By: Neda Ghomeshi / Opinion Editor
As working college students, a portion of our paychecks are allocated to fund Social Security. Texas Governor and Republican presidential hopeful Rick Perry claims that Social Security is a failure, a monstrous lie and should be managed by state governments. A basic understanding of the Social Security program proves all of these assertions to be false.
Perry’s perspective on Social Security, articulated more extensively in his book Fed Up, has become a focal point in his campaign for the Republican nomination. Perry claims that Social Security is “not something the federal government ought to be involved in, and that instead it should be given back to the states.”
As a contributor to the program, this suggestion worries me. If Social Security is converted into a state program, the distribution will be unequal. It needs to remain as a federal program to ensure that all recipients receive an equal amount.
Politicians such as Perry are poorly influencing this nation and unnecessarily frightening tax-paying citizens. The program is funded through payroll taxes collected by employees and companies. The taxes employees pay is lumped together under the Federal Insurance Contributions Act.
The FICA process is simple – the employee’s contribution is 4.2 percent, while the employer’s portion is 6.2 percent. The 2011 annual report by the program’s Board of Trustees reported that in 2010, 54 million people were receiving Social Security benefits. Clearly, the program is not a failure since all recipients are acquiring their money.
According to a CNN poll, “27 percent of Americans think that [Perry’s rhetoric that the system is a “monstrous lie” and a “failure.”] accurately describes the Social Security system… The poll, notably, did not identify Perry as the author of that statement.”
The fact that 27 percent of Americans believe that this misrepresentation of Social Security is correct is concerning. The program is anticipated to run out in 2037. However, after the trust fund is depleted, beneficiaries will be able to receive what current workers are paying in, which will be about three quarters of the scheduled benefits. Therefore, there will be money to distribute to recipients. Although the system may be struggling, it is not a failure and the system is definitely not a lie.
The Social Security program is suffering, however, as contributors to the fund, we should not be hesitant about the future of our anticipated Social Security benefits.
“Econ with Neda” is an economics op-ed column that runs every other Monday.
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