Social Security has transformed the nation. Before its enactment, growing old was something to be feared. People worked as long as they could, but when they grew old or became disabled, they invariably lost their jobs and had no choice but to move in with their children. If that was impossible, they literally went to the poorhouse. At the time Social Security was enacted, every state but New Mexico had poorhouses. The vast majority of poorhouse residents had once been independent workers. Also, when wage earners died, there was often insufficient income for children to remain with their widowed parents and siblings.But Social Security has changed all of that. Today, the wages and salaries of nearly all workers are insured by Social Security against loss as the result of death, disability, or old age. Retirees, widow(er)s, children who have lost parents, our soldiers wounded in combat, and other working Americans who have become disabled are among the nearly 60 million beneficiaries who receive Social Security’s guaranteed, monthly income.
Social Security works so well and is so popular because it embodies the best of American and religious values — rewarding hard work, taking responsibility for ourselves and our families, honoring our parents, caring for our neighbors, and managing our resources prudently and responsibly. By law, Social Security cannot pay benefits unless it has sufficient income to cover all costs — without a penny of borrowing. According to the most recent Trustees Report, Social Security ran a surplus of $25 billion last year alone and has an accumulated surplus of $2.8 trillion.
Thanks to dedicated, hard-working civil servants, Social Security is extremely efficient. It spends less than one penny of every dollar on administration. The rest is paid in benefits. It is also extremely affordable. Social Security’s actuaries project that at the end of this century, it will cost only 6.2 percent of Gross Domestic Product, a much lower percentage than what many other countries pay on their counterpart Social Security programs today. It is 95 percent funded over the next 25 years; 88 percent funded over the next fifty years.
Its one shortcoming is that its benefits are extremely modest by virtually any measure. That is why a growing number of elected leaders and Social Security experts are proposing plans to expand those modest benefits, while ensuring that all benefits can be paid over the long term. As the wealthiest nation in the world, at the wealthiest moment in our history, we can certainly afford to expand Social Security’s modest benefits.
Whether we, as a nation, decide to expand Social Security’s benefits, keep them at their scheduled levels, or cut them is most definitely not a matter of affordability. Rather, that choice is a matter of values and priorities.
Note: In honor of Labor Day, we have invited Maya MacGuineas and Nancy Altman as guest bloggers on Social Security Matters. We thank them for taking the time to share their narratives with our followers and allowing us to showcase the diversity of individuals in support of Social Security on this important holiday. Have a wonderful Labor Day Weekend!