On January 25, President Obama will address a joint session of Congress, and the nation, to deliver the State of the Union address and there is a lot of apprehension among those of us on the left. Will the President commit political suicide by grabbing hold of that so-called “third rail” of American politics, and embrace cuts to Social Security? Or will he keep his campaign promise to preserve and protect the most successful and popular social program in the history of the nation? During the campaign, he promised to fight against cuts to benefits, cuts to Cost of Living Adjustments and efforts to raise the retirement age. He also vowed to strengthen the program by raising the cap and paying Social Security taxes on those earning over $250,000 per year (currently, Social Security taxes are paid only on the first $107,000 of earnings.) He reiterated those promises in his weekly address on August 15, in which he commemorated the signing of the legislation into law by FDR 75 years before:
“I’d have thought that debate would’ve been put to rest once and for all by the financial crisis we’ve just experienced. I’d have thought, after being reminded how quickly the stock market can tumble, after seeing the wealth people worked a lifetime to earn wiped out in a matter of days, that no one would want to place bets with Social Security on Wall Street; that everyone would understand why we need to be prudent about investing the retirement money of tens of millions of Americans.
“But some Republican leaders in Congress don’t seem to have learned any lessons from the past few years. They’re pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall. It’s right up there on their to-do list with repealing some of the Medicare benefits and reforms that are adding at least a dozen years to the fiscal health of Medicare — the single longest extension in history.
“That agenda is wrong for seniors, it’s wrong for America, and I won’t let it happen. Not while I’m President. I’ll fight with everything I’ve got to stop those who would gamble your Social Security on Wall Street.”
Yet a month later when I questioned David Plouffe about the President’s committment to Social Security at the Harkin Steak Fry, I got a non-answer that made chills run up my spine…”They want to weaken and destroy it. We want to fix it.”
Try that answer on someone who doesn’t know that it doesn’t need fixing because it ain’t broke, and who went to school back when they taught us how to diagram sentences so we can decypher what those who look at the trust fund with a lustful, impure eye are really saying: “In order to avoid future benefit cuts, we must cut future benefits. Ditto raising the retirement age.”
Didn’t we put some people in military prison for destroying villages in order to save them?
The fact of the matter is, Social Security is not only not responsible for our deficit woes, it is independent of the deficit and it is solvent for decades. Period. Full stop.
That CBO report finds that the Social Security trustfund, without changing a thing, will be able to make full payouts through 2039 — it should also be noted that the full payout projections have been pushed downward by the economic downturn of the last couple of years, and those numbers should start moving the other way as the economy recovers. And if that isn’t the case, we have a lot bigger problems than Social Security coming down the pike.
And even if the trust fund were to run out, Social Security would still be in pretty good shape. First of all, the trust fund is a relatively recent creation. It was establisned in 1983, three years before the baby boomers started turning forty, to deal with the demographic bulge headed Social Security’s way in 2011. The last boomers will retire in 2029, ten years before the trust fund is currently projected to be depleted. Essentially, when the trust fund runs dry, it will coincide with the fact that it’s mission will be, for the most part, complete. It will have eased the strain caused by the retirement of the baby boom.
The depletion of the Social Security trust fund is not a pending disaster, it’s by design. The fact of the matter is, in case you are one of the people in this country to whom facts matter, Social Security is a self funding entity, independent of the general fund. It funds itself entirely through payroll taxes, and so long as payroll taxes are collected, retirees will get their checks. The only way that changes is if Congress acts to stop collecting payroll taxes or to outright abolish the program.
Faced with that reality, those who oppose Social Security tend to go into “yeah, but…” mode and clutch at their pearls while they try in vain not to hyperventilate over a projected $4.5 trillion-with-a-t hole in Social Securities budget seventy five years down the road.
But this, too, is a faulty argument because a very modest increase — 1% or less — in the amount of payroll tax withheld from workers wages would not only fill that hole, it would put the program on a sound footing “indefinitely.”
They really stick their fingers in their ears and sing “la la la la la! I can’t hear you!” when it is pointed out to them that $4.5 trillion is about the same cost, over the same period of time, of permanently extending the Bush tax cuts to the top 2% of earners.
But that isn’t the end of their subterfuge! Their next ploy is to pretend that Medicare and Social Security are the same thing. They aren’t. They are totally separate entities and they are funded via different mechanisms. Medicare does have problems, but they trace to runaway costs in our broken healthcare system, not to Social Security. Pretending the two are one and the same is either fundamental ignorance or deliberate, willful dishonesty. There is no other option.
Elected leaders embracing cuts to Social Security by either reducing the amount of benefit paid or raising the retirement age are, therefore, either stupid, or lying. In neither instance should they be making decisions that affect millions of Americans. And that goes double for those who parrot the BS knowing full well it’s just that…BS.