People on Main St. have rejected the idea that Social Security needs to be fixed, despite the claims of President Bush and Vice President Dick Cheney. Democrats in Congress are responding to that grassroots opposition, an expression of progressive family values. This is no time for Democrats to compromise with the Social Security proposals of the president and his GOP backers.
One of them is Republican Bill Thomas who represents Bakersfield in the House of Representatives. He also chairs the House Ways and Means Committee. Like Bush, Thomas talks about saving Social Security. Yet he comes not to save but wreck the program that provides about 47 million Americans with monthly checks, and keeps roughly half of retirees out of poverty.
That is a mark of Social Security’s success. The program is also in great financial shape, and has never been healthier. Social Security, begun in 1935 during the depths of the Great Depression, is fully funded to pay Americans their disability, retirement and survivor benefits for the next 46 years, according to projections by the non-partisan Congressional Budget Office.
There is no need for Congress to change the program's financing arrangement. Democrats such as House Minority Leader Nancy Pelosi, who represents San Francisco, need to stand firm against any GOP plans to fix Social Security. There is nothing broken, as the program’s financial problems exist only in the minds of the president, his GOP backers and the Cato Institute who claim that Social Security faces a cash flow problem beginning in 2017.
That is the year the Social Security trust fund will begin to be used to help finance program benefits paid to the disabled, retirees and survivors. This is not a problem, but exactly what Social Security was set up to do by the Greenspan commission in 1983. Thus in 12 years when the payroll taxes paid by employees and employers become less (not more) than the Social Security benefits being paid out, the trust fund will make up the difference. Again, this funding of the program will proceed according to plan.
Crucially, the trust fund is growing as it has grown each of the past 22 years from payroll tax revenue. The Social Security trust fund will hold $3.6 trillion (in today’s dollars) in 2017, according to Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC.
Contrast the financial safety of Social Security to what private-sector companies are doing: underfunding and defaulting on their employees’ retirement pensions. United Airlines is one example, having gotten the green light from a federal bankruptcy court in May to pull the plug on employee pension plans.
Other companies are sure to follow, inside and outside the airline industry. This trend of financial instability in the private sector makes Social Security much more vital to Main St.’s income.
In his second term, President Bush has made fixing Social Security a high priority. Yet Main St. has rejected his plan, remarkably, to cut benefits and carve out private savings accounts to be invested on Wall St. from the payroll taxes that fund Social Security. Democrats must not agree to compromise on Social Security with Bush and other Republicans offering their versions of fixes for the program.
Main St. does not want the popular program to be fixed by politicians who claim, falsely, that they need to do so because Social Security is going broke. Send the GOP fixers off to the Fourth of July recess with a failing grade for the president’s plan to wreck what American workers decades ago forced the federal government to create.
Nobody in the upper class gave them anything. Instead, they fought the good fight for Social Security and won. Now it’s Main St.’s turn to hold Congressional Democrats’ feet to the fire to defend that victory.
Seth Sandronsky is a member of Peace Action and co-editor with Because People Matter, Sacramento’s progressive paper. He can be reached at: firstname.lastname@example.org.
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