Some Excellent New Deal 2.0 Posts on Social Security

New Deal 2.0 has been running some excellent Social Security commentary over the past couple weeks. They ran a series of articles under the heading Social Security Fiscal Fitness which included contributions by Robert Kuttner: The Stealth Attack on America’s Best-Loved Program and Greg Anrig: How Social Security Can Gain Without Much Pain.

Two specific posts I want to extra encourage you to check out. First is a post, Deficits, Social Security, and the American Public, based on a Roosevelt Institute working paper, Understanding Public Opinion On Deficits and Social Security, by noted scholars Benjamin I. Page and Lawrence I. Jacobs.

Support for Social Security is found in virtually all segments of the American population. The opinion that “too little” is being spent on Social Security is shared by majorities of Republicans, Democrats, and Independents; by majorities of men as well as women; by whites as well as African Americans or Latinos; by people with a lot of formal education as well as people with little. Most important, support is very strong among young (age 18-29) Americans, fully 63% of whom told the most recent GSS that we are spending “too little” on Social Security. The supposed generation gap on Social Security is mostly a myth. There is no intergenerational war between “greedy geezers” and the young….

Finally, abundant evidence from surveys over the years by Bloomberg, NASI, the present authors, Pew, Quinnipiace, and CBS/NYT have all found that majorities of Americans favor raising or eliminating the payroll tax “cap” on high incomes. Most recently, Bloomberg found 78% of Americans saying that removing the cap entirely should be “considered.” Last summer, NASI found that fully 83% of Americans supported “lift[ing]” the cap “so that workers earning more than [the cap] would pay Social Security tax on their entire salary just like everyone else.” This one policy change, by itself, would erase most of the projected future deficit in the Social Security trust fund.

Even with select audiences and a very framed way of discussing the debate, those at the forums voted a lot like regular Americans.

I also want to point out this post, Social Security’s Family Benefits and the Fiscal Commission by Yung-Ping Chen. He makes the point, one I don’t hear often, that instead of simply using this opportunity to slash benefits, you could actually reorganize the way benefits are paid out to reflect the way the American population is changing:

But updating the program’s rules on family benefits should be the first priority. Without this, Social Security, despite solvency, will continue to leave many vulnerable people unprotected. We need a more effective safety net for the needy, most of whom are women, minorities, and children. Fortunately, updating family benefit rules does not necessarily imply more funding…

This decline partly stems from the fact that the benefit rules designed 70 years ago were meant to protect the then-dominant family structure: a wage-earning father and a stay-at-home mother with children. During the past 40 years, however, more and more women work for pay. Fewer people marry, they marry later, they divorce more often and sooner, and some never remarry. Increasingly, many people are not marrying, and unmarried couples have multiplied. While social norms have changed dramatically, benefit rules remain largely stationary…

Beyond coverage and benefit levels, there’s also the issue of equity. For dual earners whose earnings are close, the widowed spouse receives only his or her own benefits and feels short-changed compared to the one-earner family. Spouses who are better off with spousal (or survivor) benefits feel unfairly treated by not getting any additional benefit for the payroll taxes they paid. And single workers, who pay the same taxes on the same earnings, do not receive such benefits….

Earnings sharing could solve the problem for some widowed spouses and ex-spouses. While in general, married women in two-earner families would be better off under earnings sharing than those in one-earner families, there are potential problems. An important forthcoming simulation study reports that benefits for some of the most economically vulnerable subgroups of women, such as low-income widows, would be reduced, some sharply. Moreover, earnings sharing will not help the never-married. Nor will it alleviate poverty among older people generally.

What we need is fundamental reform. This Fiscal Commission has a historic opportunity to remake Social Security into a program with two tiers of benefits that incorporates earnings sharing. The first tier Social Security would pay a flat-rate benefit to eligible persons based solely on age or disability. It would be funded by the revenues currently paying for the share of program costs for older people under Supplemental Security Income, food stamps, subsidized rents, and the like, as well as through part of the payroll tax. The second tier Social Security benefit, funded by payroll taxes, would be based on earnings — an individual’s earnings when single plus half the couple’s combined earnings while married. Such a restructured Social Security system can deal with the issues of coverage, benefit level, and equity in a comprehensive manner.

There’s a research group in history that looks, with a feminist critique, at the New Deal and the way it reified the nuclear family right at the point it was starting to dissolve (see Mettler Dividing Citizens: Gender and Federalism in New Deal Public Policy and Kessler-Harris In Pursuit of Equity: Women, Men, and the Quest for Economic Citizenship in 20th-Century America.) This is a critique that conservatives obviously have a hard time making, but it is one worth noting. If Social Security payments reflect a country that no longer exists, and there are obvious ways to update and change the social safety net to make it reflect the America we are, and this is an appropriate time to do so. So check all these posts out.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s