Attacks on Social Security (5/11/2004)

In February, Federal Reserve Chairman Alan Greenspan urged Congress to cut Social Security benefits for future retirees to help control the federal budget deficit. The budget deficit is a huge, growing problem, but Social Security is not its cause. In fact, the Social Security trust fund had a surplus of $165 billion last year, but that money is being diverted to finance the government's operating deficits. (The Iraq war alone is costing $150 billion a year so far.) To suggest that retirees should have our Social Security benefits cut and that future retirees should work years longer is yet another attack to reduce and then eliminate Social Security.

President Bush opposes our current Social Security system, calling it an aberration and a deviation from what he sees as the right course. By slashing $1.5 trillion in taxes to primarily benefit the rich, Bush has created the largest federal budget deficit since the Depression; Bush's political advisors promote a burgeoning deficit as a way of "starving the beast." Succinctly put, creating a huge budget deficit will force elimination of social programs because no money will be left to pay for them. But, here are some important facts about Social Security: it has been a reliable, important source of income for older Americans since 1935; currently 90% of all persons over 65 receive Social Security, with 65% depending on it to supply more than half their income; it has been more effective than any other government program in reducing poverty; it also provides an income safety net for workers and their families of all ages when the breadwinner becomes disabled or dies.

Despite Greenspan and Bush's scare tactics, the Social Security system, as documented by its trustees' annual report, is in good financial shape. Economist Paul Krugman points out that the program is fully financed at least through 2042, and the cost of securing the program's future for decades after 2042 would be modest. Yes, as baby boomers retire and as the ratio of workers to retirees worsens, adjustments will have to be made, but adjustments to the system are not unusual; over the years, the payroll tax has been increased, the cap was raised on taxed earnings (currently capped at $87,500 for this year), and retirement ages were changed. By the way, as American jobs are sent overseas, fewer American workers pay into Social Security. Yet, President Bush's chief economic advisor, Gregory Mankiw, in defending job outsourcing, said it was, "probably a plus for the economy in the long run."

Bush wants to privatize Social Security--that is, we would pay for our retirement through individual investment accounts as a part of, or instead of, paying into Social Security. That scenario has several key problems: What if the investments tank just as the worker reaches retirement? What if a retiree outlives his or her investments? What happens to the breadwinner's family if he or she becomes disabled or dies? Clearly, Wall Street-not the retire-stands to benefit the most from Social Security privatization. Given the spate of corporate CEO, investment banker and broker scandals, are these people the safest advisers and guardians of our financial security? Besides, workers already can make private investments in addition to paying into Social Security. Furthermore, privatizing Social Security means the government would have to borrow at least $1 trillion over the next few decades to make up for the lost revenues earned under the current system.

Social Security is an earned benefit. Workers have a right to receive the money we've paid for and have been promised. Bush's ballooning of the federal deficit to kill this social program is outrageous for many reasons. One thing is clear, his "starve the beast" strategy demonstrates that he believes our seniors' and families' well-being is the beast, and he literally will starve us by reducing and/or eliminating Social Security.

- Judith Kohler

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