Bill Knight column for Thurs., Fri., or Sat., April 9, 10 or 11
And all of that is why people are afraid of Congress diminishing them.
On March 25, the Republican-dominated House of Representatives passed a federal budget cutting $5.4 trillion in spending. If enacted, the budget would start to privatize Medicare by introducing a premium support system; Medicaid and food stamps would be converted into block grants to states; the Affordable Care Act would be repealed; funds for nursing homes, Head Start, and college Pell grants would be cut – but corporate tax rates would be lowered and taxes on profits abroad eliminated.
On the 80th anniversary of Social Security, the House and Senate budget proposals “harm seniors, use the disabled as pawns, punish the needy, pamper the wealthy, and employ deceit – all to promote a selfish agenda for the wealthy and powerful,” says Richard Eskow, a Fellow with the Campaign for America’s Future.
Consequences could mean 11 million families, seniors and children will lose food stamps; 35,000 children won’t get Head Start; 133,000 fewer poor families will get housing assistance; 2 million fewer workers will receive job training and employment services; $1.2 billion will be cut from education; and the plan breaks government’s promises.
Eskow notes that a survey conducted by the Center for Community Change about increasing Social Security benefits and having wealthy Americans pay the same rate into Social Security as everybody else shows that 90 percent of Democrats said they support the idea, 73 percent of Independents support it, and 73 percent of Republicans support it.
“Eighty-seven percent of voters favor protecting Social Security and Medicare’,” Eskow added.
So: Who opposes Social Security? The 1%, according to a 2013 study by Northwestern’s Benjamin Page and Larry Seawright and Princeton’s Larry Bartels.
“Big Money has been gunning for Social Security, Medicare and Medicaid for decades – since the beginning of Social Security in 1935,” says economist Jamie Galbraith. “The motives are partly financial: As one scholar once put it to me, the payroll tax is the ‘Mississippi of cash flows.’ Anything that diverts part of it into private funds and insurance premiums is a meal ticket for the elite.”
To dismantle Social Security and so on, Congressional Republicans have resorted to misleading, if not false, claims. For example, some say that Social Security is bankrupt, but its Trust Fund holds $2.8 trillion in assets, in the form of legally binding debt from the U.S. Treasury.
“Social Security has a large and growing surplus,” says Richard Fiesta, director of the Alliance for Retired Americans. “Social Security’s cumulative surplus [is] roughly $2.8 trillion in 2014, growing to about $2.9 trillion around 2020.”
Also, accusations of fraud are exaggerated.
“The Government Accounting Office and the Social Security’s own Inspector General have both found that fraud in this program is less than 1 percent,” wrote author William Greider. “Compare that to fraud committed by Pentagon contractors, by too-big-to-fail bankers, by auto companies concealing deadly flaws in cars [or] by elected politicians.”
The truth: Social Security provides critical support for retirees, pays modest benefits, helps people of all ages, and is still needed, AARP President Jeannine English says.
“People are living longer… savings are often meager, and employer pensions have become scarce,” she says. “Without the guarantee of Social Security, the poverty rate for older Americans would skyrocket from 9.5 percent to more than 42 percent.”
In Illinois, a typical senior citizen’s annual income is 55 percent of younger residents’ pay, far short of the 70 percent standard usually needed to maintain one’s lifestyle in retirement, according to a new study by Interest.com. That’s the country’s 11th-biggest gap.
“Retirees depend more than ever on the safety and reliability of Social Security,” adds U.S. Sen. Elizabeth Warren (D-Mass.). “Social Security works – no one runs out of benefits, and the payments don’t rise and fall with the stock market. Two-thirds of seniors rely on it for the majority of their income in retirement, and for 14 million seniors. This is the safety net that keeps them out of poverty.”
Like any human endeavor, it could be improved.
Doing so could be simple. The most obvious reform would be to lift the payroll tax cap, which is now $118,500 – meaning that no earnings above that level contribute to FICA (the Federal Insurance Contributions Act, which funds Social Security).
Social Security advocates say its protection could be achieved if its popularity is translated into political action.
“The only way that Social Security and Medicare can go ‘bankrupt’ is if we let them,” wrote journalist James Surowiecki in The New Yorker.
[PICTURED: Photo from saynocuts.org.]