Social Security’s Not on Negotiating Table, but Revenue-Raising Option Being Ignored

This week wraps up with the topic that promises to be the talk of Washington and the nation until it’s resolved one way or the other by January 1, 2013: the budget showdown, entitlement programs and the impending fiscal cliff. President Obama has repeatedly stated that Social Security is not on the fiscal cliff negotiating table but that message has been largely ignored by House Speaker John Boehner and congressional Republicans, and maybe even some Democrats.

“Social Security, let’s lay it to rest once and for all…Social Security has nothing to do with the deficit. Social Security is totally funded by the payroll tax levied on employer and employee. If you reduce the outgo of Social Security, that money would not go into the general fund to reduce the deficit. It would go into the Social Security trust fund. So Social Security has nothing to do with balancing the budget or erasing or lowering the deficit.”

~ Ronald Reagan, October 1984

That was then. And, let’s face it: Reagan knew a good deal when he saw it; he raided Social Security to avoid national bankruptcy by using its funds to pay for other government programs. Since that time, according to congressional Republicans, economic necessity dictates that Social Security is the “entitlement” program most in need of reform. Social Security is projected to run out of money somewhere between 2033 and 2037 — depending on which estimates of employees in the workforce, retirement rates and birth and death projections are used — and, therefore, the program must be revamped in order to be saved.

Social Security has been placed on the chopping block far too often with its solvency noted as the primary reason. Cutting benefits, raising the retirement age and even privatisation — despite knowing that private management by Wall Street firms and tying it to the stock market is a recipe for disaster — have been pushed as viable options. Of course, not raiding the system is one way to keep Social Security intact. The other way is to ensure solvency by increasing the contribution cap.

Senator Bernie Sanders (I-VT) said this on May 15, 2012 — and here it is almost seven month later yet it’s an idea that doesn’t seem to be included during ongoing budget and fiscal cliff discussions: “Right now, billionaires pay into the Social Security trust fund the same amount of money as someone making $110,000 a year. And if we lift that cap to $250,000, if you just do that, Social Security will be solvent for the next 75 years.”

In an effort to avoid anything that even remotely resembles a tax increase on the wealthy, all ideas are not being considered by congressional Republicans. This isn’t an apples-and-oranges comparison; the negotiations are all about raising revenues and cutting expenses. But, as noted by Nobel Prize-winning economist Paul Krugman, cutting the social safety net is not the way to fix the economy and balancing the budget should not rest solely upon the backs of the poor and middle class. We may not be able to resolve the budget deficit but we can certainly ensure that Social Security is not a bargaining chip.

“The doctrine in question amounts to the assertion that, in the aftermath of a financial crisis, banks must be bailed out but the general public must pay the price. So a crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programs are slashed.”

In the words of grassroots activist Annabel Park, “Indeed we do have an entitlement problem; some feel so entitled to power and wealth that they’re willing to undermine our economy and democracy.”

The election is over and now the real work begins.