For people who understand that Social Security is an insurance program for older workers, paid for through their contributions during their working life and managed by the federal government, it's hard to understand why it continues to be so politically contested.
Sure, changing demographics (more retirees; smaller relative workforce) -- and the failure of successive Congresses to make the small tweaks that would help -- mean that, if nothing is done, in 2037 Social Security might be in some actuarial imbalance. Unless as one smart young person has noted our politicians take sensible measures.
Or we could take my favorite path to long term solvency: get rid of the cap on FICA contributions that means that people stop paying in on their yearly income when it goes over $106000. People who are making that kind of money (double the median household income) can afford to pony up!
Nancy J. Altman's The Battle for Social Security argues that several factors have led to decreased confidence in the program. She notes that, beginning in the 1980s, politicians and policymakers began to subject the program to the same sort of short term thinking that we see on Wall Street today. Where earlier plan administrators had looked decades into the future and sought to ensure Social Security's solvency, President Reagan's budget director David Stockman wanted no part of such long term planning. He was only interested in the political calculus of the moment.
This short term thinking took place in the midst of a widespread decline in citizens' trust in government. Altman writes:
Disillusionment with government has made political space for a sophomoric libertarianism that imagines that people could be better off taking care of themselves without government support. The Depression generation knew better; Altman describes right-wing think tank speculations about privatization and other schemes to undermine Social Security as
Much of Altman's book is devoted to celebrating the policy intellectuals -- especially Robert M. Ball, Wilbur Cohen, and Robert J. Myers -- who worked in a non-partisan way, through successive administrations, to make Social Security a safe, well-grounded promise to elders. Our society no longer seems to be congenial to developing and nurturing their kind of applied expertise in the service of the common good.
I have a number of my own thoughts about why that is which I think amplify Altman's picture.
- Many of the best of my generation of progressive boomers who came up in the late 60s and 70s didn't think our job was to study and propose workable policies. Our job was to help people put political pressure on politicians to attend to their needs. It was a lot sexier to be an activist than a policy wonk. We would create the heat that moved politicians to act; they could figure out how to do their job so as to satisfy us. Insofar as we left it there (and I know I often did,) we were foolishly shortsighted.
- In the same cohort, youth was where it was at. Who wanted to understand a program for old people? Old people didn't matter. Oops, now we get to feel the agism we once encouraged.
- It's all very well to remind people that Social Security is an insurance program, but "insurance" doesn't carry the positive connotation it may once have had. The label brings to mind "health insurance" -- a nasty business that makes its money by not paying out when people who have paid in need costly medical care.
For example, William Galston in The New Republic thinks Social Security should be defended as benefiting
No, no, no -- Social Security is a program for all old citizens that all of us put into. It's not some kind of generous handout for those old people who failed to get rich.
Discussions of the two percent cut in worker's share of FICA included the President's December tax compromise with the Republicans were mostly equally clueless -- when they happened at all. Most pundits seemed to have no idea that FICA is an insurance premium, not some arbitrary levy, and that a "cut" would unbalance the somewhat delicate system that ensures Social Security will have taken in enough to pay out future benefits owed to recipients. I was disgusted to hear a podcast featuring some of the bright young writers from the American Prospect blog talk about the negative reaction to the President's deal as a "Liberal Tantrum." They didn't even mention the concerns of Social Security's defenders. It was obvious they had simply no idea of the dangers hidden in the compromise because they had never really thought about how Social Security works. And these are liberal policy pundits.
Social Security will continue to face threats from all sorts of potential gimmicky "fixes" that its opponents will come up with to undermine the system. We'll be told it is "bankrupt" -- that is simply false unless Treasury bonds are also no good. (Don't tell the Chinese!) We'll be urged to raise the retirement age; that's a disguised benefit cut. There is no crisis. The alarm opponents sound is a fiction.
I want to give Nancy Altman the last word here, because she gets to the heart of why Social Security should be defended by people of all ages.
As in so much of our national life, fear makes for bad decisions and taking harmful directions. We can do better.