This article was published in the Coast Longshore Division Newsletter, Winter 2010. Photos of the PCPA convention by Lewis Wright, ILWU Local 63 pensioner.
Will Social Security be there for all of us when we retire? Has the fund been raided and is now broke? Will we have to wait until we’re 70 before we can retire? Is Social Security adding to the deficit that will eat up our fixed income with inflation?
In San Francisco, at the annual Pacific Coast Pensioners Association (PCPA) convention in September, the pensioners made it clear that Social Security was not broken, and any effort on the part of the government to “fix” it would be seen as a direct attack on their families. Here are some questions and answers from the session:
Will Social Security be there when we retire?
Yes. It was pointed out at the convention that Social Security will have a $4.3 trillion surplus by 2023 that will carry retirees to the year 2037. The year 2037 does not qualify as an emergency in need of an immediate fix.
So is the Social Security Trust Fund full of IOUs?
ILWU International President Robert McEllrath addresses the pensioners.
In a sense, yes, but they’re called U.S. Treasury Bonds or “special-issue” securities. In 2009 the fund bought $1 trillion, 49 billion worth of Treasury Bonds, and sold $950 billion of Treasury Bonds. The bonds are backed by the full faith and credit of the U.S. Government.
Our lifespan is getting longer, so shouldn’t we raise the retirement age?
The “average” lifespan is longer than it was in the 1930’s, but much of that increase is due to the fact that fewer people die in childhood. The opposition uses this somewhat misleading “average” lifespan to promote their agenda to force people to work longer into their senior years.
Is Social Security causing the rise in the deficit?
Deficit increases when tax income goes down, and/or expenditures go up, as in our present economic crisis. The housing bubble has burst and banks are not lending, so economic activity plummets, reducing the taxes collected by the government. Meanwhile, interest on the debt stays constant, people pay less in taxes, and unemployment insurance goes up as more people become unemployed. This crisis was not caused by Social Security; it was caused by unregulated, too-big-to-fail banks and insurance companies. Social Security is a transfer program that takes monies paid into the Trust Fund by the workers and their employers, and transfers those monies to retirees. The government does not “spend” any money, and therefore Social Security cannot cause any deficit. Reforming Social Security or trying to “fix” it is just another way of trying to breaking it.
So why do we now have President Obama’s Bipartisan Commission on Fiscal Responsibility and Reform, the deficit commission, looking into reforming Social Security?
One answer given is that this is an ideological fight between those representatives who are beholden to the people, and those who are beholden to the moneyed interests. If Wall Street brokers were to get their hands on the Trust Funds, they could make money investing those funds. If the investments fail, the fund loses — not the brokers. The ideology goes something like this: “Why should I be my brother’s keeper? I’m rich and I don’t need Social Security.”
Are there solutions to Social Security’s future funding problems?
Yes. For starters, the rich could pay their fair share by raising the “cap” on income. After $109,000 in income, the rich pay no more into Social Security. For those who make less than $109,000, all of their income is taxed. If everyone paid the same percentage on all their income, Social Security would need no tweaking from now until the end of time.
The convention heard how minorities and the poor pay a disproportionate amount of their income toward their Social Security retirement.
“These are the people who work physically hard all their lives. And their lives are shorter than the wealthy. To ask them to wait till they’re 70 to retire, or to reduce their benefits, is cruel,” stated Rich Austin, President of the PCPA. “We call upon our representatives to pledge to not reduce payments or raise the retirement age.”
At the request of the Coast Longshore Division Legislative Committee, six pensioners were delegated to go to Washington D.C. to make sure that their congressional representatives understand the PCPA’s position: “You can’t fix what ain’t broke.”
Also of interest: