My Turn: Is Social Security crisis real or phony?
The debate over Social Security continues to rise, fueled now by the Bush administration’s latest proposal to partially privatize it for younger workers. Unfortunately, more heat than light is being shed on this controversy.
When appeals to our emotions trump evidence and logic, we the people, are left to sort through both misinformation and disinformation, coming from both sides of the debate. For example, those who argue for Social Security “reform” assert the system is “broke.”
Actually, the opposite is true. Thanks to the contributions by millions of hard-working Americans and their respective employers, the system is solvent 70 years after its inception in 1935. Moreover, it is, by most reasonable economic forecasts, projected to remain solvent for the foreseeable future.
The most vocal opponents of Social Security change are not immune to lapses in logic either. They argue that “radical reform” will dismantle Social Security as we know it and plunge millions of senior citizens into the dismal depths of poverty. The fact they ignore is that no prudent person, including public policy-makers, is suggesting such radical reform.
Protagonists in this great debate could do themselves and us a favor by following a few useful rules for elevating the debate to more civil discourse. They could start by acknowledging a number of facts that should not be in dispute.
First, Social Security is not, and was never intended to be, a strictly personal savings and investment program. Instead, it was designed to be a social insurance program, a safety net, initially for the elderly, not a road to riches.
Second, Social Security has served its intended purpose well for decades now. In 1959, the elderly poverty rate was about 35 percent. Thanks largely to Social Security, that rate has fallen to about 10 percent today. About two-thirds of our elderly citizens rely on Social Security for the majority of their income. For the poorest elderly, it is their only source of income.
As government programs go, the Social Security System is a real success story. Its coverage is nearly universal. Roughly 95 percent of our senior citizens are receiving benefits now or will be when they retire. Meanwhile, the system’s overhead costs are miniscule, about 1 percent of payout, compared to private sector insurance plans, which often amount to around 12-14 percent.
So, the case for the current Social Security System as social insurance is, in my view, on strong economic ground. For that reason alone, it deserves more thorough, more thoughtful, discussion and debate. The focus should be on defining the magnitude of the problems facing Social Security, their causes, and on crafting creative, workable solutions to safeguard the system’s future.
However, the case for Social Security as social insurance is even more compelling when we weigh and consider its merits from an ethical point of view. This will be my topic for a future column. Stay tuned and stay informed.
Thomas B. Vaughn is a Warren County columnist.