How disappointing that the leadership of the Republican minority in the U.S. House of Representatives has dismissed peremptorily Connecticut Rep. John B. Larson’s legislation to keep Social Security solvent for a century while improving benefits. Though the bill seems likely to pass the House, given the Democratic majority there, it won’t go anywhere in the Senate, where the majority is Republican, unless Republicans in the House support it.
Republicans complain that Larson’s bill costs too much. But the increases the bill would make in Social Security taxes are small and gradual, and much of the new revenue would come from higher incomes that now escape Social Security taxation. Besides, if taxing too much for Social Security is a problem, why do the Republicans seem to think that the forever war in Afghanistan is a necessity and a bargain?
Yes, as the Republicans complain, under Larson’s bill poorer people would receive more in benefits than they contributed in Social Security taxes. But so what? Social Security is aleady largely a matter of income redistribution, just as all government itself in a progressive tax framework is redistribution. All private forms of insurance are redistribution too. But few things government does are as compelling as Social Security.
Only military contractors benefit from Afghanistan. That is income redistribution too but Republicans don’t complain about it.
Call Social Security welfare if you want, but it profoundly incentivizes and rewards work people earn benefits only through working or their relationship to someone who worked. It is a retirement savings plan and disability insurance policy that cannot fail as long as the United States endures. Larson pointedly asks: “Where in the private sector can you buy this package of benefits that is there for all Americans? You can’t. It doesn’t exist.”
Further, if, as the Larson bill envisions, improved Social Security benefits prevent people from retiring into poverty, money circulating in the economy will increase, because poorer people will spend most of their benefit on necessities. Meanwhile, with fewer people retiring into poverty, fewer people will rely on other welfare benefits.
Of course details of the Larson bill are arguable, particularly the levels of taxation and benefits. But the aging of the population is expected to make the Social Security fund insolvent by 2035 if its revenue isn’t increased or benefits reduced, and then Social Security will be competing for ordinary appropriations every year with other government functions — including the usual stupid imperial wars — even as maintaining the social insurance system should have priority.
There is no disputing the demographics. They will make Social Security insolvent in less than 20 years unless something is done, and doing nothing means cutting benefits even as income inequality worsens. Will that really be the Republican plan?