Since 1935 Social Security has been the foundation of economic security for America’s working families. With its progressive benefit structure, survivors and disability programs, family benefits, annual cost of living adjustments, and guarantee of retirement benefits for life, Social Security provides a solid foundation of income security for all workers, retirees, and their families. Because of Social Security, poverty among our seniors has fallen to under 10%, and perhaps as importantly, the fear of poverty and dependency has been almost eliminated.
Social Security as it is currently structured is strong and healthy. The most recent annual report by the Social Security trustees confirms that with normal economic and productivity growth, Social Security will easily pay full benefits through 2075 and beyond, even with longer average life spans.
Unfortunately, many Americans have come to the mistaken belief that Social Security is on the verge of bankruptcy and must be radically reformed. Several factors have converged to reinforce belief in this phony crisis. Since the 1990s, the Social Security Trustees have projected a possible long run funding shortfall, if productivity growth falls and economic growth plummets to half the average rate that prevailed throughout the 20th century. A small faction who want to see Social Security monies transferred into private accounts because of conservative ideology or financial interests have exaggerated this potential concern, and used the lure of a booming stock market to promote their agenda. Meanwhile, some politicians from both parties used the rhetoric of “saving Social Security” to gain political support.
In May 2001, the president appointed a commission of sixteen people, all of them already committed to carving Social Security into private accounts, and charged them with coming up with a plan by the fall. This proposed transformation would be a disaster for the American people. It would lead to a society where the oldest and frailest depended on charity, families of disabled and prematurely deceased workers were plunged into poverty, and only the wealthiest could face retirement with confidence.
Privatization is the wrong approach, but there are modest reforms that would make Social Security even better and eliminate poverty among our seniors. These include:
- Adjusting benefit formulas to increase benefits for the lowest income earners and for elderly widows and widowers.
- Rolling back the retirement age to 65.
- Raising or completely eliminating the cap on taxable income.
- Building universal pension systems in addition to the existing Social Security system.
Social Security is strong and healthy, and builds the kind of America most of us want. We’re all better off knowing that we, our family members, and all our neighbors who work and contribute to our national prosperity can be assured of living in dignity, even when faced with life’s adversities. We must keep Social Security so that it works for all Americans.
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