Social Security defenders like Greider objected to the tax holiday because, as he wrote in his Nation piece, it “would undermine the long-term solvency of Social Security unless the government replaced the lost revenue.” The danger is that it may not be replaced over the long run, Nancy Altman of the progressive group Strengthen Social Security told CJR.
In its “to-be-sure” graph, the Post acknowledged “Social Security is hardly the biggest drain on the budget,” but said that “its finances would continue to deteriorate” as baby boomers claimed their benefits. That will happen as the country heads toward 2036, and the system’s supporters have acknowledged that some fixes must be made. But there are deep ideological differences about how the trust funds should be replenished. The story did not discuss the range of options for fixing the trust funds after 2036; nor did it explain who would be most affected by those changes. One oblique suggestion the Post made for fixing the finances was to change the way that cost of living increases are calculated, but it did not describe how a new method might work, or how it might affect those people who rely on their benefits keeping pace with inflation.
An explanation would have been useful.The change in the way COLA is calculated may indeed be modest for those in their early retirement years, but it would nevertheless amount to a cut. Those cuts compound, and pinch retirees in their later years, when other sources of income run out. They may not be modest for people who become disabled early in life and need to rely on Social Security for a long time. Social Security’s chief actuary Steve Goss estimates that changes in the CPI would amount to about a seven percent benefit cut for someone turning eighty-five in 2035. Older women would be hurt the most. The National Women’s Law Center calculates that a woman with an initial benefit of $1,100 would lose more than $6,300 by age eighty and more than $15,000 by age ninety—the equivalent of more than a year’s worth of benefits.
The Post’s story offered a brief Social Security history lesson, but it omitted a crucial piece—the backstory of the drive to change the program. In 1983, the Cato Journal, a Cato Institute publication, laid out a game plan to undermine confidence in the system and to eventually make fundamental changes in Social Security that would transform it from social insurance into a system of privatized accounts. Written by Stuart Butler, now at the Heritage Foundation, and Peter Germanis, the paper discussed a strategy that has been unfolding for three decades. “We must press for modest changes in the laws and regulations designed to make private pension options more attractive, and we must expand the fundamental flaws and contradictions in the existing system,” they wrote. “In so doing, we will strengthen the coalition for privatizing Social Security and we will weaken the coalition for retaining or expanding the current system.”
The paper detailed how the public could be brought along to accept a privatized model and how the opposition could be neutralized by “calming existing beneficiaries,” “educating the public,” and enlisting help from the banking industry and other business groups that can benefit from a private plan. “We must be prepared for a long campaign,” they advised. Butler and Germanis argued that a main element of their reform strategy “involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it. An economic education campaign, assisted by modest changes in the law—must be undertaken to demonstrate the weaknesses of the existing system.”