The Debates We Need

You might sound like a crazy person if you said there had not been enough debates in the Republican race for the presidential nomination. Perhaps a better way to put it is that there hasn’t been much debate about the right things—especially about what the various candidates would do to implement their platforms. 

For example, all of the Republican candidates, to varying degrees, want to dismantle Social Security. Some want to do away with it altogether; others want to substitute individual private accounts. Mostly they just assert that the program is no good and none of them really discusses the problems posed by the various alternatives. It didn’t help enlighten us that at the two debates before the Florida primary (where one can assume there is a lot of interest in the topic), no questions were asked about Social Security’s future.

When they do talk about it, the GOP candidates all start with the premise that Social Security is bankrupt, or as Governor Perry called it, a Ponzi scheme. This characterization, however, doesn’t fit the facts. Social Security was designed from the beginning to be pay-as-you-go, so that each generation pays for the one ahead of them. Not a bad bargain, since each generation also inherits everything that was built and all the ideas that were developed by previous generations. The program is supported by the dedicated payroll tax paid by nearly all workers.

Social Security has been able to build up a large surplus after 1983 because of a bargain between President Reagan and Speaker Tip O’Neill. Part of the deal was to increase workers’ contributions to Social Security and put the surplus revenues in a Trust Fund. By law, those funds must be invested in U.S. Treasuries. And no matter what anybody says about them, treasury obligations are still considered by the market to be the safest investments in the world. 

Social Security is not in fact on the brink of insolvency. Even with no changes, it will be able to pay about 75 percent of current benefits for the rest of the century. With some tweaking it can be brought back the level of full benefits. Just what the changes should be ought to be the subject of serious debate. But it is tough to focus on real alternatives if you feel the need to trash the program altogether. So it-seems-like-a-hundred debates later we still have no idea what the candidates would really do to save or replace Social Security. Mostly they reassure today’s retirees that their benefits will be protected, and the changes—whatever they are—will only affect future senior citizens.

The gap between rhetoric and actual proposals it pretty wide and the need for actual proposals is significant. After all, although the average Social Security recipient receives only about $1,000 per month, that check lifts half of the elderly above the poverty level. For some groups, such as older women, it is even more important. Moreover, the survivors insurance component is worth more as life insurance than the face value if all the private life policies written in the United States. 

None of this is to say that we should not be on the lookout for new ideas whenever they are appropriate. But if we are going to have a substitute for Social Security, or if we are going to have something else in the future, we have every reason to want to hear the candidates debate their alternative visions for retirees.

Many of those wanting to privatize Social Security, including former President George W. Bush, ignore or misstate the problem of how workers would pay for the transition. They would need to keep supporting current retirees while accumulating money for their own private retirement investments. Paying double is a tall order for the average American wage earner,

Social Security is not a program to be trifled with. Otherwise, as Dwight Eisenhower put it:

Should any political party attempt to abolish Social Security . . . you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are [a] few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

—President Dwight D. Eisenhower, 1954

At the end of the day, there are some tough questions about America’s budget and entitlement programs.  Social Security ought to be dealt with intelligently and with a serious debate during the primaries, and one hopes, during the general election.