Don’t Panic About Social Security

Following big Republican gains in the midterm elections in November, and with President Barack Obama’s deficit commission unveiling its new proposals recently, everyone seems in agreement that a big part of the solution has to be Social Security cuts.
But nothing could be more devastating to our present and future prosperity than to weaken this national treasure.
While well-intended – the rising tide of debt is a challenge to our nation – the structure and timing of this commission looks like it could be a high-powered version of a longtime Republican parlor game: whack Social Security.
Just as many on the right used the health care reform debate to attack Medicare, the same thing is now happening to Social Security.
But putting aside the political folly of making this longtime Democratic program a piñata, the facts and recent polling suggest that, instead of backing away from this signature accomplishment, it’s time to double-down. Social Security needs to provide the same bedrock of stability and security for the 21st century as it did for the previous century.
Any discussion about Social Security should follow three basic rules.
First, let’s not forget the primary lesson from the health care debate: Don’t bargain against yourself.
We spent a year looking for bipartisan approaches. That didn’t work. At every step, one side stood for reduced costs and better care, while the other side spun exaggerations – even outright fabrications – instead of real proposals.
Social Security is the same. We shouldn’t assume the program is on the brink of collapse just because Republicans say it is. We shouldn’t begin a discussion about the issue from their faulty premises. We must work from the facts – and from our principles.
We already know where the American people stand. A recent poll found that 77 percent of voters say cutting the growth in Social Security spending should not be the focus of how government approaches deficits.
Second, don’t believe the hype. Most doomsayers who point to declining Social Security revenues intentionally ignore some basic facts.
They ignore that Social Security is fiscally responsible. By law, it cannot spend money that it doesn’t have. And the Social Security Trust Fund now has a $2.5 trillion surplus that can help pay out benefits for years to come.
Without any change, Social Security could cover three-quarters of benefits until 2083 – when people born today will be 73.
Short-term projections of Social Security are also inherently flawed.
That’s because Social Security is funded through a payroll tax. It brings less money in during recessions – particularly one as pronounced as this current economic crisis.
Once the economy begins to recover and people get back to work, revenues are sure to rebound. Then, we can put money back into the trust fund surplus – ensuring that Social Security will be there for generations to come.
Concerns that the baby boomer generation would push us off a demographic cliff have also been overstated.
It is true that when the baby boomers retire, each Social Security beneficiary will be supported by fewer workers than the previous generation. But this doesn’t mean the system will go bankrupt. There will still be more than one worker to each beneficiary, and projected earnings are expected to be far higher in the decades to come.
We won’t be in a recession forever. A recovering economy, combined with long-term increases in productivity, will correct the short-term revenue imbalance that some critics use to paint a distorted picture of Social Security.
We can also help improve the system once we pass sensible immigration reform. Immigrants who pay taxes contribute to Social Security, as do their working-age children. Both the Social Security chief actuary and the Congressional Budget Office predict that immigration could improve Social Security’s financial picture over the long term.
Third, we should take a hard look at minor tweaks to preserve the system.
Though Social Security’s long-term health is not the concern that critics say, this doesn’t mean we should shy away from considering small, common-sense improvements.
More than 50 million Americans now depend on the program for basic financial stability and security. At a time when middle-class Americans are struggling, we should protect and strengthen this vital lifeline.