Happy anniversary, Social Security.
That’s right, Social Security was born 75 years ago this month, and it’s been keeping its promise all those years as a strong foundation for financial security in retirement.
That’s worth remembering as the oldest baby boomers reach traditional retirement age, younger boomers start to anticipate it, and future generations ask what retirement security will mean for them.
It’s also worth remembering as the bipartisan federal deficit commission considers cuts to Social Security as one solution to our country’s fiscal straits.
Pardon me if I don’t agree.
The fact is Social Security hasn’t contributed one thin dime to our country’s perennial budget deficits or accumulated debt.
Rather, Social Security is now and always has been fully paid for by hardworking Americans who deserve a return on their contributions.
It should be off-limits to the deficit commission.
As a matter of fact, Social Security has been taking in more than it’s paid out for the last 25 years, and the accumulated difference is now worth $2.5 trillion. Combined with Social Security payroll taxes, that’s enough to pay full benefits to every beneficiary through 2037.
Is it fair to cut Social Security benefits that working people have earned in order to fix a problem that Social Security didn’t cause?
This isn’t an abstract argument. It’s about hardworking people who’ve paid into Social Security all their working lives and built their retirement security around it.
It’s also about the surviving spouses and children of workers who die or become disabled, for whom Social Security is an irreplaceable lifeline.
Let me share some statistics.
Social Security paid benefits to 1.12 million Hoosiers in 2008, including 165,000 workers with disabilities and 84,000 children. The average monthly benefit was $1,104, slightly below the national average of $1,168.
That relatively small sum is especially important because the other foundations of retirement security – pensions, savings and investments – have taken some pretty big hits between the long bear market of 2000-2003 and our current deep recession.
At the market bottom in 2009, in fact, Americans’ 401(k) and IRA investments had lost an estimated $2.8 trillion in value.
While many funds have recouped some of those losses, most second-quarter investment statements show that we’re still treading water.
As for pensions, it’s not at all clear that younger generations will even have them, whether they work in the public or private sectors.
Now it’s true that Social Security needs some long-term changes so it can continue to pay promised benefits to future generations.
But there’s time and opportunity to make incremental changes – nothing drastic – to keep Social Security strong for our children and grandchildren.
That’s been Social Security’s enduring legacy and promise.
Let me add just a few words about the Trust Fund, which some people deride as just a bunch of IOUs.
True, the Trust Fund isn’t cash. It’s an accounting mechanism that tracks Social Security revenues and expenditures over time.
But it’s also a promise and an obligation of the federal government to everyone who’s paid into Social Security, both now and in the future.
Today, Social Security is financially strong and in no immediate danger of going broke. But long-term changes will be needed to keep it that way.
That’s why AARP fully supports a search for solutions so that Social Security endures another 75 years. But AARP strongly opposes any solutions that involve unfair benefit cuts or risky proposals such as private accounts that put everyone’s retirement at greater risk.
Americans have counted on Social Security for 75 years. Let’s strengthen and protect it for at least 75 more.