SS: Plenty of cause for concern
I have several comments regarding Andrea Wassner’s (AFGE Local 3937) letter of Dec. 7 about Social Security. I am a retired federal attorney who specialized in Social Security, Medicare and Medicaid law during my long career with the U.S. Department of Health and Human Services. Ms. Wassner said one should check the facts and that there were essentially no concerns to be had about Social Security.
On her Point No. 1 about Social Security’s self-sufficiency: The “payroll tax holiday” over the past several years reducing FICA taxes by 2 percent severely impacts the self-financing Ms. Wassner describes as being deficit-neutral. In fact, this tax reduction puts the program into significant deficit, along with the recent huge reduction of the number of working Americans supporting it, i.e., those leaving the workforce because they have given up looking for work, have become disabled or have decided to retire. This reduced workforce especially impacts Social Security’s financial underpinnings.
On her Point No. 2, that Social Security is not a Ponzi scheme: Her point is valid only if the taxes for Social Security were set apart in a “lock box” solely for Social Security purposes. Sadly, beginning in the 1970s Congress took the money from the Social Security “trust funds” and used it for other purposes, leaving IOUs that are the taxpayers’ obligation to repay. Thus, there are only paper promises rather than real assets in the trust funds. Therefore, payments “required by law” will be paid from current tax dollars, borrowed money or not paid at all.
Her Point No. 3 regarding the “huge surplus:” The money has been spent. The Emperor has no clothes, but no one will realize it until the time when financial gimmicks and “robbing Peter to pay Paul” come to a halt because no one will lend to the United States government and it does not have the tax money to pay these “promised benefits.”
Our government is now borrowing 46 percent of every dollar spent. Sooner or later every citizen, from the poorest to the richest, will pay dearly for our spendthrift habits. In addition, the concerns I describe do not address the inflation likely to occur due to the profligate spending of the past five years, which seems unlikely to cease. If such inflation occurs, Congress will necessarily stop or severely reduce the annual “cost of living adjustments.” Ultimately, the government can only pay what it collects in taxes, or can convince lenders to supply. Social Security has only the government’s promises to back it, and the continuously diminishing amount of workers’ taxes to support it. Perhaps Ms. Wassner (AFGE Local 3937) is correct. However, the real facts suggest otherwise.
THOMAS STUBER
Hauser