Q: Recently, I was listening to a radio program in which the host described Social Security as a welfare program. He said millions of people are getting benefits they never paid for and don’t deserve. I’d like to get your opinion on this. Is Social Security welfare?
A: Well, I guess it all depends on how you define “welfare.” If you mean it in the narrow sense of someone getting free government benefits that they may never have paid for, then that certainly is not what Social Security is. But if you define “welfare” in broader terms as a government program designed to provide for the general good of its citizens, then I would definitely put Social Security in that category.
After all, the word “social” in Social Security is there not just because it is alliterative and sounds good. From its very beginning in 1935, social goals were built into the program.
For example, the Social Security benefit formula has always been skewed so that low-income workers get a better deal out of the program than their more highly paid counterparts. And that doesn’t mean higher benefits. A well-to-do person will always get much more in retirement benefits than a poorer retiree. But as a percentage of what they kicked into the system, the low-income person gets a more generous rate of return.
In other words, raising the standard of living of lower-income retirees has always been a goal of Social Security. And it’s worked! The poverty rate among the elderly was pushing 60 percent when Social Security started. Today, it is less than 10 percent.
Another social goal of Social Security has been to help keep families together after the breadwinner has died. And that’s why survivor benefits have been part of the program since its inception. For example, if a young husband and father dies, then his children will start getting monthly dependent child benefits on his record. And the mother may also get a monthly Social Security check if she is not working.
I’m sure these are some of the people the radio host was referring to when he said, “Millions of people are getting benefits they never paid for and don’t deserve.” While it is true that the children, and possibly the wife, of the deceased father I mentioned in the prior paragraph didn’t pay for the survivor benefits they are receiving, the father certainly did. And only the most miserly and narrow-minded of government critics would say his widow and children don’t deserve the Social Security benefits they are receiving.
There are also millions of elderly women who receive wife’s or widow’s benefits on a husband’s Social Security account. Some of these women may never have worked outside the home and paid Social Security taxes. But once again, their husbands surely did. So are these women getting “welfare”? Well, in the broadest sense of that term, yes, they are. But in the narrow sense that they are getting something for nothing, they certainly are not getting welfare.
I think a major reason many people think of Social Security benefits as “welfare” is because of confusion with the SSI program. Supplemental Security Income is indeed a welfare program that pays a small monthly stipend to the elderly poor and to poor people with disabilities. That program is managed by the Social Security Administration, but SSI payments are funded out of general tax revenues, not Social Security taxes. Still, most Americans don’t understand the distinction and they incorrectly think that SSI is just another Social Security welfare benefit.
Q: I think we could save Social Security by getting rid of the welfare elements of the program. People getting real Social Security, like retirement benefits, are OK. But all those freeloaders getting disability and dependent’s benefits should be kicked off the program!
A: To help illustrate how narrow-minded and wrong you are, let me give you some examples.
Ann began working at age 21 and retired at age 62 and started collecting Social Security retirement benefits. So she paid into Social Security for 41 years. I take it this is what you call “real” Social Security, so she deserves her benefits.
Frank also started working at age 21. But sadly, at age 59, he had severe heart problems and was forced to stop working. He applied for and started getting disability benefits when he was 60. He worked and paid Social Security taxes for 38 years. And yet you claim he is a freeloader who should be kicked off the system. Other than the fact that Ann worked until she retired and Frank was forced to stop working a few years prior to retirement, how are their cases different? What makes Ann’s benefits “real” and Frank’s benefits “welfare”?
Here is a third example. Sam, like Frank and Ann, started working at age 21. He retired at age 66 and started getting Social Security. He died at age 80 and his widow, Sylvia, started getting an additional $200 per month in widow’s benefits added to her own retirement benefit. So you are saying that even though Sam worked and paid Social Security taxes for 45 years, the $200 per month that Sylvia now gets in widow’s benefits is “welfare.” I simply don’t follow your logic.
Finally, let’s look at Barbara’s Social Security situation. She also started working at age 21. Tragically, she was killed in a car accident when she was 50 years old. Her two minor children started getting survivor benefits on her account. Barbara paid Social Security taxes for 29 years. How can you call the survivor benefits her children get “welfare”?
I can’t imagine any sensible person claiming that the benefits that Frank or Sylvia or Barbara’s kids get are welfare. At least not in the sense that you view the term as a government freebie and giveaway.
