Saving Social Security, Again

When trying to convince dubious students of the benefits of social security when they are all too familiar with the costs, professors might well ask the question: “Who are you going to believe, me or your paycheck?”

“Social Security is safe and can still pay the vast majority of promised benefits if

nothing changes between now and 2037, and even then benefits’ cuts would range

from 21 percent to 24 percent if reform is not undertaken,” University of Massachusetts economist Christian Weller writes in a report released by the Center for American Progress (CAP). “But Congress can take prudent policy steps sooner rather than later to guarantee strong benefits for generations to come.”

The current debate over saving the social security system revolves around either cutting the program’s outlays or increasing contributions to them. The president’s deficit commission recommends a combination of both.

The plan that Weller devised for CAP raises taxes and benefits. Among the beneficiaries in CAP’s plan are same-sex couples. “All legally married couples regardless of their sexual orientation should be entitled to the same insurance benefits under Social Security,” Weller asserts.

Weller, a professor of public policy at the University of Massachusetts-Boston, also serves as a senior fellow at CAP. When I asked him in a conference call what the CAP plan would do for poor women who already forfeit a good chunk of their income to social security taxes, he pointed to the CAP care-giver benefit.

He also noted that CAP “does not raise the retirement age.” So, if the ladies can hang in there and continue to fork over one of every eight dollars they earn to social security until they are in their sixties, they will really make out like bandits when their children are grown and their grandchildren are growing.

Speaking of growing pains, social security taxes, which the CAP report does not show, have increased at least 20 times in the past half century. The chief actuary of the Social Security Administration makes no effort to hide the incline.

For example, the tax rate for the self-employed went from 3.75 percent in 1959 to 12.4 percent currently. These are the folks who create new jobs.

Meanwhile, for us working stiffs, the amount we shell out is fairly close to that. “The social security tax (combined employer and employee) is 12.4 percent (so about one in eight dollars),” Carrie Lukas from the Independent Women’s Forum points out. “Economists accept that employers calculate the entire cost of hiring an employee (including costs of taxes and benefits) and give employees what’s left in take home pay.”

Malcolm A. Kline is the Executive Director of Accuracy in Academia.

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