George Bush is pushing ahead with his plan to return the United States to its pre-New Deal state of affairs. The president’s goal, neglected during his first term but now resurrected, is to end today’s widespread assumption that one function of government is to help its citizens. Now it’s Social Security’s turn:
President Bush, who has promised that his plan to allow private investment accounts in Social Security would give workers a ”better rate of return,” is seriously mulling a companion effort that could cut future promised retirement benefits for millions of workers by 6 percent, even when potential gains from private accounts are included, analysts said.
I’m not an expert on the Social Security system, but I’ve paid some attention to it ever since I worked as a Social Security interviewer in the 1970s and then for the Massachusetts Disability Determination Services for a year in the mid-1980s. That’s the state agency that decides if state residents are disabled enough to receive Social Security disability benefits. Indeed, a paper I wrote during my psychology/law post-doctoral work about the political aspects of deciding whether someone is mentally disabled is usually the page on my website that receives the most hits. Social Security remains both troubling and controversial.
Social Security was designed during the 1930s Great Depression to keep old people from starving to death and, coincidentally, to help head-off a growing socialist movement for more revolutionary change. The plan reflected the awareness that far too many people, after a lifetime of work, cannot pay their bills. The working poor would now become eligible for Social Security retirement benefits, a government guarantee that one generation’s workers would help support the previous generation’s retirees.
The politics of Social Security also reflected the reality that, to garner widespread support, those who work but remain too poor in retirement must be treated differently than those unable or unwilling to work on a regular basis. State welfare might or might not help the latter, along with whatever charity could be mustered. But despite its obvious income-transfer nature, Social Security would officially remain a non-welfare program designed to help only the “deserving poor.”
Today, lengthening lifespans and changing demographics make it harder to maintain Social Security’s financial underpinnings. But instead of making manageable adjustments to Social Security to meet the future needs of today’s workers, and certainly instead of going further and erasing the artificial distinction between Social Security’s “insurance” facade and less-favored welfare programs, the trend is to privatize Social Security, thus ending the generation-transfer obligation. “Responsible” middle-class workers may be able to put enough money into private investment accounts to have something to look forward to in retirement (if they don’t become disabled first), but the millions of working poor and even many middle class workers too disorganized to meet approved financial planning standards will be left old and poor.
So much for the New Deal.