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Social Security: Expand it, don't cut it

Sen. Bernie Sanders

Republicans are trying to convince voters that Social Security is in crisis. Let's not kid ourselves: We do have an urgent problem on our hands, but it's not Social Security. Millions of middle-class Americans are facing a retirement crisis as a result of inadequate income and growing wealth inequality. Social Security isn't the problem. It's an essential part of the solution.

How did this crisis develop? There was a time when traditional corporate pension plans paid a fixed income after retirement, but today only one in five working Americans has that kind of plan.

Today many households live from paycheck to paycheck, according to surveys, and more than half of all Americans have less than $10,000 in savings. How can people save for retirement under these conditions? Economists used to describe retirement security as a "three-legged stool" made up of savings, employee pensions and Social Security. With two of those legs cut off, why are some politicians sawing away at the third?

The truth is that Social Security is a success story. Without it, nearly half of seniors, and 1 million children, would be living in poverty today. It's financially self-sufficient, forbidden by law from adding to the federal deficit, and its operating costs are far below those of private-sector retirement plans.

So why are politicians trying to undermine public trust in it? Because we have another crisis on our hands: a crisis of democracy. Unfortunately, some politicians would rather respond to the concerns of the wealthy and powerful than address the needs of the middle class. That's not surprising, of course, since our campaign finance system encourages it.

To be fair, not all of the opposition is cynical. Some politicians have an ideological problem with Social Security, because they hate government. Social Security is a government program that works very well and is extremely popular with the public. That threatens their philosophy — so they claim that it's "going broke" instead.

That's not true. The retirement trust fund has $2.8 trillion in surplus, enough to pay full benefits for 18 years (and three-quarters of benefits afterwards). Why not longer? In large part, because income inequality — the huge gap between rich and poor — has soared, hurting millions of Americans and all but wiping out the middle class.

Income inequality has also hurt Social Security's finances, by leaving most of the wealthiest Americans' earnings above the cut-off point for the payroll tax which funds it. A Wall Street CEO who makes $18 million per year pays no more in payroll tax than someone earning $118,000. If we had the same level of economic equality we enjoyed in 1983, the retirement trust find would have another $1.1 trillion on hand — and another 20 more years of solvency. Instead, that money has gone into the pockets of the wealthy.

America doesn't have a problem with "greedy geezers," to quote one Social Security adversary. It has a "Robin Hood in Reverse" problem, a problem with policies that take from working families and give to the rich.

Republicans would rather change the subject. They want to cut benefits to disabled Social Security recipients by 19 percent, rather than make a minor adjustment between Social Security's trust funds. Congress has made that adjustment 11 times, and is only blocking it now to create the false sense that Social Security has a funding problem. If they succeed, they will then look for Democrats to join them in a new "grand bargain" that cuts retiree benefits.

It's time to address our real problem — the retirement crisis — instead. In that regard, I have reintroduced legislation that would apply the payroll tax to earned income above $250,000 as well as investment income. This would allow us not only to increase benefits to meet the elderly's higher living expenses, but to extend Social Security's solvency until 2065.

That's sensible, practical — and fair. It asks those who have benefited most from wealth inequality to pay their proper share of payroll taxes. It's what the public wants, too, according to the polls.

Some millionaires won't want to do that, of course, which raises the question: Does our government exist to serve wealthy campaign contributors, or the people in whose name it governs? Congress can answer that question — by listening to the American people who want to expand Social Security, not the Wall Street millionaires who want to cut it.