Watch Out Social Security – Here They Come Again!
By Steve Kofahl, President of AFGE 3937 and member of PSARA’s Executive Board
The most successful family insurance program in U.S. history is once again under attack. It’s been that way for 80 years. Our enemies hate this wildly-popular government program because of its success. It has demonstrated that we can take care of ourselves and each other collectively, and be protected from the loss of earnings that result from the retirement, disability, or death of a worker. Social Security’s continued existence threatens their Darwinian world view, by which only the “fittest,” the rich and powerful, deserve to prosper and feel safe.
On the very first day of business this year, the House of Representatives passed House Resolution 5, establishing their rules for the 114th Congress. One of the rules prohibits transfer of surplus funds from the Old Age and Survivors Insurance (OASI) Trust Fund to the Disability Insurance (DI) Trust Fund unless accompanied by changes that improve the long-term finances of the Social Security system overall. It artificially creates a crisis, because the DI Trust Fund surplus is due to run out next year, while the OASI surplus lasts until 2034. Because the OASI Trust Fund is so much larger than the DI Trust Fund, reallocation would keep both in surplus until 2033.
Congress could scrap the cap on earnings subject to payroll taxes in order to raise revenue, but that is not going to happen this year or next. That leaves benefit cuts as the only option. Cost of living adjustments could be cut by instituting the Chained CPI, the full retirement age could be raised once more, and/or benefits could be meanstested so that those with the most political power would no longer have a stake in Social Security and would press for privatization.
Congress has shifted surpluses from one Trust Fund to the other (in both directions) 11 times, 4 times when Reagan was President, and most recently in 1994. For the first time, Social Security is being held hostage to force benefit cuts. It is particularly ugly to pit retirees and survivors against 11 million disabled beneficiaries and 2 million of their dependent children, who would see 20% cuts in payments if nothing is done to balance the Trust Funds. That is exactly what our elected leaders are up to, the old “divide and conquer” approach.
Social Security Administration Chief Actuary, Stephen Goss, says that although reallocation is blocked, there could be limited borrowing of OASI Trust Fund reserves that may get us through another year, but that action must be taken in 2017 at the latest. Interesting, don’t you think, that 2017 just happens to be a Presidential election year? I can imagine certain candidates railing against the President and his party for refusing to “reform” Social Security, and for allowing this “crisis” to come to a head.
Fortunately, we can take action now to discourage the Senate leadership from adopting a similar rule. Five Senators, including Patty Murray, have launched a petition drive online. Just go to www.nosocialsecurityhostages. com. Ask your family and friends to do the same.