Jan 28 2013
03:39 pm

If Social Security were a person, she’d be an abused spouse. The abusive partner, of course, is the U. S. Congress.

Social Security is entirely paid for by you and me. It comes out of our paychecks. These payroll taxes from workers and employers go into a trust fund that pays for current retirees, as well as some survivor and disabled benefits. After years of payroll tax contributions, we retire with an entitlement to benefits. That’s why some nefarious politicians abuse and confuse with the word “entitlements,” but let’s remember that’s because seniors have contributed and are entitled.

For years the fund has been in surplus. And that’s where the abuse starts. Congress discovered it could mask the size of budget deficits by including the surplus in budget calculations. I understand the temptation on this. I’ve run for and been elected to office, serving as a Knox County commissioner from 2006 to 2010. The easiest thing in the whole process is to be for good things (roads, schools, libraries) and against bad things (the taxes to pay for them).

Jacob Lew, Director of the White House’s Office of Management and Budget and now Treasury Secretary nominee, put it well. He wrote, “For years, the surpluses in the Social Security trust fund have helped to mask our deficits elsewhere. Now that we are paying Social Security back, the problem is not with Social Security, but with the rest of the budget. In 2001 and 2003, Washington cut taxes for the wealthiest Americans and later expanded Medicare without paying for it. Blaming Social Security for our fiscal woes is like blaming you for not saving enough in your checking account because the bank lost all depositors' money.”

Abusers tend to project their own inadequacies onto their victims. One needs to add some stress to Lew’s observation. It was Congress, especially Republicans in Congress, that approved two wars on a credit card, an expanded Medicare drug benefit with inadequate funding or cost control, and tax breaks geared most heavily toward the wealthiest (who also double as their most generous campaign donors). Yet it is Social Security that bears GOP wrath for fiscal distress.

The actual numbers tell a much different story. Social Security’s Trustees have calculated that the current fund will be able to pay every dollar owed to beneficiaries until 2033; after that, it would be able to pay three of every four dollars owed. Furthermore, a simple fix could extend the fund even further. Every year the tax on incomes “caps out.” This year no one will pay Social Security payroll tax after the first $113,700 of income. The vast majority of us will never reach the yearly cap, so just eliminate the cap and bring in roughly $150 billion a year. Senator Tom Harkin’s plan to do that would extend the full-payout balance of the fund until at least 2052.

Congress meanwhile could ask better questions like:
• Why do we give tax breaks and subsidies to the most profitable enterprises in the world, oil companies?
• What can we do to eliminate corporate tax avoidance?
• We spend on the military multiple times that of any other nation, could we pare that down a bit starting with the projects the Pentagon itself says aren’t needed?
• Why don’t we give Medicare the same ability to negotiate down drug prices that we permit in the Veterans Administration?
• Should we reverse the 30-year trend of shifting total tax burden in this country away from corporations and the wealthy and onto the overburdened working and middle classes.

Instead, we got the spectacle earlier this month of our two U. S. Senators, Bob Corker and Lamar Alexander, insisting that Congress will not pay for the spending it already has done (a debt ceiling vote) unless Congress can beat up on Social Security some more. Social Security does not deserve such shabby treatment, but Corker and Alexander should get some abuse counseling.

R. Neal's picture

Removing the cap is the

Removing the cap is the obvious fix. We already removed it on the Medicare payroll tax.

bizgrrl's picture

Aarrrggghhhh! Well said. It

Aarrrggghhhh! Well said. It seems so simple, but, alas.

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