Sanders Says Rise In Inequality Jeopardizes Social Security

WASHINGTON, Feb. 10 – Sen. Bernie Sanders (I-Vt.), the ranking member of the Senate Budget Committee, today headlined an important briefing about wage inequality and its impact on Social Security. The event, hosted by the Strengthen Social Security Coalition, provided a venue for the release of a new report on the issue and a conversation about the implications of possible cuts to the program.

Below are Sanders’s remarks as prepared for delivery:

“We have got to send a very loud and a very clear message to the Republican leadership in the Senate and in the House: Stop manufacturing a crisis in the Social Security Disability Insurance program!  Stop trying to pit senior citizens on fixed incomes against the disabled! Stop rigging the rules so that you can cut Social Security benefits for the most vulnerable people in this country, while providing even more tax breaks to millionaires, billionaires, and the most profitable corporations in this country!

As all of you have pointed out, the skyrocketing increase in wealth and income inequality has not only hurt millions of Americans and caused the middle class to disappear, it has also hurt Social Security. If income inequality had stayed at the same level as it was in 1983, Social Security would have $1.1 trillion more than it does today. If the payroll tax had continued to cover 90 percent of all earnings rather than the 83 percent that it currently covers, the Social Security trust fund would be able to pay every benefit owed to every eligible American not just for the next 18 years, but for the next 38 years. Instead, more than $1.1 trillion has been pocketed by the wealthiest people in this country, instead of going into the Social Security trust fund.

This is Robin Hood in reverse.  It represents a massive transfer of income away from the middle class and the most vulnerable to the wealthiest people in this country.  And now you have the ugly situation that because inequality has reduced funding for the Social Security trust fund and shortened its solvency by 20 years, some of my Republican colleagues want to cut Social Security benefits to additionally hurt those people whose wages have already declined. And, now that the top one percent have captured over 99 percent of all new income generated since the Wall Street crash, now that the top 0.1 percent of Americans have almost as much wealth as the bottom 90 percent, what do my Republican friends and those on Wall Street tell us?

They want to cause even more economic pain to those who can least afford it. They are giving us two options: either cut Social Security Disability benefits by 19 percent; or cut the Social Security retirement benefits of current or future retirees.

Let’s be clear: those are unacceptable choices.

Over the short term, we have got to do what has been done 11 times in the past, under Republican presidents and congresses, and Democratic presidents and congresses: rebalance funds between the Social Security retirement fund and the disability insurance fund. Doing this would make sure that both Social Security retirement benefits and disability benefits could be paid for the next 18 years. And, over the long-term, we have got to make certain that Social Security will be there for our kids and our grandchildren, well beyond the current 18 years of solvency. And further, we have to understand that for many of our seniors on Social Security and for many people in the disability program, the current benefits are inadequate and have to be expanded.  

And we can do it in a very simple way.  At a time when the wealthiest people in this country are doing phenomenally well, we have got to scrap the cap. We have got to make sure that millionaires and billionaires pay the same percentage of their income into Social Security as the middle class. Right now, a Wall Street CEO who makes $18 million a year pays the same amount of money into Social Security as someone who makes $118,500.  That is absurd.

If we simply applied the Social Security payroll tax to income above $250,000, not only would we be able to extend the solvency of Social Security for generations to come, we could use some of that revenue to expand Social Security benefits. That’s what we have got to do, and that’s why I will be re-introducing legislation to do that very soon.  

In other words extending the life of Social Security is not complicated. It does mean however, that the top 1% would be asked to pay more in taxes.  That’s exactly what we have got to do.”