In the “State News” section of the latest AARP Bulletin, the American Association of Retired People (AARP) solicits volunteer advocates in New York, Vermont, and other states to speak with state legislatures about a variety of issues. But nowhere in the publication does AARP ask for volunteers in the national fight to preserve Social Security benefits. That’s because AARP doesn’t have any program to fight for Social Security, either by its staff or with volunteers.
I pored over the AARP website and found plenty of useful information about who’s eligible to receive Social Security, what the potential benefits are, how to apply for Social Security, how to compute whether you have to pay taxes on Social Security benefits and how much you’ll have to pay, and other important consumer information that people need to know about the program. (arp.org)
But nothing about preserving Social Security.
And yet twice in the same AARP Bulletin asking for volunteer advocates are two—count them, two!—explicit references to Social Security’s trust fund running out of money in 2033. Both times, AARP focuses on the possible reduction of benefits to 78% of what they currently are if nothing is done. AARP treats the future gutting of Social Security benefits almost as if it’s a fait accompli.
Of course, AARP isn’t the only organization to be ignoring a dire problem that will affect virtually every non-wealthy American in 12 years: how to live with reduced benefits after planning that Social Security would be a major retirement income source? The Democratic Platform expatiates at length in pious generalities about making Social Security more progressive and rejecting “every effort to cut, privatize, or weaken Social Security, including attempts to raise the retirement age, diminish benefits by cutting cost-of-living adjustments, or reduce earned benefits.” But not one single concrete proposal about keeping Social Security financially solvent.
The Democrats do have a Social Security bill before Congress that, among other things, will postpone the 2033 date for the depletion of the Social Security reserves until 2038. But again, no concrete permanent solution to the Trust Fund running out of money.
The Republicans, of course, want to privatize Social Security, so that what people get in benefits depends on how well they maneuver the ever-evolving, ever tempestuous financial markets. Most Republicans express delight at the thought of the Social Security Trust fund going bankrupt.
In the past, experts and politicians have proposed several ways to deal with the impending shortfall, including raising the retirement age, increasing the Social Security tax (known duplicitously as the “payroll” tax), lowering benefits, and borrowing from general funds. The last idea makes some sense since the federal government has been borrowing from the Social Security Trust Fund for years—another 1980’s Reagan move to avoid raising taxes on the wealthy while spending on defense as if we were actively fighting wars on six fronts; the trouble was, it increased the overall federal deficit, so it didn’t really address the underlying fiscal crisis of too few tax revenues.
Little is said about a simple, elegant, and fair solution to the Social Security funding crisis, one that will also go a long way towards addressing the problem of growing income and wealth inequality: remove the cap on income assessed the Social Security tax.
Right now, income—from minimum wage up—is taxed 6.2% that goes into the Social Security Trust Fund. But no 2021 income over $142,800 gets taxed ($147,000 in 2022), making the Social Security tax as regressive as possible, which means it removes fiscal responsibility from those making more than $142,800 and puts it on the back of those making less money. And it’s more regressive than ever, because so much income wealth has collected in the hands of relatively few people, another negative impact of growing wealth and income inequality. The cap has gradually been increasing, by 70.5% in total over the past 20 years, or 8.5% a year.
The Congressional Research Service estimates that if we removed the cap on income assessed the Social Security tax while keeping benefit maximums the same, it would push back the depletion of the Social Security Trust Fund by 30 years. And a lot can happen in 30 years. For one thing, we’ll be through the retirement years of the Baby Boom generation, whose enormous size compared to previous and future generations (save maybe millennials) has created the Social Security shortfall by virtue of so many people retiring compared to the overall population. Another possibility is that we begin accepting immigrants again, replenishing our shrinking population of younger, healthier workers to support retired workers.
Progressives, liberals, and Democrats have all supported a number of causes over the past few years that have been encapsulated into one catch phrase: #MeToo, Black Lives Matter, Pride, and Defund the Police all represent traditional and patriotic ideas of fairness and equality, and all propose clusters of viable solutions to pressing social problems. But all have the drawback of being expressed in a way that the right can undermine. The right has distorted the meaning of these slogans—and by implication, all they represent—to feed their base of the uneducated and rural whites with the fresh meat of lies and misrepresentations. The right wing has easily twisted #MeToo, Black Lives Matter, Pride, and Defend the Police into the other side of an “us versus them” fight for survival and the soul of America. Progressives and Democrats love these movements and what they represent, but their articulation in sloganeering has made them prone to the right-wing smear. Thus, they have ended up dividing the country, making it harder to address the challenges posed by these movements.
But how could the right wing contort “Remove the Cap and Save Social Security” into something that threatens the culture and financial security of poor and middle class whites, educated or not?
The Democrats have looked desperately for an issue they can use to wedge into the mass of Republican voters and pry off enough votes to build additional strength in the Senate and House and control more state governments. Every issue with which they come up the Republicans use to stoke resentment against some group—minorities, women, immigrants, LGBTQ+ movements, scientists. In the picture they paint for their base, every Democratic initiative threatens to take away the base’s wealth and give it to the undeserving poor or threatens to overwhelm their traditional way of life with immoral city ways.
But what could anyone possibly say against saving Social Security by taxing rich people?
Perhaps the reason the Democrats shy away from discussions of removing the cap is that all of their large contributors and so many other contributors make more than $142, 800 a year. One interesting variation on removing the cap is to do it gradually by creating a donut hole: all income under $142,800 and above $400,000 would be assessed the Social Security tax, exempting the heart of the upper middle class. Over time, as the cap increased, less income would fall into the exempt donut area, until finally the donut would cease to exist; that process would take about 13 years if the cap continues to advance by 8.5% a year. The short-term loss of Social Security revenue would be substantial, but it would make the idea of removing the cap more politically palatable.
For decades, Social Security has been the third rail in American politics—a beloved institution that politicians try to dismantle, privatize, or in other ways harm at their own risk. Putting Social Security front and center is a winning issue for Democrats—either Republicans have to agree to strengthen it or they risk losing lots of votes, even among the fiercest Trumpites.
“Remove the Cap” or “Remove the Cap to Save Social Security” should be one of the rallying cries of Democrats and anyone else wanting to move the country leftward. It’s a winning issue. As a wedge issue, it’s the left’s equivalent of abortion.
I fear that the Democratic party is going to need a little prodding to feature “Remove the Cap” as one the central rally cries of the 2022 and 2024 elections. I implore all readers to contact their Congressional representatives and Senators once a month asking them to develop and support legislation that removes the cap on income assessed the Social Security tax. Also tell your friends. Share this article on Facebook and Twitter. We have to keep the focus on this issue, not just as a means of showing poor and middle class Republican voters that Trumpism is not in their economic best interest. Because if something isn’t done soon, many of us will find themselves in poverty conditions starting in 2033.
