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GUEST COLUMN: Social Security in danger

Friday, August 13, 2010 | 12:01 a.m. CDT

While Republicans and Democrats spar over extending Bush-era tax breaks for the super-wealthy, another argument is under way in Washington — and this one has the power to devastate middle-income Americans, particularly those in states such as Missouri.

Using the national deficit to justify their position, conservative lawmakers now claim we need to roll back Social Security benefits and up the retirement age to bring federal spending under control. They argue the system is nearly broke and requires massive infusions of cash to remain solvent. Some are even back to promoting privatization, despite the collapse of Wall Street that wiped out $14 trillion in U.S. household savings.

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It's apparently irrelevant that their argument overlooks basic fact. But it does shed light on what's at stake in November's elections.

According to the Social Security Trustees Report, a document presented every year since 1941, issued Aug. 5, the system's future isn't nearly so dire as critics would have us think. Social Security is operating with a surplus, which will continue to grow until 2023 when it will reach $4.5 trillion. With no change whatsoever in benefit rate or retirement age, Social Security is secure through 2037.

And its impact is acute in states like Missouri.

The nonprofit nonpartisan Center on Budget and Policy Priorities calculated in 2005 that 45 of every 100 seniors in the state would fall below the poverty line if not for monthly Social Security payments. With retirement benefits, provided at the current rate, the number of destitute age 65 and over plummets to less than 6 percent.

Little known, also, is the impact Social Security has on children. Twelve percent of Missouri kids under 18 would fall into poverty were it not for such things as survivors benefits following the death of a parent. As the Center's report states, "when both the breadth and severity of children's poverty are considered, Social Security does more to reduce child poverty than any other program."

An updated report by the Center is due out later this month, and it's expected to show no significant drop in the number of Missouri residents who rely on Social Security just to meet basic need — and that means more than 1 million in a state of less than 6 million.

But it's a fair bet to assume even that won't change the minds of lawmakers intent on dismantling the nation's longest-running and most successful anti-poverty program, even though it's supported by workers' wages and law prohibits it ever from contributing to our nation's debt.

The tax cuts at issue provide $700 billion in unpaid revenue to the top 2 percent wealthiest Americans, and they don't come without a price to the rest of us.

The upcoming elections ultimately will settle the debate and determine who wins: The well-heeled financial wizards who brought our nation to economic ruin, or retirees and children of deceased or disabled workers who banked on fairness when it came to how tax dollars would be spent.

Niel Ritchie is executive director of the League of Rural Voters, a Minnesota-based nonprofit working to strengthen rural communities nationwide.


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Comments

John Schultz August 13, 2010 | 8:18 p.m.

It seems to me that good term life insurance, on the order of $10-$30 per month, could do a lot more to secure the future for a family who loses their primary breadwinner.

(Report Comment)
Ellis Smith August 14, 2010 | 6:28 a.m.

John - John! - you aren't thinking clearly. Getting off one's backside and signing up for term life insurance (and making the subsequent payments) suggests that American adults are responsible people, capable of taking charge of their lives and planning for the future. Perish the thought! Your thinking is obviously mired in a previous century (as, I freely admit, is my own).

What happens to the money spent on term life insurance? The insurance company invests a substantial part of it, in the private sector (although insurance companies also invest in government bonds).

What happens to individual and employer contributions to Social Security? They perpetuate the world's largest Ponzi scheme.

(Report Comment)
tom kelly August 14, 2010 | 4:02 p.m.

Social Security is not in danger if left alone.

Eat the rich.

(Report Comment)
John Schultz August 16, 2010 | 1:28 a.m.

Tom, if that means taxing "the wealthy" to increase the longevity of Social Security, then it won't work for long:

http://www.cato-at-liberty.org/2008/03/1...

"Mr. Obama has recently veered sharply left. He now proposes to solve the looming Social Security shortfall exclusively with higher taxes. …Currently, all wages below about $100,000 are subject to a 12.4% Social Security payroll tax. But all wages above that amount are not subject to the tax. Mr. Obama wants to eliminate the cap, but, in a concession to taxpayers, exempt wages between $100,000 and $200,000. …Mr. Obama’s plan would keep Social Security in the black for only three additional years. Under his proposal, annual deficits would hit in 2020, instead of 2017. By the 2030s the system would still run an annual deficit exceeding $150 billion. Mr. Obama’s modest improvements to Social Security’s financing come at a steep cost. …The top marginal federal tax rates would effectively increase to 50.3% from 37.9%, equivalent to repealing the Bush income tax cuts almost three times over."

(Report Comment)
Ellis Smith August 16, 2010 | 7:01 a.m.

"Mr. Obama has recently veered sharply left."

Mr. Obama has always been sharply left.

(Report Comment)
John Schultz August 16, 2010 | 10:07 a.m.

Ellis, to be fair this article was from 2008 I believe when Obama was still running for president and I think that statement may have only been in reference to Social Security (at least from the author's perspective).

(Report Comment)

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