The Solvency Of Social Security

FDR Signs The Social Security Act, 1935

Created in 1935, and signed into law by FDR, Social Security has been part of American lives for over 70 years now. But it hasn’t been without enemies. Ever since it came into existence, Republicans have sworn to take down the program that keeps retired senior citizens from living in poverty. Today, the person leading this crusade, is Representative Paul Ryan, Republican from Wisconsin.

In the GOP’s response to the State of The Union Address, Paul Ryan took aim at Social Security as he has been doing for the last few years. He has predicted gloom and doom if we do nothing to reform the system. And Ryan, along with the majority of his Republican colleagues in Congress, have voted for or against certain measures that would set up the phasing out of perhaps the most successful program in America today.
For instance, in July of 2000, Ryan voted to reduce tax payments on Social Security benefits which would reduce the revenues brought in to make Social Security payments to retirees. This makes Social Security weaker and less solvent in the long run. A year earlier, Ryan voted against a measure that would have strengthened the Social Security lock box, which would prevent Congress from dipping into the surplus revenues until a way to keep Social Security permanently solvent was passed. Ryan, has also voted for a measure that increases 401(k) limits which essentially persuades more people to invest their money into Wall Street.

And Wall Street is exactly where Republicans want your Social Security benefits to go. Republicans have hated Social Security ever since Democrats created the program. But since the Clinton Administration, Republicans have been trying to discredit and destroy America’s most important safety net. For the last few years, they have made attempts to privatize Social Security, which basically hands the fund to Wall Street. To do this, Republicans and most right wing media outlets have created and spread myths about the viability of Social Security, in an attempt to scare people into supporting privatization.

The biggest lie being told about Social Security is that it is going broke and that Social Security is in crisis. The fact is, there is no crisis. Social Security will have a 4.3 trillion dollar surplus by 2023 and can pay out all scheduled payments for decades without any changes at all. By 2037, the trust fund could still make 75% of pay outs without any changes to the system. Anyone who claims that Social Security is broke is simply in it to break the system themselves.

Another myth that Republicans are pushing is that we need to raise the retirement age because people are living longer. Again, this is a total lie designed to trick you into agreeing to benefit cuts. Retirees are living just as long today as they did in the 1930’s. Life expectancy has only gone up because less people die in infancy today and as a result, the average life expectancy age goes up. But when you break down the statistics by earnings bracket, people in the top brackets live 6.5 years longer than they did 70 years ago, and people in the lower brackets have only gained less than a 2 year increase in life expectancy. So if Republicans were honest, they would slash benefits of those in the upper crust of American society. But they won’t do that. Instead they want to raise the retirement age to keep you from claiming the benefits that you worked so long to claim. Its just another way for them to cut your benefits.

Republicans are hell bent on destroying Social Security. So much so that they have been playing the National Debt card as a reason to cut it. They claim that Social Security adds to the debt. In reality, Social Security funds, by law, are self sustaining, and are totally separate from the federal budget. In other words, Social Security pays its own way. The government does not borrow money to pay for the program. The trust fund is sustained by taxpayers who contribute a payroll tax, known as the FICA tax, that has been in effect since Social Security came into existence. Republicans are just full of excuses and will try anything to kill the program.

Privatization of the Social Security fund is the current goal of the Republican Party. They have this twisted belief that Wall Street can manage the fund better than the federal government. So let’s compare Wall Street and the US Government. The federal government has handled Social Security since it first came into being. They have never missed a payout and the fund currently has a surplus of 4.3 trillion dollars. Wall Street on the other hand has absolutely zero experience with Social Security benefits. Handing over Social Security to Wall Street would be a huge mistake. Wall Street is known for gambling with other people’s money which has led to the Great Depression in the past and the 2008 recession. If you have a 401(k), you have experienced firsthand what can happen to your retirement portfolio when it is entrusted to Wall Street. People with IRA’s, 401(k)’s and other types of retirement accounts literally witnessed their savings disappear when the stock market took a historic tumble. If you thought that was bad, if there had been a Depression, the only number on your monthly statement would be $0.00. Now just imagine what would have happened to Social Security if it had been in the hands of greedy corporate investors. Millions of seniors would have seen less money per month or nothing at all, because Wall Street cannot guarantee payments. Seniors would have panicked and would have scrambled to withdraw every cent of their savings from banks which would have caused a general panic. A Great Depression-like event would wipe out Social Security if Wall Street controlled it. This is why Social Security was kept out of the private sector in the first place. Much like FDIC insurance, Social Security insurance is backed by the full faith and credit of the United States Government and cannot be gambled away.

It is true, however, that Social Security needs to be strengthened. There is only one way we can make Social Security permanently solvent. The payroll tax that pays for Social Security currently stands at 6.2 percent and applies to the first 100,000 dollars in wages or salary, then a 1.45 percent tax applies to all wages. If the tax applied to ALL income above 100,000 dollars, it would mean trillions in revenue for decades to come and beyond. But Republicans only care about protecting the super-rich from paying their fair share, so they instead insist that benefit cuts are the only way to protect the future of Social Security.

Right now, the future of Social Security hangs in the balance. And if we do not act and prevent Republicans from handing it over to greedy Wall Street executives, here is what we as a nation and we as a people stand to lose. Social Security is comprised of many programs that are beneficial to Americans of every age and need. These programs are as follows.

Federal Old-Age (Retirement), Survivors, and Disability Insurance- This is what most people associate Social Security with. This insurance protects the financial security of senior citizens after they retire, giving them a monthly cash flow that keeps them out of poverty. Republicans claim that everyone should be responsible for their own retirement. This used to be the way it was but not everyone is capable of saving for the future. Some people hit hard times. Some lose their jobs or have major medical issues. So, by paying this tax, a person has a guaranteed retirement that is financially secure, and cannot be wiped out by a severe economic crash. By giving Social Security to Wall Street, Republicans would abandon millions of elderly Americans and squander the money the rest of us have paid into the system, leaving us with uncertain futures and less money in our wallets.

Unemployment benefits- These benefits are part of Social Security. If a person loses their job, they are entitled to unemployment funds that they have paid into the system since they began working. These benefits have never been as important to have as they are now, with a 9.4% unemployment rate and no end in sight to lay offs and outsourcing, Americans will need these benefits more than ever. If Republicans managed to kill Social Security, the jobless would be left to fend for themselves and their families would be left to suffer and starve. Republicans do not seem to care about these people who lost their jobs through no fault of their own.

Temporary Assistance for Needy Families- This assistance is used to help families in need. Think of all the children who do not need to go to bed hungry because of this fund, especially around the holidays when families are in the most need for food, shelter, and clothing. By destroying Social Security, the futures of these families would be in serious doubt.

Health Insurance for Aged and Disabled (Medicare)- Perhaps the largest health care program in the world, Medicare has saved the lives of millions of people at low cost. Medicare guarantees that the elderly have insurance. The government does not drop people for getting sick, nor do they refuse to cover a person because of a pre-existing condition. Their care is guaranteed no matter what procedure the patient needs. Without it, our grandparents and parents would be left to the mercy of private health insurance companies or with no insurance at all. Many would die. If you love your parents and grandparents, you will make sure Republicans leave Social Security alone.

Grants to States for Medical Assistance Programs (Medicaid)- Medicare covers people over the age of 65. Medicaid on the other hand protects people under that age who cannot afford medical care. Because of this program, people are able to receive life saving organ transplants and other necessary care. Even children are covered by Medicaid. By allowing Republicans to go through with their plan, many children, pregnant mothers, and families in general would be left to be sick and allowed to die, all in the name of corporate greed.

State Children’s Health Insurance Program (SCHIP)- This fund provides medical coverage to children who wouldn’t be covered otherwise by private insurance companies. If Republicans have their way, 6.6 million children would be left without insurance. Just more proof that Republicans care nothing for children outside of the womb.

Social Security is the back bone of America. In the event of a second Great Depression, it would be the final line of defense that would stand between millions of Americans and poverty. At this moment, Republican politicians, media personalities, and corporate executives are meeting in back rooms, making deals to transfer Social Security to Wall Street and sell the plan to the American people. Republicans have often claimed that Social Security is nothing more than a redistribution of wealth. That is absurd, considering that everyone pays the exact same tax percentage. The real redistribution of wealth would occur if Republicans handed Social Security to Wall Street on a platter. Once the wealthy get their hands on Social Security, they will gamble with it on the stock market, essentially stealing your money that you worked so hard for to guarantee your future after retirement. This would be catastrophic to the country at large and only the wealthy would benefit, because they have nothing to lose, its not their money they are gambling with. The rest of us on the other hand, would be screwed. We would have no retirement, no health care benefits, no unemployment benefits, no disability insurance, and we would all have to work longer to recoup our losses if we have enough time to do so. The loss of Social Security could spiral even further out of control. One of the purposes of Social Security was to allow people to retire at 65 which would make jobs available to younger people. If it no longer exists, people would ultimately have to work longer which would force millions of younger Americans to go jobless for longer periods of time. This would damage millions of families. Republicans basically want you to work until you drop dead. And then they can replace you with a person desperate enough to accept a far lower salary or wage, thus helping corporations achieve their goal of having cheap labor in America.

This is not a story of fiction. It is very real, and very frightening, not to mention sinister. Social Security is not called a safety net for nothing. It serves to keep people out of poverty and to make sure people get the funds and care they need to survive. If Republicans are so concerned about people having to live off these funds, they should finally get to work and bring back jobs for Americans and pass legislation that forces corporations to pay livable wages, instead of focusing on how to make the wealthy even richer. They should also pass legislation that makes the payroll tax apply to ALL income so that the rich finally pay their fair share. Unfortunately, Republicans will never stop fighting for their clients. They are paid too well by their corporate bosses. The time to fight back for our lives and futures is now, before it is too late and Social Security becomes a thing of the past. We must not allow slavery and working until we die to become our future and the future of our children. We must not allow the wealthy to rob us of our financial security. Even Ronald Reagan supported Social Security and kept it solvent. We must continue the legacy that Franklin Roosevelt left us. “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”~FDR

That’s the America we should strive for.