Karen Friedman is the executive vice president of the Pension Rights Center, a consumer rights organization that is coordinating Retirement USA, a campaign to promote the creation of a new universal, secure and adequate pension system on top of Social Security.
This week, members of President Barack Obama's deficit commission recommended draconian cuts to Social Security as part of a package of proposals to reduce the federal budget deficit. Wrapping themselves in the rhetoric of Mom and apple pie, the commissioners justified their proposed cuts as a way to "keep the promise of America to give our children and grandchildren a better life," adding that, "In the weeks and months to come, countless advocacy groups and special interests will try . . . to exempt themselves from shared sacrifice and common purpose."
But Social Security is the definition of shared responsibility and common purpose. And cutting it would increase another national deficit - the retirement income deficit - condemning our children and grandchildren to a bleaker future.
Social Security doesn't belong on the table at all. Social Security is self-financing, and despite myths to the contrary, Social Security is on sound financial footing for another three decades. Policy-makers should begin to explore ways of addressing solvency issues beyond that, and long-term solvency can be achieved without cuts - such as by eliminating the Social Security payroll tax cap.
Meanwhile, the United States already faces a massive gap between what people have saved for retirement and what they would need to have saved by now to meet a basic level of sufficiency in retirement. As calculated by the Center for Retirement Research, this deficit is $6.6 trillion.
If Congress follows the lead of Obama's commission and cuts Social Security, this retirement income deficit will only grow. Social Security provides a lifesaving foundation of income that virtually every retiree relies on. Two out of three retirees rely on Social Security for half of their income, and one out five for virtually all of it - even though Social Security doesn't pay more than a minimal amount: about $14,000 annually, on average. Cuts in the program would mean even less money for critical expenses such as health care, housing and other necessities.
While the commissioners have proposed cutting everybody's Social Security benefits, their grandkids' benefits are going to shrink the most. According to an analysis by the chief actuary of the Social Security Administration, by the time the commission's proposed benefit cuts are fully enacted - cuts including raises in the retirement age, reductions in inflation adjustments and reductions in the benefit formula - today's preschoolers can expect to see their Social Security benefits cut by as much as 41 percent.
That will not be a pretty picture if present trends continue. Currently, half the private workforce has no pension or retirement savings plan to supplement Social Security's extremely modest payments. Employers continue to get rid of traditional private pension plans, and 401(k) plans have turned into a disappointment for most workers. Even before the stock market crash of 2008, half of all households had accumulated less than $45,000 in their accounts - and, for those approaching retirement, only about twice that amount.
With employers steadily abandoning their commitment to provide adequate retirement plans to their workers and employees less able to save for themselves, today's 4-year-olds are likely to rely on Social Security even more than do today's retirees.
If policy-makers want to help future generations, they should start by strengthening, not cutting, Social Security. And they should begin discussions on developing a 21st century pension system - with shared responsibility among employers, employees and the government - on top of Social Security, one that will ensure adequacy and security for all.
If this were a priority, the country could truly fulfill the commissioners' desire to give the nation's kids and grandkids a better life.