Q: In a recent column, you said that disability benefits are not welfare. But you are simply wrong about that. They are. And so are benefits paid to widows and children. Only real Social Security, and by that I mean retirement benefits, should be paid from Social Security funds. All those other so-called Social Security “benefits” are undeserved welfare and should be paid out of the general funds.
A: Wow! You really think that? And sadly, I know from other emails I get that you are not alone. To show how really wrong-headed your thinking is, let’s follow four very typical examples of various Social Security situations.
Mary started 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.
Bob 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 getting welfare benefits that should be paid out of general tax revenues! Other than the fact that Mary worked until she retired and Bob was forced to stop working a few years prior to retirement, how are their cases different? What makes Mary’s benefits “real” and Bob’s benefits “welfare”?
Here is a third example. Fred, like Mary and Bob, 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 Fred 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 Anne’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. Anne paid Social Security taxes for 29 years. How can you call the survivor benefits her children get “welfare”?
But I know where some of this kind of thinking comes from. First, there is the misguided notion that retirement benefits are the original and therefore the “real” Social Security program — and that all other benefits were goodies tacked on much later.
But what most folks don’t realize is that even though the original Social Security Act passed in 1935 did provide for just retirement benefits, Congress quickly realized that was not enough. So even before the first monthly benefits were paid in 1940, they added benefits for widows and for the children of deceased workers in 1939. In other words, widow’s and survivor benefits are part of the original Social Security laws and have been around for 77 years.
And in the 1950s, Congress realized that many workers simply were not able to make it, both physically and financially, until their retirement years. So they created the Social Security disability program. And they set up separate funding and a separate trust fund to administer that program.
Another reason 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 benefit.
Having spent this entire column so far refuting the suggestion that parts of Social Security are welfare, I must point out that the entire Social Security program has always had elements of a welfare-like system. And here I am using “welfare” not in the pejorative way you intended, but in the broadest and best sense of the word.
Or dare I use that dreaded term, “socialism”? After all, it isn’t called “Social” Security just because the words sound good together.
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. They don’t get higher benefits. A well-to-do person will always get much more in retirement benefits that a poorer retiree. But as a percentage of what they kicked into the system, the low-income person gets a higher rate of return than does the high-income person.
Raising the standard of living of lower-income retirees has been a social goal of the program since its inception almost 80 years ago. And it’s worked! The poverty rate among the elderly was up around 50 percent when Social Security started. Today, it is less than 10 percent.
So if you want to gripe about Social Security being a welfare program, go right ahead. Just remember to rant and rave about retirees getting what you call “welfare” as well as other Social Security beneficiaries.
