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Essay: Defending Social Security

Posted by Will Rice (will) on Aug 05 2011 at 12:58 PM
ADA Today >>

By Mary von Euler   

Since its birth in 1935, Social Security has been a prime target for conservatives who dislike government—as well as a source of frustration to them because of its indisputable success and widespread appeal to everybody else.  And from its founding a dozen years later (in large part in order to defend New Deal programs like Social Security), Americans for Democratic Action has offered up a stream of facts and productive ideas to counter the misinformation and destructive schemes that continually threaten this prime promoter of economic justice.

Attempts to sink the system have taken many forms: privatization, which would put retirees at the mercy of fluctuating markets; weakening the Cost of Living Adjustment (COLA); raising the retirement age; basing benefits on more years in the workforce; means-testing benefits, thereby undermining the universal nature of the program; and reducing the already modest maximum annual benefit (currently just $27,876).

The ostensible objections to Social Security have also shifted over the years.  Originally it was that this quintessential example of economic self-help somehow represented socialism. A more recent claim is that Social Security—along with other “entitlements”—is a source of ballooning federal debt.

It is not, as Professor James K. Galbraith explained cogently to the President’s deficit commission last year when testifying on behalf of ADA. (Galbraith is a Vice President of our organization.) He explained that Social Security isn’t part of the federal budget at all, instead transferring money directly from current workers and employers (plus interest on past contributions and income tax receipts from higher-income Social Security recipients) to retirees, disabled workers, and their survivors.

A falsehood frequently employed in the hopes of shaking public confidence in the system is to claim that it’s bankrupt.  In fact, even with no changes made to its funding or benefits structure, Social Security would be able to pay full benefits until 2039, and thereafter 75% of currently promised  payments.

Social Security’s enemies often falsely claim that its defenders offer no proposals to strengthen the system. Yet for years ADA has put forth constructive plans to ensure Social Security’s long-term health.  These include raising or eliminating the cap on high earners’ contribution to the system (many people don’t know that the portion of a salary over around $100,000 is not currently taxed); collecting social security taxes on passive income like dividends, interest and capital gains, largely enjoyed by wealthy people; and expanding the payroll tax base through immigration reform that brings millions of workers out of the shadows of the informal economy and and into the mainstream system.

Social Security is the most successful prosperity program in history: it's rescued hundreds of millions of Americans from the want and fear that was once the common experience of aging, widowhood and disability.  Precisely because it is a sterling example of collective energy harnessed for good, ideological opponents will continue to attack it, often under the guise of some practical concern.  Luckily, ADA will be there to defend Social Security, refuting the falsehoods and putting forth constructive ideas to strengthen it far into the future.

Mary von Euler is Secretary of ADA.
   

 

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