Candidates spew falsehoods about Social Security
Social Security is among our most successful government programs. It has prevented millions of seniors and retirees from living in poverty. Prior to the program’s inception, most retirees lived in poverty. Many were forced to live with their children.
Since Franklin Roosevelt signed the program into law in 1935, there have been continuous efforts by some to dismantle it. This effort has been raised to new levels the past 10 years, starting with the Bush administration’s efforts to privatize it, followed by the recent push to dismantle the program entirely.
Here are distortions being made by politicians and candidates for office and the reality about each.
--Baby boomers are creating the present strain on the program.
False! Boomers were all born long before 1983, when the Greenspan Commission recommendations were adopted to address the population bubble. Adjustments were made to cover the boomer situation.
--Government “raided” the Social Security Trust Fund.
False! Surplus funds are invested in Special Obligation U.S. Treasury Bonds. These carry the same obligation to repay as Savings Bonds we buy for our children and grandchildren.
--The system won’t be able to make payments in 2037 (or some other year selected by the speaker).
False! Even if the trust fund were exhausted in 2037 as actuaries report, tax revenues estimated for that year will be able to pay 76 percent of calculated benefits. Adjusted for inflation and wage gain, this will still be a higher benefit than paid under the present formula.
--The only answer is to raise the retirement age to 70.
False! A great majority of workers have physically demanding jobs that they cannot realistically continue to age 70.
--The trust fund doesn’t exist.
False! The trust fund has a value of $2.4 trillion. The Congressional Budget Office estimates the fund will grow to $3.8 trillion by 2020. In 2009, Social Security paid out 94 percent of its tax revenues in benefits. Excess tax revenues and interest were credited to the trust fund.
The trust fund claim is the most common misrepresentation. In fact, the fund is a product of the program’s original legislation. In 1935, after the 1929 market crash, developers of the program realized that investing any funds in the stock market was too great a gamble for this important retirement security program. The legislation required any surplus funds to be invested in U.S. Treasuries, commonly called “bonds,” and created a formula for interest payments that would mirror other financial instruments the federal government issues. In 2008, the fund earned 5.1 percent interest on its Treasuries.
In closing, the Social Security program hasn’t added one cent to the national debt. Those who attempt to connect Social Security to the debt are, in truth, attempting to default on the Treasury Bonds owed to the trust fund.
In business, not meeting your loan obligations is considered unacceptable. Apparently, political candidates attempting to default on the government’s Treasury obligations to the Social Security Trust Fund see it as “business as usual.”
Leon Burzynski is president of the Wisconsin Alliance for Retired Americans, 6333 W. Bluemound Road, Milwaukee, WI 53213; phone (414) 771-9511. WIARA represents thousands of Wisconsin retirees and is dedicated to the health and economic security for current and future retirees. Website www.wisconsinara.org.