Saving Social Security -- and Democratic seats

Democrats are facing a midterm hurricane without the benefit of a crucial bulwark to blunt the storm surge.

House Speaker Tip O’Neill laid the foundation in 1981 when he exclaimed of GOP designs to dismantle Social Security: “It’s a rotten thing to do. It’s a despicable thing to do.”

There’s plenty of evidence to justify reprising O’Neill’s tack this fall: The Social Security–privatizing, Medicare–shredding “road map” of GOP Rep. Paul Ryan; the barely disguised complicity of the GOP congressional leadership; and, in a party where extreme has become mainstream, the blatant animus of candidates who see Social Security as “socialism”—and yearn to eviscerate it.

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An Early Bird campaign should put the debate on Social Security's future before the voters.

So why not campaign all-out, in O’Neill’s plainspoken way, against a GOP that is disloyal to the most successful—and most popular—social program in American history?

Because Democrats have been disarmed by the president’s deficit reduction commission, which plainly intends to propose Social Security cuts.

Rather than allow such cuts to be greased through the lame duck session of a decimated Democratic Congress, or passed under cover of “bipartisanship” in a decidedly more Republican one next year, shouldn’t the case be stated and debated before the election? (Right now, Social Security is treated as the issue that dare not speak its name.) There is also the question of Democratic identity: What does the party stand for if not Social Security? And then there is the question of Democratic stupidity: Qualified and muted comments by Democrats in effect suggesting that Democrats won’t endanger Social Security as much as the other guys will can only further pave the road to defeat.

The president’s deficit reduction commission was a response to a series of popular myths—that the federal deficit is a root cause of our economic distress and that Social Security is a root cause of the deficit. Over time—once the economy is strong again—the deficit must be brought down, as Bill Clinton achieved with his tax and budget packages in the 1990s. However, it’s more than doubtful that the commission, replete with taxophobic Republicans, can agree on anything like that.

So the deficit commission has targeted Social Security, which has nothing to do with the deficit. The program has a $2.5 trillion surplus right now, rising to $4.3 trillion by 2023. Paul Krugman has calculated that the increased costs of Social Security over the next two decades are “significantly smaller… than the rise in defense spending since 2001.”

The demographic arguments against Social Security are demagogic. We’re told that life expectancy has soared since the creation of Social Security in the 1930s; in fact, retirees today are not living much longer than they did then and those who do are in the upper half of income brackets. In any event, the rise in life expectancy largely reflects a steep decline in childhood mortality over the past three-quarters of a century. We’re warned that there are now too few active workers to support so many retirees. In fact, that’s how retirement systems operate from start-up to maturity. The architects of Social Security understood and prepared for that; the system was designed to accumulate prodigious surpluses—and it has.

In the face of such facts, the case for cuts conveniently shifts again. The surpluses, we’re informed, aren’t real because the government spends the money year to year on other programs, and what’s “borrowed” from the trust fund won’t be there when it’s needed. But the borrowing is secured; the trust fund holds a form of federal bonds that is widely regarded as the safest investment on earth. Are we supposed to make good on bonds for the Chinese and for high-end investors, but not for retirees whose yearly Social Security averages just $14,000? This argument is hardly worth the dishonest breath expended on it.

It is true that in 2037, according to actuaries, Social Security may—MAY—have only enough resources to pay 75 percent of scheduled benefits. Nonetheless, for the advocates of cuts, 2037 is game, set, match. One of their solutions is to raise the retirement age to 70—which ironically would constitute a 15 percent cut itself, pushing 1.5 million seniors into poverty. Their other nostrum is to means-test the program, tapering off or eliminating monthly checks for better-off recipients. On the surface, this idea registers majority approval in a USA Today/Gallup poll.

On reflection, however, substituting a two-tier system for a universal entitlement —which is the sustaining genius of FDR’s program—would inexorably erode support for the program and inevitably invite more cuts.

There are alternatives. The proposal with the highest approval in the USA Today/Gallup poll—at 67 percent—is to require higher-income Americans to pay taxes on all their wages. According to the Congressional Budget Office, removing the cap on wages subject to payroll taxes—which currently stands at $106,000—would not only eliminate any shortfall in 2037, but would extend the surplus and ensure the solvency of the trust fund until 2083. Or without lifting the cap, a 1 percent increase in the payroll tax on employees and employers would protect the trust fund until 2056; a 2 percent increase phased in over 20 years would push the date once again to 2083.

Conservative activist Grover Norquist has single-mindedly and brilliantly locked most GOP candidates into a pledge never to raise taxes. The Tea Party has brought that demand to a populist boil. With the connivance of the deficit reduction commission and its establishment allies, and the inconstancy of the Democratic establishment, the monomaniacal tax cutters have put the country on a path toward needless slashes in Social Security.

What is needed—urgently—is a counterforce. If the politicians won’t summon and lead it, the grass roots can and should. There is a coalition, Strengthen Social Security, composed of dozens of organizations from the AFL-CIO to the AARP. But there is no mass movement visible and vocal in congressional districts around the nation—and Norquist shouldn’t be the only one with a pledge. It’s late in the 2010 campaign, but an “Early Bird” movement of seniors, progressives, and working Americans should organize campaign events to demonstrate, demand answers, and hold candidates to account. They could pin Republicans as anti–Social Security. They could make Democrats do what they haven’t yet done for themselves—run as champions of Social Security.

The Early Birds, as senior citizens know, get the best deal. This fall, they could at least partially reframe the midterm contest. And instead of letting the crude former Sen. Alan Simpson, the co-chair of the deficit reduction commission, continue his reactionary rush to maim Social Security in the name of saving it, a genuine popular movement could define the conditions for a post-election bargain.

It would look something like this: Keep the retirement age where it is for the near majority of workers with tough, manual jobs—for those in the bottom half of the income scale whose life expectancy is six years shorter than it is for workers in the upper half. For white-collar, upper-income workers, set a retirement age of 70, but only in concert with a measure, for example, to lift the cap on wages subject to payroll taxes for those who make over $250,000 a year.

The bargain could take other forms, but the details matter and so does a fundamental, guiding principle. Any changes have to be fair and Social Security should not become the scapegoat for the deficit, sacrificed to conservative hostility and Democratic timidity.

Someone has to say that that would be “a rotten thing to do, a despicable thing to do.” The message will move voters if it is heard. It can be coupled with a devastating attack on Rep. Paul Ryan’s scheme to abolish Medicare in favor of vouchers for private insurance.

Democrats are determined to be responsible, but responsibility can’t mean surrendering to tax cuts for the privileged and Social Security cuts for everyone else to make up the difference.

Seldom has a political party been offered so clear an opening at such a perilous hour. An Early Bird uprising would be politically smart, allowing Dems to seize the offensive. What’s more, as Tip O’Neill said, rescuing Social Security is not just about politics. It’s about decency.