Can Social Security Survive Another "Rescue"?
The rescue of Social Security has been a staple of American journalism for 20 years now—a story all the more remarkable in that Social Security has never been in peril except from its rescuers.
The rescues have all been based on faulty arithmetic. First, in 1977, the rescuers humbly confessed that they had made a mistake in adjusting benefits to inflation, as a result of which Social Security was threatening to go broke. (They never say the Army is threatening to “go broke,” only that it needs more money to do the job that it’s asked to do.) Not to worry. Amid the Yuletide hosannas of our massed punditry, our leaders found the courage to enact a correction that would, they swore, assure solvency into the 21st Century.
“Up, Up, Away!” cried Time (11/7/77). And as they now say about proposals to neuter the Consumer Price Index, it was practically painless. The withholding tax would rise by fractions over succeeding years, so workers would hardly feel it, and the cut of 20 percent in benefits would take effect only for those retiring in 1983 or thereafter. Since the media seldom bothered the public with such details, most of them didn’t know what would hit them; all they got from the headlines was the assurance that Social Security was safe into the next century.
The assurance did not last. In the early ’80s, when income taxes were slashed and the great military buildup began, it was clear that some luxuries would have to be sacrificed, like housing, welfare, health and education. But Social Security was the promising target, one with a tax attached that bore mainly on the little folk. Because, however, the little people cherished their Social Security, a frontal attack by the Reagan White House was a political disaster, so a campaign of deception was mounted.
A bipartisan commission under Alan Greenspan went to work on the numbers, while the media developed an unprecedented campaign of vilification of the elderly. On magazine covers, in cartoons and columns and on broadcast commentaries innumerable, they were depicted as hogs, vampires, sharks, gorillas and card sharps scooping up the sustenance of the young. While the investment banker Peter G. Peterson led the media legions, Greenspan fabricated a hurricane warning. Multiplying one false assumption by another (for example, he assumed that the C.P.I. would rise nearly three times as fast as it actually did rise, while his private firm was forecasting an even smaller increase), he predicted that Social Security would go bankrupt in 1983.
The scare headlines permitted Congress in early 1983 to enact a bill acclaimed in headlines as a great rescue. In addition to the previously scheduled cut of 20 percent in benefits for new retirees, it clipped six months of cost-of-living adjustment from all then and future beneficiaries, raised payroll taxes further and postponed the retirement age from 65 to 67 in phases to begin in 2002.
The solvency of Social Security was thus assured for 75 more years. The euphoria was such that when some new retirees learned that their benefits were taking a double hit and complained, they suffered the righteous wrath of the massed media. They were called “Greedy Geezers”: “Avaricious,” “spiteful” people who would snatch food from babies —a media image of America’s elderly that persists to this day.
The Social Security crisis of 1983 was one of the boldest hoaxes in our political and journalistic history, so effective that even today few observers are aware of it. Leaving the new rescue package aside, Social Security income and outgo were roughly in balance, as they had been since its inception. Indeed, it ended 1983 with a surplus of $21.8 billion, thanks mainly to the fact that , now that the “crisis” was no longer required, Congress quietly handed over to Social Security some of the billions that the Pentagon had long owed the system.
In short, there had been no Social Security crisis, only a crisis of bad faith and bad reporting. I have not been able to find any public analyses other than my own that challenged the hoax that year; the only ones I have seen since came long afterward in a humorous acknowledgment by Sen. Pat Moynihan (D.-N.Y.), one of the architects of the “rescue,” that “there was no real danger” Social Security would go broke.
As a result of the 1977-78 and 1983 rescues, the putative reserves of Social Security, the excess of taxes over benefits, rose in an ascending arc, exceeding $550 billion now and headed for close to $3 trillion before it tops out, they say, around 2010. That might seem like a substantial cushion, confirming the promises of the first rescuers that we’d be solvent beyond 2000, and the second that our kids had it made until 2058, later adjusted to 2030. But Bob Dole observed in a campaign debate last year (10/6/96), “In 1983, we thought we had a 75-year fix, but it didn’t work.” Rescuers ahoy.
And in an exchange that drew little media attention, Clinton agreed on the need for anther bipartisan commission to avert the crisis lying in wait, far beyond the bridge into the 21st Century. On this issue, there was no more debate than you could hear on any mainstream panel. Indeed, it would be a safe bet that there will be no panelist on the next 20 airings of the topic that you see who does not accept as a premise that Social Security needs a fix.
So here we go again. As a grizzled geezer myself, I cringe at the abuse that is surely coming our way. Most of all, though, I pain for my children and grandchildren, for it should be clear by now that the real target of the fixes, past and present, has always been America’s wage earners, the middle-aged, the young and even the unborn.
John Hess, a former New York Times correspondent, wrote about geezer-bashing in EXTRA!‘s July/August 1991 issue.