Recently the Washington Post (12/11/96) clamored for the President to "perform an enormous public service" and announced their support for a reduction in the annual cost-of-living adjustments (COLAs) that cause Social Security (SS) benefits to rise each year with inflation. This strategy is made necessary "to reduce the long-term deficit in a way that is fair." As for the needs of impoverished seniors, "We [the US Treasury] need the money," it won't harm the poor, and "it would be the right thing to do."
Thus, the Post has thrown its mighty weight into the ring of what to do with Social Security. Their determination to have Social Security recipients receive less to help reduce our nation's deficit comes while the Pentagon continues to receive $725 million daily to plot wars against nations that are no threat to us.
The most aggressive SS "reformers" want to privatize it; i.e., replace the present pension system with a system of universal IRAs. As this would be an enormous windfall for Wall Street, many powerful voices like investment bankers, their puppet, "grassroots" organizations like the Concord Coalition, the mainstream press, and, according to knowledgeable sources, the honorary Republican in the Oval Office are all waiting for their chance to enact this change. Before they have their way, however, the general public should know what is at stake.
Social Security is the most effective antipoverty program in the country. It sustains 13 million seniors-over 80 percent of the elderly-who would otherwise live out their lives in poverty. (Robert Brosage, The Nation, 12/30/96). Most of these elderly are not rich from it. In 1993, the median income for people 65 and over was $17,751, about half compared to people aged 24-64 (Edward Herman, Z Magazine, 11/95).
Opponents of the current system, like the Concord Coalition's Peter Peterson, claim that it involves intolerable largess to the affluent. This is because SS benefits are distributed to all contributors, whether rich or poor. However, this is completely intentional. "The acceptability of Social Security is to a considerable extent based on the fact that it covers everyone, and therefore does not have the stigma of welfare. Means-testing SS would give it that stigma and help weaken its moral support..." (Herman).
Social Security probably threatens Corporate America the most as a "threat of a good example." With its recipients out of the labor market, wages across the board tend to remain higher than otherwise. Even worse, as a not-for-profit, Federal-gasp!-bureaucracy, SS greatly outperforms private pension systems in protecting the elderly while its "administrative costs are under 1 percent of annual benefit payments." (Herman)
Furthermore, Social Security, frequently described as virtually bankrupt by the media, is presently running about a $65 billion dollar a year surplus. And, while doomsayers are quick to point out that by the year 2039 it may be in trouble, one would have to search long and hard to read that "an increase of payroll taxes of only 1.46 percentage points would take care of Social Security for 75 years into the future." (Herman).
To put this in perspective, Dean Baker of the Economic Policy Institute points out that prison expenditure growth is more rapid than that of another imperiled program, Medicare. If one extrapolates 35 years into the future on the costs of turning this country into Alcatraz, the potential for bankruptcy is far greater than for the beleaguered entitlements. Yet this is never mentioned by the mainstream press.
Ultimately, any modification of Social Security from its present status as a highly efficient, economically sound social insurance system where one generation of workers pays the benefits for the ones preceding towards a much more inefficient, privatized model that Wall Street loves will have serious consequences beyond the bottom line. If the powerful interests are allowed to steamroll their legislation through Congress without much public debate, Social Security will become yet another institution keeping communities whole that was swept away during the class war of the 1990s.
And there aren't too many more of those institutions still remaining.