Earlier today I sent a letter to the White House, signed by myself and Congressional Progressive Caucus co-chair Lynn Woolsey, making it clear that we will stand against any potential cuts to Social Security benefits. Whether they come from the president's debt commission or from members of Congress, any proposals to reduce entitlement benefits -- one of the most fundamental bonds between the American people and the federal government -- will be dead on arrival in the House of Representatives.
It's become conventional wisdom that Social Security is in crisis. As the story goes, we can't afford to ensure our retirees maintain a decent standard of living and we need to slash and burn our way to fiscal "responsibility" or we'll all fall off a cliff. In fact, Social Security is not funded from the general treasury and does not contribute to the national debt, a point we make clear in our letter. Calls for fiscal austerity often include the disingenuous claim that tax cuts magically pay for themselves -- as Sen. Jon Kyl recently suggested -- and all we need to do is take money from America's older citizens and working families to put our checkbook in order. This is nonsense.
What these fiscal hawks don't tell you is that income above a $106,800 earnings cap is not subject to Social Security payroll taxes. That's right: anything you earn above that figure doesn't go into Social Security. Don't let anyone fool you into thinking this is just a liberal position -- it's an objective fact. Instead of hacking away at one of America's fundamental promises to its retirees, the debt commission should think about the possibility of having high-wage earners pay the same amount to protect our retirement system as everyone else does.
What else don't the fiscal hawks tell you? Well, have you heard this one?
After 2037, Social Security will not contribute to the deficit, because it is prohibited by law from taking on debt in order to pay benefits. Instead, if the projected shortfall were to go unaddressed, Social Security would pay reduced benefits, equal to about 75% to 80% of promised benefits, according to the Social Security actuaries and CBO, respectively. This is a situation that Congress must take action to avoid, but it is not the catastrophic collapse that some alarmists warn about. Eliminating this shortfall would require raising revenues equal to about 0.5% to 0.7% of gross domestic product, according to CBO and Social Security, respectively.Probably not. Instead you've probably heard, as GOP House leader John Boehner recently said, that Social Security is flat broke and we need to raise the retirement age to 70 immediately.
This is a fight that the American people are going to win. According to a major new poll just released by AARP, 63 percent of Americans view Social Security as one of the "very most important" programs in the country "and over seven in ten believe that most people on Social Security could not do very well without it" (emphasis in the original). When you hear someone holding forth about Social Security being unsustainable, remember those numbers. We need Social Security now more than ever before, especially given an economic downturn that's cost several generations trillions of dollars in net worth. These are the times that Social Security was designed to address. A struggling economy shouldn't mean a financially insecure future for ourselves, our neighbors and our communities. That's just not the American way.