Fall 2015 Issue
October 07, 2015

Social Security A system worth fighting for

Source: NYSUT United
Author and advocate Eric Kingson
Caption: Author and advocate Eric Kingson

If you think Social Security won't be there for you when you retire, Eric Kingson has two words for you — it will. "Social Security is fundamentally sound," said Kingson, co-author with Nancy Altman, of Social Security Works! Why Social Security Isn't Going Broke and How Expanding It Will Help Us All. For copies, visit www.thenewpress.com/books/social-security-works.

"Less than 1 percent of every Social Security dollar goes toward administration, the rest is used to pay earned benefits," said Kingson, a founding co-director of Social Security Works and co-chair of the Strengthen Social Security Campaign, a coalition of more than 300 national and state organizations.

Kingson is also a candidate for New York's 24th Congressional District. In a Q&A with NYSUT United, he dispels common misconceptions about Social Security and explains why younger workers, in particular, should fight to preserve it.

Q: What's at stake for younger workers? Isn't Social Security primarily for retirees?

A: Think of Social Security as wage insurance — it protects workers and their dependents from financial distress when faced with disability, death or old age. And, consider worker- and employer-paid wage deductions as premiums.

In exchange, young and middle-aged families have access to the most secure life and disability insurance plan around, equivalent to about $580,000 in coverage.

Social Security paid $834 billion to more than 58 million beneficiaries in 2013 — nearly one in five Americans. Every month, 4.4 million dependent children — about 3.4 million younger than age 19, and 1 million adults disabled before age 22 — receive $2.5 billion in benefits. Another 4.8 million children live in homes where all or part of the household income is from Social Security.

Q: Is it true that Social Security is in crisis, and current workers won't see benefits?

A: No. Social Security benefits are funded three ways: employer and employee wage contributions, via payroll tax; investment income from bonds purchased with surplus Social Security funds; and income generated from taxing some Social Security benefits as income.

As long as there are working Americans, Social Security has a dedicated revenue stream. Social Security can stop paying benefits only if Congress passes repeal legislation and the president signs it into law.

Q: Are the bonds held by the Social Security trust fund worthless IOUs, since the federal government has already spent the money?

A: No. Social Security bonds are debt securities issued by the U.S. Department of Treasury to fund government borrowing. Like war bonds sold during World War II, or savings bonds purchased for family members, the government has a legal obligation to repay the bondholder — in this case the Social Security trust fund — regardless of what it spends the money on.

Like the dollars in your pocket, bonds are backed by the full faith and credit of the United States government. Furthermore, the Social Security trust fund is healthy, with a surplus of more than $2.8 trillion and, in 2013 alone, earning $102.8 billion in interest.

Q: If Social Security isn't in trouble, where did the idea start?

A: Since 1941, Social Security's trustees have annually projected its viability 75 years into the future to give Congress time to make adjustments for projected shortfalls — Social Security benefits can't be paid unless the system has revenue to cover both the cost, and administration, of benefits.

Opponents have used the forecasts as scare tactics, declaring the program near bankruptcy anytime there's a projected deficit — no matter how far in the future, or how manageable.

Q: What can we do to preserve Social Security?

A: Contact your elected officials and advocate. If Congress required the wealthy to contribute payroll tax on all their earnings — rather than just the first $118,500 — much of the projected shortfall would disappear. And with other reasonable revenue changes, we could expand benefits.

Social Security has transformed America. We must preserve it for future generations.