'Saving' Social Security

It is time to begin a mobilization to defend and extend Social Security retirement income. The first step can be a fight to eliminate the ceiling on income taxable for Social Security. Right now, the wealthy don’t pay Social Security tax on earnings above $97,500 a year.

With the growing disappearance of guaranteed income from private pensions, workers in the U.S. are becoming more dependent on what is really an inadequate Social Security income.

Meanwhile, the more right-wing forces in the ruling class—with the current administration in the lead—have been trying to reduce Social Security. This is part of their drive to cut all government spending on social programs and divert it to subsidies for private industry. These rightist forces have opposed Social Security since it became a government program about 70 years ago.

To win support for cutting Social Security—one of the most popular government programs that exists—these right-wingers have exaggerated the future expected gap between Social Security tax revenues and payouts. Of course, any program dependent on stable growth of a capitalist economy can be blindsided by a downturn. But that’s not the danger George W. Bush and his ruling-class allies are raising. They instead claim there are too many older people now and argue that Social Security benefits must be cut and/or tied to private investment in the stock market to remain solvent in the future.

Let’s assume for a moment that they’re right. It is still not necessary to raise the retirement age or reduce benefits. There’s a simple way to keep Social Security completely funded.

A review of this question in the May 2007 issue of the Bulletin of the American Association of Retired People (AARP), considers eight different ways to eliminate any expected shortfall. One way stands out. It’s a straightforward approach that will more than remove the expected problem. And it should bring no pain to the vast majority of U.S. people, whether they be poor, working poor, or even relatively well-off income earners.

Tax income for Social Security comes from a flat tax—an equal amount paid by the worker and the employer—on the first $97,500 of yearly income. Individuals with more than $97,500 income stop paying Social Security taxes on earnings above this amount.

Keep in mind that more than 80 percent of families—no matter how many individuals contribute—have incomes substantially less than $97,500. On the other hand, the recent vast increases in income for the top few salary earners have put much of this income beyond the Social Security tax limit.

The Democratic Party politicians who now control Congress got elected promising to protect Social Security. It is past time to see if those promises are any firmer than the ones they made to end the Iraq war.

Passing a law to remove the $97,500 ceiling on taxable income would be a simple, direct way to protect this benefit. The vast majority would see this solution as eminently fair.

A mobilization to protect Social Security income would not replace the pensions already ripped off from workers by the corporations. It would not guarantee economic stability. But it would show everyone that the amount of pension income for retired people can be determined by the struggle. This would be a good start.