Busting Social Security Myths

2017-07-10T16:15:54+00:00September 13th, 2013|Aging Issues, Budget, Max Richtman, Retirement, Social Security|

Busting Washington’s biggest Social Security myths

BY MAX RICHTMAN

Special to The Tampa Tribune

Published: September 12, 2013

There is no other issue where the disconnect between Congress and the American people is more stark than the future of Social Security. Thanks to Washington’s well-financed austerity lobby, the truth about Social Security has become obscured by political propaganda designed to persuade lawmakers to use Social Security’s revenues to fix fiscal problems completely unrelated to the program.

Whether it’s cutting benefits in the name of deficit reduction (even though Social Security by law cannot contribute to the debt) or using Social Security as political leverage in Washington’s version of “Let’s Make a Deal,” these approaches ignore the fact that Social Security is paid for, earned by, and promised to American workers.

Myth One: Social Security is a driver of our nation’s deficit.

Although some in Washington claim America can’t afford Social Security, the truth is, this program provides economic benefits to every state and community in our nation.

Nationwide, families spend $775 billion in Social Security benefits annually. In Florida, $56 billion dollars in Social Security benefits are paid to four million retirees, disabled and survivors, including children, each year. When those families use the purchasing power of their benefits, they are supporting local businesses and the state economy with billions of dollars they simply wouldn’t have without Social Security.

Unfortunately, this economic reality has been ignored by those who want to cut middle-class benefits in the name of austerity. Targeting families who rely on vital programs such as Social Security ignores our real economic problems in favor of a political strategy to cut safety net programs. Members of Congress should take a look at the state-by-state economic profiles from the National Committee to Preserve Social Security and Medicare and ask themselves, “Can my community afford to lose millions of dollars from our economy?” Step outside Capitol Hill and the answer is a resounding “No.”

Myth Two: Seniors are “greedy geezers.”

One of the favorite messages used widely by Washington’s billion-dollar, anti-Social Security lobby is that America’s “greedy geezers” are stealing from their grandchildren. They claim that if we allow retirees to collect the Social Security benefits they’ve paid for throughout their working lives, then somehow our children will suffer. This mythological link between funding for seniors programs and children’s programs makes for good propaganda but there’s literally no basis in reality for such linkage. In fact, new research by the Center for Economic and Policy Research shows that real linkage may exist between the dollars spent on our nation’s top 1 percent income earners and reduced spending on children.

Cutting benefits to generations of middle-class families won’t help the children, parents or grandparents in those families. The Recession Generation and beyond will need Social Security as much, if not more, than current generations. It’s time to reverse a 40-year trend of income inequality and redistribution to the wealthy while reigniting the American dream for middle-class families, which benefits young and old alike.

Myth Three: Immigration reform and the repeal of DOMA will bankrupt Social Security.

Those opposed to immigration reform and the repeal of the Defense of Marriage Act have attempted to use vital programs, such as Social Security, as an economic excuse to avoid doing the right thing. The truth is, neither legislative issue threatens Social Security. The Congressional Budget Office estimates new taxes paid by undocumented workers granted provisional legal status would cut federal budget deficits by $197 billion over 10 years. Social Security’s chief actuary estimates immigration reform would increase Social Security’s Trust Fund reserves by $248 billion by the end of 2024 and extend the program’s solvency by two years. The actuary also predicts providing benefit equity to qualified same-sex couples in retirement is a break-even proposition.

Myth Four: The whopper of all — Social Security will be bankrupt.

The truth is, even if Congress does nothing at all, Social Security is projected to deliver full guaranteed benefits until at least 2033. Even after 2033, Social Security will be able to pay about 77 percent of promised benefits out of the payroll contributions that will continue coming into the system. If Congress enacts modest changes, such as requiring the wealthy to pay their fair share of payroll taxes, Social Security will be able to meet its full benefit obligations well beyond 2033. No one wants to see benefits cut to 77 percent; however, that’s not bankruptcy by any definition of the word.

The state of Social Security is strong today and should be made stronger for the future. But if our nation’s leaders want to be serious about addressing the long-term outlook for our nation’s most successful government program, then myths have no place in any Social Security debate.

Max Richtman is president and CEO of The National Committee to Preserve Social Security & Medicare, based in Washington, D.C.