Our Children's Social Security

This is the second in a series of guest posts about Social Security reform, which was organized by the Roosevelt Institute's New Deal 2.0 blog. Eric Kingson is a professor of social work at Syracuse University and the co-director of Social Security Works.

Former Senator Alan Simpson was on a tear when he declared that the traditional defenders of Social Security “don't care a whit about their grandchildren...not a whit." Besides being disrespectful, the logic of his assertion is all wrong. The nation’s children have a huge stake in preserving Social Security. Even more than their parents and grandparents, they stand to gain the most from the organized efforts of older Americans to strengthen Social Security, not cut it.

Social Security’s protections are by far the most important life and disability protection available to virtually all the nation’s 75 million children under age 18. Working Americans with two young children earn life insurance protections equivalent to a term life insurance typically worth around $400,000 to $500,000 dollars. They earn similar protections for their children against the possibility of severe disability undermining their ability to work. Today:

· 4.4 million dependent children – about 3.5 million under age 18 and 900,000 adults disabled before age 22 --received Social Security checks in May 2010, totaling $2.4 billion in that month alone.

· Another 3.4 million children, though not receiving benefits, live in households with one or more relatives who do.

· And Social Security takes 1.3 million children out of poverty.

As much as children need Social Security protections when young, those hoping to work, or to have children or retire one day, also need it. The Social Security Administration reports that 30 percent of 20- year-olds will become disabled prior to reaching retirement age. Not only does disability insurance have clear value over the course of their lives, nothing approaches Social Security in terms of providing secure retirement income protection. Neither stock market fluctuations nor inflation undermine its value. As billions of dollars of pension and home equity “wealth” disappeared over the two years, no one raised the specter of Social Security failing to meet its obligations.

Ironically, the changes favored by Social Security’s strongest opponents– retirement age increases, privatizing, and slowly changing the benefit formula so that over time benefits the value of benefits becomes increasing less for all but the most low income beneficiaries -- would hurt the nation’s children the most. These changes may facilitate the plundering of the $2.6 trillion dollar trust fund, built up over 27 years through the payroll tax contributions of hard-working Americans. Many reasonable ways exist to address Social Security’s modest projected financing problem that do not require benefit cuts that fall most heavily on the young.

Children as they age also benefit from knowing that their parents are protected by Social Security. By providing an orderly way for individuals to make modest payments in exchange for protections against survivorship, disability, and retirement, Social Security takes some of the tension out of family life and reinforces the dignity of many. Knowing that one’s parents have Social Security often frees up the generation in the middle to direct more family resources towards their children.

So, what’s all the fuss about? Why do those opposing the traditional Social Security program make claims that the program is unfair to today’s children? Like Alf Landon, the Republican presidential candidate who campaigned against Franklin Roosevelt in 1936 arguing that the United States government’s obligations to pay Social Security benefits were just “worthless IOUs” or like former President G.W. Bush who made similar claims, for some it’s just about not liking big government, even when efficient and delivering a service Americans want. There’s a fundamental difference between views about human nature and the proper role of government, a difference between what George W. Bush termed the ownership society versus an interdependent society.

For example, in an unguarded moment, David Walker, president of the advocacy organization funded with a billion dollar donation by Wall Street Hedge Fund manager Peter G. Peterson, opined: "[W]e used to have debtors prisons, now bankruptcy's no taint. Bankruptcy's an exit strategy. Our society and our culture have changed. We need to get back to opportunity and move away from entitlement… It's pretty fundamental."

Walker’s views stand in sharp contrast to the values underlying Social Security -- the beliefs that we, as a people, should protect our children, families and selves; honor our parents; care for our neighbors; live with dignity and receive a fair return for hard work; that we have responsibilities to each other, as families, communities and as a nation. Contrasting these views, I submit that children have a stake in living in the kind of society that maintains a sound and compassionate Social Security program, and that we have an obligation to pass it forward, without diminishing its value.