Social Security: Will Obama panel cripple it with ‘minor’ tweaks?
Social Security’s curse is that its amazing simplicity from the standpoint of its beneficiaries — those checks keep coming regardless of the state of the economy or the federal budget — masks the complexity of its inner workings.
This is what allows the program’s antagonists to disguise their efforts to destroy it as merely minor tweaks — requiring from the rest of us never-ending vigilance. That’s because some seemingly “minor” fixes can have consequences great enough to wreck the entire edifice, the way a tiny water leak can eat away a foundation and bring down a house.
Every national election seems to feature conservatives weeping crocodile tears over Social Security’s supposed fiscal plight. The latest example is Sharron Angle, the Tea Party/GOP candidate for the U.S. Senate in Nevada. During an appearance on Fox News Channel a few days after her primary victory, she was thrown the following softball question by a host: “Some have said you are out to get rid of Social Security. That’s not true, right?”
She replied, “Well, that’s nonsense.”
Leave aside that her own website calls for Social Security to be “transitioned out” in favor of “free market alternatives.” And that in her answer on Fox, she said, “what we need to do is personalize Social Security.”
This is the old George W. Bush plan to privatize Social Security in new clothing. It’s a way of diverting crucial resources from the program and loading more risk onto the shoulders of working men and women and their families — more exposure to the stock market, to Wall Street chicanery, to promoters of gold accounts and other nostrums — and eroding the average person’s one secure path to a comfortable retirement.
In the past, one could count on the Democratic Party to stand firm against attacks on this most successful government program. There’s reason to wonder whether this is still the case.
The instrument causing Social Security advocates anxiety today is the National Commission on Fiscal Responsibility and Reform, which President Obama created in February to address the long-term budget deficit. Everything, including so-called entitlement programs such as Medicare and Social Security, should be on the table, he said, prompting some progressives to worry that he’s plotting to offer Republicans cuts in Social Security in exchange for their agreeing to tax increases.
Created while Obama was still in his foursquare bipartisanship phase, the panel includes such Republican deficit hawks in sheep’s clothing as Sen. Judd Gregg of New Hampshire and Rep. Paul D. Ryan of Wisconsin.
Then there’s the panel’s Republican co-chairman, former Sen. Alan Simpson of Wyoming. Like Newt Gingrich, Simpson is one of those relentlessly partisan political insiders who casts an inexplicable charm over Washington denizens on both sides of the aisle.
Judging from a videotape of an impromptu interview following a recent commission meeting, Simpson has assiduously turned himself into a repository of every asinine misconception ever uttered about Social Security. Over the years I’ve accumulated a large collection of half-truths and outright lies purveyed about this program, but Simpson came up with a couple I’d never heard before.
Given his prominence as deficit hawk, it’s probably wise to shoot them down now, before they escape into the wild and morph into common talking points.
Simpson’s weirdest contention is that Social Security was “never” a retirement program. “They thought … you would die at 57 and that’s why they set the [retirement] date at 65,” he said of the program’s creators. “The thing was set up when the life expectancy was 57 years.” The program, Simpson claimed to his interviewer, a pro-Social Security activist, was merely “set up to take care of poor guys in the Depression.”
These notions are easily debunked. To begin with, old age pensions — i.e., “retirement” —were always a crucial component of Social Security. How do we know this? Because Edwin E. Witte, the executive director of the Committee on Economic Security, which was established by Franklin D. Roosevelt to create a social safety net, said so to Congress while it was debating the bill.
As much as 30% to 50% of the aged already were “dependent, in whole or in part, upon the support of others” prior to the Depression, Witte testified. Far from treating the need for government pensions casually or as an afterthought, he said, “this bill contemplates that where old people do not have means to support themselves … they shall be supported by the public in a decent and humane way through a pension system.”
As for Simpson’s assertion that the program’s founders connived to fleece the public by setting the retirement age well above life expectancy — “who would dream” that life expectancy would rise from 57 to 75, he asked — God knows where he got that idea.
The truth is that, while life expectancies have increased in the years since Social Security’s enactment in 1935, it was widely understood even then that average longevity rates would quickly produce a sizable population of Americans over 70.
In 1931, for example, the average life expectancy at birth for all Americans was 61; but because that figure was skewed by high infant mortality, the average rose sharply for Americans who made it past childhood. At that time it was 66 for a 20-year-old, nearly 71 for a 45-year-old, and 75 for a 60-year-old. (These numbers come from the federal government’s national vital statistics reports.)
By 1939, when Congress dramatically expanded the program, those figures had risen — to nearly 64 at birth, about 68 1/2 at 20, nearly 72 at age 45, and nearly 76 at age 60. These are averages, mind you, so the drafters didn’t have to “dream” that people would live to 75, as Simpson fantasizes — they had the evidence in front of their eyes.
When people like Simpson, Gregg, and Ryan denigrate Social Security as an “entitlement” program, check your wallet. You’re entitled to Social Security because you’ve paid for it throughout your working life, not because you think you’re entitled to get something for nothing.
The president’s commission isn’t entirely reliant on such hackery. One member, Alice Rivlin of the Brookings Institution, has advocated raising the cap on income subject to the Social Security tax (it’s currently $106,800) and modestly raising the retirement age, but taking privatization off the table. And Obama’s chief budget advisor, Peter Orszag (who will soon be leaving the administration), co-authored a penetrating analysis of Social Security in 2004 that made similar recommendations.
Still, conservatives have managed to instill a sense of rising panic about the federal deficit among many Americans. More perilously, they are trying to convince taxpayers that Social Security is a source of the problem.
What’s their motivation? Some are helping out their friends in the investment industry, who have long coveted a bigger piece of the retirement action. Some are simply following the traditional conservative precept that government shouldn’t do anything that private enterprise wants to do. And some are genuinely concerned about the size of the federal deficit, but are mistaken in their belief that Social Security contributes to the problem.
It doesn’t; it still runs a surplus from contributions and interest due. The more important point is that it is the most efficient and successful government program in American history, saving millions of individuals and families from destitution since 1940.
For some reason, there are people in Washington who don’t like that idea. It’s up to those who understand the program’s virtues to drown them out, and make sure that their voices are heard deep inside the White House.
Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at email@example.com, read past columns at https://www.latimes.com/hiltzik, check out https://www.facebook.com/hiltzik, and follow @latimeshiltzik on Twitter.