates, and what powerful Federal Reserve Chairman Alan Greenspan seems to be endorsing, is a return to the purist free-market fantasy that characterized the latter’s outlook as a young libertarian academic.

How else to explain the frantic attacks on a system that is clearly working quite well precisely because it does redistribute income over the span of one’s life?

The elderly were once the poorest sector of the society and now, thanks to Social Security and Medicare, they may be among the most secure. For the average American over 65, Social Security makes up nearly 40 percent of income, according to AARP, formerly known as the American Assn. of Retired Persons, and for about 20 percent it is their only income. These facts alone ought to appeal to younger taxpayers who would otherwise bear an often crushing personal responsibility for their parents’ retirement.

In Social Security’s extremely cautious estimates, it would only begin seeing actual shortfalls in 2042, and yet this can be prevented in many ways. One, now supported by Republican Sen. Chuck Hagel of Nebraska, would raise the retirement age by a year. Another, suggested by AARP, would raise the $90,000 cap on income subject to the Social Security tax to around $140,000.

Let me go one better to suggest the heresy of removing the cap, without increasing benefits for top earners. Make all income, even that of those making millions of dollars a year, subject to Social Security taxes, thereby bringing more money into the system.

Such a proposal is, of course, anathema to most post-Reagan Republicans, who believe the government can do nothing right, all taxes are bad and that although evolution is a crock, Darwinian selection is a grand old system for society.

This ideological hostility to progressive taxation and income redistributions is the real issue behind the assault on Social Security, and it deserves to be debated head-on.

Knowing that the program is far too popular to be axed completely, hyper-conservatives hatched this idea of diverting its funds into the stock market. They hate the idea of all that money flowing down the food chain instead of up–lower-income workers get a higher rate of return on their Social Security taxes than those better off.

Social Security-funded private accounts, on the other hand, would not redistribute income; they simply would extend into retirement the existing decades-old pattern of the rich getting richer, the poor doing worse and the middle class eroding.

Let’s be blunt: A progressive tax is a good thing for the very reason libertarian and conservative ideologues think it is bad: It redistributes income in a way that ever so slightly makes us more equal and minimally protects the weakest among us.

Anybody who wants a democratic society cannot accept excessively uneven income distribution. As Alexis de Tocqueville famously observed, the rule of the majority must be rooted in a thriving middle class.

The alternative? Class warfare and socioeconomic chaos–exactly what we faced during the Depression when Social Security was introduced to save capitalism.

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Katrina vanden Huevel
Editor and Publisher, The Nation

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