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Social Security: The Social Contract's Comeback Year?

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Source: Campaign for America's Future

Social Security provisions are so nuanced and difficult to understand that they are sure to make anyone go mad. That's why Larry Kotlikoff has three general rules, which if followed, can help maximize Social Security benefits without the headache.
(image by Image by Flickr user 401(K) 2013.)

What a difference a year makes. Last year at this time, a president and a party who had just won an election with progressive rhetoric were quickly pivoting toward a "Grand Bargain" which would cut Social Security and Medicare. Leaders in both parties were obsessed with deficits, and there was "bipartisan" consensus that these "entitlements" needed to be cut. The only questions left to debate were when they would be cut, and by how much. To resist these moves was to be dismissed as "unserious" and "extreme" -- in Washington, in newsprint, and on the airwaves.

Today the forces of corporate consensus are on the defensive. It's considered politically reckless to get too far out front on the subject of benefit cuts. Some of the think tanks who advocated Austerity Lite one year ago are focused now on inequality. And, as the leaders of Third Way learned recently, the same rhetoric which earned nods of approval all across Washington this time last year can get you slapped down today.

Social Security is a vital program, but the implications of this shifting debate run even deeper, to the future of the social contract itself.

Why Social Security?

For decades there has been a concerted, well-funded effort to cut Social Security benefits. It has successfully co-opted prominent leaders from both political parties, while recruiting lesser political figures like Republican Alan Simpson and Democrat Erskine Bowles to serve as its pitchmen.

Social Security cutters have held virtually unchallenged dominance in recent years, both in the corridors of power and on the pages and airways of corporate-funded media. President Obama and a number of key Democrats on the Hill allied themselves with this effort. They distanced themselves only at election time, when they obscured their positions with vague rhetoric. The Republicans' support for these efforts was virtually unanimous and often took the form of a more generalized anti-government extremism.

As news stories later confirmed, only concerted action by labor and other groups prevented the president from pre-emptively offering Social Security cuts in his 2010 State of the Union address. He finally offered them in his budget earlier this year in the form of the "chained CPI."

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Why is Social Security such a target? A number of government programs embody our social contract. Medicare, Medicaid, welfare, food assistance -- each reflects the vision of a society which recognizes that its shared interests are reflected in the safety and well-being of each of its members. But perhaps no program in this country reflects the social contract more clearly than Social Security.

The name itself -- "Social Security" -- has a timeless ring to it. It might have appeared in one of John Locke's notebooks. And it reflects a universality in its design: Most living Americans have contributed to the program, directly or indirectly. Most will collect benefits from it someday, either when they reach retirement age or, in the case of disability, even earlier.

The program was reduced once before, at a time of genuine crisis. There is no such crisis today, and its long-term imbalances are easily fixed in ways that would also allow for increased benefits. But it has symbolic value. If  this program -- funded by its participants, financially self-supporting, and forbidden by law from contributing to the national debt -- can be cut, it means that no aspect of the social contract is sacrosanct.

The Struggle

Social Security, like the social contract ideal which spawned it, enjoyed a long period of growth and evolution. The number of people it covered kept increasing -- Republicans boasted about that in their 1956 party platform! -- and its benefits were designed to keep pace with the cost of living for its recipients. Nobody in mainstream political thought would have dared to challenge it.

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True, the social contract always had its opponents. But for decades they were marginalized by norms of political and social decency. Right-wing radicals like billionaire H. L. Hunt might rave about tearing up social programs, and democracy along with them, but they had no standing -- not in politics, and not in legitimate debate.

Then something happened -- or, rather, some  things  happened. Future Supreme Court Judge Lewis Powell wrote a paper for some wealthy corporate interests in 1970 which outlined a long-term strategy for bringing these radical ideologies of greed back into the mainstream. Ronald Reagan put a smiling face -- perhaps even a smiley face -- on these mean-spirited ideologies.

A new breed of Democrat began to offer, not a defense of the social contract, but a "kinder, gentler" plan for dismantlement. That approach was first epitomized by the DLC (Democratic Leadership Council) faction which helped elect Bill Clinton, and then by the Wall Street-funded (and self-described "progressive") ideas of groups like Third Way.

The anti-Social Security crowd claims the mantle of objectivity and rationality, but resorts instead to deception and highly emotional arguments. Alan Simpson routinely erupts in rage at anyone who disagrees with him, especially if they use actuarial data to make their case. Social Security advocates are smeared as "irrational," "extreme," and marginal, even as they marshal logic, information, and public opinion to make their case.

And never underestimate what a billion dollars can do. Billionaire hedge-funder Pete Peterson, a hard-core right-winger from Richard Nixon's cabinet, began a multi-decade assault on the social contract in general, and Social Security in particular. He backed politicians, including Clinton. He formed "bipartisan" foundations and gave sinecures to functionaries from both political parties.

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Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

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Very interesting article. I have been wondering ab... by Beverly Wittmer on Tuesday, Dec 31, 2013 at 2:38:13 PM
There is only one political party that wants to do... by Philip Dennany on Tuesday, Dec 31, 2013 at 2:47:44 PM
I believe that there is a very practical reason.Co... by BFalcon on Wednesday, Jan 1, 2014 at 12:12:51 AM