The Social Security Administration (SSA) has been the focus of quite a hue and cry from Congress, policymakers, and newsmakers from across the country over the past year. Those looking for reasons to cut funding to this bastion of the country’s national social services programs call Social Security (including OASDI, SSI, and SSDI) everything from an outdated notion of an entitlement state to a Ponzi scheme. Those looking for ways to preserve America’s 75-year old social services safety net call it the "bedrock of American retirement security".
Attacks on the SSA play well with voters who are terrified of the national deficit and either young enough to save for retirement or wealthy enough to be unconcerned, but they worry seniors who are dependent on retirement benefits and the disabled who are dependent on disability benefits. These attacks are being used in a number of political ads and are popular topics on news programs. The opinions fall into two camps, usually down party lines, either demonizing or lionizing the agency. The middle ground of reform gets a hesitant nod.
America’s social programs are running out of money to fund the benefits they pay to Americans each month. What is unclear is whether these programs are worth saving by cutting other areas of the national budget, such as the Department of Defense which is bearing the cost of fighting two overseas wars.
The fact that the Social Security system is running out of money is not just the concern of U.S. lawmakers, but of international policymakers as well who worry about America’s ability to pay back her trillion dollar deficit.
Jose Pinera, former labor and Social Security minister for Chile, told Fox News earlier this year that the existing Social Security system is the hallmark of “the unfunded welfare estate that is bankrupting Europe and eventually the U.S…..there is no money being saved for the future. There is no funding. There’s no trust fund. You are paying the money immediately to the retirees, and the problem is that with Baby Boom generation retiring, with the expectancy of life increasing every single year…you will not be able to pay the promises. So, as more workers attain sufficient coverage quarters and become eligible for benefits, the system will eventually default.”
On the other side of the debate are speakers such as James Roosevelt, Jr., grandson of Franklin D. Roosevelt, the President who was responsible for creating the SSA three quarters of a century ago. Speaking to a reporter for the Associated Press, Mr. Roosevelt called on all those involved in the debate to “stop scaring seniors.”
Mr. Roosevelt reminded us that Social Security is insurance. He maintains that the programs have not increased the federal deficit and has always run a surplus and is sound. He was alarmed that some want to eliminate the agency, privatize it, or cut benefits.
Fearing that Congress will target social programs in their scramble to find money to balance the budget and cut the deficit, those who want to preserve America’s social programs, such as the National Committee to Preserve Social Security and Medicare, charge that “the real reason for the budget imbalance is billions of dollars in tax cuts for the wealthy, a decade of borrow and spend policies and a recession driven by the excesses of Wall Street….Today Social Security is owed $2.6 trillion previously loaned to the federal government to cover the cost of other programs. But budget hawks are arguing that there is not enough money to pay back this loan to Social Security, so their answer is to cut Social Security benefits instead.”
In February of this year, President Obama established the Bipartisan National Commission on Fiscal Responsibility and Reform, charged with “mak[ing] recommendations that put the budget in primary balance so that we are paying for all operations and programs for the federal government (achieving deficits of about 3 percent of GDP) by 2015 and meaningfully improve the long-term fiscal outlook”.
Since the SSA itself admits that it expects to start losing money by 2037, it is hard to see how the programs can be continued without a realistic raise in taxes, never a popular option among the voting public. But to those for whom OASDI, SSI, or SSDI benefits are a lifeline, these debates transcend the issue of higher taxes. It seems obvious to them that a society is measured by the way in which it cares for its most vulnerable citizens. They wonder if Americans will step up to the challenge.