Social Security: How Social, How Secure?

This past week, my placement sent to of us to the National Academy of Social Insurance’s Demystifying Social Security, Academy for Interns 2011. Commonly, our generation is told that the social security system is broken, and, as the presenters illustrated with countless polls, today’s youth often accept that as being true. With the August deadline fast approaching, it was interesting to hear the other side of the argument.

Social security affects more people than I originally realized. Of course, retired folks depend on it in varying degrees, with the poorest twenty percent of people’s retirements consisting of at least eighty percent of benefits from social security. Even the richest folks receive forty percent of their benefits from it. SSDI is available for workers who must go on disability for a variety of reasons, and widows often rely on the benefits from their spouses. Young people, too, are eligible for the program through survivor’s benefits, given when children’s parents die to provide support for the family.

So, why isn’t the program broken? Social security is not part of what is called on-budget. In simplest terms, it’s separate from what the government spends. The money comes from a trust fund that’s already in place and from pay role taxes that employees and employers pay. If Congress did nothing for the next twenty years, and though everybody picks on Congress for its struggles the last few months, even that’s unlikely, current projections show no problems until 2037, when a twenty-three percent cut becomes required. As of 2009, it’s not running deficits that are not being covered from the fund.

In fact, social security’s got quite some things going for it. The recession in late 2009 impacted most groups, causing more people to enter or come closer to the poverty line. Yet, statistics show the retired population remained largely unaffected because of, yes, social security. It benefits our economy, too, ensuring that people have money to spend. Considering only one percent of its costs are administrative, the program is more cost-effective than most government programs.

So, is it salvageable? Well, we were broken to twelve groups of between eight and twelve people, given realistic cost-analyses, told to come to a consensus on which benefits to increase and methods for making the necessary revenues, and given sixty minutes to complete this task. Though there were debates over which benefits to add and the best, most fair, and most fiscally responsible way to pay for these additional benefits, every table succeeded. I don’t think that’s a coincidence.