Moscow-Pullman Daily News October 1-2, 2005
By Judith L. Brown
Early this year, President Bush named Social Security “reform” as his top domestic priority for 2005. Quietly, the alleged Social Security crisis has become much less urgent. Had you noticed?
But don’t feel too secure that your hard-earned Social Security benefits are safe just yet.
Things did not go well all spring for the president on this issue. In fact, the more he and his cohorts tried to explain the fuzzy math used to make their schemes for privatization pencil out, the less the public liked the idea.
Skepticism turned to outrage particularly after President Bush’s press conference at the end of April, when he unabashedly presented the idea of preserving Social Security benefits for lower-income workers by reducing the benefits of middle-income workers-while continuing to propose that the country could afford to maintain and extend tax cuts for the wealthiest Americans.
By August, a poll by the USAction Education Fund found that more than 70 percent of voters in key congressional districts believed the president’s proposals would cut their Social Security benefits. Almost as many – 68 percent – said they would be less likely to vote for a candidate who supported the president’s Social Security proposals. The president’s own advisors were telling him this issue needed to be moved to a back burner.
They hatched a new plan: let things simmer down for a while. And then … .
Meanwhile, Social Security quietly turned 70 on Aug. 14. There was surprisingly little fanfare for the anniversary of one of the most effective and popular government programs ever, a program that has become woven into the very fabric of American life. “Americans resist change to Social Security” read one headline. Oh, those stodgy Americans. Why would they be so resistant to change?
Here’s why: Social Security by and large has accomplished what it was designed to do, is accomplishing what it was designed to do, and is needed into the future to continue accomplishing what it is designed to do.
In 1935, when President Roosevelt signed the Social Security Act, nearly half of all seniors in this country lived in poverty.
Today, less than 9 percent of seniors live in poverty. The poverty rate for seniors is less than the poverty rate for the general population by several percentage points.
However, according to analysis by the Center on Budget and Policy Priorities, nearly half of all Americans older than 65 would still be living in poverty today were it not for their Social Security benefits.
Social Security has drastically reduced poverty among the elderly. It is arguably the most successful anti-poverty program we have ever had.
The fact that Social Security enables so many seniors to avoid poverty goes along with the fact that many Social Security beneficiaries are indeed middle-class Americans. Furthermore, their Social Security benefits are a critical part of most seniors’ retirement income. For two-thirds of elderly people, 50 percent or more of their income comes from Social Security.
Social Security was never intended to be one’s sole source of retirement income, especially for middle-income Americans. But Social Security was meant to be one part of a traditional three-part retirement plan, the other two parts being company pensions and personal savings.
Company pensions are eroding, for various reasons. Personal savings is at an all-time low, for various reasons. Social Security has become the one “sure thing” in many retirement plans.
Privatization would turn that one sure thing into a risky thing. From this perspective, it is not surprising that the public has not warmed to the idea.
However, privatization is – or at least was – the president’s top domestic priority. Privatization is on the back burner at the moment, but the burner is still on. The heat could be turned up again later this year or next, most likely in the form of proposing a temporary pilot program to test the idea-and get a foot in the door for greater privatization down the road. Hope that these proposals will be quashed.
Hope also that when Social Security turns 75 in five years, there will be joyous fanfare and shouting from the rooftops in celebration of what Social Security is: a successful, effective, popular and much-needed government program.
* Judith L. Brown is an economist and the director of the Idaho Center on Budget and Tax Policy. She lives in Moscow with her family and can be reached at jlbrown@turbonet.com.