Los Angeles Times columnist Michael Hiltzik deserves a shout-out for his strong piece on how the government is keeping Americans in the dark about their Social Security benefits. Hiltzik, who has been chronicling the politics of Social Security for a while, found a fresh angle on the now-familiar narrative of “Social Security causes deficit.” He reported on the disappearance of those paper statements outlining benefits—not just what people have accrued for retirement, but also what their disability and survivors’ benefits are likely to be. Talk about useful information for families struggling to figure whether they have enough life insurance, for people who can’t qualify for or afford private disability coverage, and for everyone planning for retirement.
A year ago, because of a “bleak” budget projection, the Social Security Administration stopped sending those statements to everyone under age 60. Hiltzik dug into the details of how much it actually cost the government to send that information. It’s $70 million a year, or 44 cents per recipient, including postage, which Hiltzik says is about one half of one percent of the agency’s budget of $11.7 billion. Congress began sending the mailings in 1989. In 1996, Hiltzik noted, the Government Accountability Office observed “public confidence in Social Security has been low for a number of years, in part because the public has lacked an understanding of Social Security programs.” Hiltzik asked if there “could there be a worse time for this informational vacuum to occur,” since the political attack on Social Security is the most ferocious it has ever been. “The change signifies how little effort the federal government puts into communicating what it achieves for Americans in an era when our public discourse focuses almost exclusively on the cost of government and not at all on its benefits,” he told readers.
Hiltzik noted the statements that arrived each year “undermined the popular notion that you can’t count on Social Security,” a phrase that, he said, was a “scare-tactic pitch of unscrupulous investment brokers, annuities hawkers and their friends in Congress as they tried to peddle retirement deals to people reluctant to part with their money. The phrase has been repeated so often that it’s become an article of faith” for young people far away from retirement. Last week a 29-year-old woman deciding whether to opt out of Social Security, which her city government pension arrangement allowed her to do, told me she would “not qualify for Social Security because it’s a known fact that if it is kept the way it is, it will run out of money by 2035.” She saw no reason to pay money into the system.
But she didn’t have the full story. Based on current projections, Social Security can pay full benefits until 2036 and then three-quarters of the benefits after that. Nor did she know about Social Security disability and survivors’ benefits.
The Social Security Administration has asked for more money in its budget to restore the statements, but Social Security commissioner Michael Astrue told Hiltzik he thought it “unlikely” the agency would get all the money it asked for. The agency says it hopes to replace the paper statements with an online version, but that solution may be months away. In the meantime, it offers an online calculator, which Astrue admits is an inadequate substitute for paper statements. You have to know the calculator exists on the agency’s website, and Hiltzik reported the agency has “hardly been proactive in letting people know it exists.”
Hiltzik’s piece deserves wide readership. It’s tailor-made for local reporters who want to bring the Social Security story—now back on the agenda—to their communities.