Saturday, January 22, 2011

a progressive approach to strengthening social security

americanprogress | Social Security underpins the retirement income of 36 million Americans, provides basic survivor benefits for another 6 million widows or widowers, and delivers critical disability insurance to another 10 million working families. Social Security is arguably the greatest progressive achievement of the last century, embodying the values of shared responsibility and economic security for everyone, not just a select few. When President Franklin D. Roosevelt formed the Committee on Economic Security—the basis for Social Security—he said he wanted a program that would “provide at once security against several of the great disturbing factors in life—especially those which relate to unemployment and old age.” Those values continue to be the foundation of Social Security today. The program represents a shared responsibility to one another and from one generation to another. It underpins the retirement income of 36 million Americans, provides basic survivor benefits for another 6 million widows or widowers, and delivers critical disability insurance to another 10 million working families.

Social Security protects almost all Americans who work or have worked for pay and their families. Currently, 156 million Americans are paying into Social Security in 2010 and 205 million people in 2009 had paid enough into Social Security or were dependent on somebody who had paid enough into Social Security to qualify for retirement and survivorship benefits. Most of these current workers and their dependents will count on Social Security as their income insurance for decades to come.

Social Security, in short, is our bedrock for basic income insurance for all Americans.

Yet the program and its founding progressive values face two significant challenges: one short term and the other longer term. The immediate challenge is defending Social Security from decades-long conservative charges that the program is too costly. What Republican Presidential Candidate Alf Landon said about Social Security in 1936—that it would encourage wasteful spending and deliver children nothing but “roll after roll of neatly executed IOU’s” from their fathers’ safe deposit boxes—isn’t very different from what conservatives of the present day continue to predict. They always see disaster just over the horizon, and propose diminishing and now privatizing Social Security.

Progressives should reach out to all sides of the political spectrum, but we cannot pretend to give “even handed” treatment to arguments that have been wrong for 75 years. Social Security today faces a conservative onslaught seeking to undermine and dismantle the program. Congressman Paul Ryan (R-WI), who will certainly enjoy an elevated position in the new 112th Congress that convenes in January next year with its Republican majority, released a budget roadmap that privatized Social Security similar to President Bush’s unsuccessful privatization plan in 2005. This conservative plan, if enacted, would dismantle Social Security’s founding progressive principles and replace it with an “on-your-own” philosophy that guts benefits for middle-class families, explodes the national debt even fur- ther, and is not supported by the majority of Americans.

Progressives must stand up to these attacks on Social Security but also tackle the long-term challenge of modernizing Social Security so that it can offer the best insurance benefits to those who need them the most. This means updates to address demographic and economic changes that have occurred over the past few decades as well as Social Security’s long-term financial challenges so that we can provide these modernized benefits for generations to come. In 2037, all of those participating in the program will suddenly receive benefits one-quarter below what they were promised—if nothing changes. This would be an unprecedented break in the generational agreement in place since the 1930s to support everybody’s retirement and those struck by disability or the death of a primary breadwinner. (See Box)

These challenges—both the conservative assault on Social Security and the need for modernization—cry out for progressive changes to Social Security to ensure the program’s long-term viability without jeopardizing the values on which it was built. Social Security is in no immediate danger of financial insolvency—the long-term financial challenge is being used by conservatives simply as an excuse to destroy the program. But Social Security does need to change in order to strengthen the program for the rest of this century.

Our nation must rise to meet these twin challenges today. Conservative plans to dismantle Social Security represent a clear and present danger, but another lesser danger is to reject any calls for updating the program. Progressive governance requires us to modernize this program to provide a strong and fiscally sustainable Social Security system to meet the economic challenges of our age. This is not the political fad of the moment, but an economic imperative for each and every generation of Americans.

In this paper, the Center for American Progress proposes a Social Security system worthy of meeting America’s challenges in the 21st century. Our approach to social insurance rewards work with secure retirement, attacks poverty, and responds in meaningful ways to the fundamental changes in how families work and live today. And our recommendations meet Social Security’s financial needs for the next 75 years.