Cutting Social Security will not solve the problems of the national debt or the deficit. Funding for Social Security comes from a separate payroll tax, not from the general fund, which is primarily paid for with individual and corporate income taxes. According to the website Social Security Works, in 2011, Social Security ran a $68 billion surplus, while the general fund ran a $1.4 trillion deficit (strengthensocialsecurity.org).
As Dean Baker from the Center for Economic and Policy Research put it in The Atlantic in an article titled “Nine Misconceptions about Social Security”: “Social Security is a social-insurance program, not a welfare program. People pay into it during their working lives. They have a right to expect something in return, just as they expect interest payments when they buy a government bond.”
Unfortunately, the Obama Administration is going back on its campaign promises not to cut Social Security. Congress and the President are now discussing tying Social Security payments to the Chained CPI, a different method of calculating price levels of consumer goods and services. Doing this will result in 3 percent cuts in Social Security benefits for those who have been retired 10 years, 6 percent after 20 years, and 9 percent after 30 years.
Baker points out that the vast majority of seniors are already not doing well because our defined benefit pension system is disappearing, 401(k)s have not come close to filling the gap, and retirees lost much of their home equity in the 2008 housing crash.
In addition, Baker reminds us that cutting social security is bad for the economy (in truthout.org on Jan. 14, 2013) because it will slow growth and cost us jobs.
Instead, Baker proposes taxing Wall Street speculation, which could raise almost $40 billion a year.
There are dozens of other ways to cut debt and balance the budget. Cutting military by 50 percent and ending fossil fuel subsidies are at the top of my list.
This Saturday, there will be a rally to protect Social Security, Medicare, Medicaid and essential elements of the social safety net at noon at the Boulder County Courthouse, at 14th and Pearl Streets. Please attend. Also contact your Congress people (you’ll find contact info at congress.org) and let them know how you feel about preserving important programs for the most vulnerable people in our society.
Carolyn Bninski is on the staff of the Rocky Mountain Peace and Justice Center. You can contact her at Carolyn@rmpjc.org.