Don’t Destroy Social Security

Although it may not seem so at first, Social Security is directly connected to poverty in America. Why? Because without Social Security there would be a lot more poor people.

For 70 years, Social Security has helped to provide older Americans with a reasonably dignified quality of life. Before Social Security, it was commonplace for the elderly to live out their lives in poverty. But Social Security is not a welfare program. It is a retirement system that most Americans have paid into. Its benefits have kept millions of retired Americans out of poverty and in the middle class.

Social Security benefits are especially crucial for people of color. Half of New York State’s older black and Latino residents depend on Social Security for about 80 percent of their income. In Congressman Charles Rangel’s district, more than 85,000 New Yorkers get Social Security benefits; in Congressman Edolphus Towns’s district, over 71,000; in Congressman Major Owens’s district, over 63,000.

Widespread Reliance

Reliance on Social Security is widespread, across all boundaries of race, gender, income, and geography. It’s the only source of income for 22 percent of elderly Americans. Over three million residents of New York State receive Social Security benefits, totaling more than $31 billion annually. One-third of older New Yorkers rely on Social Security for 90 percent or more of their income. Social Security benefits prevent more than 800,000 older New Yorkers from sinking into poverty.

It’s not only the elderly who receive Social Security benefits. So do widows, widowers, and their families. Nearly 190,000 children in New York State under age 18 are getting benefits.

In our latest survey of low-income New Yorkers, of those age 65 and older, half said they had less than $1,000 in savings to fall back on. In addition, more than half of full-time workers living at or near the poverty level have no retirement plan or pension benefits on the job. For these New Yorkers, Social Security is crucial to their survival.

There has been a great amount of publicity about Social Security in the past few months. The system will be financially strained within the next 40 years, necessitating possible changes in age eligibility, reduction in benefits, or increases in withholding.

The Bush administration wants to change the system by creating private accounts financed by diverting taxable income into the stock market. This would do nothing to help put the system on a better financial footing. But it would reduce the revenue available to pay Social Security benefits.

A government
program
that works

Bush’s latest plan is “progressive indexation,” where low-wage workers would get a higher percentage of benefits than higher wage workers. But if the Social Security system becomes increasingly unimportant to the retirement solvency of higher income workers, it will eventually turn into a welfare program. This is exactly what the framers of the program sought to avoid. The strength of the system is its universality. Once identified as a program for the poor, it would be open to the typical budget cutting that accompanies every welfare program. The ultimate effect would be to destroy the system.

Why this push for radical changes? The right wing in America has always opposed Social Security. They don’t think the government should be in the business of ensuring financial security in people’s old age. Also, privatized accounts would be a windfall for Wall Street, one of the major revenue streams for right-wing political candidates.

New Yorkers are not fooled by Bush’s campaign to portray the system as in crisis. A recent poll by the state AFL-CIO found that 67 percent of New Yorkers disapproved of the way President Bush is handling Social Security. Similarly, two-thirds opposed creating private accounts.

The extensive reliance on Social Security is in itself evidence that older Americans cannot gamble their retirement income on the capriciousness of the stock market. The impact on the quality of life for those who acquire losing investments would be grim.

Keep System Intact

What is really needed at present to ensure the financial stability of the system? If Social Security taxes were withheld on earnings above $90,000 – the upper limit today – this would restore the system to solvency for the foreseeable future without having to cut benefits.

We must not lose sight of the fact that this is, at bottom, a political fight. It is up to our representatives in Congress to protect the Social Security system. It is a prime example of a government program that works. Maybe that’s why right-wingers hate it.

From the New York Amsterdam News
May 5 - 11, 2005