Youth Stand Up for Social Security

Social Security wasn’t in crisis until Bush started attacking it. There is no “crisis� coming in 2018. Today, benefits are paid with interest that is made on treasury bonds. In 2018 the system is supposed to begin using the fund’s surplus to pay benefits. That will be the only immediate change if the system is left unchanged.

Why is President Bush suddenly appearing at high schools and college campuses across the country? He’s trying to sell students and young workers on his plan for privatizing Social Security and convince the public that people under thirty love his “private accounts� scheme. The Bush administration and its friends in the corporate media have been going all-out to convince youth that privatization is in our interest.

Most recently, Bush strutted on stage with actor (and former Nixon speechwriter) Ben Stein to pitch his plan at a Maryland high school. Outside, four hundred students and community members demonstrated, chanting “Don’t privatize!� Bush can’t go anywhere these days without angry groups of seniors, students, and workers shouting him down as close to the venue as security forces will allow.

Back in the high school auditorium, the President attempted to convince the audience that they’ll never benefit from the current Social Security system, because it will be bankrupt by the time young people reach retirement age. He then moved into the salesman role, throwing around tantalizing terms like “personal accounts� and “ownership society.�

Bush and other proponents of dismantling Social Security claim that the program is facing a “crisis� and that it is doomed to fail in 2018. This lie allows them to argue that the only solution is to “reform� the program by privatizing it. A large percentage of young people are being led to believe that they’ll never collect Social Security.

But the numbers say otherwise: even the Social Security trustees (mostly appointed by Bush) admit that in 2041 and thereafter, Social Security still will be able to pay at least 70% of scheduled benefits. The nonpartisan Congressional Budget Office says that full benefits can be paid until 2052 and 80% of scheduled benefits thereafter. In either case, small adjustments in the program (smaller than were made in the 50s, 60s, 70s and 80s) could preserve full benefits.

In the face of activists armed with such evidence, those bent on destroying Social Security have been on the defensive almost from the get-go. In fact, they’ve been forced to change their approach constantly, putting forward ever-more convoluted schemes to disguise their agenda. What’s the common element in the mess of PR stunts, speeches, and proposed legislation? The plan to kill Social Security centers on moving public money out of the public system, turning the funds over to the instability of the market. This shift means transforming a secure and permanent benefit system, widely known as the most successful program the U.S. government has ever created, into a risky investment scheme. In order to see what privatizing Social Security would actually mean for students and young workers, it is important to understand what Social Security is and how it works.

Origins of Social Security

During the Great Depression of the 1930s, poverty rates among senior citizens soared above 50 percent. Masses of people were unemployed and demanding jobs. The Communist Party, Young Communist League, and increasingly radicalized movements for social and economic justice demanded and fought for programs like Social Security, unemployment insurance, increased welfare programs, and government funding for the arts. These struggles, combined with intense pressure from a militant labor movement led by the Congress of Industrial Organizations, forced President Franklin Delano Roosevelt to sign the Social Security Act.

Social Security proved to be a success in combating poverty and elevating the standard of living among retirees. In 1939, the program was expanded to include survivors’ benefits (assistance to the dependents of deceased workers) as well as benefits for the dependents of retirees. Social Security has changed over the years. Unions and a strong people’s movement fought for the creation of Social Security Disability Insurance (SSDI), which provides benefits for workers who have become mentally or physically impaired and can no longer work. And in 1965, as part of the Child’s Benefits program of the Social Security Administration, college students up to the age of 22 began receiving a ‘student benefit’ to help with educational costs. Studies have shown that the student benefit, which at its peak provided grants totaling $3.9 billion a year to one out of eight college students, made the crucial difference in access to education for many young people.

Big business and the politicians who pander to it have targeted Social Security since the very beginning. As recently pointed out on commondreams.org, critics were calling Social Security a “hoax� and a “waste� as early as 1936. A serious right-wing assault on the program began under Ronald Reagan’s presidency. In 1982, Congress passed a series of changes to Social Security, including a major blow to young people: the elimination of the student benefit.

How It Works

Social Security is funded by a dedicated payroll tax, paid to the government in equal amounts by an employee and his or her employer. These payroll taxes are the source of the benefits that are being paid to current recipients. This money is kept safe by the government, and then used to guarantee an income for people who are past retirement age, people who have lost a parent, people who are disabled and cannot work, as well as others.

One of the crucial facts that the Bush spin machine has been trying to obscure is that Social Security is not the same as private pensions, such as 401(k) plans. It is not an investment program. It is more like an insurance plan, to which you contribute all your life. Social Security was never meant to be a retirement program. Social Security was
always meant to be a safety net—some income that would, no matter what, always be guaranteed to every worker.

The Republican proposals, even the ones that steer away from the phrase ‘private accounts’ are all about removing this vital guarantee – forever.

Social Security benefits are the only source of income for approximately 22% of the elderly, while about two-thirds of retirees on Social Security rely on it for 50% or more of their income. It is a problem that today many people live only on Social Security. This
means that after a lifetime of work, capitalism has left these seniors without retirement savings or pensions. Even without the Bush attacks, Social Security barely provides enough coverage for seniors, dependents, and the disabled to survive. 2005 is the 70th anniversary of Social Security. Many are calling for expanding the promise of support for those unable to work by raising the benefits to a livable level and lowering the retirement age. Most importantly for young people, restoring the student benefit could begin to alleviate the effects of the current crisis in access to education.

Not Just for Retirees

Social Security does far more than just send checks to Grandma and Grandpa every month and provide a promise of stability to future generations of retirees. 47 million Americans collect payments from the Social Security program; of these, about one third are not retired workers. This includes disabled children, children and spouses of
deceased workers, and other dependents, as well as disabled workers of all ages. While pitching his plans to young people, Bush has completely avoided addressing the consequences of privatization for these people.

According to the Social Security Administration, a 20-year-old worker has a nearly 30% chance of becoming disabled before the age of 65. Nine out of ten minors would be eligible for benefits if a working parent becomes injured, retires, or dies. Rock the Vote’s ‘I Love Social Security’ campaign has helped tell the story of young people like Howard Lloyd, a 19 year old student at the University of Maryland. When Howard was 13, his father passed away. Howard’s parents had divorced when he was 3, and he was raised by his mother, but his father had continued to help support him financially. Howard says that after his father died, “Social Security stepped in and covered what my father would have if he were still living.� Social Security even helped Howard finance his education: “Without the aid of Social Security I may not have been able to attend a four-year college or university.�

Since Bush’s scheme for private accounts treats Social Security like a retirement plan, it would have failed Howard. It’s simple: Bush would have your money go to a private investment account. But even in the bestcase scenario, where your investment was profitable, you would be out of luck if (for instance) you became disabled at age 35.
There’s no way you could have saved enough money for the rest of your life by that age – and you and your family would be out in the cold!

In the Bush economy, young people need a reliable safety net more, not less, than ever. With many starting out their working lives crushed by educational and consumer debt, retirement seems out of reach. Without Social Security, many will find themselves up a very unpleasant creek when they reach retirement age.

Since the threats to Social Security began, the group Students for a Secure Future has been gathering the facts about how young people would be affected by any changes. Take the example of someone who works as a sales clerk at Wal-Mart:

“The average salary would be below $10 an hour – a yearly income of only $20,134 before taxes. Even if you put away $50-$100 a month, made smart investments, and waited until age 66 to retire, you’d still only be able to guarantee an income of $200 a month. Without a Social Security supplement, you’d be well below the poverty line, even after almost 40 years of hard work.�

There is No Crisis

Social Security wasn’t in crisis until Bush started attacking it. There is no “crisis� coming in 2018. Today, benefits are paid with interest that is made on treasury bonds. In 2018 the system is supposed to begin using the fund’s surplus to pay benefits. That will be the only immediate change if the system is left unchanged.

It is true, however, that Social Security will face a funding shortfall sometime around 2042–2052. Jessica Wilbanks of Students for a Secure Future says that the students she speaks with about Social Security become indignant when she explains that the plans Bush has been putting forward will do nothing to fix the shortfall – and will create billions in additional debt!

The privatization plans will end up relying on benefit cuts to make up for wasted billions and to address the shortfall. But there are simple ways to help Social Security that have nothing to do with private accounts. Currently, wealthy people only pay the Social Security payroll tax on income up to $90,000 a year. Raising or abolishing this cap would send millions of dollars flooding into the system, enabling it to pay full benefits indefinitely.

Young people, who are largely opposed to the war in Iraq, have a hard time believing Bush when he talks about a shortage of funding for Social Security. After all, the ongoing occupation of Iraq has already cost $178 billon! Billions more are spent to establish new military bases and control oil supplies around the world, as in Afghanistan, and in aid to repressive, violent governments such as Haiti, Colombia, Saudi Arabia and Israel.

Demanding a Future

The ideas behind Bush’s privatization scheme are reflective of the problems with a for-profit economy. Under capitalism, people are set up to fail. Workers are expendable. There are always more. So why take care of them when they stop working? Social Security is a genuine social program – a progressive transfer of wealth to those members
of society who really need it. That’s why it’s so important; and that is exactly why Bush and his allies in the business community are fighting so hard to get rid of it.

Before Social Security, seniors who had worked their entire lives often died in extreme poverty. The stock market crash of 1929 made this situation even worse by destroying the economy and individuals’ savings. Is there any reason to trust that same stock market today? That’s what Bush is asking us to do.

Young people marched, campaigned, and fought tirelessly for the establishment of Social Security. Once again, people of all ages are coming together to voice their support for the program and to counter the efforts of those who wish to destroy it.

Groups like Students for a Secure Future (SSF) and Rock the Vote are at the heart of this struggle. Like President Bush, they have been out in communities and on campuses talking to young people about Social Security. But they have a different message, one that has been taken up by thousands: Don’t privatize our future!

150 student body presidents from all 50 states sent a joint letter to Congress and the White House: “We do not support plans that divert funds away from Social Security, that cut benefits for people who need them or result in deficits…. Our generation has an enormous stake in the outcome of this debate.�

Activists with the Student Labor Action Project (SLAP) played a major role in the AFL-CIO’s March 31 National Day of Action against Social Security privatization. The day targeted Charles Schwab and Wachovia, two financial institutions eager to collect the gigantic fees that would come attached to private accounts. They have been pushing for Social Security privatization, with the Bush administration as a willing partner.

SLAP, the United States Student Association, and other youth groups have formed a coalition that will mobilize youth to fight plans to privatize to Social Security.

And what about that Maryland high school where Bush spoke in June? Rock the Vote reports that Bush’s ‘audience’ that day was invite-only. No students or community members were actually inside the auditorium during the speech: they were outside, marching through the town with signs like “Privatization = Social Insecurity� and shutting down a major intersection.

For More Information on Social Security and how you can get involved in the struggle to save it, make sure to check out:

www.studentsforasecurefuture.org – Students for a Secure Future

www.rockthevote.com/socialsecurity – Rock the Vote (Buy “I Love Social Security� gear!)

www.americansforsocialsecurity.com/ – Americans United to Protect Social Security

www.unionvoice.org/campaign/ProtectSocial – Union Voices (online petition)

www.cepr.net/calculator/calculator.html – Center for Economic and Policy Research (Accurate Benefits Calculator – find out if private
accounts will really do anything for you!)

Shane Brinton, 18, is a student, writer, musician, and community activist residing in Humboldt County, California.

Keren Wheeler is the editor of Dynamic.

Photo courtesy of Carl Lipscombe. Marching against Bush's privatization scheme.