The Coming Senior Revolution

 

The Bush Administration has been developing the concept of the Big Lie to an art form: Iraq is developing nuclear weapons, Iraq is linked to Al Qaeda, unprecedented deficits will create jobs, invasion is liberation, anti-missile missles actually work, and so on. But the latest whopper is really something.

Over the next few months, American taxpayers will be receiving their annual statements of account from the Social Security Administration. Those are the letters you get each year summarizing your wage-earning history and providing you with an estimate of the monthly check you can expect to receive when you retire and begin collecting Social Security.

Well, this year your statement will come with a new statement–a disclaimer by the Social Security Administration that the funds you expect to receive can not be relied upon. Why? Because the Social Security Trust Fund will be dried up by around 2040.

As the new statement reads: “For more than 60 years, America has kept the promise of security for its workers and their families. But now the Social Security system faces serious future financial problems and action is needed soon to make sure that the system is sound when today’s young workers are ready for retirement.

It goes on to say, “Unless action is taken soon to strengthen Social Security, in just 15 years we will begin paying more in benefits than we collect in taxes. Without changes, by 2042, the Social Security Trust fund will be exhausted. By then, the number of American 65 or older is expected to have doubled. There won’t be enough younger people to pay all the benefits owed to those who are retiringSWe will need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations as it has done in the past.”

A spokesperson at the Social Security Administration denies that the new statement is being alarmist. “The purpose is to educate people about the future of the program,” he says. He claims that the changes from a prior statement, in use through last year, are minor and “all factual.” In fact, the prior year’s statement makes no reference to there “not being enough” younger people to pay for retirees’ benefits. Rather, it states simply that “payroll taxes collected will be enough to pay only 73 percent of the benefits,” and that “We’ll need to resolve long-term financial issues to make sure Social Security will provide a foundation of protection for future generations as it has done in the past.”

The new, more alarmist warning, coming right after tax time, is sure to worry and rile American workers, who see nearly eight percent of each paycheck snatched away to pay their Social Security tax each pay period.

It’s bad enough you have to lose a tenth of your wages off the top paying for Social Security and Medicare, but if you’re not even going to collect somedayS?

The note as currently written is, however, a bald-faced lie. Social Security is not a pension, though the right wing and the Bush Administration would like you to think so. It will be there in 2042, and it will be paying whatever benefits that Congress decides it should pay.

It’s true that if present trends continue, the trust fund will be exhausted in about 2040, but scary as that sounds, it really doesn’t mean anything, and the Social Security Administration knows this. The trust fund is an accounting fiction. It is actually just a part of the U.S. government, and the U.S. government can’t go bust.

Even today, although there is so much money in the trust fund that the government routinely borrows from it to finance the federal deficit (remember that dreadful “lockbox” the insufferable Al Gore used to keep referring to?), current Social Security beneficiaries get much of their monthly check courtesy of current payments into the fund by current workers.

All that happens come the arrival of all those Baby Boomers at retirement age is that current workers, who will be far fewer relative to retirees than at present, will have to pay more in Social Security taxes than workers pay today–or someone else will have to take up the slack. Since most workers have parents on Social Security, even if future workers had to pay 10 or 12 percent of wages as a Social Security tax, instead of 7.5 percent, this is not the ugly generational battle that conservatives love to warn against. Most people, if asked, would rather see their parents supported decently on government payments than have to support them out of their own pockets (how many workers do you know who resent their parents’ benefit checks?).

But here’s where the plot thickens. Higher taxes for workers are not the only cure for Social Security’s “problems.”

At the same time as there will be nearly twice as many elderly retirees pulling Social Security benefits as the bulge of Baby Boomers begins to hit retirement (the first Boomer retires in 2012, just seven years hence), the senior political lobby–already extremely powerful–will be twice as large. And it gets better (or more frightening, if you are a conservative politician or a corporate titan): Whereas today’s seniors came of political age in the quiescent 1950s, tomorrow’s retirees will be people who came of age during the rebellious 1960s and 1970s.

In a few years, we will see a senior lobby that knows how to organize politically, that knows how to do street politics, and that has demonstrated its ability to fight hard when its own interests are at stake (remember those struggles for the vote and against the draft and the Indochina War?). And once they near retirement, this group of Americans will be seeing Social Security and Medicare as their number one political issue. If Social Security is already the “third rail” of electorial politics, not to be touched, in a few years, it will be the molotov cocktail, blowing up the political status quo.

Corporate America knows this. Those people in the boardrooms and the right-wing thinktanks aren’t worried about 2040. If they were, they wouldn’t be so cavalier about the environment and global warming. They’re worried about 2010, because this new senior revolution is just around the corner. That’s why there is an increasingly panicky effort underway to destroy Social Security before the Baby Boomer population realizes where its real political interests lie. If Social Security is effectively killed off before it becomes a core Boomer issue, it will be much harder to re-establish it. Hence all the lies about Social Security going bust, and this most recent scam in the mail courtesy of Bush’s Social Security Administrator Jo Anne Barnhart, former Republican staff director of the Senate Committee on Government Affairs.

Consider a moment. Doesn’t all this feigned concern in conservative and corporate circles about the fate of Social Security seem a trifle out of character? When’s the last time you heard a company president or a Republican elected official express concern about the fate of poor people on welfare? Yet when you really come down to it, that’s what Social Security is really–a welfare program for the nation’s elderly. The rich don’t need it–it’s chump change for them. It’s the poor and working class who are dependent on those checks for their very living.

The Right doesn’t really have much time on this one. It appears, to judge by the marketing folks at the American Association of Retired Persons (AARP), which offers memberships to everyone turning 50, that somewhere in their mid-50s, people start to think seriously about retirement. Today’s earliest Baby Boomers are just hitting that milestone now.

When today’s Boomers really start to contemplate their retirement, the picture will not be pleasant. Property values–where many have placed their faith and their savings–are stagnating, not rising, and post-Enron, those 401K pensions that the middle class was all excited about are now smaller than they were five years ago. Meanwhile companies are whittling away pension programs as fast as they can, doing away with “defined benefit” plans that paid benefits based upon set formulas in favor of plans that pay depending upon what employees put in, and how well the investment portfolio performed–even as those investments that have been made with workers’ contributions have been languishing or shrinking in value (if they weren’t being pilfered, as happened at Enron). What’s left? Social Security and Medicare. Given the sorry state of their private safety net, it’s a safe bet that it won’t be long before a movement springs up among the new elderly not just to “save” Social Security, but to radically change it into a true retirement program.

Tomorrow’s senior lobby won’t feel constrained by current law, which makes workers foot half the bill–a key assumption behind the false threats of the Bush Adminstration of looming trust fund bankruptcy. We can expect to see future Congresses pressured into passing reforms that will remove the income cap on the Social Securities tax, so millionaire investors will be paying taxes on the full amount of their incomes, not just the first $85,000 (this one reform alone, if made today, would push the trust fund’s demise off into the future well past the Baby Boom retirement “crisis”). We can expect to see private pensions made fully portable, so that employers can’t pocket years of contributions everytime the let go workers before they are “vested.” And we can expect new laws that will shift the burden of Social Security taxes onto employers, so that young workers won’t be overwhelmed trying to pay the benefits for their retired parents (there’s nothing magic or sacred after all, about a 50/50 split in payroll tax payments. It could as easily be 25/75 or 10/90).

We can probably also expect to see a movement to expand Medicare from a niggardly program that only barely covers the medical care of the elderly, to a full-fledged national healthcare program that covers everyone. Why?

Because it will be in the interest of the much more powerful and radical senior lobby to give everyone a vested interest in a real healthcare plan.

No wonder the Bush Administration and the Right are turning to outright scare tactics in mass government mailings.

There’s a senior revolution brewing.

David Lindorff is the author of Killing Time: an Investigation into the Death Row Case of Mumia Abu-Jamal. A collection of Lindorff’s stories can be found here: http://www.nwuphilly.org/dave.html

 

CounterPunch contributor DAVE LINDORFF is a producer along with MARK MITTEN on a forthcoming feature-length documentary film on the life of Ted Hall and his wife of 51 years, Joan Hall. A Participant Film, “A Compassionate Spy” is directed by STEVE JAMES and will be released in theaters this coming summer. Lindorff has finished a book on Ted Hall titled “A Spy for No Country,” to be published this Fall by Prometheus Press.