September, 2005
Survey Says, Let’s Get Cracking on Social Security Reform
Seniors Against Federal Extravagance (SAFE) and Students Saving Social Security (S4) joined forces on September 18, 2005, inviting the public to “sound off” on Social Security reform. 263 people participated in our Newark Community Day survey, keeping three clipboards busy nearly nonstop. Their responses indicate a range of opinions on this topic, but also consensus on two key points.
First, most people see Social Security reform as an issue that should be addressed now. Forget whether the system is facing a “crisis” or a “problem,” the argument that our country can afford to let things slide has been rejected.
Second, there is growing awareness that Congress is spending “excess” Social Security taxes for other programs, and people don’t like it. Among core workers (30-54), disapproval of this practice is virtually unanimous.
Think of Social Security reform as ensuring the system’s continuing solvency, and the solution will be seen as crafting the least worst package of benefit cuts and tax increases. This could be a tough slog, our survey suggests, because opinions vary widely as to the appropriate makeup of such a package.
It would be counterproductive to raise taxes now, for example, to cover the Social Security deficit later. As one survey participant put it, “tax increases would simply result in more money in the general fund to be misspent in the same manner as the current level of funding.”
Is there some way Congress could begin reforming Social Security now, and in the bargain stop spending Social Security revenues for other purposes? That’s what the participants in our survey are asking for, and the only practical way to give it to them, in our opinion, is by empowering younger workers to establish Personal Retirement Accounts. See our respective Websites: Secureourfuture.org and “It’s Your Money” (Cato Institute pamphlet) for further information.
Restructuring Social Security and curbing federal extravagance in other areas are vital to our country. If we and other fiscal conservatives fail, the result will be a financial meltdown and/or a crushing burden on future generations. It’s encouraging to be reminded that people appreciate our efforts, and we cherish one participant’s comment: “Cheer up. Keep going. Thanks!”
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WE BEGAN THE SURVEY WITH SOME BASIC FACTS.
Social Security has traditionally operated on a “pay as you go” basis. Thus, active workers’ payroll taxes (6.2% for Social Security plus a matching 6.2% paid by their employers) cover benefits for retirees. It is understood, but not guaranteed, that active workers will receive comparable benefits in their retirement years.
Due to the declining ratio of workers to retirees, a Social Security deficit is projected by 2017. No money has been put aside to cover this deficit (the current Social Security surplus is being spent on other programs). The deficit will grow rapidly, e.g., hit $200 billion annually in today’s dollars by 2027.
THEN WE ASKED FOUR QUESTIONS, AND PARTICIPANTS RESPONDED:
Which statement best describes your feelings about the urgency of the projected shortfall [in Social Security, starting in 2017 and growing rapidly thereafter?
Ninety-two percent of participants said this issue “should be addressed now;” only 8% said it “can be dealt with later” or “will take care of itself.”
In 1983, when Social Security was last “reformed,” our political leaders agreed on a package of tax increases and benefit cuts. If the same thing were to be done again, what would you consider the proper mix?
Participants were offered a choice between 20% tax increases/ 80% benefit cuts, 50% tax increases/ 50% benefit cuts, 80% tax increases/ 20% benefit cuts, and “other.” One-third said 50/50, one-third said “other” (often adding that neither tax increases or benefit cuts should be necessary, at least for themselves), and the remainder split between 20/80 and 80/20.
Do you think Congress should fix Social Security for good this time, and then keep their hands off it?
Fifty-four percent said “yes,” 16% said “no,” and 30% were “not sure.” Several undecided participants expressed skepticism about fixing things once and for all, e.g., “I’m not sure Congress can be trusted to fix Social Security right.”
How do you feel about the taxes that you and/or others pay for Social Security?
Nine participants out of ten said that all of these taxes “should be spent on Social Security,” while one out of 10 said “it’s OK for any excess to be spent on other government programs” [as Congress has been doing for the past two decades].
HERE IS SOME INFORMATION ABOUT THE PARTICIPANTS IN OUR SURVEY:
Gender - 41% male, 59% female. The most striking gender difference was on the third question, where men seemed more inclined to vote “yes” or “no” (59%/ 21%/ 20% “not sure”) than women (51%/ 13%/ 36% “not sure”).
Age – seniors + (56 up) 94; core workers (30-55) 105; students (average age 20) 58; unknown 6. In general, core workers seemed more receptive to personal accounts than seniors+ or students. Thus, nearly 2/3 of core workers said they want Congress to fix Social Security for good and 102 of 105 said all of their Social Security taxes should be spent on Social Security.