PRESS EDITORIAL: Let’s talk about Social Security—now

Greedy politicians have diverted Social Security money into the federal government general fund and spent it on pork projects.

Wrong, Social Security funds are secure in an inviolable trust fund and it is an easily disproved myth that they have been raided for other government spending.

That was the gist of a give and take between a pair of letters to the editor published recently in Ozaukee Press. For the record, the letter stating that Social Security money is not spent on anything but Social Security benefits was correct.

Revenue collected through the payroll tax paid by workers and employers is required by law to be credited to the Social Security trust fund and has never gone to the general fund. Surpluses are invested in U.S. treasury bonds. The treasury securities are redeemed to pay Social Security benefits.

The myth that the misuse of Social Security revenue is sapping retirement benefits has been around for a long time. What is noteworthy now is that the little debate on the Press opinion pages between conservative and liberal readers was one of the few references to the political implications of Social Security to be read about or heard of during a presidential campaign season that is already in full swing.

This is surprising on two counts. First, except for military defense, no government service is more important to the American people than Social Security, yet it faces a debilitating problem that has to be dealt with by political leaders.

Second, socialism is an issue in the presidential campaign, and Social Security is a socialist program. The government runs it, decides how much citizens have to contribute to it and how much they will get in benefits. Critics of socialism have called it mandatory charity.

In its political ads and videos, the Trump campaign raises the specter of socialism as a threat to the American way of life and applies the socialist label to the outspoken progressives among Democratic candidates. But Social Security, in spite of its socialist trappings, is not mentioned.

That is no doubt because Americans love Social Security. A recent survey found that more than 90% of Americans approve of the institution of Social Security and want its benefits maintained or increased. Disparaging it as a menace to capitalism is not an election-winning strategy.

On the other hand, politicians ignore it at their peril. The Social Security trust fund will run dry in about 15 years. Without changes, benefits will then start to shrink, according to a Social Security Administration analysis.    

Current benefit recipients don’t have much to worry about. They will receive their expected monthly checks, with small increases to account for rises in the cost of living, until 2035. But workers who expect to retire around that time or later face uncertainty.

This should not be happening. It is unacceptable that a government program so many Americans depend on for a modest retirement income is in danger of failing to meet its obligations.

The average Social Security check is only about $1,500 a month and yet, according to data gathered for the Social Security Administration, this represents 90% of the retirement income for one-third of those who receive benefits. For nearly two-thirds of retirees, Social Security represents at least 50% of their retirement income.

The simple answer to Social Security’s future problem is to increase the revenue that supports it. Currently, that comes from a 6.4% payroll tax paid by workers and a matching percentage paid by employers. A moderate increase would replenish the Social Security trust fund.

Republicans in Congress, however, want no part of that. Instead, they have proposed cutting benefits and raising the retirement age. That remedy would come at a cruel cost to many Social Security beneficiaries.

It’s easy for members of Congress, who wear suits to their job, spend much of their working days in comfortable offices, get long weekends and lengthy vacations and can retire with full government pensions at age 62 to talk about raising the retirement age. But America still depends on manual laborers and manufacturing workers, and they deserve to be able to look forward to retirement from their hard work in their early 60s, rather than wait until age 69, as in one GOP proposal.

The simplest and fairest way to put Social Security on a strong footing for the future is to eliminate the cap on earnings subject to the payroll tax. As things stand, earners don’t have to pay the tax on earnings over $132,900. Applying the tax to all earnings would not only generate the revenue Social Security needs to remain solvent, but would make its funding more equitable by changing the rules that allow wealthier earners to pay a smaller percentage of their income for Social Security than those of lesser means.

If that sounds like a socialist concept, it would fit right in with Social Security—capitalist America’s wildly successful experiment with socialism.