FacebookTwitterGoogle+RedditEmail

The Assault on Social Security

 

Social Security, the New Deal program that has provided a basic level of economic support for the nation’s elderly, disabled and orphaned for 70 years, is in grave danger–not from Baby Boomers, but from a campaign of lies and fear-mongering, led by the president.

The truth? There is no Social Security crisis. None whatsoever.

Yet, in his State of the Union address Wednesday night, President Bush put the campaign to destroy Social Security and its promise of old-age and disability security front and center in his second-term agenda, claiming that the system founded in 1935 is headed for “bankruptcy” in 2042.

Like the mythical weapons of mass destruction in Iraq, this was a flat-out, deliberate lie. First of all, even if the date were correct, all that would happen in 2042 would be that the trust fund used to pay out benefits to workers would be exhausted, but even then current workers taxes would continue to cover 73 percent of promised benefits to retirees. More importantly, that 2042 projection by the increasingly politicized Social Security Administration was just a conservative projection made a few years ago based upon unrealistically low estimates of future economic growth. It has already been pushed back by several years’ good economic performance, and in fact, the Congressional Budget Office and most independent economists say that the trust fund should enable the system to cover all benefits through at least 2052 and perhaps on out through 2080 and beyond.

Not mentioned by the president or right-wing critics of Social Security is the fact that by 2045, the last of the Baby Boom generation will have already shuffled off this mortal coil, taking their outsized claims for benefits with them.

Given that there is no real crisis, the real unasked question is why the president, right-wing politicians and pundits, and corporate leaders and business organizations–and the media–are all calling for “reforms” to “save” the system.

The real reason for this urgency is that they understand that the Baby Boom generation, which is approaching retirement, does pose a crisis–not for Social Security, but for them and their political agenda.

Consider this: Just as there will be nearly twice as many elderly retirees collecting benefits when the wave of Americans born between 1945 and 1960 hits its retirement age peak (the first Boomers start retiring in 2011), there will also be twice as many elderly voters. And it gets better (or more terrifying, if you are a conservative politician or a corporate executive): while today’s seniors came of age listening to Perry Como in the politically quiescent 1950s, tomorrow’s retirees will be people who listened to Bob Dylan and the Beatles and cut their political teeth in the Civil Rights and Anti-War Movements of the 1960s and 1970s.

In a few years then, we can expect to see an unprecedentedly large senior lobby that knows how to organize politically, that knows how to do take it to the street, 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 powerful voting bloc will be seeing Social Security and Medicare as their number one political issue. If Social Security is already the “third rail” of electoral politics, not to be touched, in a few years, it will become the Molotov cocktail, exploding the political status quo.

Corporate America knows this. The people in the boardrooms and the conservative think tanks aren’t worried about 2042. They don’t think that long-term. (If they did, they wouldn’t be so cavalier about the destruction of the environment and about global warming.) They’re worried about 2010, because this new senior revolution is just around the corner.

They know that today, seniors and people over the age of 65, as powerful an electoral block as they are, represent only 17 percent of the voting age population of the country, while by 2025, when the bulk of Baby Boomers will be in the 65-80 age bracket, retirees will represent 25 percent of the voting-age population, an increase of 45 percent in their relative voting power. If those aged 55-64 are added in–a reasonable assumption, since people who reach 55 are starting to think about their retirement and tend to vote more in line with the interests of actual retirees–the elderly and near elderly will by then represent fully 40 percent of the electorate. That’s a 40 percent increase over the 28.5 percent of the electorate this broader group represented in 2000.

Moreover, while the Right talks ominously of a generational conflict between older retirees collecting pensions and younger workers paying the taxes to cover them, in fact, those retirees are the parents of many of those workers (not everyone has children, but everyone has parents!). And how many people complain about the size of their parents’ Social Security checks, or would really want to have to be personally responsible for taking care of their elderly parents’ finances? There really is considerable support even among young workers, for a secure and generous retirement system, because people don’t just vote their own interests; they vote their parents’ and grandparents’ interests, too.

That’s why there is an increasingly panicky aspect to the efforts to destroy Social Security before the Baby Boomer population realizes where its real political interests lie. Social Security’s opponents know if the program is effectively killed off before it becomes a core Boomer issue, it will be much harder to re-establish it.

The Right doesn’t really have much time on this issue. 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 oldest 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 a few years ago, have been treading water. Meanwhile companies are whittling away pension programs as fast as they can, eliminating “defined benefit” plans that paid benefits based upon set formulas in favor of plans that pay depending upon what employees contributed, and on 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 the private safety net, it’s a safe bet that it won’t be long before a movement springs up among the new elderly and near elderly not just to “rescue” Social Security, but to radically transform it into a true retirement program.

Tomorrow’s senior lobby won’t feel constrained by current law, which makes workers foot half the bill (we’re talking about their own kids, after all!). We can thus expect to see more of the tax burden shifted onto employers. We can also expect to see future Congresses pressured into passing reforms that will remove the income cap on the Social Securities tax. (And here’s something the president has not told people: if the cap on income subject to Social Security taxation, currently set at $90,000 in wages, were eliminated so all income was subject to the tax, there would be no shortfall in the trust fund–not in 2042, not in 2075, never.) We can also expect to see private pensions made fully portable, so that employers can’t pocket years of contributions every time they let go workers before they are “vested.” As well, 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.

That is a scary vision for business and the Right, and it’s why Bush is pushing to wreck the system now. If the president were to go before Congress and announce that the banking system was in grave danger, and that the FDIC insurance program could not really insure people’s accounts, it would spark a run on the banks and destroy the banking system and the president would probably be impeached. And yet that is exactly what his dire warnings of a bankruptcy of Social Security in 2042 are trying to do-cause a political run on the system.

The president’s proposed “solution”–private accounts for younger workers–is really nothing but a classic divide-and-conquer tactic. It doesn’t solve the long-term problem, and by most accounts would probably worsen it by removing some contributions that would have helped build up the reserve fund. What it would do though is leave older workers stuck with the current system, while weaning younger workers away with a promise of easy money and a lower tax bite. Then, with fewer people dependent upon classic benefits, it would be politically easier for a future Congress to slash those benefits later, since younger workers with a private “nest egg” would be less affected.

It’s time to see the president’s attack for what it is: an attempt to destroy the most enduring legacy of the New Deal.

DAVE LINDORFF is the author of Killing Time: an Investigation into the Death Row Case of Mumia Abu-Jamal. His new book of CounterPunch columns titled “This Can’t be Happening!” is published by Common Courage Press. Information about both books and other work by Lindorff can be found at www.thiscantbehappening.net.

He can be reached at: dlindorff@yahoo.com

 

More articles by:

Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

Weekend Edition
July 13, 2018
Friday - Sunday
Brian Cloughley
Lessons That Should Have Been Learned From NATO’s Destruction of Libya
Paul Street
Time to Stop Playing “Simon Says” with James Madison and Alexander Hamilton
Jeffrey St. Clair
Roaming Charges: In the Land of Formula and Honey
Aidan O'Brien
Ireland’s Intellectuals Bow to the Queen of Chaos 
Michael Collins
The Affirmative Action Silo
Andrew Levine
Tipping Points
Geoff Dutton
Fair and Balanced Opinion at the New York Times
Ajamu Baraka
Cultural and Ideological Struggle in the US: a Final Comment on Ocasio-Cortez
David Rosen
The New McCarthyism: Is the Electric Chair Next for the Left?
Ken Levy
The McConnell Rule: Nasty, Brutish, and Unconstitutional
George Wuerthner
The Awful Truth About the Hammonds
Robert Fisk
Will Those Killed by NATO 19 Years Ago in Serbia Ever Get Justice?
Robert Hunziker
Three Climatic Monsters with Asteroid Impact
Ramzy Baroud
Europe’s Iron Curtain: The Refugee Crisis is about to Worsen
Nick Pemberton
A Letter For Scarlett JoManDaughter
Marilyn Garson
Netanyahu’s War on Transcendence 
Patrick Cockburn
Is ISIS About to Lose Its Last Stronghold in Syria?
Joseph Grosso
The Invisible Class: Workers in America
Kim Ives
Haiti’s Popular Uprising Calls for President Jovenel Moïse’s Removal
John Carroll Md
Dispatch From Haiti: Trump and Breastfeeding
Alycee Lane
On Heat Waves and Climate Resistance
Ed Meek
Dershowitz the Sophist
Howard Lisnoff
Liberal Massachusetts and Recreational Marijuana
Ike Nahem
Trump, Trade Wars, and the Class Struggle
Olivia Alperstein
Kavanaugh and the Supremes: It’s About Much More Than Abortion
Manuel E. Yepe
Korea After the Handshake
Robert Kosuth
Militarized Nationalism: Pernicious and Pervasive
Binoy Kampmark
Soft Brexits and Hard Realities: The Tory Revolt
Helena Norberg-Hodge
Localization: a Strategic Alternative to Globalized Authoritarianism
Kevin Zeese - Nils McCune
Correcting The Record: What Is Really Happening In Nicaragua?
Chris Wright
The American Oligarchy: A Review
Kweli Nzito
Imperial Gangster Nations: Peddling “Democracy” and Other Goodies to the Untutored
Christopher Brauchli
The Defenestration of Scott Pruitt
Ralph Nader
Universal Voting Dissolves the Obstacles Facing Voters
Ron Jacobs
Vermont: Can It Happen Here?
Thomas Knapp
Helsinki: How About a Fresh START?
Seth Sandronsky
A Fraught Century
Graham Peebles
Education and the Mental Health Epidemic
Bob Lord
How to Level the Playing Field for Workers in a Time of Waning Union Power
Saurav Sarkar
I Got Arrested This Summer (and So Should You)
Winslow Myers
President Trump’s Useful Idiocy
Kim C. Domenico
Outing the Dark Beast Hiding Behind Liberal Hope
CounterPunch News Service
First Big Strike Since Janus Ruling Hits Vermont Streets
Louis Proyect
Survival of the Fittest in the London Underground
David Yearsley
Ducks and Études
FacebookTwitterGoogle+RedditEmail