Every few weeks, without fail, I hear someone proclaiming that Social Security is near collapse, teetering on the edge of insolvency, poised to bankrupt our nation and destroy the economic futures of our children and our children’s children.
These assertions suggest a rapidly expanding aging population will inevitably cause the collapse of Social Security and America’s future economic well-being. But they run counter to the lessons learned from history. This mentality reflects, at least in part, a measure of anti-aging thinking that can create divisions between the young and the old. It also reflects plain old historical ignorance. It does not encourage thoughtfulness and rationality when it comes to planning for and, ultimately, enacting the needed refinements to Social Security policy that will position the program for a healthy and stable future.
The concept of Social Security, or old age social insurance, was first put forward in Germany in 1881 and became law in 1889 under Chancellor Otto von Bismarck. In the United States, it remains what is undoubtedly one of the most successful and enduring policy mandates ever enacted. A doomsday mentality about Social Security’s insolvency does little more than risk creating antagonism across the generations — pitting younger, working-age Americans against retirees and those approaching retirement age.
Past presidents, members of Congress and special interest groups have attempted to dramatically change — and, in effect, greatly harm — Social Security only to fail when confronted with broad bipartisan and public disdain. Surveys repeatedly confirm that large majorities of Democrats, Republicans and independents of all ages feel Social Security must be preserved for future generations, and that includes working Americans who say they would be willing to pay additional Social Security taxes to ensure its survival.
It remains one of the most efficiently run federal programs, spending less than one cent of every dollar on administrative functions even though it collects taxes from 94 percent of working Americans and distributes benefits to approximately 60 million individuals.
Yes, the 2015 annual reports from the Social Security and Medicare boards of trustees project that, if combined, the two Social Security trust funds will be depleted in 2034. But, such projections have become commonplace over time. As a result, dozens of amendments over the past decades have done just what they were intended to do — realign the program so it remains both solvent and responsive to anticipated demographic and economic trends. Those amendments have traditionally enacted a combination of strategies that both increased the system’s revenues (for example, by raising the Social Security taxable earnings cap and the tax rate) and lowered certain benefits (by raising the eligibility age for early and full retirement benefits and lowering the cost of living adjustment).
As the National Academy of Social Insurance, a non-partisan, non-profit organization made up of the nation’s leading experts on social insurance, points out, “there are many options for making moderate adjustments to Social Security that will keep Social Security solvent for 75 years or more.”
Since President Franklin D. Roosevelt signed it into law in August 1935, Social Security has been a stable source of income through seven recessions and periods of high unemployment. It has established itself as an essential feature of modern life with one in four households and one in seven Americans benefiting from it. Close to half of all older Americans would be poor without Social Security as it continues to lift almost 15 million adults 65 years and older out of poverty. The program also benefits 6 million children — more than any other federal program.
Policymakers shouldn’t tamper with a social insurance program that has come to guarantee the vast majority of Americans a significant measure of economic security and stability. I have faith that cooler heads will prevail in the long term. Keeping Social Security strong is in the best interests of all Americans, young and old alike.
Lenard W. Kaye is a professor at the School of Social Work and director of the Center on Aging at the University of Maine. He is a member of the Maine chapter of the national Scholars Strategy Network, which brings together scholars across the country to address public challenges and their policy implications. Members’ columns appear in the BDN every other week.