Pick an Agency, Any Agency: SSA

As fiscal conservatives continue to seek avenues through which to derail the federal gravy train, it helps from time to time to take a look at the mind-numbingly long list of federal departments and agencies that are on board. Of course, this list is hardly exhaustive – just one that is publicly available – but it can certainly give us some concrete ideas on how and where to cut the spending.

Today: The Social Security Administration (SSA) 

About: “The Social Security Act was signed by FDR on 8/14/35. Taxes were collected for the first time in January 1937 and the first one-time, lump-sum payments were made that same month. Regular ongoing monthly benefits started in January 1940. ”
FY 2010 Budget: $695 billion in benefits + $11.6 billion in administrative costs (Source)

That’s right – Social Security. The gift that keeps on giving, if you consider higher taxation, retirement ages, and future entitlements to be a gift. Social Security is the elephant in the room in American politics: everyone knows it’s an issue, but no one is willing to cut. Don’t you care about the poor and the elderly? We can’t just kick them out into the street! Anyone who proposes the end of Social Security must be a heartless monster!

Certainly, an abrupt end to Social Security would spell disaster for the millions who paid in and are dependent upon it today. Social Security, unlike most wasteful government programs today (GIPSA, anyone?), will not be abolished overnight. However, phasing out this unsustainable safety net must be a priority of fiscal conservatives, who certainly can’t be pleased with a quarter of their paycheck being pilfered before it ever finds their hands. How can it be done, while still demonstrating the respect and support that our elderly have come to expect through a lifetime of the SSA?

First, allow the young people to opt out. As a 22 year old, I don’t ever expect to receive a dime of my involuntary Social Security payments. Due to the inflationary monetary policy set by the Federal Reserve, any benefits that are paid out today to individuals are much higher than the receipts from those same individuals 10, 20, or 30 years ago; the system is inherently unsustainable. What if SSA was optional? What if, rather than being required to pay into a fiscally and morally bankrupt system, I could keep my money and choose to save or spend it where I wish? In the short term, this may cause a further increase in the deficit as we must honor our commitments to those reliant on Social Security; in the long term, this reduces the future liabilities and the size of government.

Next, end automatic payroll deductions for Social Security for those who choose to remain in the system. Certainly, when faced with explicitly paying hundreds of dollars per paycheck for the government to handle your retirement, that pill becomes much more difficult to swallow. It highlights the true nature of the problem: that the government assumes it can handle your retirement savings better than you could on your own accord.

Finally, a goal should be set to limit payments to individuals. Ultimately, even in an “entitlement” program, citizens should only be “entitled” to the money they paid in, adjusted for inflation. Again, this would need to be a long-term goal to be accomplished over a period of 10-20 years in order to treat those in the system fairly. Decreasing caps on the “amount over rightful entitlement” could be set over that time period until the cap was eventually reduced to zero. The time period would be long enough so that individuals set to retire in 10, 20, or 30 years could plan accordingly – and, in combination with the aforementioned changes, they could choose to opt out altogether.

Besides, does anyone really believe that there was ever any constitutional authority for the Social Security system? Well – aside from the SSA itself, and the Supreme Court (the great protector and defender of the Constitution that it is). You have to love that a document so explicitly written could have an interpretation known as the “implied powers” doctrine. As James Madison said: “For what purpose could the enumeration of particulars be interested, if these and all others were to be included” in the “general welfare” clause?

Constitutionality: None (unless you believe in “implied powers”)
Visibility: Very High
Ease of Abolishing: Very Hard
Taxpayer Expense: Very High
Priority: High

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