Americans And The Right To Social Security
By Michael M. Bates (03/30/05)
American philosopher Yogi Berra once sagely noted, "What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so." Or maybe it was Zsa Zsa Gabor who said that. Either way, it’s unquestionably an insightful observation.
President Bush’s popularity has been dropping faster than you can say, "restructuring Social Security." Still, I give the man credit. He tackled what’s been called the third rail of American politics and not been electrocuted. Yet.
Clinton rightly warned of "the looming fiscal crisis in Social Security." Like other presidents, though, he did precious little to deal with the predicament.
Politicians remember what happened to Barry Goldwater when he ran for the White House in 1964. The Arizona Republican truthfully explained where the dollars collected for Social Security go. They’re used to fund other government programs.
His reward for pointing this out was getting clobbered on Election Day. Since then, pols have been very cautious whenever the subject comes up.
Last weekend, the Washington Times reported the results of a recent national opinion poll. This particular survey of 1,000 registered voters was conducted by a Republican pollster, but the results echo findings cited by others.
Almost half of those asked believe there’s an actual trust fund in which their money is kept until they retire.
Despite the loose talk from some pols about lock boxes, the truth is there is no trust fund. Moreover, there has never been one. That was revealed almost immediately after Social Security started.
In 1937 the U.S. Supreme Court (Helvering v. Davis) determined: "The proceeds of both employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way."
Employee and employer taxes? And all these years the government has tried to convince us that they are really "contributions."
The recent survey also disclosed that more than two-thirds of the public think there is a "legal obligation" for Social Security benefits to be paid.
Again, that’s an issue settled long ago. And not the way most Americans suppose.
Here we can look to the Supreme Court’s 1960 decision in Flemming v. Nestor. A deportee who’d paid Social Security taxes sued when his checks stopped. His argument: I’m entitled to benefits because I participated in the system for many years.
The Court decided that was meaningless. It noted: "To engraft upon the Social Security system a concept of accrued property rights would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands."
For those not paying close attention, "flexibility and boldness" mean the government can do any darn thing it wishes to. That includes reducing or abolishing benefits. Money paid into Social Security guarantees nothing.
With such a dismal level of public understanding of Social Security, it’s not unexpected that so many citizens are complacent and resistant to change. Perhaps the only shock is that President Bush’s ratings haven’t dropped to single digits.
AARP, the pressure group formerly known as the American Association of Retired Persons, spearheads opposition to any genuine reform. Senator Alan Simpson had it about right years ago when he called the group, "33 million Americans bound together by a common love of airline discounts," but it’s still an organization with remarkable clout.
AARP’S January online bulletin includes a piece titled, "Social Security: Don’t Mess with Success." All the program needs, you see, is a little fine-tuning. Naturally, several of the modifications require higher taxes.
Increase the percentage — for both employees and employers — paid into Social Security each payday. Remove the established maximum earnings on which people pay into the system. Force millions of public employees not already in Social Security to join all the other happy participants joyfully ponying up their "contributions."
Additionally, AARP mentions benefit changes. Raise the retirement age. Have more people pay higher taxes on their Social Security income. Calculate benefits differently so benefit checks will be smaller.
Even AARP admits that in 35 years there will be only two workers for each retiree. If that’s a success, I’d hate to see what AARP’s definition of failure is.
The President has initiated a national dialogue on Social Security. Turning away from it now would be a mistake. It’s time we collectively bite the bullet and overhaul it.
Developing a national consensus on how best to do that is going to require Americans having a better grasp of Social Security’s realities. Mr. Bush and his team need to do a better job of getting that information out.
First published in the March 31, 2005 Oak Lawn (IL) Reporter.
(Printer friendly version) Email: Michael M. Bates
