What Social Security should actually be paying to survive in this economy

What Social Security should actually be paying to survive in this economy
Image via Creative Commons.
Economy

Social Security is one of the most popular and progressive government programs in the United States. But Republicans, who try to obscure their real agenda, are bent on cutting it.

Inflation continues to rise in the United States. Although gas prices have recently fallen since their record high over the summer, the cost of groceries rose by 11.4 percent over the last year, and there is no expectation that they will fall back to reasonable levels. Prices overall have risen by 8.2 percent, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index report covering September 2022 as compared to the same month last year. While most working Americans are not getting hefty wage raises to compensate for inflation, seniors will see their Social Security benefits—which are pegged to inflation—rise next year. Starting in January 2023, beneficiaries will see an 8.7 percent cost-of-living adjustment (COLA) bump in their Social Security checks.

This article was produced by Economy for All, a project of the Independent Media Institute.

Conservatives are scoffing at this automated increase, as if it were a special treat that the Biden administration has cooked up to bribe older voters. Fox News reported that there was a “social media backlash” against White House Chief of Staff Ron Klain’s tweet lauding the upcoming increased COLA benefits for seniors. The outlet elevated comments by the conservative America First Policy Institute’s Marc Lotter, who retorted to Klain, “Nice try Ron. Raising benefits next year does not help seniors with the higher prices they are paying today or the higher prices they’ve been paying since you took office.”

But Social Security benefits have risen automatically with inflation since 1975 by design, precisely so that the livelihoods of seniors are not beholden to partisanship. This is an imminently sensible way to ensure that retired Americans, who spent their working lives paying Social Security taxes, can have a basic income.

If conservatives are complaining that an 8.7 percent bump is not enough to counter inflation, one might expect them to demand an even greater increase to Social Security benefits.

But, as is often the case with conservative economic logic, hypocrisy abounds. Bloomberg Government reporter Jack Fitzpatrick recently reported that several House Republicans who are vying to chair next year’s House Budget Committee if their party wins a majority in the November 2022 general elections are crafting plans for reductions, not increases. They hope to leverage negotiations on raising the 2023 debt ceiling by demanding cuts to Social Security and Medicare—programs that the GOP loves to deceptively label “entitlements.”

Fitzpatrick, using conservatives’ nakedly partisan language, said that Republican negotiators “could subsequently put major entitlement programs in play.” One of the GOP members of Congress eyeing the committee leadership, Georgia’s Buddy Carter, was more forthcoming about his plan, saying, “Our main focus has got to be on nondiscretionary—it’s got to be on entitlements.” Another Republican lawmaker, Jodey Arrington of Texas, also hoping to chair the crucial committee, understood the value of discretion when discussing cuts to programs favored by his constituents. He warned his Republican colleagues against getting too specific because “this can get so politicized.”

But Republicans have been demanding cuts to so-called entitlement programs for at least the past seven years running, in 2015, 2016, 2017, 2018, 2019, 2020, and 2021.

Oddly, the Washington Post’s fact checker Glenn Kessler found no evidence to back up Democratic Senator Patty Murray’s recent claim that “Republicans plan to end Social Security and Medicare if they take back the Senate.” Awarding Murray four “Pinocchios”—the Fact Checker column’s highest possible rating for lies—Kessler assured readers, saying, “Don’t worry, seniors: There is no such plan.” (In the hundreds of comments on the piece, many readers called out Kessler’s obvious service to Republicans in helping to hide their agenda.)

Social Security is one of the best, most popular government-funded programs in the nation. I recently explained its workings to my parents who emigrated from the United Arab Emirates to the U.S. a year ago. The custom they are familiar with in countries like the UAE is that of a “gratuity” or severance, paid to retiring workers—a lump-sum tip—based on their salary and number of years worked.

I explained that in contrast, U.S. workers pay a small percentage of their wages into the Social Security fund their entire working life. Upon retirement, workers draw a monthly sum based on their salary, years worked, and the current cost of living. While this may not sound as enticing as receiving a large sum of money at once, the monthly payments will never run out and last from retirement until death. My parents were duly impressed.

This year, to mark the 87th anniversary of Social Security, Data for Progress found in a poll that the program remains extremely popular and that a majority of voters want to increase benefits.

Those surveyed also worried that Congress could cut current or future benefits, or privatize the program. Most had not heard about Republican plans for cuts, however, suggesting that the efforts to hide the GOP’s real agenda have generally worked.

And, most were in favor of a very simple solution to ensure that Social Security’s funds don’t run out as revenues have dropped due to increasing inequality, and life expectancy has increased: make the wealthy pay their fair share. Social Security payroll taxes are capped at $147,000 in wages currently (and beginning in 2023 will increase a modest 9 percent to $160,200). That means those earning a million dollars a year in 2022 pay the same amount into Social Security as those earning $150,000. Removing the cap ensures that the fund will remain solvent and stable.

Social Security, in spite of some flaws, is also one of the nation’s most progressive programs, helping to further racial and gender justice among older Americans.

According to the Center on Budget and Policy Priorities (CBPP), “Social Security is a particularly important source of income for groups with low earnings and less opportunity to save and earn pensions, including Black and Latino workers and their families, who face higher poverty rates during their working lives and in old age.”

Furthermore, CBPP finds that “Social Security is especially important for women, because they tend to earn less than men, take more time out of the paid workforce, live longer, accumulate less savings, and receive smaller pensions.”

In spite of enduring Republican desires to cut the program, it is not nearly as generous as it ought to be. A global comparison of government retirement benefits by the Organization for Economic Cooperation and Development (OECD) in 2019 found that the U.S. ranked 24th on the ratio of worker benefits to earnings. This is below average for OECD countries, and lower than the benefits paid by countries like Turkey, Greece, Estonia, and Latvia, in spite of the U.S. being the richest nation in the world.

In other words, there is a basis for the conservative critique that an 8.7 percent increase in Social Security benefits slated for 2023 is insufficient. But the solution is to make benefits more generous, rather than to cut the program as Republicans aim to do.

Author Bio: Sonali Kolhatkar is an award-winning multimedia journalist. She is the founder, host, and executive producer of “Rising Up With Sonali,” a weekly television and radio show that airs on Free Speech TV and Pacifica stations. Her forthcoming book is Rising Up: The Power of Narrative in Pursuing Racial Justice (City Lights Books, 2023). She is a writing fellow for the Economy for All project at the Independent Media Institute and the racial justice and civil liberties editor at Yes! Magazine. She serves as the co-director of the nonprofit solidarity organization the Afghan Women’s Mission and is a co-author of Bleeding Afghanistan. She also sits on the board of directors of Justice Action Center, an immigrant rights organization.

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