Issues: Social Security

Everyone has heard of Social Security, but not everyone knows that Congress is trying to destroy it! Social Security is the most successful government program ever implemented in the US, and we want to keep it that way. 

Since its inception 75 years ago, Social Security has been an independent off budget program funded by a dedicated payroll (FICA) tax. Social Security has never contributed a single penny to the national deficit and it remains in strong financial condition today, currently with a $2.6 trillion dollar surplus that is projected to grow to over $4 trillion by the year 2023. Unfortunately, there are some who for political reasons have made false claims that Social Security is part of our nation’s deficit problem and financially unsustainable.

Think Social Security doesn’t affect you or someone you care about? Click to see how Social Security works to protect these different groups in North Carolina.

Women: Social Security provides benefits to about 856,900 residents in North Carolina, more than 1 out of every 6 women in the State.  It provides benefits to nearly 54,600 spouses, most of whom are women, and without Social Security, nearly 6 out of 10 North Carolina women aged 65 and older would have income below the poverty line.

Workers with Disabilities: Social Security provides disability benefits for nearly 281,500 workers, more than 1 out of 6 of all beneficiaries.  The median benefit received by a disabled worker in North Carolina is about $11,900 annually.

Retired Workers: Social Security provides benefits to over 1 million retired workers in North Carolina, more than 1 out of 10 residents and 6 out of 10 beneficiaries.  The median benefit received by a retired worker in North Carolina is about $13,500 annually, and lifts 461,000 elderly North Carolinans out of poverty.  Without Social Security, more than half of those residents would live in poverty.

People of Color:  In North Carolina, nearly 1 out of 6 African American residents, and more than ¼ of residents who are described as “some other race,” receive Social Security benefits last year.   Nationwide,  Social Security provides nearly three-quarters of the income of African American elderly households, on average.  On average, Social Security is 100 percent of the total income for 4 out of 10 African American households with beneficiaries aged 65 and older, and provides three-quarters of the total income of Hispanic elderly households. 

Working Families: Through their hard work and payroll tax contributions, nearly all North Carolina workers earn Social Security’s retirement, disability and survivorship protections for themselves and their families.  Social Security is the most valuable disability and life insurance protection for most North Carolina workers. Nationwide, an estimated 3 out of 10 working-aged men, and 1 out of 4 working-aged women, will become severely disabled before reaching retirement age.  An estimated 1 out of 11 working-aged men and 1 out of 17 working-aged women will die before reaching retirement age.  A 30-year-old worker who earns about $30,000 and who has a spouse and two young children, receives Social Security insurance protection equivalent to private disability and life insurance policies worth $465,000 and $476,000, respectively.

How do we keep Social Security on track? What do we propose? A plan that will keep Social Security on sound financial footing while continuing to provide the valuable benefits that all the hard-working families in North Carolina, and the rest of the country, deserve.

  • First, the plan would gradually raise the tax cap to cover 90 percent of all earnings. This will reduce the 75 year projected deficit by nearly 40 percent.
  • Second, the plan gradually diversifies the Social Security trust fund reserves by investing in equities. This closes the projected 75 year deficit by a further third, while providing needed investments for America’s economy and bolting shut Social Security’s lock box.
  • Third, the plan extends Social Security coverage to newly hired state and local employees to ensure that all Americans can benefit from Social Security. In addition to helping local and state employees, this has the further benefit of reducing the projected 75 year deficit by 9 percent.
  • Fourth, the plan raises additional revenue by treating all salary reduction plans like 401(k) contributions, closing the 75 year projected shortfall by a further 13 percent. Additionally, Social Security can further be strengthened by increasing legal immigration.

Social Security must retain its function as a social insurance program. It also must remain independent and apart from the general budget. Because of the importance of Social Security in providing a capped level of economic security to beneficiaries, there should be no benefit cuts and no increase in the retirement age, which is a benefit cut. The plan keeps a direct and meaningful correlation between Social Security contributions and benefits. This plan is consistent with what Americans say they want, surveys show that Americans don’t mind paying for Social security because they understand its value for themselves, their families and millions of other Americans who depend on the benefits. This support for Social Security cuts across party lines – fully 93 percent of Democrats, 85 percent of independents, and 81 percent of Republicans agree.

The Protecting Social Security plan is reflects the core values of the American people and will strengthen benefits, invest in America’s future, and increase the financial solvency of the system.