What do welfare programs like food stamps, unemployment compensation, and the Social Security program have in common? The answer is little, but that could change.
Mention the very word “welfare” to almost any voter, regardless of party, and the reaction is a negative one. It’s a pejorative word. The term conjures up images of people taking something that hasn’t been earned.
Sadly, that appears to be happening to the term unemployment now.
The unemployment program has always had broad bipartisan support. The program was designed to replace around one-half of one’s income prior to job loss for about half a year (26 weeks). States run the program. Thus benefits and time periods vary somewhat. In deep recessions with an economy-wide shortage of jobs, Congress has routinely extended benefits in increments of 13 weeks. The 2008-9 financial crisis allowed folks to collect up to 99 weeks—almost two years! That was the most generous to that time.
The hallmark of the program was always that it was temporary. It wasn’t a “gift.” It was short-term income replacement that came with a stern catch—you have to actively search for work. Applicants had to prove that weekly, sometimes on the honor system and other times with actual documentation. There was no going on vacation, playing endless video games, or filling your day with online shopping. You knew the miserly benefits had a fast-approaching end date, and thus the incentive to return to work as soon as possible was strong. The weekly unemployment benefit enabled folks just enough to make ends meet yet be able to search for jobs, update resumes, and go on interviews, etc.
But the so-called “Biden Bonus” that continues to pay people more not to work than to actually work (until September 6th) changed the program from a temporary unfortunate situation to a windfall for sloth. Folks used to feel sorry for those that said, “I’m collecting unemployment” and encouraged the jobless as best they could. Now “collecting” is met increasingly by a stink eye from angry taxpayers. And why not?
There are 10 million job openings.
Lots of choices. Pay is way up. Hiring bonuses are common. Some companies will start you the moment you walk in. Yet, there are so few takers now that Democrats have made their mark on this new, not improved unemployment program.
What about Social Security? That program is a near-universal one. All workers pay a 6.2% payroll tax, matched by their employers, and they are then able to collect a retirement benefit as early as age 62 with a minimum of ten years of contributions. A formula is used to calculate the monthly payments based on the highest 35 years of work from one’s lifetime and the age one wishes to begin benefits. If you earn more, you contribute more (in taxes), and thus you will receive more. Delaying benefits yields still more.
Social Security needs reform given changes in life expectancy and declining birth rates, but that is a subject for other articles. There are those in Congress on the Left that are pushing one-time payments, higher cost of living adjustments, and using poverty indexes to calculate benefits. Other plans seek to tax upper-income earners more without giving any corresponding increase in benefits. In short, many proposals seek to turn Social Security into more of a welfare program.
That would be a huge mistake, as Social Security and Medicare are two programs roundly supported by the American people, a populace who otherwise distrust and dislike most other things the federal government does. When something starts to give off an aura akin to welfare, it will lose support.
It’s a strange gamble for The Left to seek changing and thus destroying a widely popular and successful program that keeps America’s seniors out of abject poverty. Curiously the same leftists continue pointing fingers at conservatives as the ones trying to “throw grandma off the cliff” by making modest changes that are necessary to ensure Social Security can continue for successive generations.
In sum, the Biden Administration just approved a nearly 30% permanent increase to food stamp benefits, the largest in the program’s history. The program has admirable intentions but is not time-limited and thus ensnares millions of Americans by paying them to remain poor. Unemployment has simultaneously ensnared people with perverse incentives to stay home. Millions have lost their skills and work ethic. Worse still, by not contributing payroll taxes while out of work, they have unwittingly imperiled their retirements.
Let’s not let The Biden Administration and Democrats in Congress do to Social Security what they’ve done to other programs. For information on what a sensible, bipartisan solution to Social Security’s long-term financial troubles looks like, see AMAC’s Combined Social Security Guarantee & Social Security Plus proposal here: https://amac.us/social-security/.
Jeff Szymanski works in political communications for AMAC, a senior benefits organization with 2.4 million members. He previously taught high school economics for 15 years.