Fixing Social Security: Who Do You Trust?
There’s a cartoon of a couple walking past a bank. A sign in the window says, “Deposits insured by the U.S. Social Security Trust Fund.” The looks on the couple’s faces are cynical, to say the least.
In 1935, when Social Security became law as part of President Roosevelt’s New Deal, a battered country reeling from the Great Depression gratefully welcomed this program. Today, however, the attitude of most Americans is more like that of the cartoon couple. We know Social Security is broken. We’re worried…even scared to think about what will happen to the program and to us when we need it–for good reason.
Is Social Security “insurance?” No, it’s not. The funds collected through FICA payroll deductions from the working generations are supposed to pay benefits for the retired generations. But today, as the baby boom generation prepares to retire over the next few years, there will be far more retirees than working citizens. The numbers just don’t add up.
Is there a “trust fund?” Well, yes and no. The law allows Social Security funds, until needed, to be “invested in securities backed by the full faith and credit of the Federal government,” including treasury bonds, treasury bills, treasury notes and special issue bonds. Basically, the government is allowed to “loan” Social Security funds to itself to spend on whatever it deems appropriate, leaving behind IOUs. While many expenditures are warranted, our elected officials have had a long history of tapping it for pork-barrel projects–like funding the “Bridge to Nowhere” in Alaska.
Too many people retiring…not enough working people contributing money to provide the Social Security they were promised. How do we fix it? So far, our elected officials have treated it like patching a tire…but the tire is ripped to shreds.
The age at which you can collect Social Security is rising. People born in 1942 must now wait an additional ten months past the age of 65 to receive full Social Security benefits. Some suggest immediately increasing the age to 70, which puts older workers in the position of working even longer than they anticipated or planned for, while many are already having trouble making ends meet.
The Social Security wage base is going up this year from $97,000 to $102,000—another tax increase for those who can least afford it. But those who earn millions are exempt from contributing on earnings over $102,000, yet entitled to collect maximum benefits along with people who have earned significantly less. Does this seem fair?
Many younger workers like the idea of having control over their own funds to invest as they see fit. This idea keeps the money out of the hands of a “tax-and-spend” government. But it also limits the contributions needed to cover the now-retiring boomers, making the situation worse.
Our elected officials have always considered Social Security the third rail of politics–like the train tracks, if touched it can kill you. If you’re a politician, it can mean not getting re-elected.
No more patchwork! Social Security needs a complete revamp before it simply collapses. Will the present members of Congress have the vision and the guts to do it? Or do we have to elect new people who do? It’s really up to you.
Pat Benjamin, of Cherry Hill, is the former Vice Chairman of the Reform Party of the USA and the author of The Perot Legacy: A New Political Path. She is also a member of the Courier-Post Community Editorial Advisory Board