Fact and Fiction on Social Security
It’s okay to cut Social Security since no one expects it to be around when they retire anyway: The program is a guarantee to the people who pay into it. They’ve earned the benefits that it gives, they aren’t just a privilege.
Social Security is a big contributor to the deficit and debt:
Social Security has not contributed a single cent to the deficit or debt. It currently has a $2.7 trillion surplus. That surplus will grow to $3.7 trillion by 2022. It is actually illegal for Social Security to go into deficit mode. The real causes of the deficit and debt growth are the Bush tax cuts, the recession, the wars in Iraq and Afghanistan, stimulus and recovery spending and the bank bailouts.
Times are tough, everyone has to share the sacrifice:
Banks and other companies have received massive bailouts and taxes for the rich have been cut. Ending bailouts and making the rich pay their fair share would go much further towards fixing our economic problems than harming Social Security would. It would have added benefit of being the morally correct thing to do.
Social Security is bankrupt and in a crisis:
Social Security is fully funded for the next 25 years. After that it can pay 77% of promosed benefits through 2085 and 74% after that, with no changes to the program as it is now.
There is no easy solution to fixing Social Security, so we have to do something difficult: There is a Social Security tax cap on people with wages more than $106,800 a year. If those people paid taxes on all of their income — like everyone else does — there would be no funding problems for Social Security. The program would be fully funded for at least the next 75 years.
The public favors changes and/or cuts to Social Security to reduce the deficit: 15% of the public does. 82% oppose cuts. Even 74% of Tea Party supporters oppose cuts. Similarly, large majorities of Americans oppose cuts to make the program solvent (67% oppose), oppose means testing the program (63%), oppose raising the retirement age to 69 (69%) and support eliminating the tax cap of $106,800 (66% support). The popular solution to potential future problems with Social Security is also the morally correct solution.
Continuing the payroll tax holiday is a good economic solution: The holiday increases corporate profits without stimulating hiring and cuts revenue coming into Social Security. Corporations don’t need a revenue boost. In the first quarter of 2011, they made a record $1.7 trillion in profits and the currently sit on a record $1.9 trillion in liquid assets. Corporations have more money than they’ve ever had and they aren’t hiring. Giving them more, in order to cut other programs, is a terrible idea. The holiday also is one of the worst ways possible to boost economic activity. Moody’s analytics says that extending unemployment benefits, increasing food stamps and providing direct aid to state governments all boost the economy significantly more than the payroll tax holiday.
Linking the Cost of Living Adjustments (cola) for recipients to the Consumer Price Index is a good solution: Tying cola to the CPI would be a major benefit cut to Social Security recipients and it would get bigger over time. Furthermore, despite Republican claims that their proposals don’t affect current recipients, the cola-CPI change would affect everyone. As it currently exists — even though it hasn’t been applied for two years — the cola is not enough to account for increasing health care costs. If the Republicans proposed Medicare changes are passed, the increase in costs for seniors will consume their entire Social Security check.
Raising the retirement age is a good solution:
Raising the retirement age would effectively work out to a 20% cut for retirees. This would disproportionately harm workers in the lower half of the earnings spectrum. These workers have not seen the same increase in life expectancy as the overall population and some groups have seen life expectancy declines, meaning an even bigger benefit cut for those workers. People who work in physically demanding jobs (nearly half of workers over 58) will find it difficult or impossible to extend their careers until they reach 69. Age discrimination also makes it harder for older workers to find jobs.
Means testing Social Security is a good solution:
Only 2% of Social Security benefits go to people with an income over $100,000 or more a year, so cutting benefits for them would make little difference in the funding for the program. If the means test were set at a lower level, it would have to have a negative impact on middle class recipients, not just the wealthy.
Social Security is a wasteful program:
Less than 1% of program costs go to administrative costs. Social Security is the largest and most successful program in terms of providing aid to the disabled, children, women, veterans and other groups in society. These groups are served very well by Social Security and any cuts to the program will increase poverty and other associated problems for these groups. This is while offering recipients an average of $13-$14,000 per year, making it one of the least generous retirement programs in the world. The program lifts 20 million Americans out of poverty.
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