Social security

THE United States social security system -- marking its 50th anniversary today -- has become perhaps the most venerated, and politically sacrosanct, of all American governmental programs. And for good reasons. Over 37 million Americans now receive upward of $185 billion in social security benefits of one kind or other, plus $70 billion more earmarked for medicare. For more than half of all current retirees, social security checks constitute the main source of income.

For all the criticisms often expressed about social security (its benefit levels, for example), it still does basically what its originators contemplated. As President Franklin Roosevelt noted in a 1938 radio broadcast, social security ``does not offer anyone, individually or collectively, an easy life.'' But it does ``furnish that minimum necessary to keep a foothold, and that is the kind of protection Americans want.''

The questions that are now being asked about social security are essentially twofold:

Given the changing demographics of the American work force -- with fewer and fewer Americans supporting more and more retirees as the US population continues to age -- will social security provide a meaningful ``minimum [income] necessary to keep a foothold'' in the years to come?

Should social security continue to be placed in the unified federal budget -- as at present -- or should it go ``off budget,'' as it is supposed to do in 1992? An argument by Congressman Matthew J. Rinaldo supporting the view that the program should go off budget can be found on the page opposite.

To take the two questions in order:

Changing demographics: Whether the work of the Greenspan Commission in 1982-83, and subsequent congressional action, will prove to have been enough to ensure the long-range viability of social security is still disputed by economists. For now, at least, social security has been ``rescued.'' The retirement age was slightly raised. Benefits were partially taxed. The then-existing indexing system for benefits was altered.

It seems clear that future retirees, particularly after the turn of the century, will have to look beyond social security to private pensions and individual savings programs to ensure an adequate retirement income. Washington must continue to take steps to see that Americans have access to both corporate and personal retirement plans. At the same time, Congress should continue to resist efforts to ``privatize'' the social security system -- that is, let social security become an entirely voluntary, rath er than mandatory, retirement program.

Going off budget: Congress, in 1983, voted to move social security off the unified federal budget in 1992. The reason: concern that the Reagan administration would attempt to balance the budget by reducing or eliminating social security benefits.

President Reagan, presumably stung by criticisms that he, and certainly the GOP Senate, have sought to cut social security benefits to help lower deficits, has thrown his weight behind this effort by urging that lawmakers move the program off budget before 1992.

But what is the rush?

As pointed out by the nonpartisan Congressional Budget Office, most economists would still continue to count social security receipts and disbursements in measuring the difference between what the government collects in revenues and what it spends in outlays -- as well as what it must borrow to offset any such difference. Indeed, the Reagan administration has been attempting to bring other federal programs that are now off budget into the unified budget, so as to determine the total fiscal impact of suc h programs. Seeking to move social security off budget is clearly inconsistent with this effort.

As a practical matter, moving social security off budget would only enlarge the apparent deficit, since social security now posts surpluses. So it seems unlikely that lawmakers will take any step that would make their recent perfunctory budget-cutting effort look even more modest -- and worse -- than it was.

The underlying challenge for Congress remains what it has been the past several years: making genuine cuts in federal outlays, particularly defense, but also farm, veterans, and credit programs, to reduce the deficits. Playing bookkeeping games with social security is not going to meet that larger challenge.

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