The Social Security program was established under the Social Security Act passed by Congress in 1935 as a prominent part of President Franklin Delano Roosevelt’s New Deal, and its purpose was to provide a safety net for elderly Americans to prevent them from falling into poverty. The program is funded by payroll tax contributions from both employers and employees, and these funds are invested in a federally managed trust. The proceeds of this trust are used to pay out benefits to individuals who have already reached retirement age. In its early decades, the Social Security program was not a major source of political controversy. The baby boom that began in the mid-1940s and continued through the 1950s ensured that an influx of new contributors would keep the program afloat for years to come. The first Republican president to succeed Democratic presidents Roosevelt and Harry Truman, Dwight D. Eisenhower, considered Social Security to be a well-established American institution by the time he ascended to the White House in 1953. The program has become more controversial over the past decade because these baby boomers have started to retire and draw benefits, placing a tremendous strain on the program’s resources in an era of declining birthrates. While Americans have grown concerned about the long-term viability of the program, Social Security remains a popular entitlement; and historically, few politicians have been willing to propose changing it, leading it to be termed “the third rail” of American politics.
The Campaign of 1964 demonstrated the clear political risk of proposing major modifications to the Social Security program. Republican nominee Barry Goldwater represented a faction of the Republican Party that sought to sharply reduce the role of the federal government in American society. In particular, Goldwater’s supporters wanted to roll back many of the New Deal programs, viewing them as a massive (and expensive) government overreach. In the early days of his campaign, Goldwater discussed the possibility of making Social Security a voluntary system. While Goldwater would later back away from this position, incumbent president Lyndon Johnson accused Goldwater of seeking to destroy Social Security. While national security and civil rights concerns took precedence in this election, criticism of Social Security did little to help Goldwater, who went down in one of the worst defeats in American presidential campaign history. During this era, the only major change to Social Security involved indexing its benefits to inflation, part of President Johnson’s Great Society reforms.
However, the specter of the baby boomers’ retirement continued to haunt the Social Security program. A series of reports released during the late 1970s indicated that the program needed a major influx of revenue to assure the full benefits of future retirees. In the Campaign of 1980, incumbent president Jimmy Carter accused Republican nominee Ronald Reagan of seeking to change the Social Security system. While Reagan had been a vocal opponent of another entitlement program for the elderly in the 1960s (Medicare), he was careful to avoid discussion of Social Security reform in the presidential debates of 1980. After he was elected, Reagan established a bipartisan commission to examine the viability of the Social Security program in 1983. Many of the committee’s recommendations were adopted by Congress, including a gradual raising of the retirement age for full benefits to sixty-seven, and requiring self-employed persons to pay the full amount of Social Security payroll tax. In the years that followed, proposals to make major reforms to the Social Security program quickly ran into a political buzz saw.
This changed with the Campaign of 2000. George W. Bush, the Republican nominee, proposed a different approach to Social Security reform. Instead of making participation in Social Security voluntary, Bush proposed that individuals be permitted to invest a portion of their Social Security payroll tax in stocks and other investments, with the goal of receiving a higher rate of return. At the time the proposal was made, the economy was booming, as was the stock market. Younger Americans in particular found the proposal to be an attractive alternative to the severely diminished benefits that they otherwise expected to receive from the program upon their retirement. Democratic nominee Al Gore vigorously opposed any changes to the Social Security system, vowing during the presidential debates that he would keep the funds in a lockbox to prevent them from being squandered. In the final weeks of the campaign, Gore ran numerous ads attacking Bush for the proposed reforms, arguing that they would deprive the program of needed operating revenue and ultimately harm its viability. Gore won the popular vote but lost the Electoral College vote after intervention by the Supreme Court ended a controversial Florida recount.
Once again, in the Campaign of 2004, Bush proposed to allow individuals to divert part of their Social Security taxes into private individual retirement accounts. And again, the Democratic nominee, this time John Kerry, strongly opposed the proposal on the grounds that allowing individuals to divert funds from the Social Security trust fund would undermine the financial solvency of the trust. The issue was overshadowed by the wars in Iraq and Afghanistan, although public opinion polls showed that Americans retained their suspicions about reforms to this program. After winning the election, Bush pitched his proposed reforms to Congress. However, by this time, the stock market was no longer booming, and Americans were far less confident about risking their retirement funds in the market. The proposal quickly faded away.
Social Security resurfaced once again in the Campaign of 2008. The Democratic nominee, Barack Obama, criticized Republican nominee John McCain for his initial support of Bush’s proposal for the partial privatization of Social Security. McCain responded by attacking Obama’s proposal to raise Social Security payroll taxes on wealthier Americans. The system in place at the time taxed Americans on their earnings up to $102,000 at a rate of 6 percent. Obama proposed to tax those earning between $102,000 and $250,000 at a rate somewhere between 2 and 4 percent on any income earned beyond the threshold of $102,000. The collapse of the stock market between 2006 and 2008 made it difficult for McCain to make a case for market-based Social Security retirement accounts.
Social Security remained a controversial political topic in the Campaign of 2012. Most Republican candidates lined up behind Representative Paul Ryan’s budget reform proposal, which included a major overhaul of Social Security and Medicare (essentially privatizing the latter by distributing benefits through vouchers). Ryan suggested limiting benefits for the wealthiest Americans and increasing the amount of income that would be subject to the Social Security tax (ironically, similar proposals were made by Democratic hopeful Jesse Jackson in the 1980s, but they were dismissed as socialism). Some Republican hopefuls, most notably Governor Rick Perry of Texas, implied that they might be willing to make even more dramatic changes in the program. Perry became notorious for repeatedly calling Social Security a “Ponzi scheme” and suggesting that the program was a failed endeavor since its inception. Republican Mitt Romney acknowledged that the Social Security program had problems, but he expressed a commitment to saving it, although neither Romney nor Democratic incumbent Barack Obama explained in any detail their plans for “saving” the program. However, Obama did signal his willingness to raise the Medicare eligibility age and cut Social Security benefits as part of a deficit reduction strategy, angering many of his Democratic supporters.
Public Policy Polling conducted surveys of likely voters in New Hampshire and Iowa in May 2015 and found that overall, most voters were unwilling to vote for a candidate who suggested cuts to Social Security benefits. Republican voters were somewhat more likely than independent or Democratic voters to accept cuts to the program. Sizable majorities of voters across party lines in both states indicated that they would be more likely to vote for a candidate who was willing to protect Social Security benefits, and most were also supportive of increasing Social Security taxes paid by more affluent Americans as well as taxing investment income as a means of funding the program. In both instances, independents and Democrats again exhibited somewhat higher levels of support, although clear majorities of voters of every affiliation supported such propositions. Given the continued popularity of the program and the diversity in views about how to keep it solvent, political candidates will undoubtedly continue to bicker about how to best repair it for many years to come. Moreover, it appears unlikely that any candidate will find success in running against one of the few government programs that most voters have deemed valuable.
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Democrats.org. “Keeping Social Security Safe.” http://www.democrats.org/news/blog/keeping_social_security_safe. Accessed September 18, 2015.
Klein, Ezra. “Why Liberals Should Thank Eric Cantor.” Washington Post “Wonkbook” newsletter, July 12, 2011.
Krugman, Paul. “Social Security Finances.” New York Times, August 13, 2010.
Pew Center for People and the Press. “Public Wants Changes in Entitlements, Not Changes in Benefits.” July 7, 2011. http://people-press.org/2011/07/07/section-5-views-of-social-security/. Accessed September 18, 2015.
Ryan, Paul. “A Roadmap for America’s Future: Social Security.” http://www.gpo.gov/fdsys/pkg/BILLS-110hr6110ih/pdf/BILLS-110hr6110ih.pdf.
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