It has become increasingly common for Social Security and Medicare to be referred to as ‘entitlements’ – usually voiced in stern tones of disapproval. An entitlement is a legitimate right or claim to something and, in this sense, Social Security and Medicare are surely benefits to which U.S. workers are entitled: we contribute to their costs through payroll taxes while we are working and expect to receive pension income and health insurance when we retire or become disabled.
The cost of those programs is significant. Payroll taxes are 6.2% for Social Security, 1.45% for Medicare. For someone earning $25,000 a year, payroll taxes amount to just over $1,900. Together, Social Security and Medicare make up approximately 40% of the federal budget or $1.2 trillion. Much of the rhetoric surrounding these figures, however, is presented as though we are supposed to find them astounding or infuriating, without ever making the case that other social priorities are more important.
We could do away with Social Security and Medicare – but only high-income earners would be able to save enough money to be able to stop working in their mid 60s. We could raise the retirement age – but should we really ask nurses, teachers, construction workers, and auto mechanics to go soldiering on past the age of 65 or 70?
This raises an even deeper question: Should we see our society as a community made up of joint enterprises and collective contributions? Or as an arbitrary assemblage of individuals? Libertarians (and even some anarchists) prefer the latter view, imagining themselves to be connected to others only through explicit transactions in the marketplace. Yet, this view ignores the incredibly vast range of ways in which the members of a large, highly developed society are connected by relationships that are rarely conscious or explicit. Who laid the pipes that flush the sewage out of your toilet and send clean water to the sink? Who now makes sure that each continues to function properly?And who taught the paramedic who saved that person’s First Grade teacher’s mother’s life how to read?
If we are not simply a random grab-bag of individuals going our separate ways, don’t we owe the members of our community more than just the assurance that we will not steal from them or murder them in their sleep? If our lives are better because we live in a community filled with nurses, teachers, construction workers, and auto mechanics, shouldn’t we offer them some relaxation and freedom from worry in their last years? In the richest country on Earth, with a $15 trillion economy, are we really going to say that we can’t afford this – that we have other, more pressing priorities?
It is worth adding, of course, that we could vastly expand the revenue available for Social Security without increasing taxes on ordinary workers or cutting other forms of government investment. Social Security payroll taxes currently apply only to incomes below $110,100. Simply lifting that cap and asking high-income earners to pay their fair share would erase any fears of Social Security running out of funds.