What's the Deal With Social Security?
Part I in a series...
This article is the first in a series following up my opinion piece, Stop the GOP. An opinion piece, by definition, is not required to quote sources. That article was my own overview of a number of political issues, the result of many years of keeping up with the news, accessing a variety of sources and forming my opinion.
This series of articles is intended to address some of the issues raised by those who had questions, concerns or disagreements with that article. This series will present a more in depth look at each of these issues. In each article, whenever possible, I will attempt to seek out sources that are more likely to resonate with those whose opinions frequently differ from my own. I will also attempt to introduce a voice or message that resonates with me that I feel is likely to resonate universally.
There is no social security emergency!
“Social security is paid for with payroll taxes. It has nothing to do with the debt ceiling. Any attempt to take anything from it is theft from We the People. Social Security is an entitlement program because we are ENTITLED to it because we paid for it! It is a successful and fully funded program that can continue without change for the next 37 years. There is no Social Security emergency.” ~ The first paragraph of Stop the GOP
Q: If there is no social security emergency, why is the GOP insisting that cuts in social security be tied to the debt ceiling issue?
Some respondents stated that the GOP had not proposed any cuts to Social Security. In response to this, I would like to direct you to a reliable online source:
800,000 People Without Benefits for at Least a Month!
A Press Release from the Democrats Ways and Means Committee dated 2/15/11
Verifies that House Republicans have proposed a 9.3% ($1.7 billion) reduction in SSA funding for the remainder of 2011. This reduction would reduce the Social Security operating budget by more than a billion dollars or 8.5% percent less than what is needed. The result would be $506 million dollars less than actual expenditure for 2010.
Furthermore, House Republicans propose taking $500,000,000 from Social Security’s (We the People’s) reserve account. This is money that has already been budgeted for a much needed computer system update; however, under the Republican plan, it would be removed.
An additional $118,000,000 that was also budgeted for the necessary computer upgrade, which has been determined to be critical to the mission of the Social Security program, would be rescinded.
What would the results of these cuts be?
- A one month closing of all 1300 field offices
- A huge claims backlog that would negatively impact the system and recipients for years
- No telephone recourse and a complete standstill in claims processing
- Suspension of the necessary (and already budgeted) acquisition of an up-to-date computer system
These cuts would not only shut Social Security down for a month, withhold benefits from recipients for at least a month, and put a stop to necessary equipment updates, they would also exacerbate the already problematic hiring freeze, which has accounted for about 3500 jobs lost this year. And what would happen to the employees from the 1300 field offices? Would they apply for unemployment? Would they still have jobs after the month was over? How would these circumstances affect our economy?
How would Social Security Recipients be impacted?
Specifically, the consequences of cuts proposed by Republicans would be that 400,000 people would not receive their benefit payments for at least a month. This would result in a huge backlog that could take years to sort out, not to mention 400,000 people being unable to pay rent, buy food, pay bills, and so on. The effect on the economy and on emergency care services and on individuals would be devastating.
In addition to the 400,000 people who would likely be turned out on the streets to starve, 290,000 people who are currently waiting for disability benefits would simply have to wait until the mess was sorted out, having already waited a very long time. Appeals and reviews of disability claims would also be backlogged, affecting an additional 90,000 people.
“I’m on record saying Social Security is the last place in the federal government we should look for cuts. It’s a lean, efficient program that, if anything, is too Spartan. In 2009, the average monthly benefit was slightly more than $1,000 — hardly lavish. That makes it one of the stingiest national-pension programs in the developed world, actually.”
Ezra Klein, The Washington Post
Will Social Security “go broke”?
Some respondents stated that Social Security is not a successful program and will go broke; however, according to Ezra Klein of the Washington Post - the oldest US newspaper, which is also generally regarded as being conservative, and is well known for excellent financial and political reporting, this is not necessarily the case. Mr. Klein states that there are aspects of the Social Security program in which responsible adjustments can be made to prevent any such scenario and improve the program.
Here are some of the changes he recommends:
- Place a 3% surcharge on income higher than $200,000 to address half of the SSA shortfall.
- Uncap payroll taxes so that income over $106,000 is also taxed. He explains that, currently, people with an income of $80,000 annually are taxed on every dollar, while those making a million dollars a year are only taxed on 10% of their income. He says that this change would eliminate the shortfall.
- Have SSA benefits accrue more slowly for the wealthy because they don’t need them as much. I actually disagree with this. If the wealthy are to be taxed at the same rate as everyone else, they should also have the option of enjoying the same benefits - even if they don’t need them! They can always choose to show support for their country by refusing them or donating them back or to some other cause.
- Address flaws that have developed in the SSA system with the passage of time, such as outdated regulations regarding divorce and marriage and the fact that minimum benefits are often woefully inadequate.
- In addition to these adjustments, Mr. Klein recommends enhancements of the program:
- Instate a universal 401(k) plan for all Americans to go along with social security benefits. A matching funds plan for the first $2000 invested annually by low income Americans could be set up. Klein points out that this plan would encourage personal saving while providing a stable retirement plan. He notes that the reinstatement of the estate tax on multimillionaires would more than fund this plan
What’s the bottom line?
In this article, Klein states the fact that Social Security has proven to be an efficient program. Furthermore, he states that it has weighed in as an overwhelmingly popular program with people across the board in every poll. He opines that these facts should indicate to politicians that talking about cutting benefits is not going to help their careers any.
He goes on to say that the concept that America, as the wealthiest nation on earth, can afford to provide a secure retirement for its citizens is more true now than it was when social security was begun. He essentially expresses the idea that this dream must simply be updated to reflect the current situation in the US today.
I am sure that a number of readers will disagree with some of these ideas and will holler about “socialism” when faced with the idea that multimillionaires might have to pay an estate tax, or wealthy people might face a lower rate of benefits accrual; however, the fact of the matter is, these people are Americans who live in this country and benefit from doing so. They, too, must make some sacrifices to keep our nation strong. The difference is that the “sacrifices” could be asked to make won’t land them on the streets or starve them to death. However, taking support away from seniors and people with disabilities who are already living at or below the poverty threshold will have just that effect.
Would making cuts to social security reduce the national debt?
Not really - it mainly would cause hardship and animosity and weaken our nation. Social security needs to be taken out of the mix regarding the deficit. It is money that belongs to We the People. Any problems social security faces are no greater than those that would be faced by any large service operating over the same time period. They must be handled separately and responsibly.
Congressman Dennis Kucinich (D-Ohio) is a true representative of the people. He is well-known for working both sides of the aisle in the best interest of our nation. He regularly authors and introduces successful bills with bi-partisan support. He is a self-made man who embodies the American dream, having risen from a childhood of poverty to a seat in Congress. Those who have followed his career from the start know that he is not one who “can’t see the forest for the trees”. In the last 10 years I have seen him proven to have been “right all along” on many occasions.
In this video, Congressman Kucinich explains the real reasons behind the attempt to cut social security benefits.
Social Security Didn’t Create the Deficit
Sources and Resources...
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I hope this will be helpful!