By Susan Feiner
Monday, September 27, 2010 [Cross-posted at http://www.womensenews.org/story/retirement/100924/women-obama-hands-social-security]
Obama’s discussion of the economy on CNBC last week included what Susan Feiner sees as an alarming reference to Social Security as an “entitlement.” In fact, it’s a self-funded insurance program that women can’t afford to lose.
(WOMENSENEWS)–Anyone who watched President Barak Obama defend his handling of the economy in the televised town-hall discussion last week might have come away remembering the exchange with the hedge-fund manager. He had the nerve to ask when Obama would stop giving Wall Street “the treatment.”
The president’s answer: “If you’re making a billion dollars a year after a very bad financial crisis where 8 million people lost their jobs and small businesses can’t get loans, then you shouldn’t feel put upon.”
Obama’s retort drew warm applause, and rightly so. But minutes earlier the president made a remark that should terrify the majority of Americans–especially women.
In responding to a question about closing the federal deficit he said that after you set aside “security spending”–whatever that may mean–the biggest part of the national budget is “entitlements.”
Ominously, he specified Social Security as one of those “entitlements,” along with Medicare.
Stop right there Mr. President.
Women Should be Horrified
Women in this country should be horrified by your comment for the following reasons:
- Women still earn less than men, so their opportunity to save for retirement is more limited.
- Only 13 percent of women aged 65 or older currently receive a pension.
- Social Security provides 90 percent of the income for 42 percent of women, but only 28 percent of men rely on Social Security for 90 percent of their income.
- Women are more likely than men to be single, widowed or divorced in retirement.
Adding up these facts leads to one conclusion: The health and dignity of women over age 65 depends on their continued receipt of monthly Social Security checks.
Moreover, Social Security is not an entitlement program as it’s paid for entirely by payroll taxes. It is an insurance program, not an entitlement. Not one penny of anyone’s Social Security comes out of the federal government’s general fund.
Social Security is, by law, wholly self-financing. It has no legal authority to borrow, so it never has.
If this incredibly successful and direly needed program hasn’t ever borrowed a dime, why is the president and his hand-picked commissioners putting Social Security cuts (and/or increases in the retirement age) in the same sentence as deficit reduction?
Fully Paid Until 2037
Social Security insurance is fully paid until 2037.
The program began in 1935 and is considered the greatest achievement of Frances Perkins, labor secretary under President Franklin Delano Roosevelt and the first woman to hold a cabinet level position in the U.S. government.
In every decade of its existence, lawmakers have adjusted its funding formula to ensure its solvency.
President Ronald Reagan, for instance, in the mid-1980s appointed the “Greenspan Commission” (Greenspan later became the chairman of the Federal Reserve, the nation’s central bank), which recommended significant increases in Social Security payroll taxes to ensure the build up of a trust fund to finance baby boomers’ retirements.
The Greenspan Commission was honest; it looked at Social Security and figured out how much was needed to pay future retirees’ benefits. The necessary changes were made, the needed dollars flowed in and the trust fund grew. The fix engineered by the Greenspan Commission worked: the Social Security ‘trust fund’ is valued at $2.54 trillion today. By 2024 its projected value will be $4.2 trillion.
Nothing in the accounting future of the program warrants any major changes.
Enemies of Social Security have juicy private pensions, but few women enjoy this perk.
Social Security is as essential to older Americans today as it was 75 years ago when it was founded. Leave it alone.
Susan F. Feiner is a professor of women’s studies and economics at the University of Southern Maine. She is co-author of the 2004 book, “Liberating Economics: Feminist Perspectives on Families, Work and Globalization.” She is also a board member of the Frances Perkins Center.
For more information:
Older Women’s League: http://www.owl-national.org/Welcome.html
Frances Perkins Center: http://www.francesperkinscenter.org