Social Security is the most successful social program in American history. It shouldn't be privatized; its benefits shouldn't be cut; and the retirement age shouldn't be raised.
Before Social Security was established 75 years ago, more than half of our elderly population lived in poverty. Because of Social Security, the poverty figure for seniors today is less than 10%. Social Security also provides dignified support for millions of widows, widowers, orphans and people with disabilities.
Since it was established, Social Security has paid every nickel it owed to every eligible American, in good times and bad. As corporations over the last 30 years destroyed the retirement dreams of millions of older workers by eliminating defined-benefit pension plans, Social Security was there paying full benefits. When Wall Street greed and recklessness caused working people to lose billions in retirement savings, Social Security was there paying full benefits.
Despite its success, Social Security faces an unprecedented attack from Wall Street, the Republican Party and a few Democrats. If the American people are not prepared to fight back, the dismantling of Social Security could begin in the very near future.
Rep. Paul D. Ryan (R-Wis.), the new chairman of the House Budget Committee, wants to partially privatize Social Security, lower its cost-of-living adjustments and drastically cut benefits. An increasing number of his fellow Republicans agree. Rep. Michele Bachmann (R-Minn.), one of the leaders of the "tea party" movement, has said that we need to "wean" everyone except current retirees off Social Security and Medicare.
There are threats on other fronts. A deficit-reduction commission established by President Obama called for increasing the retirement age to 69, reducing cost-of-living adjustments for today's retirees and deeply reducing benefits for future retirees who make as little as $42,000 a year.
Just about every day, one conservative or another tells us that Social Security is in crisis, that it is going bankrupt and that the Social Security Trust Fund contains nothing more than a pile of worthless IOUs. As a result of this barrage of misinformation, many young Americans have been convinced that when they reach retirement age, Social Security will not be there for them.
So what are the facts?
According to the latest report of the Social Security Administration, the program will be able to pay all of its promised benefits for the next 26 years. After 2037, Social Security will still be able to pay about 78% of promised benefits.
The nonpartisan Congressional Budget Office has come to a similar conclusion: Social Security will be able to pay full benefits to every eligible recipient until 2039, and after that, it will be able to cover 80% of promised benefits.
Although Social Security will be strong for more than a quarter-century, Congress should strengthen it for the longer term. That is why I agree with the president, who has called for raising the cap on taxable income. Today, that cap is at $106,800; no matter how much money you make, Social Security taxes are only deducted on the first $106,800. But by removing the cap on incomes of $250,000 or more, we can make Social Security fully solvent for generations to come.
Even with no change, the fact is that Social Security has a $2.6-trillion surplus that is projected to grow to more than $4 trillion in 2023. Is this surplus, as some have suggested, just a pile of worthless IOUs? Absolutely not!
Social Security invests its surpluses, as it should, in U.S Treasury bonds, the safest interest-bearing securities in the world. These are the same bonds that wealthy investors and China and other foreign countries have purchased. The bonds are backed by the full faith and credit of the U.S. government, which in our long history has never defaulted on its debt obligations. In other words, Social Security investments are safe.
Further, despite the manufactured hysteria about a crisis, Social Security has not contributed one penny to the very serious deficit situation the United States faces. Social Security is fully funded by the payroll tax that workers and their employers pay; it's not paid for by the Treasury. Our deficit has been, in recent years, largely caused by the cost of two wars, tax breaks for the rich, a Medicare prescription drug program written by the insurance and pharmaceutical industries, and the Wall Street bailout — not Social Security.
Why has there been such a concerted effort to privatize Social Security, raise the retirement age or cut benefits? First, Wall Street stands to make billions in profits if workers are forced to go to private financial establishments for their retirement accounts. Second, as the Republican Party has moved far to the right and become more anti-government, there are more and more Republicans who simply do not believe government has a responsibility to provide retirement benefits to the elderly, or to help those with disabilities.
Needless to say, I strongly disagree with both of those propositions. In my view, maintaining and strengthening Social Security is absolutely essential to the future well-being of our nation. For 75 years it has successfully provided dignity and support for tens of millions of Americans. Our job is to keep it strong for the next 75 years.
Bernie Sanders is an independent senator representing Vermont.