Protect Social Security

One of the first important decisions before the new Congress will be whether or not to support a Balanced Budget Constitutional Amendment. This very same proposal was rejected in the 104th Congress but only by a single vote. While there appears to be several legitimate reasons to oppose a balanced budget amendment, one of the most glaring mistakes would be to include Social Security trust funds in federal deficit and revenue calculations.

The U.S. Treasury Department estimates that such a Constitutional requirement could result in an out of pocket cost of up to $1,100 per year for the average Social Security beneficiary. This is assuming no increase in taxes. The primary responsibility for balancing the budget could fall on the backs of all Social Security beneficiaries. A Balanced Budget Amendment, in addition to putting Social Security on the chopping block, could endanger many Older American Act programs such as Meals on Wheels, as well as risk major cuts to Medicare and Medicaid.

How could our Congress possibly justify such an inequitable result? The 1990 Budget Enforcement Act properly excludes Social Security trust funds from budget enforcement procedures. A Constitutional amendment would overturn that legislation and allow the trust funds to finance general revenue spending. This hurts low and middle income workers the hardest since the regressive payroll tax already favors upper income taxpayers. In 1997 the 6.2 percent tax will be levied only on the first $64,500 of income.

Social Security is NOT responsible for our deficit problems. Since it is entirely self-financed, It does not contribute a single penny to the deficit. Since the government is able to borrow from the Social Security surplus, it can borrow less from other sources, thereby using Social Security to conceal the actual size of the federal deficit. The trust funds were never intended to be used for this purpose.

Senior citizens, like all Americans, are concerned about the size of the federal deficit. But we need an honest accounting of the true sources of the deficit. One that does not create undesirable changes in the Social Security system and does not work to undermine its future.