Wall Street, anti-government ideologues, and others determined to cut Social Security have their solution. They just need to find the right problem. There is a dead giveaway that this is what is going on: Their solution is always the same, even though the problem keeps changing. Indeed, the problem for which cutting Social Security is their solution sometimes actually contradicts another problem for which cutting Social Security is their solution. Take longevity.
Until recently, those determined to cut Social Security argued that everyone is living longer, so we must cut Social Security. Now that supporters of Social Security have pointed out that not everyone is living longer, those determined to cut Social Security are starting to say: okay, not everyone is living longer, so we must cut Social Security.
This is not an exaggeration. In 2005, President George W. Bush argued for cutting and privatizing Social Security because, “In today’s world, people are living longer and therefore drawing benefits longer.” Supporters of Social Security dutifully pointed to research showing that this is not true. The wealthier are living longer but those without high school diplomas, for example, have experienced a decline in average life expectancy.
Without missing a beat, those determined to cut Social Security simply pivoted to those new facts. Indeed, the Wall Street-funded Third Way think tank even went so far as to claim that Senator Bernie Sanders, a self-proclaimed socialist, favors the rich when he fights to expand Social Security!
Last week, new ammunition was provided to those whose solution is always to cut Social Security, no matter the problem. A new paper quantifies, with a dollar amount, how longer average life expectancies translate into higher lifetime Social Security benefits for the wealthy.
Last week, new ammunition was provided to those whose solution is always to cut Social Security, no matter the problem.
Revealingly, the authors examine the impact of various cuts to Social Security on lifetime benefits, but not the impact of requiring the wealthy to pay more for their earned benefits. But this latest entry into the war over Social Security has much more fundamental problems.
At base, why the focus on Social Security? These growing disparities in average life expectancies are a national disgrace. And we know the causes. Growing disparities in longevity — sometimes measured between rich and poor or between people of color and whites or between those with more and less education — are a symptom of the upward redistribution of wealth resulting from federal tax and spending policies in recent decades.
The response should be directed at the root causes of the disparity in life expectancies. The nation should substantially increase the minimum wage and spend more to ensure that all of us receive adequate health care, education, good-paying employment, safe working conditions, clean water to drink, and clean air to breathe. Those who have seen their incomes and wealth skyrocket should be required to pay more for this increased spending, which will benefit us all.
As part of the solution, Social Security should be expanded, not cut, while requiring the wealthiest among us to pay their fair share. Social Security is a solution to income and wealth inequality. Moreover, increasing Social Security’s modest benefits, while a late intervention, may increase longevity and reduce Alzheimer’s. Even without those added benefits, Social Security is already particularly important to those very groups who find themselves on the losing end of the longevity comparisons. Cutting those modest benefits or, worse, undermining support for this essential program, would be a cruel response to the outrageous disparities in longevity.
A tipoff that the focus on Social Security and disparities in longevity is simply one more solution in search of a problem is that the analyses willfully refuse to see Social Security as the wage insurance that it is. The program isn’t about lifetime benefits. Is it unfair that twins with identical work records receive drastically unequal benefits because one dies at age 70 and the other lives to 105? No. That is the point of insurance.
Social Security should be expanded, not cut, while requiring the wealthiest among us to pay their fair share.
The point of Social Security is to replace monthly earnings when those earnings are lost as the result of disability, old age, or the death of a breadwinner. Its benefits are designed to replace a specified percentage of earnings. Those percentages are progressive but woefully inadequate in light of a looming retirement income crisis where working families will be more and more dependent on Social Security for most or even all of their retirement income.
Those who turned age 62 last year and earned the maximum wage amount under Social Security — $118,500 in 2015 — received benefits that replaced 21.6 percent of those maximum wages. Medium-income workers, earning around $48,000 received benefits replacing 32.7 percent of those earnings. And low-income workers, earning around $21,500, received benefits replacing 44.2 percent of those earnings.
Even the highest of those percentages provides much too small a replacement of pre-retirement income. And those percentages will be lower in the future, as the result of already-enacted benefit cuts, still being phased in. That is why benefits should be expanded across-the-board. The fact that beneficiaries live different lengths of time is the point, not the problem. Unlike savings, one cannot outlive Social Security.
Social Security offsets to some extent the impact of discrimination against people of color, women, and the LGBTQ community. But it is not responsible for that discrimination, any more than it is responsible for the disparities in longevity. Cutting its modest benefits is not the solution. Indeed, the so-called solution is not even responsive to the problem.
So what gives? In magic, it is called misdirection — focusing attention on something over here in order to distract from the real action over there. Social Security is the misdirection. The real action is policies that exacerbate, rather than alleviate, income and wealth inequality.
President Franklin Roosevelt understood this tactic extremely well. He laid it bare when, in response to misinformation being spread about Social Security in the 1936 Presidential campaign, he charged, “It is an old strategy of tyrants to delude their victims into fighting their battles for them.”
Here, the misdirection is to get people fighting over Social Security’s supposed unfairness, rather than uniting everyone to fight against the monied interests. All of us, together, should fight to expand Social Security and Medicare. As part of that fight, we should demand that those at the top pay their fair share for these vital programs. More generally, we should fight to require those at the top, who have benefited so greatly from our nation’s common wealth, to pay more toward the common good. Let’s not be fooled by this latest misdirection. We should all keep focused on the goal: expanding, not cutting Social Security.