By Sandra DeMent
For the Sentinel 

Social Security: Guaranteed retirement? Or welfare?


In 2012, when Mitt Romney ran for president, he famously said , “There are 47 percent of the people who will vote for [President Obama] no matter what…who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, you name it. …And the government should give it to them.”

I asked my friend Mary how she felt about Romney’s remarks. She said she didn’t understand what he was saying. Well, I said, take your family as an example: you and John are both signed up for Medicare, right? Yes. And John is getting his Social Security, right? Yes. And your son Ben was laid off in the middle of the recession and got unemployment, right? Yes. Then, Mary, Romney was talking about you. In his view, social security and medicare are welfare benefits, just like programs for the poor.

Most older Americans do not view their social security benefits as “welfare.” They feel they have “earned” their retirement benefits by making payments into the system with every paycheck. And Social Security provides each taxpayer with an annual statement of what their retirement benefit is likely to be, based on their annually reported income.

Yet most experts today agree that Americans “misunderstand” social security. Experts agree that social security is not insurance, not an annuity or a pension, but actually is part of the social welfare safety net. They point to three key features of social security:

• Payroll taxes are compulsory;

• The money collected, while “credited” to social security, actually goes into the general U.S. Treasury fund. It is not segregated into individual accounts, nor guaranteed to be paid to a separate “fund” for social security. Money that is not needed to pay for social security benefits is used for other federal spending;

• Congress has the power to change benefits and eligibility as it sees fit.

The U.S. Supreme Court has twice ruled on the nature of Social Security. The first case, Helvering v. Davis, came just a few years after the enactment of the Social Security Act in 1935. Justice Benjamin N. Cardozo reviewed the effects of the Great Depression on older workers, pointing out that in hard times, older workers were the first to be let go, the first to have their wages lowered, and the last to be hired if younger workers were available. He wrote, “The fate of workers over 65, when thrown out of work, is little less than desperate.” Justice Cardozo concluded that Congress had the right, established by the Constitution, to “spend money in aid of the ‘general welfare.’”

The second U.S. Supreme Court ruling, Flemming v. Nestor, came in 1960. It upheld the constitutionality of Section 1104 of the 1935 Social Security Act, which gave Congress the power to amend and revise the schedule of benefits, including eligibility for benefits. So, Congress can increase or decrease benefits and change eligibility rules, for example, cutting off benefits to non-citizens who are deported for communist party activity. The last major overhaul of social security occurred in 1983, and included pushing the full retirement age out to age 66.

In 2017, the average social security benefit in Klickitat County will increase to $1,638 per household per month. It is higher than any other county in Washington. Over 3,000 seniors in the county receive social security benefits, and for many seniors, it represents their only source of cash income. If future social security benefits don’t keep up with inflation, we can expect home gardens and flocks of chickens to become even more critical.

In recent years, presidents and Congress have been pointing with increasing urgency to the need to “reform” social security. The proposed fixes include reducing benefits, increasing the age of eligibility, changing the cost-of-living adjustment (COLA), and other ideas. Already a bill has been introduced in Congress to make some of these changes.

In my next column, we’ll look at how your “welfare” benefit may change under the current Congress.


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