Focus On Strengthening Social Security, Not Cutting It
The National Committee to Preserve Social Security and Medicare recently held an event on “Commissions, Cuts and Crisis Calls”. Over the next few days we will post recordings of some of the exciting and informative speeches that took place at the event.
BARBARA B. KENNELLY: Good morning. Thank you all for coming out here this morning as we invited you to, and I want to take a few minutes to outline why we have asked you to come here this morning before I introduce our valued guests. I want to tell you a little about this organization. I’m Barbara Kennelly; I’m president of National Committee to Preserve Social Security and Medicare. We have 3 million members and supporters across these United States. Our members have various political backgrounds, but they have one passion and that is to preserve Social Security and Medicare, and not just for themselves but for their children and for their grandchildren.
I have to tell you that Social Security and Medicare have always generated controversy. They were under attack before the enacting legislation even passed in the House and the Senate. And you know, the opponents of Social Security they’ve changed their tactics, they’ve changed their retric, but they have never changed their convictions. They think that Social Security and Medicare are unwarranted expansions of government and they should not survive in their current form.
And I have to tell you this morning, the national committee and the people who are on this panel, and I think some of the people in this room, absolutely believe we must preserve Social Security. Before the Great Depression, people worked; they hoped they could save a little money, but when they stopped working the lucky ones they could go live with the younger members of their family. The ones that weren’t so lucky, they often lived in poverty. And what we hear about today, after the Great Depression, all those savings that people who even had savings they didn’t have it anymore, and this cannot happen today because we have Social Security.
But what we want to emphasize this morning is how moderate Social Security benefits are. The average benefit for Social Security is $13,000 a year; now that’s not a lot of money but it’s absolutely crucial to those that are collecting it. I constantly talk about the figure that 2/3 of those who have Social Security is half their income; one out of five people on Social Security, that’s all the income they have. We also don’t remember that Social Security is the largest disability program that we have in the United States and the largest children’s health program, and Medicare meets a similar need, and Medicare provides healthcare for seniors.
Now I was in Congress for 17 years, I represented Harvard Connecticut, the insurance capital of the world. And let me tell you something, those insurance companies they have to make a profit, they have to respond to their shareholders, and you, know they didn’t want people over 65, insure them because people over 65 have claims, there’s no doubt about it. But once Medicare was passed in 1965, all the people over 65 were put in a pool, the risk was shared, and that demographic that had the least healthcare then had the most healthcare.
And the last time I want to talk about now is the last time, some of it took place in this room. The last time Social Security was overhauled and that was in 1983. And let me tell you something, we had a real crisis then. We didn’t have the crisis where the people are talking about now, 3 decades out; we had a crisis then that we didn’t know if the checks could go out in 3 months. And at that time Ronald Reagan was president, and he put aside his political differences and represented by his Treasury Secretary Jim Baker and Speaker O’Neill was Speaker and he put his political differences aside and he was represented by Bob Ball, who’s the godfather of Social Security. And eventually with the Greenspan commission, a deal was put together to put Social Security back into fiscal balance, and guess what we did? We looked forward to the retirement. We knew those baby boomers existed; this idea that they just came when they’re retiring. When they were born we built schools for them, when they got married we built housing for them, and the 1983 overhaul took care of their retirement for many, many years. There’s no doubt about it, we have to be very clear about it.
We’ve had a financial meltdown and we’ve had situations. Retirement funds in the last 15 months have gone down 2 trillion dollars; 20% of their value. Now yes, we have an economic fall down, we have massive borrowing and we have to get our economy back on a positive path, and certainly, you know, your bosses have to take that tough vote on the stimulus. But this massive borrowing and the stimulus bailout and the TARP doesn’t mean that we can’t afford Social Security and Medicare. In fact, these people who are trying to sell this this way, or pointing at the structural deficit, say that you know it’s unsustainable to have entitlement programs, and we have to cut future benefits for Social Security beneficiaries, and we have to cut deftly the next generation of benefits.
And I’m telling you that I am here to persuade you that this is something that is not true. And don’t misunderstand me; I understand that this long term deficit is real, but it’s not caused by Social Security. Yes, there’s symptoms there, there’s problems there, but they extend far, far beyond the Federal government. And now we’re talking about an entitlement crisis, and you know if you really want to get, and I know some of you are so bright and so hard-working you understand, we don’t have an entitlement crisis; we have a healthcare crisis. The growth of healthcare cost in the public and private sector have outpaced growth of income in the United States for decades. The CBO tell us the entitlement, Social Security, Medicare, food stamps, every one of these programs, if they were repealed outright, it would not slow down the gross domestic product growth of 70% by 2082 if we do nothing about healthcare.
What are the figures of Social Security? Who are .3% of the gross domestic product who’s paid Social Security? Over time it will raise about 2%; you know that’s an awful modest growth when you’re talking about the elderly in this country will grow in the amount that they will grow in the next coming years, and also, why am I standing here and telling you this is not a problem? I’m telling you that because today, this very day, 166 million people are paying into Social Security, and 52 million people are getting benefits; it’s a pay-as-you-go program.
Unfortunately, the Neo-Conservatives have singled out for attention Social Security. You now, they say they’re concerned about the Federal budget, there’s a fiscal anomaly that’s coming. And they have swept up Social Security, Medicare and Medicaid all into the same bundle, and I have to tell you these are very different programs with very different solutions. An entitlement has become a perjorative term; you think of entitlement, you think of Wall Street fat cats who are getting these incredible incomes, you think of a program that’s on automatic pilot, you think of a program that’s draining today’s government. And you know, Social Security is anything but out of control. It’s the most fiscally conservative part of the Federal budget; it runs a surplus, it looks out, trustees look out 75 years, no other program is looked out that way and it’s important on every year. And let me tell you something, nothing has changed since we’ve had this economic downturn.
There are so many misconceptions about Social Security. You know I hear people tell me, “Well if you free up some funds from the benefits of the future for Social Security, we can do a healthcare reform.” Well that totally ignores the statutory structure of Social Security. Social Security revenues, by law, are dedicated benefits for administrative costs and benefits. Yes, Social Security can lend money to the Federal government by buying Treasury Bonds, but that – if it runs a surplus – but those funds still belong under the law to Social Security.
I know everyone of you have heard about how the trust funds’ worthless pieces of paper worth nothing. You know what; those bonds backing Social Security are no different than the bonds that represent the rest of our Federal debt. Behind them is a full faith and credit of the United States of America. It’s the safest investment. Even in these days when the people are trying to get out of the market, where do they put their money? They put it in government bonds even if they don’t get any interest.
I have to end by saying that America is still the greatest economic power, and Social Security remains a great program. And you know, even as we talk about it, it’s a much smaller part of our gross domestic product than any other advanced nation. The bottom line that I’m trying to talk about today here, that our speakers will talk about, is that we certainly can and must afford Social Security in the future. We should be focused on strengthening, not on cutting them, and let me tell you, don’t be fooled. Don’t let Social Security be a pawn in the next great budget deal, and don’t let it be a trading chip with competing legislation; that’s not the place for Social Security.
Every industrialized country has social insurance; a system that spreads risk and protects people, especially the future generations, and we can’t afford to build anything less.
For more information about Social Security and Medicare visit The National Committee to Preserve Social Security and Medicare at ncpssm.org
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You know if rich folks didn’t take the SS benefits, that would also help to maintain a surplus in the fund.
Like the Kennedys and Rockefellers and Trumps – seriously – SHOULD THEY RECEIVE SS and Medicare at age 65 or if disabled?? Even if they paid into it by law, so what – I’m sure they go to charity events and give away millions to look “grand” – America could look at the very rich as “grand” indeed if they’d not accept or be allowed to get those benefits…