Human beings are unique in their ability to learn because they can transfer knowledge from one person to another through teaching, training, or research, and if the educational process is successful, it can have a formative effect on the way others think or act. Successful politicians understand that affecting the way voters think is crucial to garnering support for their favorite agenda, and Republicans have been relentless in teaching the public that Social Security is adding to the deficit and in jeopardy of going broke, and they are not alone. There has never been a better time for President Obama to educate the people about Social Security and its non-effect on the deficit, as well as its financial health.
A couple of days ago, Goldman Sachs CEO, Lloyd Blankfein, joined Republicans’ entitlement bashing rhetoric and said “in general, entitlements have to be slowed down and contained because we can’t afford them, “and his remedy was raising the Social Security retirement age for workers to receive benefits. It is easy for a Wall Street CEO whose net worth is $450 million to launch another 1% assault on the rest of America, but his GOP idea will have deleterious effects on Americans he thinks should work longer before they retire.
Before getting into why Blankfein’s contention about the affordability of maintaining Social Security in its current form is fallacious, there are some prescient facts President Obama and Democrats must teach the population. First, Social Security is a worker-funded retirement savings account, not an entitlement; unless one considers that after paying into Social Security for 45 years, a worker is entitled to their own money, and then it is an entitlement. Second, the Social Security Trust is forbidden, by statute, to take one penny from the federal government under any circumstance so it adds nothing to the deficit, and raising the retirement age or cutting benefits will not reduce the deficit. For the record, the Trust funds its own extremely low administrative costs (about 2% ) making it the most fiscally efficient program in the nation’s history.
Social Security does not now, and never has, had any effect whatsoever on the national debt regardless how often Republicans claim otherwise. They are, after all, habitual liars, and why any sane American believes cutting benefits or raising the retirement age will reduce the deficit is mindboggling. Further, Social Security is able to pay 100% of benefits for decades, and if rich Americans like Blankfein paid the same percentage as people who work for a living, the Trust would be solvent forever. Just raising the income cap will ensure it could continue paying benefits for at least 75 years, but Republicans will never tell the public that inconvenient truth. However, Blankfein did tell some inconvenient lies.
He said, “Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career. So there will be things that, you know, the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised because we can’t afford them.” Blankfein is not very proficient at simple arithmetic because most Americans start working at age 18, and if they retire at age 62, then they worked 44 years, not 25. Republicans have pushed raising the retirement age for years, and it may be great for men like Blankfein who sits in a chair earning $16 million a year, but for the average American with repetitive or physically taxing occupations, working extra years will cause serious problems.
Life expectancy for wealthy Americans in non-physical jobs has been increasing over the past thirty years, but poorer workers in physically demanding jobs have not seen the same life expectancy gains. If the retirement age is raised to 70, the average retiree would see their benefits cut by 19% because they most likely will die before getting a return on their investment. As it is now, the average benefit for a worker 65 and older is, on average, just over $12,000 annually, and for most retirees it represents the majority of their income after paying in to the system for nearly 50 years, not, as Blankfein claimed, 25 years.
If Blankfein thinks “we” cannot afford to maintain Social Security in its current form, then there are adjustments to maintain it that may not please him one bit. The “we” Blankfein is referring to does not include the wealthy elite like himself, because Willard Romney is worth less than Blankfein and earns about the same as the Goldman Sachs CEO and his payroll tax rate was .02% of his income while every American earning less than $110,100 pays 4.2 percent through the end of this year. Self-employed workers pay 4.2% and 6.2% to match what an employer would contribute.
The question Americans should ask Republicans is why the wealthy are allowed to pay such a remarkably low rate. As noted above, Social Security would be solvent for at least a century if everyone, especially the uber-wealthy, made payroll tax contributions on all their earnings. However, America is the land of inequality, and the wealthy will never be required to pay the same rate as most working Americans until the President and Democrats educate the people about why cutting benefits or raising the retirement age is unnecessary since it does not add to the deficit.
Republicans have attempted to kill the New Deal’s Social Security Act since its inception in 1935, and attaching it to the nation’s deficit is their latest attempt to slash benefits and punish workers who paid into it their entire working lives. In fact, they have spent 50 years attempting to destroy successful government program to bolster their argument that government has no useful purpose whether it is the Veterans Health Administration or Social Security, and their goal is saving money for more tax cuts for the wealthy.
President Obama encouraged his supporters to “push him” to work for the people, but he should not need to be pushed to tell Americans people four simple facts. Social Security is not an entitlement, is not broke, does not add one penny to the nation’s deficit, and requires only one adjustment; make filthy rich men like Lloyd Blankfein pay the same rate as a plumber, butcher, or carpenter who actually works for a living.