Social Security funding is sound, but program remains at risk

By Steve Kofahl

The recent report by the Social Security Trustees shows only a slight deterioration in future funding projections, with the Trust Fund reserves now expected to last until 2036, rather than 2037. After that date, 77% of scheduled benefits would still be payable, with checks actually being higher than those issued today, even when adjusted for price inflation. That is because benefit amounts and cost-of-living adjustments are calculated based on wages, and in most years wages rise faster than prices. This period of recession, high unemployment, and wage suppression is the exception, not the rule. The trustees’ “intermediate” economic assumptions have proved to be pessimistic assumptions in normal times, with most of their previous reports extending the projected date by which the reserves would run out.

Annual surpluses ($69 billion this year) continue until 2025, when the current $2.6 trillion Trust Funds will have grown to well over $4 trillion. You wouldn’t know it if you relied on the major media, which misrepresents the finances of the program by failing to count interest payments as income. The Social Security chief actuary has told us that the law requires that all income and assets be included when describing the financial health of the program. Too many politicians refer to Trust Fund assets as “worthless IOUs.” They’re just as real and secure as U.S. Savings Bonds, and our debt held by China and other nations, and we need to keep saying it.

What we clearly need is first, to get more Americans back to work now in jobs that pay a living wage, and second, to scrap the $106,800 cap on wages and self-employment income that is subject to Social Security contributions. Politicians need to make real investments in education and job creation, and stop busting the unions that created the middle class. They should stop slashing public sector jobs. The vast majority of local, state, and federal workers now pay into Social Security.

Economist Dean Baker points out that projected increases in life expectancy in this year’s report also made a difference in the trustees’ projections. How much you can expect to benefit from these increases depends largely on your race and economic class. Those with low and moderate incomes, and African-Americans, have seen little increase in life expectancy. Rich white folks are the ones who are living much longer. That should only strengthen our resolve to defend the majority of the population that is not enjoying increased longevity, and that therefore will not receive significantly more checks in their lives than did previous generations. We must not tolerate any cuts in benefits or in cost of living calculations, period.

As I write this, it appears that the infamous “Gang of Six” is disintegrating. Faced by angry crowds at home, some of our elected representatives are now saying that they will not include Social Security in their plans to address growing budget deficits. However, we must remain vigilant. The President has Joe Biden negotiating with both political parties, and says he wants no lines drawn in the sand, and a bipartisan compromise.

The greatest threat now is that Congress and the White House may agree to binding caps or “triggers” that would automatically cut future domestic spending, including Social Security payments, when overall spending exceeds a certain level. There would be no new revenues, just more shredding of the social safety net.

This approach to deficit reduction would not only be cowardly, but cruel and inequitable. The wealthiest among us would continue to avoid paying their fair share from the riches they have accumulated, while the vast majority of Americans would suffer even more. No individual politician who holds office today would be held accountable for the future damage done.

We will not be fooled into accepting that kind of raw deal. We will press lawmakers to make the right choices, insist on healthy cuts in war spending, and demand an end to tax breaks that benefit only big corporations and the richest Americans. The battle is far from over, and the Alliance will never stop fighting.