Advice for 2010: Don't Touch Social Security

While there's a real policy debate to be had about which of these three programs really has a long-term spending problem, the political debate should be over before it starts: don't touch Social Security.
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There's a battle brewing in Washington -- one that may not garner much attention from insiders, but that could have unintended and unanticipated consequences for 2010 and beyond. As President Obama signs an executive order to convene a bipartisan commission to tackle deficits, many commentators are already demanding -- and expecting -- that the commission address what they consider the Prodigal Trinity behind long-term budget growth: Medicare, Medicaid, and Social Security.

While there's a real policy debate to be had about which of these three programs really has a long-term spending problem, the political debate should be over before it starts: don't touch Social Security.

The conventional wisdom in Washington is that Americans associate Social Security with entitlement spending run amok.

This is wrong. Americans approve of Social Security overwhelmingly. They value the program for the benefits it will provide for themselves and for others. They do worry about the long-term viability of the program, but instead of cuts, they're willing to pay more to protect it.

Most Washington political insiders may have trouble believing that there's any government program that people genuinely love, much less one that provokes a willingness to actually pay more in taxes.

But, as a nationwide poll shows, that's the amazing reality about Social Security. Commissioned in 2009 by the National Academy of Social Insurance and the Rockefeller Foundation, the poll of 1488 adults -- including 1210 likely 2012 presidential voters -- found enormous support for Social Security:

  • 61% have a favorable view of the program
  • 88% want to know that Social Security will be there for them--even if they won't need it
  • 87% don't mind paying Social Security taxes because of the benefits provided to retirees, widows, the disabled, and children of deceased parents

This support transcends generational gaps and party lines. More than half (55%) of adults ages 18-34 have a favorable view of the program. Perhaps not surprisingly, a large majority of Democrats (71%) regard the program favorably, but so do most Independents (60%) and even a slight majority of Republicans (51%).

Why is support for the program so pervasive? The answer is both a combination of our current historical moment, and some basic values Americans share about retirement.

As the poll revealed, more Americans (78%) are concerned about their retirement than about themselves or a family member losing their job (55%), keeping up with monthly bills (64%), or even health care costs (77%). Although times are tough, Americans still worry that what they hope to be a comfortable retirement is simply unattainable in a world where a good pension is hard to come by.

That's why only 28% agreed with the view that now is the time to cut spending -- including Social Security benefits -- to reign in the federal deficit, while 66% agreed that, in these harsh economic times, it's more important than ever to strengthen Social Security.

The program also appeals to our basic sensibilities. The poll found that 80% believe we have an obligation to provide a secure retirement for all working Americans. The key term is "work." Americans may have rejected the welfare capitalism of Europe, but we do believe you should get what you earn. That's how Social Security works -- workers make contributions to a federal insurance program and they expect to get those contributions back in benefits.

There is no question that many Americans have anxiety over the ability for Social Security to pay out benefits when they retire. Two-thirds (65%) are concerned about the program's ability to provide benefits to the next generation.

But critics confuse concern over the program's future with support for reform and cutbacks. What Americans really want is to strengthen the program -- and they'll pay higher taxes to do so. The poll discovered that majorities of around two-thirds and higher support a raft of benefit increases to Social Security for older retirees, those in danger of slipping into poverty, and children of deceased parents.

To achieve these benefit boosts, Americans support such measures as lifting the tax cap so that earnings over $106,800 can be taxed (83%), dedicating estate taxes over $3.5 million to Social Security (70%), taxing higher earners at a greater rate (69%), and even increasing the Social Security tax rate across the board (58%). When asked to choose between cutting benefits, raising the retirement age, and raising taxes, a plurality (46%) selects raising taxes.

Recent presidents have learned both sides of this lesson. Almost exactly 12 years ago, President Clinton thrilled the nation during the 1998 State of the Union with his plans to achieve the first balanced budget in three decades. What did he promise to do with the surplus? "Save Social Security first."

Seven years later, President Bush took a different approach. He understood that Americans support Social Security, but focused on the long-term solvency and pushed a plan to partially privatize benefits. We all know how that ended.

Americans care about our nation's fiscal health and the debate about how to control our debt is a serious one. But conflating that worry with zeal for Social Security reform is a fatal mistake. The wise political approach to Social Security should be to protect and strengthen the program. Anything else could have serious political consequences.

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