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Social security: seniors organize to move Rostenkowski



Anne Knefel didn't expect a big turnout on the rainy Saturday afternoon in November when the Guardians first met. And at first the meeting room at the Copernicus Foundation, a northwest-side social-service agency, was pretty empty. But slowly the seniors from nearby neighborhoods--like Portage Park, Jefferson Park, and Belmont Cragin--wandered in, until finally all the chairs in the room were taken.

Some of the seniors were outraged, others confused. They had heard stories of draconian cuts in social security benefits, but they were tired of rumors; they wanted facts. By the end of the day, Knefel's wildest expectations had been met. The Chicagoland Guardians of Social Security and Medicare were now about 150 members strong, and ready to sow the seeds for a grass-roots social security protest movement.

"We were all tired of being kicked around," says Knefel, a 67-year-old widow and social security recipient who lives in a modest bungalow on the city's far northwest side. "We want to deliver a message to Mr. Rostenkowski and all the other politicians: that they should keep their cottonpickin' hands off our social security!"

It's going to be no easy task. The Guardians are a loosely knit conglomoration of housewives and retirees spun off from the Washington-based National Committee to Preserve Social Security and Medicare. They have no budget, no headquarters, and no telephone. And the target of their protests is Eighth District Congressman Dan Rostenkowski, one of the country's most powerful politicians.

As chairman of the House Ways and Means Committee, Rostenkowski decides which social security and taxation legislation reaches the floor of the House of Representatives. The Guardians contend that Rostenkowski has bottled in committee a host of bills that would, among other things, smooth inequities in the social security benefit formula and protect the social security trust fund from being used to help erase the national debt. Moreover, Rostenkowski has suggested that the government raise the tax on social security benefits--a move with potentially painful consequences for seniors on small fixed incomes. And these abound in his working-class northwest-side district.

"If he keeps going the way he's going, we'll all be in trouble," says Knefel. "This is an outrage. We are people who fought for this country. We are people who built this country. And now we're getting a little old, so they want to just throw us out. Well, I've got news for Rostenkowski and all the other politicians: we're not just going to roll over and die."

A Rostenkowski spokesman counters that that's not Rostenkowski's position at all.

"I never heard of this group [the Guardians], but I think it's unfair of them to criticize the congressman for his stand on social security," says the spokesman, who asked not to be named. "If they look at the record over the past eight years, they will see that Dan Rostenkowski has done one hell of a job standing up for them in the face of a conservative administration that's very hostile to social security. The problems with some representatives of the elderly is that if you disagree with them on one issue out of ten, you're a bum."

The central dispute, over how the social security trust fund should be used, goes back to the 1930s. That was when President Franklin Delano Roosevelt pushed the Social Security Act through Congress as part of a social-insurance system that would cover people "from the cradle to the grave." But, as historian Arthur Schlesinger Jr. writes in The Coming of the New Deal, Roosevelt had to figure out a way to care for people who were "on the verge of retirement [and had] had no past opportunity to contribute to their own old-age pensions."

Roosevelt had two choices. He could cover the retirees with money diverted from general governmental operating revenues. Or, as Schlesinger puts it, he could "impose a double burden on the present generation, which would have to contribute not only to its own annuities but to the unearned annuities of people middle-aged or over. 'The plan we advocate,' said [Roosevelt's advisers], 'amounts to having each generation pay for the support of the people then living who are old.'"

Roosevelt opted for the latter alternative. That way, he later explained, payroll contributors had a "legal, moral, and political right to collect their pensions. With those taxes in there, no damn politician can ever scrap my social security program."

Schlesinger points out that conservative Republicans and business leaders warned at the time that social security would "undermine our national life by destroying initiative, discouraging thrift, and stifling individual responsibility." But by now, social security has become so sacrosanct that even the most conservative of politicians feels compelled to support it.

"The federal government was at last charged with the obligation to provide its citizens a measure of protection from the hazards and vicissitudes of life," Schlesinger writes. "One hundred and ten years earlier, John Quincy Adams had declared that 'the great object of the institution of civil, government' was 'the progressive improvement of the condition of the governed.' With the Social Security Act, the constitutional dedication of federal power to the general welfare began a new phase of national history."

In fact, the program has been almost too efficient. The social security trust fund has a surplus this year of $50 billion--a pool of cash that has accumulated in the last five years, after a raise in social security taxes. Most workers' wages are now taxed at 15 percent: the employee and employer each contribute 7.5 percent of the employee's income. Self-employed workers pay about 13 percent of their incomes to social security. By 1990, the social security trust fund surplus should reach $60 billion. And yet the federal government shows no sign of either cutting the tax or increasing social security benefits beyond cost-of-living hikes. The reason, critics charge, is that the government needs the money to help erase the country's $150 billion debt.

"The politicians count the social security trust fund against the debt," explains Allen Johnston, director of grass-roots action for the National Committee to Preserve Social Security and Medicare. "They say, 'OK, we have a $150 billion debt--we're taking in $150 billion less than we pay out. But if we add social security to the equation, it's only a $100 billion debt.' Well, we say social security shouldn't be included as part of this discussion. It is money that belongs to its contributors, not to Congress or the administration to use as an accounting device."

Rostenkowski's spokesman counters that this is a normal accounting procedure. "There's no doubt that the social security trust fund has the practical effect of masking the true size of the deficit," says Rostenkowski's spokesman. "But that's not a question of fairness--that's a fact of accounting."

What's more, other elected officials, long before Rostenkowski or President Reagan (Roosevelt included), have applied social security funds against the debt. The danger in doing so, says Johnston, is that the social security trust fund may eventually be absorbed by the debt, at the expense of its intended recipients.

Johnston and his group feel that, to prevent the trust fund's being depleted, it should be used strictly as it was intended to be, not as part of a hocus-pocus accounting procedure. "We say that the government should tax enough this year to pay next year's benefits," says Johnston. "The way we're going right now, we should have a surplus of about $300 billion by 1999. That money is raised by the social security tax, but it's not going to social security recipients. It will be used to buy government bonds that will be for housing, military, education, paying off old debt, or whatever." Although the fund might be used to purchase those bonds anyway, he feels the government is becoming too dependent on social security taxes.

"That's not right," he says. "If these are good and laudable programs they should be financed through a graduated income tax system. Otherwise you're being deceptive. What's worse, you're inviting disaster. Because if the deficit keeps growing, the government may overcommit the social security trust fund. Then [the government] will say they have to trim benefits or raise social security tax. Well, that's ludicrous. Why should you have to trim benefits in a program that's running a $100 billion surplus? The answer is that the money isn't being used for its purpose."

In the 1970s, Johnston says, during one of the social security fund's periodic crises, Congress trimmed the benefits for people born after 1917. These recipients are called "notch babies" because, if you look at a graph that tracks social security benefits, these benefits slip downward a notch for them. "My father was born in 1918, and my uncle was born in 1916; ever since World War II they've been running the same flower store in Arkansas," says Johnston. "But my father gets about $230 a month less in benefits than my uncle. It just doesn't make any sense."

Legislation intended to erase these disparities has languished for about a year in Rostenkowski's committee. Rostenkowski's spokesman defends his position, however. "We held hearings on the notch; we solicited all kinds of testimony. It's a straw-man issue without merit. Notch babies are not getting less than what they deserve, they're getting the benefits they are supposed to get. However, there was a mistake in the benefit formula and a lot of people born before the notch years were getting more than they deserved. We made the adjustment so the inflated benefits would not continue.

"The people who want to change the notch want a windfall, and the system can't afford that. Some people will say, 'That's not fair.' Well, we're dealing with an enormous deficit. That's the problem. And there's going to be a lot of pain shared getting that deficit down. Rostenkowski has to think of all sectors of society, not just the seniors. This committee has to balance a lot of interests, and we will never agree with one group 100 percent. We can't."

Still, the notch is a rallying issue for the Guardians.

"The two issues that get seniors the maddest are the notch and using social security to pay off the deficit," says Edward Tokar, a retired architect who helped Knefel organize the Guardians. "It seems so unfair."

Like Anne Knefel, Tokar learned about the notch in articles published in Saving Social Security, the national committee's newspaper.

"I joined the national committee a few years ago by sending in a $10 membership fee, but until Allen [Johnston] came out to help organize us, I didn't know a lot of these things," says Knefel. "After that, I was piping mad. Allen asked if we would help organize, and I said, 'You bet! We put up notices in the libraries, banks, and supermarkets--everywhere we could think seniors might be."

Trends in government are against the Guardians, however. President-elect George Bush has vowed not to raise the federal income tax, which is the country's most progressive tax. That means not only less federal aid for Chicago but higher local property taxes, user fees (for things like boat moorings), and "sin" taxes (on booze and cigarettes, for example), which are regressive. Thus the day-to-day living expenses of seniors will rise while their social security benefits remain roughly the same.

"I got a friend who's a member of our group, she makes $400 a month on social security and about an extra $100 from a private pension plan," says Knefel. "Out of that she has to pay $360 a month in rent plus utilities, doctor's bills, and food. You can't live like that."

"That's why it is so important to influence Rostenkowski," says Tokar. "He lives in Chicago. He grew up here. I can remember his dad [Joel; he was a big politician when I was growing up. Dan must have some heart for the old neighborhood. I don't think he would turn his back on the old people from the old neighborhood."

Flush from the success of their first meeting, the Guardians plan to elect officers at a meeting next month at the Copernicus Foundation. Then they will put together a mailing list and ask to meet with Rostenkowski.

"A lot of people who showed up to that first meeting were happy with Rostenkowski," says Tokar. "One guy said, 'My God, I worked for him in the last election.' You see the people aren't aware of what's going on. They're quiet; they're afraid. They just take what's given to them. Our job is to educate them. That's really the only way we can get what we deserve."

Art accompanying story in printed newspaper (not available in this archive): photo/Bruce Powell.

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