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Time for Moral Outrage About Social Security
Published on Monday, January 31, 2005 by CommonDreams.Org
Time for Moral Outrage About Social Security
by Gar Alperovitz

I’m a political-economist, teaching at a major university. In a recent book I’ve offered my analysis of the problems facing Social Security, along with my preferred solutions. I’d be happy to discuss these at another time, but not now. The reason? It’s become obvious to me that we are all off the mark–just about all of us: economists, politicians, pundits. And it’s not because we’ve done the arithmetic wrong.

What is missing from our analyses–and from our national conversation–is a sense of outrage. We are far too cool about the current realities, and about the implications of the various proposals–especially (but by no means limited to) those emanating from the White House.

My own all too slow burning sense of outrage began when I took over management of an elderly relative’s affairs after she recently went into a nursing home in Wisconsin. I noted–and then (for the first time really) began to think about–two things. Number one was her Social Security check, which after a lifetime of work as a baker, amounted to $760 a month–up the huge sum of $11 from $749 last year.

Number two was the supplemental insurance program which she pays for out of this--at a cost of $312.40 a month. That leaves her with $402.60 a month. But ignore this–and focus only on the $760 per month she receives from Social Security.

Most of the people dealing with policy concerning Social Security, like me, are middle or upper-middle class professionals. I suspect that most readers are as well. So ask yourself the obvious question: Could you live on $760 a month–i.e., $9,120 a year? What would it mean?

And what happens if payments are cut by as much as a third, as would occur under some of the schemes being put forward by Bush Administration officials? And even at $760 a month or its future equivalent, would you personally rely for your security on a risky stock market bet like that involved in privatization plans? Keep in mind that Social Security is essentially the sole source of income for one-third of Americans over age 65.

This is the richest country in the history of the world. What the hell are we talking about when we propose schemes like this which threaten people living at the bottom end of the system? And indeed this is hardly the bottom! Social Security payments for very large numbers are less than this. The median is currently around $11,000 per year–which means fully half are under the mid-point (many far under).

Dealing with our current problems does not require sophisticated deliberation about complicated policy scenarios. There are obvious ways to fix the difficulties facing Social Security–and at some level of awareness I believe almost everyone understands this. The simplest place to begin is with one of two recognitions:

First, if we want more revenue, then payroll taxes which currently do not apply either to earnings above $90,000 or to non-wage/salary income (e.g. dividends and capital gains) should be raised. Currently a person making $300,000 a year pays exactly the same into the Social Security Trust Fund as someone making $90,000 because of the present ceiling. The system is financed in a highly regressive manner: above $90,000 the more you make the lower the percent of your income you pay.

Second, as many have pointed out, taking back some part of the huge tax cuts given to those at the very top by the Bush Administration could easily solve any problems which the system may possibly face down the line.

I come from the progressive side of the debate, a liberal if you like. But, frankly, the best things I’ve read about this have come from honest conservatives who have been willing to challenge the kinds of ideas being put forward by the “neos” now in power.

Two in particular have made the point that the richest country in the history of the world should be increasing, not decreasing its support for those in the final years of life–especially as time goes on and as technological progress moves the nation ever upward economically.

The Nobel prize winning conservative economist Robert Fogel has outlined a comprehensive plan radically different from the “solutions” proposed by those on both side of the aisle who would save money by delaying the age and thereby reducing the total years of retirement. Fogel suggests that this wealthy nation should begin retirement earlier (routinely at age 55)–and he further argues that the number of years free from work at the end of one’s career should increase as the nation’s wealth increases over the course of the century.

Fogel does not flinch from the implications. For low income people his plan would be financed in significant part by “a tax of 2 or 3 percent applied progressively to the top half of the income distribution.”

Another conservative, former Bush Treasury Secretary Paul O’Neil, has also recently proposed a system of savings and investment which would yield the equivalent of a million dollar annuity for every American. It too would be financed by taxes based on the idea that “those of us who are more fortunate can help those of us who are not.”

A very frightened elderly woman in Indiana asked me a question in the course of a recent talk. Her voice quivered as she stammered: “Are they going to cut my Social Security soon...? How soon...?”

The current fear mongering, “crisis politics” is both morally and economically outrageous. I like very much O’Neil’s retort to those who say that bold proposals are not possible: “Baloney!” If we can give away trillions in tax cuts, we can help this woman–and many more. A current estimate is that if the United States merely does as well in the 21st Century as it did in the 20th, the economy will be producing the equivalent of at least $1 million a year for every four people by century’s end. There should be more than enough to go around if we get our priorities straight.

It’s time for all of us to confront the moral as well as the economic questions at the heart of the Social Security debate. I’m one blue state American who is more than willing to join hands with the Robert Fogels and Paul O’Neils of this world and get on with it.

Gar Alperovitz (, author of America Beyond Capitalism, is Lionel R. Bauman Professor of Political Economy at the University of Maryland.


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