Means testing: Here’s what’s wrong with it

By Nancy Amidei and Will Parry

“Means testing” Social Security is a slick, seductive idea being promoted by Social Security’s enemies, supposedly to address the federal budget deficit. But like proposals to raise the Social Security retirement age, means testing has nothing to do with the deficit, and everything to do with emasculating Social Security.

So how would means testing apply to Social Security? It’s simple: Continue to require everybody to contribute to the Trust Fund from their paychecks, but abandon the established practice of paying benefits based on those contributions. Instead, pay benefits based on “need.” That is, reduce or eliminate benefits for those with incomes above a certain level.

Note that means testing, whatever its form and whatever its rationale, betrays two basic principles of Social Security: First, that benefits be universally available; and second, that a benefit be an earned right. Everyone who works and pays into the system is entitled to a benefit. It’s always worked that way.
That’s why the Puget Sound Alliance for Retired Americans and its partners in the Social Security Works/Washington coalition have explicitly rejected means testing: “Principle No. 3: Social Security is an insurance policy, and as such should not be means tested.”

In a survey of nearly 1,500 people last year, hefty majorities said they had no problem with having to pay Social Security taxes. Why the popular support? It’s the program’s universality. People know that that they will receive a monthly Social Security check when they become eligible.

It’s a well understood principle in Washington, DC, that “programs for poor people tend to become poor programs.” Consider a means tested program like TANF (Temporary Assistance to Needy Families). Only poor people qualify. Eligibility is strict. And the benefits are temporary and meager.

Grotesquely inadequate as it is, TANF is always on the chopping block when government budgets get tight. The wealthy and the powerful do not spring to the defense of TANF. Why should they? They’re means-tested totally out of the program.

In summary, to means test Social Security is to place it on the proverbial slippery slope, its funding without powerful champions, inevitably degenerating into a program no longer recognizable as Social Security, sooner or later to become simply an under-funded twin to TANF. The enemies of Social Security want the program to wither away and die. That’s why they churn out slick arguments for means testing.

(Nancy Amidei is a member of PSARA.)