Contributor: Buddy Robinson
You may have heard some say that “Social Security is running out of money, and won't be there when today's young people retire.” However, that's not true. It's a lie, designed to generate support for reducing Social Security Benefits.
You aren't hearing much about this in the news, but it is a big issue in the November election. It's lurking just below the surface.
There has been intense right-wing opposition to Social Security ever since its inception in the 1930s, even though it is the most popular thing the federal government has done for Americans.
Big corporations would be happy to see it go, so that they wouldn't have to keep paying in their matching share of employee payroll tax deductions. The millionaires and billionaires wouldn't mind seeing it disappear either, because the benefits are insignificant to them. They don't care that Social Security is keeping 15 million of their fellow Americans out of poverty.
Nowadays, to try to reduce and hurt the program, conservatives are ringing an alarm bell to say that “Social Security is running out of money, and there won't be anything left when today's young people retire.”
This is a false scare tactic, deliberately concocted in order to try to erode public support for the program, and to get voters to reluctantly agree to the idea of reducing benefits.
Social Security's opponents have a few ideas up their sleeves on how to reduce benefits, if they get the chance:
Increase the age to start getting full benefits up to 70. This would result in an average loss of 14 per cent in lifetime benefits. To justify this, they claim that people are living longer, but guess what: It's the rich who are living longer, not the poor.
Change the formula to calculate how much your initial benefit is, to lower it.
Change the formula for the automatic annual Cost Of Living Adjustment, to make that smaller.
But hold on – is Social Security truly running out of money? Here's the reality: The projection of the Social Security actuaries is that there will be enough money coming in to pay 75 per cent to 80 per cent of current benefit levels, through 75 years from now. Those actuaries, by the way, are career bureaucrat accountants and statisticians, not political actors. This graph tells the story:
What today's young people can look forward to – if no changes are made – is getting 75 per cent of what they should get at retirement. 75 per cent is certainly not full benefits, but it's most of them, and it's a far cry from “nothing at all.”
One of the specific scare tactics right now is to say that “the Social Security Surplus Fund will be depleted in 2035, so that's when it runs out of money.” However, here's what they're not telling you:
The surplus fund was built up starting in the 1980's in the Reagan years, to get ready to pay benefits for the huge number of Baby Boomers when they retire. Currently, the surplus only pays for 25 per cent of all Social Security benefits. The rest, 75 per cent, is paid by the payroll taxes that are collected from workers and employers, year after year.
The surplus will be gradually used up to pay for the Boomer's benefits, as originally planned. However, those payroll taxes will keep coming in as usual, once the surplus is depleted. And since the payroll taxes will keep rolling in, that's why there will continue to be enough money for 75 per cent of benefits far into the future.
So, the claim that “Social Security benefits come to an end in 2035” is a cynical, total lie. The people who promote this lie know darn well that it isn't true, buy they want you to believe it anyway.
Don't fall for the scare tactics. Social security benefits are in good shape, and there is no need to cut benefits. Although, the funding could use some improvement, to make sure that today's young people will get 100 per cent of benefits, not 75 per cent when it's their turn to retire. More on that later.
This election, vote for candidates who know and tell the truth about Social Security, not the candidates who propagate lies in order to undermine it.