Show #282 Airing: Sunday, January 30, 2005
Social Security may be headed back to the future. The President has declared his intent to take a portion of the tax dollars needed to fund Social Security and direct them into private investment accounts. Because fewer tax dollars will be going into the traditional Social Security program, benefits to future retirees will be cut by a third.
To understand what’s happening, let’s take a quick history lesson. Before Social Security, people paid no Social Security tax. They invested their own money as best they could. That was the ultimate in privatization, no government involvement. And when they retired, millions of older folks found themselves in poverty-- without enough money for food, clothing, medicines, or housing.
Social Security was designed as a safety net, to provide a minimal level of security for older Americans. And you know what? It worked! Today the average monthly benefit check is $955 a month. Not a fortune. But for two-thirds of all Americans who are 65 and older, Social Security makes up most or all of their income. And for them, it’s a life saver.
The White House is trying to sell radical Social Security change by telling us that Social Security is about to go broke. Let’s be real clear: that’s just not true.
The Social Security Trustees say that, without any changes, Social Security can pay all benefits until 2042; the Congressional Budget Office gives Social Security an extra 10 years, to 2052. And in 2042 or 2052, Social Security still doesn’t go broke. It will be able to pay 70 percent of all scheduled payments. Even with 70 percent benefits, retirees would still get more than they’d get under the President’s plan to cut a third of future benefits.
Yes, it’s true that Social Security eventually will face a shortfall. But let’s put it into perspective. Using projections by the Congressional Budget Office, the President’s tax cuts, if made permanent, will cost more than five times the Social Security shortfall. Five times! Put another way, the entire Social Security problem could be fixed just by slightly reducing the tax cuts and directing that money into Social Security. And remember, the vast majority of the tax cuts benefit only the wealthiest one percent of Americans.
This year, you are going to hear a lot about the need to “save” Social Security. And you’re going to be told that the entire program will collapse without radical change. These are scare tactics, pure and simple. In future weeks we’ll keep you posted on the latest proposals, and what they really mean. So stay tuned. And let’s hope that the Social Security debate doesn’t end like the old joke, with the punch line: the surgery was a success, but the patient died.
