FAQ: There is no rational reason to cut Social Security benefits (or to raise the retirement age) in order to reduce the Federal deficit.
Social Security has its own source of funding, the Social Security Trust Fund, and does not contribute a dime to the federal deficit. On the contrary, the Trust Fund surplus—$137 billion in 2009—is invested in special issue U.S. securities and has been used to balance the budget for years. These securities are no different than U.S. Savings Bonds; they are backed by the full faith and credit of the U.S. Government.
HOW CRITICAL IS SOCIAL SECURITY TO THE AMERICAN PEOPLE?
FAQ: Social Security is a successful program—it has greatly decreased poverty among the elderly. In 1959, 35 percent of elderly Americans were poor, and during the 1960s elderly Americans experienced twice the poverty rate of all other Americans. By 2003, largely because of changes in the Social Security and Medicare systems, the poverty rate among the elderly fell to 10.2 percent and today, the elderly have a poverty rate similar to that of working-age adults.
FAQ: Social Security currently is the major source of income for one third of all elderly households, and provides more than half of the income of another third of elderly households. Social Security is even more important in the later years of retirement because it is adjusted for inflation.
FAQ: Social Security is insurance as well as retirement income. According to the Social Security actuaries, the risk of disability or early death is greater than people think; about 39 percent of men and 31 percent of women will die or become disabled before they reach retirement age.
FAQ: The federal budget is, however, impacted by Medicare and Medicaid benefits. The rising budgetary costs of these benefits cost the government much more per person than is spent in most other industrialized countries (which also have much better health outcomes). The health care reform legislation recently enacted does little to rein in these costs.
THEN WHY DO THEY WANT TO CUT THE ENTITLEMENT PROGRAMS?
There are several reasons, none of them more compelling than the fact that these are vital social safety net programs that are vastly popular—88 percent of Americans support them. Some think the Trust Fund is just “an accounting device” and not a real debt obligation. They want to reduce the deficit by avoiding using the securities or interest earned on them to pay benefits. (Do you suppose that if Goldman Sachs held the special issue securities, they would still be considered just an “accounting device”?) For others, the idea is to reassure investors in government securities that the government is willing to impose harsh measures to safeguard their investment, even though U.S. bonds are still the safest in the world. Still others are simply ideologically opposed to the very existence of a government safety net and want to dismantle it. However, adjustments have been made several times in the past to keep Social Security viable and minor adjustments to Social Security now can secure full coverage of all benefits going forward without cutting benefits.
Let your U.S. Representative and Senators know you want them to protect Medicare, Medicaid, and Social Security! The number for the Capitol switchboard is (202) 224-3121.
For more information go to www.handsoffourmedicare.org
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