It was 75 years ago today that the first Social Security check was issued to Ida May Fuller, a Vermont school teacher who later worked as a legal secretary, for $22.54. Because of the assistance she received from Social Security, she was able to live a long and happy life before dying at 100 years of age.
It's hard for us to imagine what life was like for seniors and persons with disabilities before Social Security. For nearly half of American senior citizens in those days, old age meant poverty, inadequate health care, and desperation. Today, just 1 in 10 seniors are living in poverty. Though that number is still much too high, we've made real progress.
That's why Social Security is so vitally important. When Americans reach old age and can't earn an income, they know that there is a guaranteed source of revenue coming into their lives to help them with their retirement years. While we may take it for granted, that's an extraordinary achievement.
Most Americans understand that Social Security is an old-age insurance program, but it also plays an important role as America's largest anti-poverty program for kids, protecting children of deceased and disabled parents. In fact, without Social Security, more than 4 million disabled Americans would be thrown into poverty. Right now, an average young American entering the workforce has a 25 percent chance of becoming disabled before he or she turns 67.
Yet despite this enormous success, some Republicans want to make huge cuts to this important program. Social Security benefits are modest; the average disability insurance benefit is only about $1,150 a month, which is barely above the poverty line — about 1 of every 5 workers claiming disability insurance still lives in poverty. The United States has one of the most restrictive disability insurance systems in the world, with 59 percent of applications being denied by the Social Security Administration. Only 37 percent of severely disabled Americans receive disability insurance payments.
Let's be clear: Social Security is not going broke. Since Ida May Fuller received her first check, Social Security has paid every promised benefit owed to every eligible American without adding one nickel to our deficit or national debt. Social Security has a surplus of $2.8 trillion dollars and is projected to be able to pay every benefit until 2033 without any changes at all. After 2033, our Social Security system will be able to pay about 75 percent of all promised benefits.
If we applied the Social Security payroll tax to income above $250,000, we could not only extend the solvency of Social Security for decades, we could expand the program.
What we must understand is that there is a retirement crisis in America today. Right now, only 20 percent of workers in our country have a traditional defined benefit that guarantees income in retirement. More than half of all Americans have less than $10,000 in savings. The average Social Security benefit for retirees today is just $1,328 a month. Two-thirds of seniors rely on Social Security for the majority of their income, and one-third rely on their earned benefits for all of their income.
We should be talking not about cutting Social Security, but about expanding it.
People earn their Social Security benefits by paying 6.2 percent of their salary up to a $118,500 earnings cap. The more an individual contributes, the higher the benefit they receive. In 1983, the last time Social Security was reformed, the cap was set to capture 90 percent of all earnings. But the rapid growth of inequality, with all the economic gain of the past 30 years going to the wealthiest Americans while real wages have declined for the middle class, has meant that today only 83 percent of earnings are contributing to our Social Security system. This costs Social Security more than $40 billion a year.
The best way to expand Social Security is to make the wealthiest Americans pay more into the system by scrapping the cap on income that is subject to the Social Security payroll tax. Right now a billionaire pays the same amount into Social Security as someone who makes $118,500 a year. That is absurd.
If we lifted this cap and applied the Social Security payroll tax to income above $250,000, we could not only extend the solvency of Social Security for decades to come, we could provide the resources necessary to expand the program.
For example, we could bring back Social Security benefits for the college-enrolled children of disabled or deceased parents. This benefit was eliminated in 1983 because college costs were low. Today, they no longer are, even as an education has become more important than ever.
The good news is that an overwhelming majority of the American people are in favor of expanding benefits. According to an August 2014 poll by Lake Research Partners, 79 percent of likely voters support the idea of "increasing Social Security benefits and paying for that increase by having wealthy Americans pay the same rate into Social Security as everybody else." Only 21 percent were opposed.
So Congress has a choice to make: Do we listen to the American people who want to pay for an expansion of Social Security by asking the wealthiest Americans to contribute more into the system? Or do we listen to the views of those on Wall Street who want to cut Social Security and privatize these benefits?
Social Security has helped people like Ida May Fuller for 75 years. We need to strengthen Social Security to help Americans for another 75.
Senator Bernie Sanders of Vermont is the ranking member of the Senate Budget Committee. Follow him on Twitter: @SenSanders
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