A White House deficit commission is reportedly considering deep benefit cuts for Social Security, including a steep rise in the retirement age. We cannot let that happen. The deficit and our $13 trillion national debt are serious problems that must be addressed, but we can and must address them without punishing America’s workers, senior citizens, the disabled, widows and orphans.
First, let’s be clear: despite all the right-wing rhetoric, Social Security is not going bankrupt. That’s a lie! The truth is that the Social Security Trust Fund has run surpluses for the last quarter-century. Today’s $2.5 trillion cushion is projected to grow to $4 trillion in 2023. The nonpartisan Congressional Budget Office, experts in this area, say Social Security will be able to pay every nickel owed to every eligible beneficiary until 2039. Got that? In case you don’t, let me repeat it. The people who have studied this issue most thoroughly and have no political bias report that Social Security will be able to pay out all benefits to every eligible beneficiary for the next twenty-nine years. It is true that by 2039, if nothing is changed, Social Security will be able to pay out only about 80 percent of benefits. That is why it is important that Congress act soon to make sure Social Security is as strong in the future as it is today.
The hatred of Social Security from the right-wing antigovernment crowd is based on the fact that Social Security, a government program, has been enormously successful in accomplishing its mission. For seventy-five years, in good times and bad, Social Security has provided financial security for tens of millions of Americans.
Despite this outstanding record, Social Security has become a political football. For ideological reasons, some in Congress believe that government should not be in the business of providing benefits to seniors or the disabled. They want to privatize Social Security. Others say, incorrectly, that Social Security is going bankrupt, so benefits should be reduced and the retirement age set at 70. I strongly disagree with both assertions.
While the critics profess concern about Social Security’s financial future, their fuzzy math ignores the fact that this highly successful program has not added a dime to our deficit. From the day when the first check landed in the Ludlow, Vermont, mailbox of retired legal secretary Ida May Fuller on January 31, 1940, Social Security has more than paid for itself.
With regard to the future of Social Security, there are some really dangerous ideas out there, and one proposal that makes a lot of sense.
One of the worst ideas is to privatize Social Security. After the greed and recklessness of Wall Street caused markets to collapse in 2008, does anyone still seriously believe it would be a good idea to turn the retirement security of millions of Americans over to Wall Street CEOs whose dishonesty and irresponsibility have no end? Their administrative fees alone would take a 15 percent bite out of workers’ retirement investments, not to mention the real threat of another stock market collapse. In sharp contrast, administrative costs for Social Security are less than 1 percent of the program’s budget. Most importantly, despite economic conditions and the ups and downs of the stock market, Social Security has never failed to pay full benefits to every eligible beneficiary.
Another horrible idea is to move the retirement age up to 70. That would cheat today’s young workers out of about 15 percent of their retirement benefits over a lifetime. The proposal also ignores the reality that millions of workers in demanding professions simply cannot continue to work until they are 70. The upshot for them would be reduced lifetime benefits for retiring "early." Lower-income workers, those less likely to have other savings, would be hurt the most.
In the midst of all of the destructive rhetoric and ideas out there with regard to Social Security, there is one proposal that is simple, sensible and would keep Social Security strong and solvent in a fair and just way. Under the law today, the Social Security payroll tax is levied only on earnings up to $106,800 a year. That means millionaires and billionaires get off scot-free on all of their income above that amount. In other words, an individual who earns $106,800 pays the same Social Security tax as a multimillionaire. That’s wrong. Applying the Social Security payroll tax on those with the most income, say over $250,000 a year, would correct this inequity. According to CBO, applying the tax to all income would provide all the revenue that Social Security needs for the foreseeable future—for our kids and grandchildren and great-grandchildren.
As we mark the anniversary of Social Security, now is the time to pat ourselves on the back for a job well done. For seventy-five years, Social Security has lifted millions of people out of poverty and has provided stability and dignity for the elderly and for other vulnerable Americans. Our goal today must be to make sure that Social Security will be as strong and stable seventy-five years from now as it is today.