Keep Your Hands Off My Social Security

He who permits himself to tell a lie once, finds it much easier to do it a second and third time, till at length it becomes habitual; he tells lies without attending to it, and truths without the world’s believing him. This falsehood of the tongue leads to that of the heart, and in time depraves all its good dispositions. — Thomas Jefferson, 1785.

Last year during the protests by the Tea Party, some on the Left smugly mocked the protesters who wanted the government to keep their hands off their social security. At face value, this appeared to be hypocrisy or stupidity. On one hand, one of the key themes of the Tea Party is limited government. On the other hand, some Tea Party followers wanted to make sure that the government program they benefited from was unaffected by any new government action.

However, the confusion of some of these protesters can be traced to the fact that they have bought into the government’s myth of Social Security. It is not portrayed as an income transfer program paid for by taxes, but rather as a social insurance program into which people invest, much like any retirement program. Many social security recipients are convinced they are just getting out what they put in. Hence, they believe they own the same proprietary interest another person might have in their 401(k) investment. The Roosevelt Administration and successive administrations have deliberately cultivated this view of Social Security so that people would not feel that it was an income redistribution program which might loose popularity. The government wanted Social Security recipients to feel an entitlement to the payments rather than the an embarrassment about being beneficiary of welfare program.

While the Franklin Roosevelt Administration described Social Security one way in public, they were forced to argue something else entirely in court. The Federal Government does not have the Constitutional authority to institute a mandatory social insurance program, so they argued that payments into the social security system were really taxes. Even so, it was not clear that the Federal Government had the authority for this tax. In Helvering v. Davis an intimidated Supreme Court acquiesced to this large increase in Federal power.

At present, there is a similar misrepresentation about the nature of the medical reform package passed last year. During the 2008, presidential campaign, then Senator Barack Obama made a “firm pledge” to not raise taxes on those making less than $250,000 per year.

The final medical reform legislation included an “individual mandate’’ compelling people to pay for some form of health insurance. In an seminal interview George Stephanopoulos challenged President Obama on whether this mandate constituted, in effect, a tax increase on those at all income levels, including those making less than $250,000. Here is the exchange:

STEPHANOPOULOS: That may be, but it’s still a tax increase.

OBAMA: No. That’s not true, George. The — for us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase…

Recently, there have been a number of suits challenging the constitutionality of the individual mandate. The Administration has now argued in court that the mandate is essentially an exercise of Congress’s power to tax.

If a policy requires one public face and a contradictory legal argument to buttress it in court, even if wise, such a policy serves to undermine trust in government and weaken the moral authority important for the implementation of that policy.

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