Social security has become an issue in the presidential election campaign. Democratic candidate Joe Biden has come under criticism from his competitor, Bernie Sanders, for his past advocacy of cuts to social security benefits. Donald Trump has made headlines for recent comments suggesting he’d be open to cutting social security.
There is no doubt that Biden has in the past supported cuts to social security. But there are other reasons, too, that social security should really be a prominent issue in this presidential campaign. Despite the fact that about one-sixth of Americans get a check from social security – and millions more, including poor children, are helped immensely by it – the nation’s largest anti-poverty program remains vastly misunderstood by most of the country.
In March, a Pew Research poll found that only 16% of Americans believed that the social security system would be able to pay promised benefits to older Americans when they retire. Polls showing majorities who do not believe that they will see anything from social security are common.
In reality, there is no reason for anyone to believe such wild nonsense. Social security has paid all promised benefits for more than 75 years, and there is nothing in its finances indicating that the future will be different. Current projections show an eventual gap between forecast resources and promised benefits. But that gap going forward is much smaller than what was closed in the past. Anyone with knowledge of the subject matter can tell you with “high confidence”, as the UN climate reports like to say about global warming, that this relatively small gap will also be closed. And there is no need, or reason, to close it with any kind of benefit cuts.
The surreal polling data on social security is a result of many years of effective public relations work, financed by billions of special interest dollars, including political campaign contributions. The American right has always hated social security, from its origin in the New Deal of the 1930s. Social security is based on an ethic of solidarity: we are all in this together, so it is in our collective and individual interest to pay into a social insurance fund when we are young, healthy and working, and draw upon it when we need it. This does not fit well with the rightwing narrative of society as a collection of atomized, self-interested individuals.
Social security has paid all promised benefits for more than 75 years, and there is nothing in its finances indicating that the future will be different
But it was in the ‘90s that many liberals began to accept, and even promote, the arithmetically false, rightwing talking points that social security was going broke.
The verbal and accounting tricks were swallowed by much of the media and proved effective. There was a demographic time bomb, we were (and continue to be) warned. In 1999, there were 3.3 workers paying into the social security system for every retiree drawing benefits. But the Baby Boomers are going to retire! And by 2030, it was estimated, this ratio would shrink to 2.1. they said.
Hardly anyone, outside of those of us who looked at the numbers, seemed to notice that this is just one side of the balance sheet. The other side shows that productivity and wages also grow, and hence it takes fewer workers per retiree to finance any given level of benefits. That’s one reason why, for example, the ratio of workers to retirees fell from 8.6 in 1955 to 3.3 in 1999 and nobody missed a social security check. And people accepted that payroll taxes increased, because their wages increased vastly more.
The “granny-bashers”, as we affectionately called them, created a phony intergenerational war out of something that was very much a war waged by the rich against all generations.
And guess what, the much-dreaded retirement of the Baby Boom generation has come to pass – about 58% have already become eligible for social security benefits – and the sky did not fall. OK Boomers, thanks for not destroying our economy by collecting a modest average benefit of $1,471 a month, which you have fully paid for out of your wages over the past few decades.
That brings us back to Joe Biden, who has supported cuts to social security benefits in the past. Maybe he has come to see the error of his ways, without saying so. Like many other Democrats, he has followed Bernie Sanders in now supporting the expansion of social security benefits instead of cutting them. Although not nearly as much expansion as Sanders. Still, people can change.
But a look at the social security section of the Biden campaign website leaves cause for skepticism and concern. “The impending exhaustion of the social security trust fund imperils American retirement as we know it.” Um, not really: the trust fund sits at $2.8tn right now, and it’s got 15 years before it would be exhausted. And it’s never going to be the main source of social security benefits, 77% of which would still be paid when it’s used up. And as noted above, revenues will inevitably be increased before this catastrophe could materialize.
But the Biden campaign is presenting that 1990s alarmist picture adopted by the people who have long wanted to cut and/or privatize social security. There’s more: “With social security’s trust fund already in deficit and expected to be exhausted in 2035, we urgently need action to make the program solvent and prevent cuts to American retirees.”
To say that the Trust Fund is “in deficit” doesn’t have an actual meaning in accounting or arithmetic. For the reader who is left to guess what it means, it sounds like an overdrawn checking account. What they are trying to say, with a conceptual error and a dose of unnecessary fright, is that social security will be taking in less revenue than it is spending on benefits, and therefore drawing on the Trust Fund. But that’s no reason to panic – that’s what the Trust Fund was accumulated for: to give us some time to make the political decisions about how to maintain (or expand) benefits.
A better approach to this problem is to first acknowledge that we have been fed a load of cow manure about social security’s finances for decades, and then show how it is affordable to expand social security so that people who depend on it for their retirement can escape poverty. That has been Sanders’ approach.
There’s a lot at stake, and a lot could go wrong, as policymakers decide how to close the gap that is continuously brought about by people living longer. Social security keeps more than 27 million people above the poverty line, including at least 1.5 million children. A lot of people could get hurt by changes that don’t make headline news. So, it might be good to have someone at the helm who has seen through the false narrative that we have been fed, has a consistent record on the issue, and a clear picture of what to fight for.