Misconceptions Distort Social Security Policy Discussions

By every standard—number of benefiThe Goal of Adequate ciaries, family protection, and dollars and Widespread Protection spent—social security is the nation's most important social welfare program. The report of the Committee on Eco In January 1989, social security—the nomic Security (1985), issued in 1935, Old-Age, Survivors and Disability Inserved as the basis for the Social Se surance (OASDI) program—provided curity Act of 1935. Social security and benefits to approximately 38.5 million companion programs were grounded in persons, and about 131 million workers the belief that all citizens should be made payroll tax contributions. In 1989, protected against what President Roos approximately $236 billion will be paid evelt referred to as the "major vissi in benefits. tudes of life" and that over time the Although strongly supported by the United States would be able to achieve public, the social security program is this goal through legislation that ex not well understood. Even within the panded protections. The term social social work profession, at times little security, as used most often today and as more than lip service is paid in the generally used in this article, refers to education of professional social workers the OASDI program, which provides to its importance. Such failure to uncash benefits to retired, disabled, and, derstand social security among the gensurviving beneficiaries and certain fam eral public and the profession opens the ily members. However, the program door to misconceptions that can distort can be seen as one strategy toward and policy discussions. One example of such as an expression of the larger goal of distortions is the view that social seachieving social security for all citizens curity is just a middle-class entitlement; through a variety of interventions. So another distortion is the charge that the cial security is more than a program that program is unfair to young workers, tosimply protects against identifiable day's children, and future generations risks; it also is a mechanism that gives (Lamm, 1985; Longman, 1985, 1987; "individuals greater freedom in their Makin, 1988). personal lives" and "a way of assuring To frame policy discussions on social the dignity and independence of the in security and other important social dividual, the integrity of the family, and welfare programs properly, the nature stability and purchasing power of the and function of social security as an community" (Cohen, 1985, p. 13). evolving institution must be understood. Through the use of social insurance To provide background, the author principles, social security provides pro highlights the importance of adequacy tection against losses of income that in social security. Several misunderresult from long-term and severe dis standings about social security then are ability, death of a worker, and retire discussed as examples of how the failment. The use of insurance principles ure to understand the characteristics of enables individuals and their families to social security can distort policy disspread risks across all those partici cussions. In shaping the social welfare pating in a social insurance program agenda for the 1990s, social workers (Ball, 1978; Myers, 1985). In the case of must challenge faulty problem definisocial security, in exchange for making tions and work to disseminate accurate regular payroll tax contributions during information. their work lives (matched by employers) workers earn protection against circum stances that otherwise could financially overwhelm them or their families. Providing widespread and adequate protection for the entire population against such economic distress is the fundamental goal of social security. If adequacy were not the driving goal, then there would be little need for using the social insurance approach (Hohaus, 1960; Myers, 1985). This concern for adequacy is expressed through a benefit formula that provides proportionately larger benefits for workers who have worked consistently at lower wages, hr ugh the provision of benefits for certain family members, and through automatic cost-of-living adjustments that ensure that benefits once received do not diminis in purc asin power the longer a beneficiary live To provide wide spread protecti n, c verage is univers l —that is, nearly everyon in the work force (about 95 percent) is covered—and participati n is compulsory. However, social security is designed only to provide a floor of protection that is expected to be suppleme ted by other means, in cluding private pensions, nnuities, or savings. Individual equ ty is a secondary prin ciple of social security. A dominant rinciple in private insurance, individual equity, requires that b nefits received bear a direct elationship to p emium payments. All other qualities being equal, persons who pay twice as much in privat life insurance premiums should receive twic as much protection. Under social security, however, individual eq uity is g ven expressio through the basic benefit formula that, all things being equal, pays somew t larger benefit amounts to beneficiaries who had higher earnings over their work lives. Failur to understand the principles that inform soc al security—especially th t social security involves a unique blend of adequacy nd individual equity and that ad qu cy predominates—is a source of much isunderstanding about the program (Kingso , Berkowitz, & Pratt, in press). (Other authors have