In reality, Social Security is a family protection plan. About 3.3 million children are receiving benefits every month because one or both of their parents are deceased, disabled, or retired. These benefits help stabilize families across the nation – and across generations.
So it’s ironic that the co-chairs of the President’s fiscal commission and some members of Congress recommend cutting Social Security to create a more secure economic future for our children. It is precisely our children and grandchildren who would bear the brunt of the Social Security benefit cuts being proposed.
A steady worker making about $43,000 can expect to get $16,760 a year in Social Security benefits at 65 today. When her 5-year-old grandchild retires in 2070, the benefit will have been reduced by 26 percent to $12,380 if Congress moves to enact the cuts in the co-chairs’ plan.
Social Security benefits are bigger as you move up the wage scale. But the proposed benefit cuts are bigger, too. A worker making about $69,000 and retiring this year at 65 will get about $22,000. If his 5-year-old granddaughter makes comparable earnings, she’ll get 40 percent less or $13,350 in 2070.
Such cuts are unnecessary and unwanted. Americans favor a different future. A new 60 Minutes/Vanity Fair poll found that only 3 percent favored cutting Social Security as the first step in balancing the federal budget. By contrast, 61 percent favored increasing taxes on the wealthy, and 20 percent favored cutting defense spending.
A recent Harris Interactive survey for Generations United found that 75 percent of those polled see programs such as K-12 public education and Social Security as sound investments that benefit all generations. They want their leaders in Washington to support programs that reinforce intergenerational connections.
But when lawmakers debate Social Security, the urge to cut benefits can override common sense. The student benefit that helped Beth Finke was eliminated in the 1980s. As a result, many young people in low-income families lost an opportunity to attend college, while the Social Security system lost the contributions from the higher paychecks they would have earned. Over their lifetimes, college graduates make 61 percent more than high school graduates do. That is a message lawmakers should hear loud and clear.
The fact is, Social Security is in good financial shape for the next quarter century, but some new revenues will be needed to keep it fully funded into the far distant future.
Surveys by the National Academy of Social Insurance find that – across generations and across party lines – Americans don’t mind paying for Social Security and would rather pay more than see future benefits cut. Eighty-seven percent of Americans say they don’t mind paying Social Security taxes because they value it for the “security and stability it provides to millions of retired Americans, disabled individuals, and children and widowed spouses of deceased workers.”
Those willing to pay for Social Security include 93 percent of Democrats, 85 percent of Independents, and 81 percent of Republicans. Lifting the cap on taxable wages so that high wage earners contribute more to the program’s finances can do much of the job. Setting a modest increase in the Social Security contribution rate some 12-15 years into the future could balance program finances for 75 year and beyond.
Lawmakers could restore the student benefit and strengthen Social Security to help “grandfamilies” in which grandparents care for their grandchildren. Improving benefits for the oldest old would benefit multiple generations by helping families cope with the burdens as well as blessings of increased longevity. It’s wrong to suggest that helping older people hurts children, or vice versa. It’s not a fight, it’s family.
Donna Butts is executive director of Generations United, which works to improve the lives of children, youth and older people through intergenerational collaboration, public policies and programs.
Virginia Reno is vice president for income security policy at the National Academy of Social Insurance, a nonprofit, nonpartisan organization made up of the nation's leading experts on social insurance.