Monday, April 20, 2009

The Misguided Notion - and demise - of Social Security

The Pittsburgh Tribune reported Saturday that Vice President Joe Biden has been drawing Social Security benefits since November 2008 when he turned 66 and became eligible for full benefits under the law. For those not familiar with Mr. Biden, he has been a member of the United States Senate since 1973 up until he was selected as Mr. Obama’s running mate in the 2008 presidential race. Mr. Biden’s salary in 2008 was $169,300 as a US senator. As the vice president of the nation, he will earn $227,300 for as long as he serves in that capacity.

Eventually he will retire altogether and, due to his extraordinary length of service time, will be genuinely entitled to a pretty generous government pension. The issue at hand is the “entitlement” mindset of Social Security that allows everyone to draw, regardless of work status or income bracket. That Mr. Biden had to pay taxes on a large portion of his Social Security earnings is beside the point. Why, pray tell, would he feel compelled – or entitled - to draw this money on any level, particularly while he is still drawing a substantial salary? This same article reported that the Bidens disclosed income in 2008 of $253,866, of which $6,534 was Social Security income. I would hardly consider $247,332 an income that requires subsidy. Incidentally, this same article also reported that former VP Dick Cheney, who is a year older than Mr. Biden, did not report Social Security income in 2008. Whether he will attempt to claim these benefits in 2009 or ever, I suppose, remains to be seen.

Former President Bush took quite a beating in his last term over Social Security in debates that never actually took place except in the media. The opposition to Mr. Bush’s privatization proposals amounted to a lot of political posturing and chest-thumping by Democratic blowhards such as Marion Berry, D-AR, who “assured” his elderly constituents that as long as he had breath in his body, he would protect their benefits even though currently paid benefits were never in jeopardy, according to Mr. Bush’s proposal. Mr. Berry never directly addressed the actual proposals, and he never made a serious contribution to the debate or discussion except to engage in a lot of name-calling and scare tactics. What he and so many others like him did was to ensure that the “sacred cow” of Social Security will continue to pay out more than it collects under this misguided notion of entitlement that does not consider genuine need, which was the founding intent of Social Security to begin with, and continues Social Security’s downward spiral toward insolvency until drastic action will be required to maintain this “entitlement”. That fund was intended to keep our nation’s elderly from starving to death; it was not meant as an income subsidy for a more lavish lifestyle or more expensive vacations or play money for slot machines.

I realize Social Security is a hot-button issue for the majority of Americans. I also recognize the political reality that if Mr. Bush had engaged in such a discussion in his first term, it is highly unlikely he would have seen a second term as US president due to this issue alone. This is the rub, though, isn’t it? The state of this nation’s mindset is such that the government has, over the years, taken so much from us that we feel somewhat compelled to take back from this government whatever we can to sort of balance the scales. It was also a mistake for the Social Security Administration to begin sending out quarterly statements to individuals so as to suggest that the fund is “holding” the money we pay in trust now for our own private, individual use later.

In simple terms, Social Security funds withheld from paychecks is a tax that is paid out directly to those who qualify for benefits. I doubt that many working Americans ever conceived of the day when we would be subsidizing the US vice president’s salary, which is paid from income and other federal taxes, while giving his total annual income a boost from the Social Security funds withheld from our earnings.

It is said by many that our current economic situation will get worse before it gets better. My guess is that the Social Security situation, as it is now, will get worse but never better because Americans and our Congress lack the courage to face up to certain realities. It has become the task of each member of the Congress to get and keep the job they have, not to actually do the job that has been entrusted to them. It will be our demise sooner or later.

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