Today, in 1935, President Franklin D. Roosevelt signed Social Security into law. It was a great day for workers, and it's still worth celebrating 77 years later.
In some corners, Social Security has been controversial from the very beginning. But where I grew up in a blue-collar community, working people understood its value clearly, and FDR's framed picture claimed a place of honor on many walls.
For most people, Social Security is what makes retirement possible. It provides a dependable monthly income to 50 million retired workers and workers with disabilities, their dependents and their survivors. It keeps more than 13 million low-income and disabled people from falling into poverty. Every worker pays in and every worker gets something.
Naysayers like to call Social Security bankrupt, but it is a pay-as-you-go program. The money comes in via payroll taxes, and it is immediately paid back out again. Alicia Munnell, director of the Center for Retirement Research at Boston College, calculates that the shortfall equals 2.67 percent of taxable payroll or 0.9 percent of gross domestic product.
Methods to eliminate the shortfall are easy to understand. Workers and employers could each pay more into the program. Eligibility could be delayed. The cap on payroll taxes could be raised. The Society of Actuaries offers nearly a dozen of these suggestions. A combination of them would certainly do the trick.
The presidential campaign so far has been focused on cutting, with Social Security a prime target. If we instead refocused our efforts on figuring out ways to increase payroll and GDP, we wouldn't have to worry about trimming a program that has revolutionized retirement planning and the way we live as we get old.
As Munnell says, "Stabilizing the system's finances should be a high priority to restore confidence in our ability to manage our fiscal policy and to assure working Americans that they will receive the income they need in retirement."
There's room for Social Security to change -- it should change -- but how we do it shouldn't be the turning point of this election. The real issue is how we're going to put the economy on sound footing and get people back on the job. Unfortunately, it is a lot harder for the candidates to come up with these kinds of solutions than it is to take pot shots at Social Security.