My father was in the private pension business before he died, and the idiocy of how Social Security was set up drove him to distraction. I’m pretty sure he voted for Ross Perot in 1992 because Perot argued that it made no sense not to means test the program. I’m tempted to take a copy of Robert J. Samuelson’s op-ed last week to Arlington National Cemetery and leave it on his gravestone.
Samuelson is reliably one of the most rational, thoughtful and probing of all the op-ed columnists. Last week he wrote about how the life-expectancy gap between the wealthier segments of U.S. society and the poorer ones made Social Security as it is currently constituted a significant contributor to the income gap that progressives desperately want to make a key issue in the 2016 election, because dividing the nation by class (and race, ethnicity, religion and gender) is a big part of their playbook.
“The figures come from a new report by the National Academies of Sciences, Engineering and Medicine, which estimated life expectancies for workers born in 1930 (now 85) and 1960 (now 55) at age 50. The findings are stark. For the richest fifth of men, there was a 7.1-year increase in life expectancy, from 81.7 for those born in 1930 to 88.8 years for those born in 1960. Meanwhile, for the poorest fifth of men, life expectancy fell slightly, from 76.6 years for those born in 1930 to 76.1 for those born in 1960. The changes for the remaining men also parallel income: For the second richest fifth, the increase was 8 years to 87.8 years; for the third richest, 5.3 years to 83.4 years; and for the fourth richest, 1.1 years to 78.3 years.”
Nobody should be surprised that wealth equals health. It is difficult to pinpoint why the gap is so large, but should we have to? It seems intuitively obvious. Many disadvantages–race, upbringing, family stability, good roles models, education, character, intelligence, opportunities, culture, neighborhoods—that undermine quality of life simultaneously or in combination with each other handicap earning ability and health before we even get to the question of medical care.
Samuelson goes on…
“Whatever the causes, the gaps in life expectancies dramatically affect federal spending on the elderly. Although Social Security and many programs for the aged were designed to favor the poor, the longer life expectancies of the middle and upper-middle classes offset this bias. Because richer male workers collect payments for more years than the poor, their lifetime benefits are much larger.The study estimated the present value of four federal programs for typical recipients (Social Security, Medicare, Medicaid and Supplemental Security Income). For the top fifth in income for men, lifetime benefits totaled $522,000, a third more than the $391,000 for the poorest fifth….We are spending the most money for the longest periods to protect people who need the least protection, because they have more private savings and pension benefits than do the poor…Does this make sense for us as a society? To me, the answer is: No.”
Samuelson reasonably concludes that Social Security needs to be fixed, both to make sure it stays viable, but also to more fairly distribute benefits:
“Social Security should be a safety net, not a gravy train. As the number of retirees soars, so does the cost of paying their benefits. It’s squeezing other federal programs, creating pressures for higher taxes and sustaining long-term budget deficits. We are penalizing the future to pay for the past. We need (as I’ve often written) a fairer distribution of generational burdens. Eligibility ages for Social Security and Medicare should gradually increase to reflect longer life expectancies for most Americans. Benefits should be slowly curbed for those near the top.”
Or not so slowly. With the coming boom in seniors, either somebody’s benefits will have to be reduced or an increasingly small group of working young will find themselves paying more—that they need themselves to get their own lives off to promising starts—to support a hoard of self-righteous geezers who have retired to Boca Raton unless another administration, or three, decides to pretend the problem doesn’t exist and just adds more to the national debt. Social Security should be thought of as insurance: we pay for it during our working years as a hedge against failure or disaster. If we do not have other resources like accumulated wealth, investments, savings or pensions in our “Golden Years,” we still won’t be forced to eat from cans of Fancy Feast. If we don’t need it, then the money goes to someone who does.
The words for wealthy seniors who make the argument that no adjustment to their Social Security benefits is fair because “it’s a commitment” are selfish and greedy, as well as deluded and irresponsible. Somebody has to give up something, or Social Security goes bust. I recently heard that well-known impoverished pundit Sean Hannity make the commitment argument regarding his own future SS checks. Currently benefits usually exceed significantly what the beneficiaries put into the system. Okay, Sean, if a retiree is rolling in dough, give him back the amount he put in—with interest, I know you’ll insist on that— and make him wear a scarlet G on his chest evermore. I could support that.
Samuelson’s last word on the topic seems prescient.
“What looms is the status quo on steroids. Politics makes policy backward-looking. Programs for the elderly overwhelmingly benefit the middle and upper-middle classes but are defended by appeals for the poor. Some call this “progressive”; others might say cynical.”
Dad called it “idiotic.”