Want to Fix Social Security? Your Best Bet Is to Push Democrats to Do the Right Thing and Vote for Democratic Control of Congress and the White House
Many readers know the background to this statement, but many voters don't. It is a fact: Republicans are likely to want to cut Social Security. Their willingness to weaken SS, a most effective government anti-poverty program, is not new. Since 1935, there have usually been at least some Republicans who have wanted to cripple SS. Today, it is hard to find a Republican in the House or the Senate who will vote to preserve and enhance benefits.
Admittedly, the history of Republicans and SS is mixed. In the 1950s, Republican President Eisenhower asserted that any politician who attacked SS was suicidal. In the 70s Congress and Republican President Nixon raised taxes and benefits and legislated an automatic cost-of-living escalator. In the 80s Reagan and his followers wanted to undermine Social Security, yet in 1983, a bi-partisan committee came up with a plan to fix SS funding. It wasn't perfect. The agreement created a calendar for the gradual increase by three years of the age for full benefits. Reagan had campaigned against SS when he worked for General Electric as a propagandist, and as President he wanted to undermine SS. But Republicans were taking political heat for a brutal recession and for a plan to slash SS benefits. Reagan was a pragmatic politician and he arranged for a committee that could keep the benefits coming and build a surplus for later years when retirements ballooned. Given Reagan's predilections and the conservative bent of Alan Greenspan, the chair of the committee, the outcome was pretty good.
Recently, George W. Bush has benefitted from media love--hey, he isn't as bad as Trump, right? He never insulted John McCain. But Bush has a history of animus toward SS and as President he was happy to get help from right-wing outfits like the Heritage Foundation and the Cato Institute. His campaign was billed as an effort to save Social Security, but it wasn't. The gimmick was to let new workers divert some of what they would normally pay into SS over into individual private retirement accounts. But market ups and downs could leave them without enough for retirement. To sell the program, the Bushies proposed to subsidize and guarantee the account. That raised federal spending, even as the diversion was undermining SS finances.*
The Cato-Bush attack fizzled, but it foreshadowed a new hardening of Republican arteries. Today many Republicans are in hock to Social Darwinians like the Koch brothers. Trump's chief of staff, Mick Mulvaney, leads the attack on safety-net programs. Trump's proposed 2020 budget includes cuts in Medicaid, Medicare, and the Social Security Disability program. On most safety-net issues, Republicans in Congress are impossible. As former Republican representative from Florida, David Jolly, argued on MSNBC, Republicans won't get better and there is only one way to deal with them; vote them out.
Social Security cannot be fixed as long as Republicans control the Presidency or even one house of Congress. Indeed, as Nancy Altman points out in the article linked below, Republicans can cut Social Security by making sure that nothing is done. Without a funding fix, sometime around 2035, the trust fund/surplus that has accumulated over the years will be used up and current contributions will cover only 70 to 80% of benefit obligations.
It's true, Democrats, especially party leaders, often don't do the right thing. In the past Joe Biden and Nancy Pelosi were ready to reduce benefits if Republicans agreed to something in return, such as raising taxes to reduce the federal deficit. President Obama supported a new cost-of-living index that would have reduced expected benefits. This Chained Consumer Price Index assumes that people can find cheaper substitutes for items whose price is rising fast. But do they? Many people on SS are poor or nearly poor and they must be substituting all the time. More broadly, SS benefits are pretty low, many people on SS have big medical bills, and we should not be thinking about how to cut them. The Chained CPI is flawed. And it's sleazy. Here is how it goes: we won't directly attack benefits. We can use a method that looks scientific, is confusing, and cuts benefits gradually. My rule of thumb is that when you see "Chained Consumer Price Index" next to a government benefit program, it's bad news.
Most Democrats today, led by progressives and socialists, are committed to improving rather than cutting SS benefits. But all Democratic candidates need to be asked where they stand on saving and improving SS. And voters need to understand that SS cannot get the right kind of fix if Republicans control even one house of Congress or the presidency.
But if people want to save and improve SS, there are plenty of good ideas. One proposal has been introduced into the House as the Social Security 2100 Act. It has 210 House co-sponsors. It lifts the minimum benefit. It raises payroll taxes for workers and employers from 6.2% to 7.4% by 2043. If we started today, that would be mean an increase of 1/20 of a percentage point a year. Finally, there is the ceiling that currently means that affluent Americans pay no SS taxes on income over $132,900. The new law would impose SS taxes on income over $400,000. (I don't know why people should not pay on earnings from $133,901 to $399,999.)
There might be other ways to go, but this is a practical plan to fix SS and a good start. Republicans won't support it. They want cuts. And if nothing is done, they will get their way.
* Another aspect of the campaign to undermine SS during Bush's presidency is represented in this story: an NPR reporter, looking for the huge SS surplus that existed at the time, traveled to the Federal Bureau of Public Debt in Parkersburg, West Virginia. Once there, he could not find the SS surplus. No gold bars, no real money. Just paper. You know, just bonds guaranteed by the United States government. Kinda like other U.S. bonds. This nonsense was a common theme among SS-haters. Surplus? What surplus? It's just paper. Who believes in paper assets?
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Nancy Altman's article: https://www.timesleader.com/opinion/op-ed/752652/their-view-an-easy-fix-for-social-security. Also very useful is Michael Hiltzik, The Plot Against Social Security: How the Bush Plan is Endangering Our Financial Future (2005).
Frank Stricker is CSUDH emeritus professor of history and labor studies and is on the Board of Directors of NJFAC. His views do not represent either organization. They are wholly his own. His new book, American Unemployment: Past, Present, and Future, will be published next year.
