Entitlements - you see and hear the word everywhere, mostly used by politicians and political pundits performing in print or on television. To them, it almost seems to be a dirty word, appropriate to people who are a national problem. Well, I am entitled to certain things that they really want to mess with.
Of course, they usually want the rest of us to think it is all about welfare cheats - you know, the 16-year-old female with two children and another on the way who plots a lifetime of making money as a baby factory. That's obviously a male story line. No one who has been through weeks of morning sickness followed by months of sharing internal space with a whirling dervish of knees and elbows and enduring the beached-whale period of constant discomfort would choose that experience repeatedly.
Yes, there are welfare cheats. But there are also drug company executives who jack up the prices of medications necessary for survival, free from legal constraints or the threat of any to come. Soon the political discussion of entitlements comes around to Social Security and Medicare, usually painted as fiscal icebergs that soon will sink the ship of state. We who are recipients come off as problem people somehow.
My message to them is, "I am entitled." I began paying Social Security tax when I was 17 years old. With breaks during my college years and my time as a pastor, I paid most of my long life, as did my employers. With the establishment of Medicare, my checks were docked for that, and employers matched those contributions.
Yes, I am entitled. So are millions of other senior citizens who have done their parts with only occasional complaining.
The usual explanations for the projected shortfall in Social Security funds are the influx of retirees from the baby boom and the fact that, on average, seniors are living longer, thus receiving Social Security payments longer. So, it is our parents' fault for having too many kids and our fault for not dying sooner.
Truth: These demographics have been known for decades. The problem lies in bad policies and management in the case of Social Security and the lack of political will to address the issues and solve them in the case of Medicare.
For years, Social Security was operated on a pay-as-you-go basis with no significant reserves. During the Reagan administration, Social Security taxes were increased, creating the so-called trust fund. In fact, the money goes into the general fund, and government bonds are issued for Social Security and redeemed periodically as they mature. Such funds may be borrowed against at the will of Congress and the president. The trust fund is as secure as the federal treasury, which has never failed or defaulted on its debt.
The plan looks reasonable, but it has problems. First is the interest rate paid on the bonds that make up the trust fund. The average monthly rate for 2015 was 2.021 percent, and conservative rates have been the norm. With the proper mandate, the Social Security Administration could have built a richer trust fund with other, but still secure, investments. Critics say that Social Security funds have been used to finance the government for decades.
A second problem is limited participation. There has always been an upper limit on the amount of income on which Social Security taxes must be paid. That number has been increased occasionally as inflation affected the value of the dollar. It now stands at $200,000. Now that's a lot of money for a retired professor but not for a third-level corporate executive, an assistant football coach at one of the biggies, a second-string professional athlete, a so-so rapper, an assistant computer animator of awful films and on and on. What's wrong with everybody paying into Social Security on every dollar of income instead of requiring those at the upper-lower and middle ranges of income to carry the burden of the program? After all, those who pay in a lot will also get back a lot at retirement. In answer, one is tempted to say that those who would pay a lot have a lot greater clout in Washington.
There are other types of non-participation. There is the shadow economy, in which workers are paid off the books for working a few days or even a few hours. Employers lose the opportunity to count these payments as business expenses, but they also do not have to pay withholding taxes or keep records on them. Workers, typically unskilled, have little choice and like the fact that nothing is withheld from their pay, but they end up with no Social Security, no savings and likely on welfare. This is far more prevalent than anyone knows.
Another type of non-participation comes through the use of labor contractors in seasonal work, such as large-scale agriculture. Laborers are delivered to the work site by the contractor, who also receives their compensation and his own fee. Since the laborers literally work for him, he is responsible for paying them and fulfilling all other employer responsibilities, including paying his and their Social Security withholding taxes. However, they move frequently, following plantings and harvests, demolition and building and so forth. Even the IRS has trouble keeping up with them.
Full participation of every sort would solve the shortfall in Social Security and remove some of the pressure on Medicare. However, this would require more political courage than has been seen in Washington for decades. Some non-participation clearly violates federal laws. So enforce them! Remove the income limit for Social Security withholding taxes. Like the rest of us, those who get nipped for more taxes will get it back at retirement.
Additional things can be done to strengthen Social Security. The age for full retirement has already been raised, and further raises have been proposed. After the changes already mentioned have been made, it would be appropriate to revisit the age-of-retirement issue - but with great caution.
As people live longer, they have more time to get tired of the work they have done for decades. Some would be happy to move into a second career. What can they do? Nobody's really asking. Every school of every sort advertises how it can make young people ready for great jobs, regardless of whether such jobs exist. With some creative thought, they can come up with educational programs that fit older people for new jobs, too. They could even hire older people to help them envision these programs.
This is not fanciful thinking. Military retirees can be found in a wide range of work in their second careers. Public school teachers retire and transfer their expertise to private schools all the time. University faculty move from one system to another. My friend Billy retired from industrial work and became a marvelously comforting funeral assistant. As seniors retain their health and want to stay creatively involved longer, they should be viewed as solutions, not problems.
Roger G. Branch Sr. is professor emeritus of sociology at Georgia Southern University and is a retired pastor.