Sam Uretsky

Saving Social Security Again

There’s a chance, however remote, that the Democrats can salvage the midterm elections. The elections are expected to be a vote on current economic conditions, and there’s no question that conditions are bad. President Obama was a wonderful candidate, but “it could be worse” is a terrible replacement for “yes we can.” When Press Secretary Robert Gibbs complained, “They will be satisfied when we have Canadian health care and we’ve eliminated the Pentagon. That’s not reality” he ignores the fact that candidate Obama, while generally avoiding specifics, created an aura that let his supporters, no matter how diverse, invest him with their hopes and dreams. One former Obama supporter has been saying “I want to be a Republican. They pander to their base. I want to be pandered to.” A quick review of The Drudge Report shows that Democrats rank below bankers in public esteem. Even so, there’s a chance that the Party can hold onto a majority in both houses of Congress as long as the Republicans are willing to help.

The economic failings of the Obama administration can be traced back to the very start. The recovery plan was budgeted at $862 billion, which, according to some economists was too small. Of this, 30% to 40% was allocated for tax cuts. While this may have been an effort to get bipartisan support, tax cuts are one of the least efficient ways to stimulate the economy. Stimulation comes from spending; the money should go to people who will spend every cent. People who pay taxes already have some money, and use the extra money to replace lost savings. Finally, according to the Washington Post, “At the end of July, nearly 18 months after the stimulus passed, more than half of the $275 billion in investments had yet to be spent.”

But, if there is an issue that could work in the Democrats favor, it’s Social Security, and they seem to have found it. How effectively they use it remains to be seen. One of the key targets is Rep. Paul Ryan (R-Wis.), ranking member of the House Committee on the Budget. Rep. Ryan has been drawing a great deal of personal attention with his Roadmap for America’s Future, which includes a provision for Social Security that “Offers workers under 55 the option of investing over one third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to Federal employees. It includes a property right so they can pass on these assets to their heirs, and a guarantee that individuals will not lose a dollar they contribute to their accounts, even after inflation.” The claim sounds good, but in its details, it’s just a revival of George W. Bush’s proposal to privatize Social Security. Sharron Angle, running for the senate in Nevada on the Republican line, advocated phasing out Social Security and Medicare during the primaries, but has been backpedaling for the general election. No matter — Harry Reid has the tapes.

When Social Security was enacted, it was intended to be part of a “three-legged stool” for retirement, to provide income in addition to pensions from employment and personal savings. Guaranteed pensions gave way to 401(k)s, which shifted the risk from employer to employee, although in other cases, companies including Bethlehem Steel and United Airlines found that by declaring bankruptcy they could eliminate their pension obligations altogether. In New Jersey, in 1997, Republican Gov. Christine Whitman skipped payments into the state employee’s pension fund in order to cut taxes. This, over time, caused a huge shortage in pension assets. Now, New Jersey Republican Gov. Chris Christie is making a name for himself by fighting the state’s unions over their pensions.

Personal savings barely exist. For years, Americans had minimal and sometimes negative savings, a combination of middle-class economic stagnation and the misguided belief that home equity would replace savings accounts. 

According to a 2007 estimate by the Social Security Administration, 33% of people over the age of 65 rely on Social Security for 90% or more of their incomes — this may be higher now. We all heard the cry “keep your government hands off my Medicare,” but now it’s Social Security and the Republicans who want to make changes.

In midterm elections, people over the age of 65 traditionally have the highest turn-out, and have been estimated as being 40% of total voters. This group, and those approaching retirement age, may be particularly aware of how essential Social Security has become. The phrase, “(they) never miss an opportunity to miss an opportunity” was first said by Abba Eban about the Arabs, but has been accurately applied to the Democrats as well. This time, though, they may have an issue that will salvage their congressional majorities. When they say “it could be worse,” they can follow up with “let’s go to the videotape.” This year it could mean a lot.

Sam Uretsky is a writer and pharmacist living on Long Island, N.Y. Email sdu01@mail.com.

From The Progressive Populist, September 15, 2010