Is Social Security Really in Danger?

This is a guest opinion from Rancho Bernardo resident Charlie Williams.

There is a scheme afoot in the new Congress to privatize both Social Security and Medicare. The privateers claim that Social Security is becoming insolvent and only through privatization of the system will it be saved. The scheme is to convince enough of us and Congress that the system is going broke. Will Congress take the bait?

Is the current fear now being spread that the Social Security Trust Fund is going broke a valid concern? According to the fund’s trustees, the fund has a $2.6 trillion surplus in reserve. The fund is not part of the federal budget nor is it an entitlement, as claimed by the fearmongers and some in mainstream media. It is a trust fund bought and paid for by We the People during our working lifetimes.

The $2.6 trillion in the trust fund is enough to pay every recipient, every penny owed to both current and future retirees for the next 27 years. Thereafter, benefits are projected by the trustees to continue at 78 percent if nothing at all is done to bring in additional funding.

Hardly a crisis! But still worthy of good congressional planning for providing additional funding for the future, as was wisely done during the Reagan years. Additional funding sources could come from raising the OASDI (Social Security) tax cap, which now stands at $106,800 annually. Raising or eliminating the cap is estimated to ensure the solvency of the trust fund for the next 75 years or more.

How reliable has the Social Security system been throughout its long history? Benefits have been paid in full, on time each month for the past 75 years of its existence. Benefit amounts have been substantially increased over the years, helping recipients keep up with inflation and the cost of living.  

The aim of the privateers is to frighten both current and future retirees by spreading false fear that Social Security Trust Fund is going broke. One of their proposals is that workers under age 55 would no longer be covered by Social Security, replacing it with a Wall Street investment program. That would mean future OASDI taxes would no longer go to the trust fund, endangering the fund’s solvency and current retirees’ benefits.

Privateers offer a similar scary deal for Medicare recipients, only in this case all of us would lose our Medicare program, replaced with a voucher system where we would be forced to go shopping in the insurance jungle for our future health insurance needs.

Keep in mind, Social Security provides at least half of the total income of 64 percent of aged beneficiaries. Benefits are also provided for children of widowed parents and the disabled. Without Social Security, nearly half of all recipients would be living in poverty. The poorest beneficiaries are older women, and minority widows.

President Franklin D. Roosevelt, once said, “The only thing we have to fear is fear itself.” He challenged fear because the right wing was busy spreading it during the early 1930s debate for the enactment of Social Security. They spread fear that Social Security was a socialist scheme—or worse yet, a communist plot.

Sound familiar?

Roosevelt knew then that fear could wreck his effort to enact Social Security, and so he spoke directly to the people of how they should respond to the unfounded fear being spread. Congress and the people overcame the preaching of fear, and Social Security was enacted and signed into law by President Roosevelt in 1935.

Will we overcome today’s fears and press on as was successfully done in the 1930s? Or will we give in to fear and throw out the program that has worked so well throughout all these years? Just as was in the case in the 1930s, it will be a tough struggle regardless of the outcome.

I predict most of us will place our faith in the Social Security Trust Fund and its very reliable history and reject the Wall Street attempt to raid the trust fund, knowing its many hits and misses over the years. Retirees who rely on personal savings have recently felt the brunt of Wall Street crashes and are well aware that even with their stock market losses, their Social Security and Medicare benefits were left fully intact.

That’s something we should all keep in mind as the debate heats up in the new congress.

Charlie Williams lives in Rancho Bernardo and is former Midwest States Regional Director, National Council of Seniors Citizens and currently serves as chairman of the Alliance for Retired Americans Field Mobilization Committee.