Ignore fear-mongering on Social Security

Opinion: August 24, 2010 at 12:00a.m.

By Peter Dreier and Donald Cohen

Los Angeles Times

Alf Landon, the Kansas governor running as the Republican Party’s 1936 presidential candidate, called it a “fraud on the working man.” Silas Strawn, a former president of both the American Bar Association and the U.S. Chamber of Commerce, said it was part of President Franklin D. Roosevelt’s attempt to “Sovietize the country.” The American Medical Association denounced it as a “compulsory socialistic tax.”

What was this threat to American prosperity, freedom and democracy they were all decrying? It was Social Security, which Roosevelt signed into law 75 years ago, on Aug. 14, 1935.

The opponents of Social Security were not the counterparts of today’s “tea party,” but the business establishment and the Republican Party mainstream.

In the early Depression years, more than half of America’s elderly lived in poverty. But most business leaders and conservatives considered the very idea that government had a moral responsibility to help senior citizens retire with dignity to be outrageously radical, a dangerous trampling of individual liberty. They predicted that the Social Security tax would bankrupt the country.

As New York’s former governor, Roosevelt knew that business groups had opposed the most important pieces of social legislation on that state’s books, including the factory inspection law (passed as a result of the 1911 Triangle Shirt Waist factory fire that killed 146 women), the law limiting women’s workweek to 54 hours, unemployment insurance, pensions for the elderly and public works projects to put people back to work.

Humanizing capitalism

Once elected president, FDR viewed Social Security as part of his broader New Deal effort to humanize capitalism. Born to privilege, he understood that many wealthy people considered him a traitor to his class. They were, he thought, greedy, unenlightened and on the wrong side of history.

FDR outmaneuvered Social Security’s opponents, using his bully pulpit to explain why they were misguided.

“A few timid people, who fear progress, will try to give you new and strange names for what we are doing,” he said in a June 1934 “fireside chat” on the radio. “Sometimes they will call it fascism, sometimes communism, sometimes regimentation, sometimes socialism. But in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical. ... I believe that what we are doing today is a necessary fulfillment of what Americans have always been doing — a fulfillment of old and tested American ideals.”

Most Americans agreed. Running for re-election the next year, FDR beat Landon in a 60.8 percent to 36.6 percent landslide.

Today, Social Security insures families against the loss of income caused by retirement, disability or death. It provides more than $600 billion in benefits to 51 million people. It lifts more than 35 million older Americans out of poverty. One-third of Social Security’s beneficiaries collect survivors or disability insurance, keeping millions of families with a disabled or deceased breadwinner from destitution.

Americans view Social Security as a central component of the nation’s social contract. It is probably the most popular federal government program. Not surprisingly, when President George W. Bush tried to privatize Social Security — essentially asking Americans to put the security of their future in the stock market — the people considered it a preposterous idea, especially after they had watched thousands of Enron investors lose their savings and saw the stock market lose 38 percent of its value between January 2000 and October 2002.

Today, 77 percent of Americans — even 68 percent of Republicans — believe that policymakers in Washington should “leave Social Security alone” and find other ways to reduce the deficit, according to a national poll in June by the University of New Hampshire. In fact, 75 percent of tea party supporters favor Social Security and Medicare, a New York Times/CBS News poll found in April.

There are still a handful of Americans who bash Social Security. They dress their arguments in different clothing, but their views haven’t changed much from those of their counterparts 75 years ago. We can’t afford Social Security, they say. It’s going bankrupt. It will destroy our economy and our society.

America, one of the world’s wealthiest nations, can afford to provide an economic cushion for the elderly and the disabled. By making some minor adjustments, Social Security will remain vital and solvent for this and future generations. Economists say that raising the income ceiling on the payroll tax, applying the Social Security tax to nonwage income or adding a modest increase to the payroll tax could add decades to the health of the Social Security trust fund.

Fear-mongering

In retrospect, it is obvious that Social Security’s Depression-era opponents engaged in fear-mongering, not economic reality. Their opposition was based on a free-market fundamentalist ideology that abhorred any attempt to use government to improve Americans’ living conditions.

Just as the early battle over Social Security wasn’t really about old-age insurance, current fights over public policy are really placeholders for broader concerns. They are about what kind of country we want to be and what values we consider most important .

Peter Dreier teaches politics and chairs the Urban & Environmental Policy program at Occidental College. Donald Cohen is the president of the Center on Policy Initiatives, a San Diego-based think tank. They wrote this for the Los Angeles Times. Distributed by McClatchy-Tribune.