Moderator's question

[National Dialogue Moderator <moderator>]

Let me rephrase the question in terms consistent with the debate, and
pending legislation: should the system be even more progressive?  Yes,
and in part that would be achieved by restoring taxable earnings to their
previous levels.  Currently, those at the high end of earnings, are
planned to receive benefits that cost--in relative terms--previous
generations of workers more.

The system is already, of course, quite progressive.  It is progressive
both because there is a minimum benefit, which some low earners would not
get based solely on their "Social Security savings,"--if viewed from that
perspective--and because the earnings formula ignores the lowest years of
earning, which would also disproportionately impact on minority workers
who experience their greatest labor market difficulty when they are
young.

I think breaking completely from the earnings base would hurt the
philosophy of the program.  Also, it would be hard to argue that the
insurance premiums embodied in the FICA tax, had no relationship to the
benefit level.

The best way to address racial inequity is to meet it head on.  Fighting
job, housing and credit discrimination directly.  I think it is asking
too much for a system, which is progressive and already favors minority
workers at almost every turn, to try and compensate for racial inequity.
A flat payment would not do that, and would not begin to do that--more
privileged workers would still have their pensions, and access to health
care plans to bridge gaps in Medicare coverage--most notably prescription
drug coverage, and advantaged status from home ownership and home value
differences.  But, a flat payment plan may undue the political glue that
makes the program have wide support, while being among the most
progressive government programs ever.

I think in assessing Social Security it is always necessary to go back to
basic philosophy, and principles--values.  The flat payment scheme, I
think would create a system that did not combine enough core values.

Those who criticize Social Security for not being the panacea for
minority inequality rarely understand the depths of the real inequality
or its sources.  An attempted quick fix, at the end-of-life, to
generations of discrimination is more insult than balm.  A real solution
requires serious study of the real problem, and a serious answer on its
own merits.

Still, increasing the existing minimum payment, and adjusting payments to
single retirees--both having the effect of flattening the payment--should
be done.  But, in the sense of general equity--those drawing the minimum
are less likely to have had access to private pensions (and the share of
workers who have not had access to private pensions will only grow), and
will be much more dependent on Social Security than in the recent past;
and changing marriage patterns will increase the share of seniors who
will be single.  If those changes are not made, then seniors in the
future will face greater inequality than in the past.


Bill Spriggs