Judy explained the difference between Social Security and welfare. “Direct welfare programs are strictly tax supported,” he said. “Social Security is participant supported.”
Judy knew he had participated and had made his contributions all these years. When he turned sixty-two, he took his early retirement benefit—about $1100 a month. Why, I asked? “I could probably live without it,” he told me. “But I figured I may not recoup all my benefits so I said why not.” He went on. “Social Security is a contract with the government, and you’re entitled to it. I paid in and might as well draw it out.”
The conversation about taking early retirement benefits inevitably led to the singular question in the national discussion. Should the age at which someone receives full retirement benefits increase from sixty-seven to seventy? Judy did not think so. “It goes against my conservative beliefs,” he told me. He said while it might be a realistic solution, Social Security is a contract with an individual and should not be broken. “It’s a violation of the original contract. I should get what the system was set up to give me. If they want to change the rules, let them apply to new people coming into the system.”
Judy also understood that making someone wait longer for full benefits might hurt some people financially. “It’s going to be tough going. It’s going to be a hard pill to swallow.”
A new survey (pdf) released at the end of last week shows that Judy’s beliefs about raising the retirement age are in step with other Americans’ beliefs. When it came to raising the retirement age for Social Security, 65 percent of voters said no. The poll by Stan Greenberg and colleagues, commissioned by the Campaign for America’s future and Democracy Corps with support from MoveOn.org and the SEIU, found that while voters believed reducing the deficit is important, 68 percent said they would oppose major spending cuts in both Social Security and Medicare to reduce it; 28 percent said they were in favor of cuts. The pollsters said that number included 61 percent of Republicans and 56 percent of independents.
However, some experts believe that if the system is means tested, which is being discussed, only low- and middle-income people would qualify for benefits, leading to a lack of support for the program among wealthier people. Eventually Social Security could turn into a welfare program like Medicaid as the social solidarity that underpins the program vanishes.
Doesn’t the current system, which allows for some public sector unions to opt out of Social security in favor of privately managed pension plans, damage this supposed “social solidarity”? And who exactly are these experts?
The course of action to shore up entitlements most heavily favored by liberals is raising or eliminating the cap on payroll taxes. If the current payroll cap of $87,900 is lifted, and benefits are based off of the workers contributions via payroll taxes, does this mean that a high income earner would expect to get the same rate of return on his Social Security benefits as a low income worker? If the answer is no, then doesn’t that erode the “social solidarity” of the program because lower income workers are going to see bigger gains on their investment than higher income workers. If the answer is yes, doesn’t that just put us in the same exact fiscal boat a generation down the road?
#1 Posted by Mike H, CJR on Tue 17 Aug 2010 at 12:12 PM
It seems to me that social security was started and was only meant for people who had approached the age for retirement. I know that the government started to allow people with disabilities, and benefits to children when a parent had passed away. If in fact this had not happened there would not be a problem with social security, Oh did I forget to mention that the government has borrowered money from the social security fund also. If a person is not capable of working then that persons family should help them, also the other surviving parent should shoulder the responsibility of raising their children not picking the pockets of older americans. Now that the money is almost gone from people figuring out how they can get disability ss who will step up to take care of retirees? I am sure it will not be the government sence they are the ones who started sending checks out to all those people way under 65
#2 Posted by Nancy Thacker, CJR on Mon 30 Aug 2010 at 10:27 PM