Who Needs Social Security Anyway?

Employees will pay 2% less into Social Security this year. Their deduction will decrease from 6.2% to 4.2% of their gross wages. Employers will continue to pay 6.2%. These percentages will apply to the first $106,800 earned. Once over that amount, both contributions will stop. (For years this ceiling annually increased, but in 2010 and 2011 it remained at the 2009 amount.)

According to a year-end letter from my accountant, the Social Security contribution cut will cost $120 billion. According to the tax bill any shortfall will be covered by the general fund.

For years we have heard our politicians arguing that Social Security was threatened with insolvency. It puzzled me that the same people who have made this claim voted for the contribution cut. Further, they chose to do this in the year that the first baby boomers retire. That's right, the great deluge of retirements of the post World War II population surge begins this year. The population bubble that began in 1946 and continued well into the 1960s is aging. This year Bill Clinton, George W. Bush and myself are among the first wave of Americans, to reach what was once considered retirement age - 65. The Social Security Administration does offer some incentive if we postpone retirement until age 67. Medicare qualification remains at 65.

Social Security was designed to pay for itself, with benefits to retirees paid from contributions made into the system by the currently employed. During the baby boomer working years this worked well. With far more workers than retirees, the system produced surpluses. These surpluses were supposed to prepare the system for the time when the number of retirees exceeded the number of workers. Of course the money went into the general fund so it was probably spent.

Now our debt-swamped government is decreasing the contribution just as the real challenge to its solvency begins.

Many of our conservative leaders oppose the entire concept of Social Security. They believe folks should take responsibility for their own retirement. Well, guess what, that did not work out real well for most of us. Lower and middle income workers in this country have seen their purchase power decline over the past 30 years. Wages have stagnated. Their homes, the one investment most of them made, have declined in value, with many worth less than the mortgages they carry. Company pension plans have disappeared. IRA savings accounts have been earning nothing for several years. Investment accounts were slammed during the crash.

Without Social Security many of us face destitution in our retirement years. We earned those benefits. We and our employers made those contributions over our working lifetimes.

Who needs Social Security? We do.

Do NOT let Washington destroy it.