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Strengthening Social Security
Oppose Balanced Budget Amendment and other attempts to cut Social Security!
We know a lot of you are asking "What's wrong with a balanced budget?" Well, theoretically, nothing. But when a balanced budget is being used as a weapon to hurt Americans by cutting critical programs, then the answer is "everything."
Read this letter the Save Social Security Coalition is sending to Congress to let them know that millions of Americans aren't fooled by talk of a "balanced budget." We see through these attempts to undermine middle class Americans while letting rich corporations and CEOs off scott free.
We write to oppose both “The Cut, Cap, and Balance Act of 2011” and any Balanced Budget Amendment (BBA) proposals, on behalf of the Strengthen Social Security Campaign, which is comprised of 320 organizations representing more than 50 million members from many of the nation’s leading aging, labor, disability, women’s, children, consumer, civil rights and equality organizations.
Voting in favor of the Cut, Cap and Balance Act and the BBA is to vote for draconian cuts to Social Security. These measures will result in a huge and outrageous raid on the Social Security Trust Fund, which is paid for by those who contribute to it. Social Security should not be treated as a piggybank used to reduce the deficit or to fund continued tax breaks or new spending.
Social Security has no borrowing authority, and so it cannot deficit-spend. Because it is self-financed and its revenue exceeds benefits paid, Social Security does not contribute a penny to the federal deficit. It has a surplus of $2.7 trillion in 2011 that will grow to $3.7 trillion by 2022. Social Security can pay all benefits in full through 2035 and more than three-quarters of benefits for the next 75 years.
Social Security has been off-budget for most of its 75-year history. That is appropriate because it does not add to the federal deficit or debt and its income and assets, by law, must be used for the exclusive benefit of those who are contributors. Because of its unique nature, in the past Social Security has not been subject to budget enforcement rules mandating spending cuts. But that would change with the BBA – Social Security would no longer be protected from cuts.
That’s because Social Security would be prohibited from drawing down its large surplus due to the BBA’s requirement that federal spending in any year must be offset by revenues collected in that same year. Only a three-fifths vote in both chambers of Congress would permit deficit spending – a very high bar to overcome.
The BBA would require reducing federal spending as a share of the economy to 18 percent by 2021 – down from the current 24 percent. This would require draconian cuts to Social Security at a time when the baby-boom generation is about to retire.
The Economic Policy Institute has examined the effect on Social Security of a BBA requirement beginning in 2016. Assuming that the spending cuts required would be distributed evenly across the government, Social Security would be cut by $1.8 trillion from 2016 to 2020 – about a one-third cut.
Needless to say, cuts of this magnitude would have a devastating effect on beneficiaries, plunging millions into poverty and making for a very bleak future for most others. Already more than one-third of beneficiaries depend on Social Security for more than 90 percent of their income and nearly two-thirds depend on it for more than half of their income.
Congress has a fiduciary responsibility to make sure that Social Security contributions from American workers and their employers are kept segregated, in reserve, safely and conservatively invested in Treasury notes backed by the full faith and credit of the United States, to be available when needed to pay scheduled benefits. This is what allows for the promise of Social Security to be realized. To enact reckless legislation that would break that promise by in effect allowing for those contributions to be raided for other purposes is morally wrong and politically very risky. We urge you in the strongest possible terms not to do it.
If we can be of assistance, please contact Alison Reardon, Legislative Director, at 202-454-6190, or email@example.com.
Nancy Altman, Campaign Co-Chair
Eric Kingson, Campaign Co-Chair
Frank Clemente, Campaign Manager