Social Security Cuts: More Than Money At Stake

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I’m old enough to remember when Social Security was the “third rail” of American politics -- too dangerous for even the most conservative politician to touch. You’re probably old enough to remember that, too. It wasn’t very long ago. As recently as the 2012 Republican primaries, Mitt Romney defended Social Security against attacks from other candidates (notably Rick Perry), and Romney emerged the GOP standard-bearer.

How things have changed in just a year. It’s not merely that a Democratic president is offering, very publicly, to cut Social Security benefits. There’s something much more important: In the mainstream of American political conversation, this revelation was not treated as very big news.

Oh, it made headlines. But it shared equal billing at best -- and was often buried beneath -- a host of other stories. You could easily get the impression that the most important thing Barack Obama did on April 5 was to remark on the good looks of California’s state attorney general and then apologize to her.

As I wrote this, his budget proposal including the Social Security cuts was number five on the Washington Post website’s “most viewed stories” list; his apology to that attorney general was number one. The very idea of cutting Social Security benefits is no longer a big deal in the media, so it’s no longer a big deal to the public. And that change is a very big deal indeed in the mythology of American politics.

Until recently, successful Republican as well as Democratic politicians have avoided any hint of tampering with Social Security. It’s a bipartisan tradition going back to Dwight Eisenhower. When he was just a private citizen he warned that the liberal Democrats, who had created Social Security a decade earlier, wanted to “advance us one more step toward total socialism, just beyond which lies total dictatorship.” In letters to wealthy friends he pledged to “combat remorselessly all those paternalistic and collectivistic ideas."

Once in the White House Eisenhower changed his tune. Even though his Republican party controlled both houses of Congress, he told aides that it would be politically impossible to change the Social Security system; the public would never stand for it.

That was precisely the way Franklin D. Roosevelt had planned it. Knowing conservatives were eager to pounce on every New Deal program, he designed Social Security so that no one could attack it as a “government giveaway.” The benefits would not -- and still do not -- come out of the government treasury. They come out of a special pool of money funded by payroll taxes. To hammer home that point, FDR made sure the first benefits would not flow until some time after the first taxes were paid in.

In this way FDR created the myth of Social Security: When you retire or are disabled and stop working, the checks you get in the mail don’t come from the government. They are your own money -- the money you’ve set aside over the years -- being returned to you, fair and square. No American worker is going to let the government touch his or her own money. That’s how FDR made sure Social Security would be the “third rail.”

Like most myths, this one is compounded of fact and fiction. It’s true that Social Security is a separate fund and an insurance program of sorts. You don’t take out of that fund unless you’ve paid in. But the amount you take out is rarely directly proportional to what you’ve put in. And the separation between Social Security fund and federal treasury disappeared long ago, because the government has raided the fund regularly.

However the proportion of fact to fiction has little to do with the power of a myth. The myth of Social Security has been such a staple of American political life because it is so simple and seems to capture so well the basic idea of fairness and equity: If you work hard and set aside some of your earnings every paycheck, when you can no longer work you will still have enough to live a decent life. The government won’t give you the money; it’s your money. But government will guarantee that the money will be there.

That sounds a lot like the recent rhetoric of Barack Obama: If you work hard and play by the rules, it’s the government's responsibility to make sure you can live a decent middle-class life, no matter how long you live.

Yet now Obama’s policies have diverged from his rhetoric, as well as from the policies of all successful politicians since FDR’s day -- and it’s not very big news at all. How can that be?

The short answer is that the old myth of Social Security no longer has the power it has held since FDR’s day. We are watching a time-honored political myth begin to die.

Myths don’t die because they are debunked by facts. Myths die when new, more persuasive myths come along to take their place. Soon, the demise of the old myth just doesn’t seem so important any more.

The new myth, in this case, is a story about the baby-boomers who will soon all be retired or disabled. They’ll draw down huge amounts of Social Security money, the myths says, far more than they have put in and far more than the younger generation can provide for them. If we don’t cut their benefits, the nation will go broke.

This myth thrives despite the mountain of facts that contradict it. Social Security is infine financial shape until the youngest baby-boomers are at least 90, maybe 100. If the system needs more money after that, there’s a simple solution: Raise the cap on the Social Security payroll tax. Right now, no matter how many millions you may earn, you pay that tax on only the first $113K of your income. Start taxing income over $113K (which is only the top 5% of wage-earners) and the Social Security fund begins to swell, covering all future needs. It’s a solution that gets huge support from the public, when pollsters ask about it.

But, to repeat, myths don’t die because they are debunked by facts. They die when they are eclipsed by new, more powerful myths. The myth that Social Security benefits must be cut is one part of the myth of the “debt crisis,”  which is, in turn, just part of the much larger mythology of homeland insecurity -- the narrative that says America is teetering on the cliff, ready to be plunged into disaster, very possibly even extinction, by some evil force or other. That’s been America’s master narrative, our most powerful myth, for decades.

The fact that Social Security is sound, and could be made more sound by raising that cap on the payroll tax, doesn’t make headlines or get much air time because it doesn’t fit into our ruling myth of insecurity. And Obama’s decision to propose Social Security cuts doesn’t make a huge political wave because it fits so well into that ruling myth.

Sure, polls consistently find people opposing those cuts. But the more important point is that -- judging from the media coverage of Obama’s decision and the weakness of the opposition to it -- the public now accepts those cuts as inevitable, because the myth of insecurity is the political water we all swim in.  

Cutting Social Security benefits even a small amount will be another victory for the myth of homeland insecurity. Once that myth comes to control the public view of Social Security, there’s no limit to the cuts in benefits. Everything and anything must be given up for the sake of national security: That’s been America’s creed for a very long time. When Social Security cuts become routine news, that creed gets a huge boost, opening the door to even larger benefit reductions.

So there’s much more at stake in the Social Security debate than the amounts of the monthly payments. It’s really a fundamental debate about the mythology that shapes American political life. Will we maintain the New Deal myth, the basic social contract, which Barack Obama voices so eloquently: If you work hard and set aside part of each paycheck, you’ll be guaranteed a decent life after you stop working?

Or will we scrap it in favor of the insecurity myth, which creates such a different  kind of social contract: Since danger threatens America so massively and so imminently, each of us must sacrifice to save a whole nation on the brink of collapse -- and the poorer you are, the more you must sacrifice? That’s the direction Obama’s policy is taking us in.

Yet both options remain open. Like FDR and Eisenhower, Obama will go whichever way the political wind blows. The choice is up to us.