This year’s Social Security Trustees Report shows that our Social Security system works just as intended, even in difficult times. The 2012 report revealed that Social Security has a large and growing surplus; predicting that by the end of this year Social Security will have an accumulated surplus of $2.7 trillion. Despite this fact, every spring when the Social Security Trustees' annual report is published, the media and some politicians blame Social Security for our country’s fiscal problems and urge severe cuts to the country’s most successful income protection program. Though it’s not surprising, it is disappointing to see Social Security come under unwarranted attack, year after year. Here are the facts:
1. Without any congressional action, Social Security will continue to pay benefits to children, families and retirees for decades. With modest improvements to the program, it will continue to pay those benefits for the next century and beyond.
Social Security has never missed a payment in 75 years. The 2012 Trustees Report projects that Social Security can pay all monthly benefits in full and on time (with no congressional action) through 2033. It is 100% solvent for the next 20 years and, in the highly unlikely case that Congress did not act before 2033, Social Security could still pay about three-fourths of benefits for the next 74 years. The precise year has fluctuated in virtually every Trustees Report, sometimes projecting a later date, sometimes sooner. The most recent projected date is undoubtedly a result of the economic recession our country has experienced over the last five years. As millions of workers have found themselves without jobs, Social Security has received fewer contributions. Furthermore, any fluctuation in the projected date can occur because of the uncertainties with projecting inflation, wage growth, productivity, birth rate and other factors years into the future. With minor changes, Social Security can be solvent for generations to come.
2. Social Security does not contribute to the deficit.
Social Security is financed by its own revenue stream, the payroll tax. By law, Social Security cannot add to the nation’s deficit. It should not be cut to reduce a deficit it did not cause. Social Security should be addressed sooner rather than later, but it should be done after the current deficit debate is concluded.
3. Social Security is much more than a retirement program.
It provides essential protections for people of all ages. Social Security pays more benefits to children than any other federal program. Today, nearly 7 million children receive part of their family income from Social Security. In addition, the program offers protection to almost every child in the U.S. should they lose a parent to death or disability.
4. Social Security needs to be strengthened, not cut.
Unfortunately some politicians continue to falsely claim that Social Security is going bankrupt and won’t be there for your children/grandchildren. Their motive is to frighten the public and further their political agenda. The truth is, as Social Security celebrates its 77th anniversary this August, it remains one of the nation’s most successful, effective and popular intergenerational programs.
The best way to invest in and protect our nation’s most vulnerable citizens is to strengthen Social Security, not cut it. Social Security plays a critical role in providing economic security and indispensable protections for millions children, families, and retirees. Benefit cuts would mean a considerable loss of economic security for children and seniors and would break the promise of Social Security for all generations.
One way is to follow Senator Harkin’s proposal contained in his Rebuild America Act: phase out the cap on Social Security taxes. Currently, individuals are taxed up to $110,100 of their annual income; they do not have to pay Social Security tax on any income they make beyond that amount. By lifting that cap, we can extend the life of the Social Security Trust Fund until 2052.
Another low-cost recommendation to strengthen the program would be to reinstate the student benefit. By reinstating the student benefit, we can help eliminate financial barriers to college for those who have lost parental support due to disability or death. At a time when our economy needs educated workers, this is a wise investment—and it would only require Congress to raise Social Security contributions by $35 per person per year. That’s a very small price to pay for enormous long-term benefits.
5. Americans would rather pay more into Social Security than see benefits cut.
According to a poll co-sponsored by the National Academy of Social Insurance and the Rockefeller Foundation, the majority of Americans are willing to pay for Social Security because they value it for themselves (72%), for their families (75%), and for the security and stability it provides retired workers, disabled individuals, and children and widowed spouses of deceased workers (87%).
We don't have to slash benefits to make Social Security financially stronger for future generations. Social Security is arguably the most successful program in our nation's history. It is not in crisis.
While we must address Social Security, we have the time to do so in a calm, bipartisan way without the hype and scare tactics. People want security. They want to know they and their families will be taken care of in the wake of disability or death. And they want to be able to retire without having to worry whether they need to choose between their health, their home, or the food they put on the table.
We have time to find a lasting solution to our current economic challenges. What we need now are thoughtful leaders who are willing to put politics aside and do what is best for the majority of Americans.
For more information on the Trustees report, check out the National Academy of Social Insurance’s Findings of the 2012 Trustees Report.
To learn more on how Social Security helps children, youth and older adults, check out the following resources or visit the Generations United website (www.gu.org):