En español | Social Security faces an uncertain future. As the bipartisan fiscal commission appointed by President Obama considers ways to address the federal budget deficit, the 75-year-old system finds itself caught between two sharply conflicting points of view.
Strengthen the system
Increase revenue to bolster its long-term financial stability. As pensions and personal savings decline, people over 50 are counting more on Social Security than they expected when they were younger, according to a new AARP Bulletin survey.
Shrink the system
Reduce benefits. Many lawmakers, citing a need to control the ever-widening federal deficit, have floated proposals for lower-than-expected benefits for millions of workers retiring 20, 15, even 10 years from now.
Let’s take a closer look at the two basic views. Paul Ryan, meet Myra Trent.
Rep. Paul Ryan of Wisconsin, the ranking Republican on the House Budget Committee, is a member of the deficit commission, which expects to deliver its recommendations by year’s end.
Ryan has drafted legislation that he calls a “Roadmap for America’s Future.” It would address the deficit largely by reducing future payments for Social Security (along with Medicare and Medicaid). Workers who are 55 or younger in 2011 would see their future benefits reduced.
To compensate, they could divert part of their payroll taxes to a series of government-managed funds—but with no guarantee that their savings would replace their lost benefits.
Ryan’s road map would sharply reduce the government’s role in Americans’ retirement security. We have no choice, Ryan insists. Looming deficits, if uncontrolled, will mean saddling future generations with a lower standard of living—“and we’ve never done that before. … We’ve got to come up with better ways to help assist retirement.”
Myra Trent doesn’t buy his argument. A 50-year-old disabled Coast Guard veteran living in Spokane, Wash., she doesn’t want anyone touching Social Security—not because she’s a beneficiary (she isn’t yet) but because of what she says it has done for America.
Trent sees the current deficit debate as a distraction, “to take our minds off things they don’t want us to look at—like corporate welfare. If you want something to cut, just look where the lobbyists are spending the most money, and start there. ... And don’t get me going on waste in the military. I’ve seen it, up close.
“The people who want Social Security to disappear would start us back down the road to being a country with just two classes, the haves and the have-nots.”
Among the achievements of Social Security is that it has helped to drastically lower the poverty rate among the elderly—from 35 percent in 1960 to less than 10 percent today. It provides 40 percent of the income of people 65 and older, the Employee Benefit Research Institute reported in June.
Most people now receiving Social Security never expected to need it as much as they do. Even before the recession, retirement plans and personal savings were in decline. Now, as unemployment remains high, 50 percent of Bulletin survey respondents age 50 and older said that they “rely or will rely” on Social Security more than they expected when they were younger.