Texas Gov. Rick Perry has a tin ear when it comes to Social Security, the venerable entitlement program that has enabled generations of Americans to retire with some measure of dignity and a modest safety net. The Republican candidate for president inaccurately calls Social Security a "Ponzi scheme" because current workers pay the retirement benefits of past workers. He has questioned its legal legitimacy and called it a "monstrous lie," claiming there won't be anything left when today's younger workers reach retirement. In fact, Social Security is among the nation's healthiest entitlement programs and it wouldn't take much to get it on solid financial footing. Responsible leaders should be weighing those options rather than scaring Americans and exaggerating Social Security's challenges.
Social Security is widely popular across all political strata, particularly among its more than 50 million beneficiaries. And with the stock market swinging wildly, the idea that Americans should depend for retirement security entirely on private investment accounts and fend for themselves is out of touch with reality.
But Perry's contempt for Social Security goes beyond his concern over its financing and is grounded in distaste for federal authority. Perry writes in his book Fed Up! Our Fight to Save America from Washington, that Americans were "forced to accept" Social Security "at the expense of respect for the Constitution and limited government." He thinks the program was a mistake at its inception, trenching on the rights of states and individuals. Of course, a more authoritative source on the Constitution — the U.S. Supreme Court — disagrees with him.
Americans planning for retirement count on Social Security as the one constant they can rely upon to avert poverty. Social Security provides most of the income for 55 percent of the elderly. For 26 percent of the elderly, it provides more than 90 percent. The United States should not abandon this promise or change the program's fundamental character as a defined benefit. It has been emulated by other Western democracies as emblematic of a progressive, humane society.
Still, moderate changes to Social Security benefits and taxes would bring added stability and longevity to the program. Right now, full benefits can be paid through 2036. Then the trust fund is depleted and the program can pay only 75 percent of benefits. But it wouldn't take much to ensure that beneficiaries received every dime promised for the next 75 years.
One promising idea is to increase the earnings on which Social Security taxes are due. Social Security taxes are paid only on the first $106,800 of annual earnings. That cap could be raised or removed.
Other ideas include lowering the rate of inflation on which Social Security's cost-of-living adjustments are made, gradually raising the retirement age and imposing payroll taxes on the cost of employer-sponsored fringe benefits.
America without Social Security would be a very different place, where aging seniors would be at risk of penury at the most vulnerable point in their adult lives. The entitlement program that provides some small comfort for millions should be improved upon, not dismantled.