On 77th Anniversary of Social Security, Paul Ryan Pushes Dismantling the Social Safety Net
Republican presidential contender Mitt Romney’s newly picked running mate, Paul Ryan, is on the forefront of efforts to dismantle Social Security by putting seniors’ savings into risky Wall Street investments. Over the years, Ryan has not only pushed for privatizing Social Security, but also dismantling Medicare and slashing funding for Medicaid. In the Republican response to President Obama’s 2011 State of the Union address, Ryan defended cutbacks on social spending. "We’re in a moment where if government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century," Ryan said. "This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency." For more, we speak with two experts on Social Security: independent journalist Eric Laursen, author of the book "The People’s Pension: The Struggle to Defend Social Security Since Reagan," and Heather McGhee, vice president of policy and outreach at the progressive policy group Demos and co-author of a chapter on retirement insecurity in the book "Inequality Matters: The Growing Economic Divide in America and its Poisonous Consequences."
NERMEEN SHAIKH: We turn now to Social Security, which celebrated its 77th anniversary on Tuesday. President Franklin D. Roosevelt first signed Social Security into law on August 14th, 1935, at a time when about half of America’s senior citizens lived in poverty.
PRESIDENT FRANKLIN D. ROOSEVELT: Today, a hope of many years’ standing is in large part fulfilled. The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure. Young people have come to wonder what would be their lot when they came to old age. The man with a job has wondered how long the job would last. This social security measure gives at least some protection to 30 millions of our citizens who will reap direct benefits through unemployment compensation, through old-age pensions and through increased services for the protection of children and the prevention of ill health.
NERMEEN SHAIKH: Franklin D. Roosevelt, speaking 77 years ago. Today, less than 10 percent of senior citizens live in poverty. Social Security provides retirement security as well as assistance to millions of people with disabilities. The program also supports widows, widowers and their children. Critics of Social Security say the program is fiscally unsustainable, but supporters point out it’s funded by the payroll tax and does not contribute to the deficit. Senate Majority Leader Harry Reid, a Democrat from Nevada, was among those who celebrated the program’s success.
SEN. HARRY REID: Happy birthday, Social Security. Happy 77th birthday, Mr. and Mrs. Social Security. It’s a wonderful program, the most important successful social program in the history of our country. And don’t be misled. Social Security isn’t about to go broke. It’s a strong program that’s funded by people who pay into that fund. Again, let’s all celebrate a very important birthday.
NERMEEN SHAIKH: Despite the high level of popularity that Social Security enjoys, the program’s future remains more precarious than ever. President Obama has shied away from his 2008 campaign promise to defend Social Security. This year, he’s failed to stand behind his four-year-old opposition to cuts. Instead, Obama has suggested he’s possibly receptive to lowering benefits by changing how they’re calculated.
Meanwhile, Republican presidential contender Mitt Romney has signaled he wants to go even further by beginning the process of privatizing Social Security. He also would gradually increase the retirement age to 68 or 69. And his newly picked running mate, Paul Ryan, is on the forefront of efforts to dismantle the program by putting seniors’ savings into risky Wall Street investments. Over the years, Ryan has not only pushed for privatizing Social Security but also dismantling Medicare and slashing funding for Medicaid. In the Republican response to President Obama’s 2011 State of the Union address, Ryan defended cutbacks on social spending.
REP. PAUL RYAN: We’re in a moment where if government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency. Depending on bureaucracy to foster innovation, competitiveness and wise consumer choices has never worked, and it won’t work now. We need to chart a new course.
AMY GOODMAN: Paul Ryan has become a Tea Party favorite for pushing a controversial budget and economic vision, marked by deep cutbacks to the social safety net coupled with lower tax rates. Ryan has also proposed cutting food stamps for as many as 10 million Americans, cutting funds for programs likes Meals on Wheels, eliminating Pell Grants for more than a million students. On the tax front, Ryan has proposed a plan to slash taxes for the wealthiest Americans while raising taxes on some of the poor. The New York Times reports, by one statistical count, Ryan is the most conservative vice-presidential nominee in more than a hundred years.
For more, we’re joined by two guests. In Chicopee, Massachusetts, we’re joined by Eric Laursen. He is an independent journalist, author of The People’s Pension: The Struggle to Defend Social Security Since Reagan. And here in New York, we’re joined by Heather McGhee, vice president of policy and outreach at the progressive policy group Demos, co-author of a chapter on retirement insecurity in the book Inequality Matters: The Growing Economic Divide in America and its Poisonous Consequences.
Eric Laursen, Heather McGhee, we welcome you both to Democracy Now!Heather, let’s begin with you. It’s been hard to pin down Romney, the presidential candidate, on what his plans are for Social Security, for Medicare, Medicaid, but Paul Ryan is a man with a plan, and he has clearly laid it out. Can you talk about that plan and what your concerns are?
HEATHER McGHEE: Sure. I think that the best way to really take a step back and see what the totality of Ryan’s vision is for America is to look at what the CBOsaid would happen in 2050, where essentially—
AMY GOODMAN: This is the Congressional Budget Office.
HEATHER McGHEE: Yes, sorry, the Congressional Budget Office—where essentially, in 2050, there would be virtually no more federal government, outside of Social Security, Medicare, Medicaid and defense. No more. It’s Grover Norquist’s vision for shrinking the size of our federal government down to the size where you could drown it in a bathtub. So, no more Federal Aviation, no more investments in transportation, roads, consumer protection—essentially, eliminating the federal government. The idea that we would have that at the top of our presidential ticket is quite astonishing.
NERMEEN SHAIKH: Heather McGhee, your organization, Demos, put out a report card for all of the different budget proposals under discussion, and Ryan’s budget plan got the lowest score. Can you explain why?
HEATHER McGHEE: Yes. We had to give him an F, because what we were grading for was not just were you able to cut, cut, cut, but were you able to ensure that we have fiscal balance while also recreating the great American middle class for those who are already there and those who aspire to it. And on simply every single measure that we judged—job creation, retirement security, investments in the next generation’s future security—the Ryan plan really consistently chose those who are already wealthy, millionaires and billionaires, who would essentially see their taxes eliminated, as in the case of Mitt Romney himself, over, the next generation, the most vulnerable in our society.
AMY GOODMAN: And yet, when presidential candidate Romney on Saturday, standing in front of the USS Wisconsin in Norfolk, Virginia, introduced Paul Ryan, both of them reiterated that it is President Obama who’s going to cut more than $700 billion from Medicare. Explain what they’re saying about what Obama is doing and then what their plans are.
HEATHER McGHEE: There’s a huge difference in what the president’s vision is, which is expanding healthcare for millions of Americans, as we know, through the Affordable Care Act, and finding savings, ways for Medicare, which is already quite efficient, to do it more efficiently, and what Ryan’s vision is. Obviously Romney did not mention that Ryan has over a trillion dollars in cuts from Medicaid and about $810 billion in cuts from Medicare, because he would turn Medicare into essentially a private voucher program, where instead of having a guarantee of coverage, a schedule of benefits that pays doctors, you would essentially get a voucher and be—as a senior, and then be able to go into the private market, and if the voucher didn’t cover your medical expenses, you would have to pay that out of pocket. It would be an enormous shift in burden from the government to individuals.
NERMEEN SHAIKH: Heather McGhee, who are the people who would be most impacted by slashes in Social Security?
HEATHER McGHEE: Right. In Social Security, in Medicare, in the non-defense discretionary budget, which really is going to—would see, under Paul Ryan, an incredible cut, 22 percent just in 2014, that really is going to affect the working middle class, the middle class and our country’s future. Obviously there’s a gender—there’s a disproportionate gender effect here, where the vast majority of people on food stamps, on Medicaid and on welfare are women.
AMY GOODMAN: Let’s bring in Eric Laursen into this discussion. You wrote The People’s Pension: The Struggle to Defend Social Security Since Reagan. This week is the 77th anniversary of FDR announcing Social Security. Where would it stand under Reagan-Ryan, and where does it stand under President Obama in a second administration, Eric?
ERIC LAURSEN: Well, under Reagan—under Romney-Ryan, Social Security would be well on its way to being either phased out or reduced to—
AMY GOODMAN: Romney-Ryan, sorry.
ERIC LAURSEN: —reduced to irrelevancy. Social Security right now is—just for perspective, is not an overly generous program. It keeps 20 million people out of poverty every year, including children, survivors, widows, as well as retired workers. It’s actually one of the least generous national old-age income systems in the industrialized world, but it’s absolutely vital to keeping millions of people out of poverty.
Now, what Ryan and Romney, Romney and Ryan, are proposing is several things. One of them is to raise the retirement age. Another is to means test Social Security, meaning that if you are an upper-income or somewhat more affluent person, your benefits would be reduced. They’ve also talked a little bit about what they call targeting benefits more closely to low-income people. Now, this is Republican code, meaning turning—excuse me—Social Security into more of a welfare-type program. Right now Social Security is what’s known as a social insurance system, which means that individuals pay into it, receive benefits—excuse me—based on the contributions they make to the system. It’s something that we own. It’s something that belongs to us as workers. Turning Social Security into more of a means-tested system means turning into welfare, which, as we know, in the post-Reagan era, which I write about in my book, that means that it’s something that can be cut, reduced and turned into something that’s much less relevant in terms of keeping people out of poverty.
Now, who is this going to affect? It’s going to affect everybody. If the Republican ticket gets its way, Social Security will be much, much less effective for current retirees and for people who are nearing retirement age, but the cuts would be most severe for younger workers, people in their twenties, thirties and forties today, who are faced with collapsing home equity, the loss of private pensions, the inability to save due to stagnating wages. These people are actually going to be more dependent on Social Security in the future than current retirees or older workers today stand to be. And the cuts that Romney and Ryan are talking about, the changes in the program, will affect them—will take effect increasingly over the next few decades when those people are getting ready to retire. If you’re a younger worker today, you should be, if anything, more concerned about Romney and Ryan than your parents are.
NERMEEN SHAIKH: Eric Laursen, can you comment on whether either Romney or Ryan support raising the Social Security cap, which would make some or all earnings above $106,000 subject to the Social Security tax?
ERIC LAURSEN: They are both against that. Ryan, in his budget, the House budget which he authored, fairly specifically said that he opposes anything of the sort. You have to remember, the Republicans, at the beginning of the day and the end of the day, are about tax cuts for the affluent, and raising the cap would essentially shift more of the cost of paying for benefits to more affluent people. This is really a matter of fairness. They don’t pay as large a share as they should at the current time, but the Republican ticket is very explicitly opposed to this.
AMY GOODMAN: In a part of Paul Ryan’s biography, one of the first things that Romney mentioned in introducing him is that his father died at a young age, which meant that Paul Ryan got Social Security. And he talks about this as very important in helping him. Heather McGhee?
HEATHER McGHEE: Yeah. I think it’s really interesting to see someone who’s really benefited from government, not only in his youth, but his family’s wealth actually, it’s been reported recently, has come from a lot of companies really taking advantage of much of the public works, public infrastructure investments that the government does with that non-defense discretionary spending that he would eliminate in 2050.
AMY GOODMAN: Ryan told AP in 2005, it was a tough time for our family, and Social Security was there to help us when we needed the help.
HEATHER McGHEE: Yeah, yeah.
AMY GOODMAN: Eric Laursen, is it broke? I mean, let’s talk about Social Security. They say it’s bankrupting this country, and whether you like it or not, we have to be grown up, and people at the government level have to do what you do in your own house: you have to balance your budget.
ERIC LAURSEN: Social Security is not broke. Social Security has a trust fund that’s over $2 trillion in size. Their projections, that the Social Security Administration makes, say that it will—the trust fund will run out in 2033. Now, what does that mean? That means that Social Security will only have the payroll tax receipts that are coming in at that time to pay for benefits. But there’s lots of things that can be done to prevent that from happening. Congress can simply vote more money to put into the program. The Social Security payroll tax could be raised gradually across the board over a period of decades in a way that would not cut into anybody’s purchasing power, and that could be done in a slow—as a slow process. That’s the way Social Security’s books have been balanced in the past, and there’s no reason why that can’t be done in the future. The only thing standing in the way of doing it, which is the sensible thing, is the fact that, in Washington today, Republicans basically get the flu every time the subject of taxes comes up.
The other larger issue, though, is: can we afford Social Security in the future as a society? Now, the Social Security Administration gives us some very useful numbers to talk about this, as well. Social Security today costs about 4.5 percent of GDP, which means that about 4.5 percent of the entire economy goes to funding Social Security and all the things that it does. The projections are that that number will rise to about—if nothing else is done, that number will rise to about 6 to 6.5 percent by about 2050. That’s a significant rise. But again, it’s something that’s sustainable without anybody losing their purchasing power—the point being that it’s a small price to pay, 6 percent to 6.5 percent of the entire economy. For all the things Social Security does for us, at a time when the population is aging, it’s a small price to pay. And it, I think, makes a very dramatic point that Social Security is not unaffordable. It’s not something that needs to be cut for the nation not to go bankrupt or something like that.
NERMEEN SHAIKH: Heather McGhee, one of the things that you’ve mentioned that has not been talked about very much about Ryan’s budget is the effect on the military.
HEATHER McGHEE: Yes, absolutely. And interestingly, that’s where Paul Ryan and Mitt Romney really differ. Paul Ryan does not want to decrease the military budget, as the president does over time. He wants to cut, essentially, Obama’s proposed cuts by about half, so that would mean about a $228 billion increase from our current record—near-record defense spending for the modern age over the next 10 years. Now, Mitt Romney, on the other hand, I think in a sense of wanting to really show his military might without having the service, would increase the military budget by nearly $8 trillion over the next 10 years, without really any explanation for what that funding would go for, other than of course maybe some of the bellicose comments he’s making about Iran.
AMY GOODMAN: We’re going to have to leave it there, but I want to thank Heather McGhee, vice president of policy and outreach at Demos. Thanks so much for being with us. And Eric Laursen, his book is called The People’s Pension: The Struggle to Defend Social Security Since Reagan.