"People's Pension" Author: Social Security Cuts Would
Hurt Ethnic Families Most 

Sunday, 05 August 2012 

By Paul Kleyman, New America Media | Interview

http://newamericamedia.org/2012/07/peoples-pension-author-calls-to-cut-social-security-would-most-hurt-ethnic-families.php

Wasington, DC - Although Social Security has been the
benchmark of the Democratic Party since President
Franklin Delano Roosevelt signed it into law 77 years
ago, efforts to curtail the program's modest
protections have drawn bipartisan support in recent
years. On Monday, former New York Times executive
editor Bill Keller wrote called on the boomer
generation to support reductions in entitlement
programs to reverse what he called an "already
neglected investment" in education and infrastructure.
Many observers believe efforts to curtail Social
Security and other entitlements might come as part of a
"grand bargain," as President Obama called it last
year, to reign in the national deficit. What's at stake
for aging ethnic boomers and others on the economic
edge? New America Media's Paul Kleyman interviewed
independent journalist Eric Laursen, author of the new
book, The People's Pension: The Struggle to Defend
Social Security Since Reagan.

ALSO SEE: Q&A: Eric Laursen on the Future of Social
Security

New America Media: I understand you spent over seven 
years researching and writing The People's Pension.
What kept you going on such an ambitious project--over
800 pages?

Eric Laursen: One thing that kept me going with the
book was the realization that the story I tell in The
People's Pension involved me personally more and more.
I'm a self-employed person in my early 50s. I don't
have a pension plan. My individual retirement account
(IRA) was slammed by the dot.com collapse in 2000, and
again by the housing bubble's collapse in 2008. My home
equity has taken a hit, too. When I look ahead to when
- and if - I stop working, I thank heavens I'll at
least have Social Security--unless, of course, the
politicians decide to take it away.

NAM: We've heard for 30 years now that Social Security
is in crisis and won't be there for our children and
grandchildren. How much trouble is it in?

EL: Social Security is not in crisis. We can deal with
any of the program's long-range fiscal problems for
decades to come by raising the portion of income
subject to payroll tax, which would tax affluent
workers a bit more heavily. In 2012, the payroll tax
only applies up to $110,200 in earning. Or the payroll
tax could be raised very gradually across the board -
over a period of decades, so no one's purchasing power
would be eroded. This is how Social Security has been
"fixed" in the past, and there's no reason it couldn't
be done again.

Yes, there will be more retirees in future years. But
the Social Security trustees say the cost of securing
Americans against the losses of aging and disability
through the program now will rise only modestly to 6.2
percent of U.S. gross domestic product by 2035, then
level off at around 6 percent by 2050. Given all that
Social Security does for us, that strikes me as quite
affordable for our society.

NAM: This week Bill Keller said in the New York Times
that the boomer generation should support reductions in
entitlement programs, such as by raising the retirement
age. Why shouldn't people be able to work longer rather
than tap into the public's pension system?

EL: For one thing, not everybody can keep working into
those later years. The healthiest workers also tend to
be the wealthiest. Also, life expectancy has mainly
risen for the most affluent, but it's still relatively
low for people who work very physical and low-wage
jobs, such as large percentages of aging Latino and
African American workers.

In addition, older people are more prone to sudden
changes in their capacity to work: accidents, serious
health problems, and so on. In these kinds of
situations, Social Security can quickly go from being
the icing on the cake of retirement income to a
lifeline. That underscores a basic fact: Lots of people
think they don't need Social Security. All too often,
they get wised up.

NAM: Why should younger people of lower- and
middle-incomes be especially concerned about Social
Security?

EL: So many of their traditional sources of retirement
income are eroding. Millions of younger workers will
not be able to rely on employer-based pensions or from
sales of their homes. Also, the stock and bond markets,
which were supposed to be a vast new source of wealth
through 401(k)s and IRAs, are treacherous. Health
insurance costs and student loan payments eat away at
what savings they've managed to acquire. Employment
itself is a lot more volatile. Social Security is the
one thing they have that is guaranteed.

NAM: What changes would improve the program for those
who need it?

EL: Women could really use two major improvements in
Social Security: Caregiver benefits would enable them
to build up benefits even when they take time out of
the workforce to raise a child or care for an aging
relative - because it's still women who tend to do
these tasks. An increase in the spousal benefit for
surviving partners of deceased workers would help them
to stay out of poverty in old age - -because the
poverty rate among elderly women is much higher than
for men. These ideas have been kicking around at least
since the Gore campaign in 2000, but never seem to get
anywhere, which is shameful.

Also, Social Security is a lifeline for older workers
and retirees from communities of color in the U.S. and
they can play a key role in demanding that it not be
restructured out of existence. They already are. But
the best way to defend Social Security in the long run,
I believe, is for its defenders to get out of their
defensive crouch and start playing offense.

NAM: Politicians often say that spending is too high
for seniors and too low for children. Why shouldn't the
country reduce spending on old-age entitlements?

EL: We should certainly spend more on education, health
care and social services for the young, but that
doesn't mean it has to be taken from elders. Old-age
benefits actually help younger generations, because
they enable seniors to live independently, to not
become a burden on their families. Social Security
benefits also help elders to help their children and
grandchildren stay in school and get them established
in life. This is a growing trend, especially in this
recession -- far from the "selfish" generation Keller
discusses in the Times article.

NAM: Both parties have had advocates for reducing the
program's benefits in the effort to shrink the National
Debt. Why are some Democrats, including Obama, favoring
that idea?

EL: Because they've bought into the false argument that
Social Security and other aspects of government are
part of a zero-sum economic equation, the idea that the
wealthiest nation in history only has one economic pie
with so many slices to share. In fact, Social Security
doesn't contribute to the federal deficit, because it
has its own dedicated tax to cover its costs. It
shouldn't be used to foot the bill, for instance, for
the Bush tax cuts and dangerously open-ended Pentagon
spending.

But the major reason why so many prominent Democrats
favor cutting Social Security boils down to money: It's
become harder and harder to get elected unless you're
very adept at raising money or have an awful lot of it
yourself. The center-right wing of the Democratic Party
has spent years cultivating a group of wealthy backers,
many of them from Wall Street, by convincing them that
the Democrats are no longer the "party of tax and
spend." These backers are very concerned that an aging
population will spur greater spending on seniors -- and
therefore higher taxes -- in the decades ahead. The
candidates they back want to make sure the tax bill
won't go up for their contributors.

NAM: How will Social Security fare in the wake of the
November election?

EL: What I learned in researching The People's Pension
is that Social Security's future problems aren't fiscal
but political. As long as it enjoys overwhelming
support from the American people - which it's always
had - and the Republican right and Democratic
center-right can't get together on a common plan for
cutting it, Social Security is fairly safe. My guess is
that Social Security will be OK after this election,
even if the Republicans retain control. That's because
the GOP leadership won't want to be tarred as having
slashed such a popular system.

The real danger is in later years, as the Democratic
leadership continues its march to the right and
therefore becomes more willing to sacrifice the core of
the party's New Deal heritage. Watch how well the
progressive caucus fares, and you'll know whether
Social Security will survive. This piece was reprinted
by Truthout with permission or license. Paul Kleyman

Paul Kleyman is the Director of the Ethnic Elders
Newsbeat at New America Media. He is also the cofounder
and National Coordinator of the Journalists Network on
Generations and edits its e-new, Generations Beat
Online.

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