Will Social Security Be There For Today’s Young People? – posted 6/14/2015
In August, Social Security will celebrate its 80th birthday. I think it is fair to say the program has been solidly established for a long time now. Every month, 165 million workers make Social Security contributions and over 58 million receive earned benefits. 93 percent of all workers are covered by Social Security.
In spite of this most impressive, consistent, and uninterrupted record, many young people have been led to believe the program will not be there for them when they retire and need it. According to one poll I saw, half of Americans between the ages of 18-29 don’t believe Social Security will exist by the time they reach retirement. I must say I am surprised by how many young people seem to believe that.
I was jolted when my own son Eric recently voiced the same sentiment. He said that since middle school he and his friends have not believed Social Security would endure for them. Eric is now 33.
While the belief Social Security will not be there appears to be widely held, nothing could be further from the truth. There may be more evidence for the Loch Ness monster, UFOs’ in Rozwell, New Mexico, and Bigfoot than there is for the demise of Social Security.
Social Security is far more solvent and strong than its critics and doubters seem to realize. Even if no new measures are taken to shore up the program, the 2014 Social Security Trustees Report found that Social Security can pay all benefits until 2033. After 2033, Social Security could still pay three quarters of scheduled benefits for another 50 years after that using its tax income. And that is again with policymakers doing nothing.
Of course, there are plenty of reforms Congress could initiate which would strengthen, secure, and expand the program for the indefinite future.
I would suggest that information about Social Security is contested terrain. Since its inception, it has been subject to a campaign of misinformation and lies by its opponents. They have wanted to shake confidence, turn people against the program, and ultimately destroy it.
The effort to persuade young people that Social Security will not be there for them is only the latest episode in an 80 year battle. I think young people are being conned by the same extreme right wing, moneyed interests who have always opposed the program. It is instructive to examine the history.
Initially when President Franklin Roosevelt’s administration created the program, the Republican Party opposed Social Security altogether. The 1936 Republican presidential nominee, Alf Landon, who ran against Roosevelt, called Social Security “a fraud on the workingman” and “a cruel hoax”. Landon tried to scare the American people with fantasies about federal snooping by a vast array of bureaucrats who would be collecting information. President Roosevelt won reelection by a crushing margin winning 61 percent of the popular vote.
Next came the court challenges to the Social Security Act. In Helvering v Davis, a 1937 case, the U.S. Supreme Court held that Social Security was constitutionally permissible as an exercise of federal power to spend for the general welfare and did not contravene the 10th Amendment.
After sustaining these losses, opponents of Social Security retreated and were more marginalized. There was a long period of time when the program gained wider acceptance, including in the Republican Party. No one knew what President Eisenhower would think about Social Security but he evolved into a strong supporter. He expanded the program to cover 10 million more Americans who had not previously been covered. These included farmers, domestic workers, and self-employed professionals.
A split developed in the Republican Party between more extreme right wingers and moderate forces. Some Republicans opposed all New Deal programs including Social Security; some believed Social Security should become a means-tested welfare program; and some supported the program.
Arizona Senator Barry Goldwater, who became the Republican presidential nominee in 1964, reflected the more right wing perspective on Social Security. He advocated making Social Security voluntary. During the New Hampshire primary, he was on the defensive because he had created the impression he would abolish Social Security. President Johnson politically annihilated Goldwater and caused much soul searching in the Republican Party, with different factions drawing different conclusions about the lessons learned.
For a time, the more moderate forces gained ascendancy. It may be forgotten but it was President Richard Nixon who initiated the Supplemental Security Income (SSI) program, a critical safety net program for the poor and disabled. President Ford ran for president on the theme that he would preserve the integrity and solvency of Social Security.
Whatever expectations may have been about what President Reagan would do, he created the Greenspan Commission which only very modestly reformed Social Security. When Reagan signed the bi-partisan Social Security Amendments of 1983 into law, he said:
“This bill demonstrates for all time our nations’s ironclad commitment to Social Security. It assures the elderly that America will always keep the promises made…Our elderly need no longer fear that the checks they depend on will be stopped or reduced…Americans of middle age need no longer worry whether their career-long investment will pay off…And younger people can feel confident that Social Security will still be around when they need it to cushion their retirement.”
Neither the older President Bush nor Kansas Senator Bob Dole, the 1996 Republican presidential nominee, who were both from the moderate wing, wanted to mess with Social Security.
It was President George W. Bush, with his privatization scheme, who broadly opened the door for attacks on Social Security. I recall Bush saying he was going to spend political capital he had accumulated on his effort to privatize Social Security. Although the wildly unpopular effort got nowhere, many long-time criticisms which had been dormant were again voiced.
These included: Social Security is going bankrupt: it is a Ponzi scheme; too much is going to greedy seniors; the program is unfair to young people; you could do better investing on your own: and the only way to stave off catastrophe is to cut benefits, increase the retirement age, and privatize. Critics have derided Social Security as “an entitlement”.
The allegation that Social Security is intergenerational theft is a newer spin. Accompanying that charge is concern about the demographics of a large number of Baby Boomer retirees being supported by a small group of post-Baby Boomers.
In fairness to young people, I do think it is easy to believe the older generation is selling young people out. I would point to the failure of my older generation to act decisively on climate change. Still, the arguments around intergenerational theft are a sham and they are based on a misunderstanding of the program and its solvency.
The opposition to Social Security and the right wing and libertarian intellectual critique of the program have been heavily bankrolled by billionaire interests, including Pete Peterson and the Koch Brothers. These billionaires have created a cottage industry of think tanks, bought academics, talking heads on TV and elected officials to make their extreme views seem mainstream. They are good at messaging.
Their effort to set young against old has been effective. I would encourage young people to consider the sources and the financial interests behind the misinformation being fed.
For a thorough refutation of the arguments of the opponents of Social Security, I would recommend the book Social Security Works by Nancy Altman and Eric Kingson.
As I noted earlier, there are progressive reforms which could go a long way to solving any Social Security solvency concerns. I would suggest increasing revenue by raising the maximum amount of wages subject to the payroll tax which now encompasses only 83% of covered wages.
Income over $117,000 is not subject to payroll tax. So our wealthiest billionaires pay the same payroll tax as someone who makes $117,000 annually. There are many ways the payroll tax on the wealthiest could be increased.
I believe Senator Bernie Sanders introduced a bill that would impose the payroll tax on income above $250,000 a year. There are 8.3 million American workers who make more than $110,000 a year and almost 2 million who make over $250,000 annually. That move alone would generate significant money and would dramatically strengthen Social Security for the next 75 years.
Simply as a matter of equity, the very rich should pay their fair share. Why should billionaires be paying the same amount of tax as someone who makes $117,000 a year? In this context, it is worth pointing out the tremendous growth in income by our 1% over the recent historical period.
Our 2016 presidential nominees should be quizzed closely on whether they favor expanding Social Security or cutting it.
In writing this piece, I know I can be accused of bias as I am writing about the agency I work for. I do have a stake in the program’s continuity and success. I guess I would admit my bias about the importance of the program for the American people. As a 60’s person and a representative of my sometimes maligned and idealistic generation, I feel a responsibility to pass along a healthy Social Security to future generations. I admit I do not like to see young people sold a line.
At the time of its 80th birthday, the original vision of FDR still seems vibrant to me. To quote Roosevelt:
“We can never insure one hundred percent of the populace against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.
This law, too, represents a cornerstone in a structure which is being built but is by no means complete…It is, in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness.”
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