Taking Care of Each Other|
Sermon for Seekers Church
January 30, 2005
I'd like to begin by asking you a question. What is the most substantial thing that you do that shows solidarity with the poor?
I'm fortunate to get a turn at preaching when the lectionary gospel reading is the Sermon on the Mount, perhaps the best known sayings by Jesus. You heard the reading from Matthew. I'm going to read from Luke's version, specifically Luke 6: 20b-21. I'm reading from the Scholars Translation, reading the section of the Sermon on the Mount that the Jesus Seminar Scholars consider to be most likely to be a clear transmission of the words of Jesus. Luke says that Jesus looked squarely at the disciples when he spoke.
Congratulations, you poor!
God's domain belongs to you.
Congratulations, you hungry!
You will have a feast.
Congratulations you who weep now!
You will laugh.
This sermon is called Taking care of Each Other, and, given our imperfect selves, we need a lot of taking care of.
Think for a moment about the ways you take care of each other in your family.
Now think for a moment about the ways we take care of each other in Seekers.
Perhaps you thought of the emotional support, encouragement, pastoral care, that we offer to each other. Maybe you remembered Tiffany's sermon, the work and gifts of our massage therapists and healers, that encourage us to respect our bodies, the most intimate gifts of Creator God. Do you know that there have also been some moments of substantial financial aid, worked out privately in the Seekers context, that have helped to save a business or buy a first house.
Did you know that in 2004 Seekers gave more than $89,000 in gifts to groups other than Seekers for various kinds of ministry compared to about $69,000 in costs for building operation, salaries and program. Seekers are generous people and our contributions in 2004 came in at about $220,000, which is about 10 percent above what we had projected for income. Such generosity beyond our expectations allowed us to give an end of the year gift to Church World Service of over $4,400 for Tsunami relief.
I'm thankful for the voluntary generosity we display and for the message it sends about who we are.
But Seekers, collectively, paid a lot more than $220,000 to help care for the disabled, to help care for the survivors of workers who died, and to reduce poverty among the elderly. I'm talking about the 12.2 percent tax on wage income up to a cap of $87,000 that you paid for Social Security.1 That's more than a tithe. More than half of U.S. taxpayers pay more in payroll taxes for Social Security than they pay in income tax for all the rest of federal government functions.
You don't have an individual choice about whether you want to pay your Social Security taxes so maybe you don't feel virtuous about this spending. But we live in a country that has made repeated choices to first create, and then expand, Social Security. Now we face a key political moment in which the president has proposed taking a significant step to start breaking down the traditional Social Security system. The choice is collectively before us once again.
Social Security is the most important way we take care of each other as a nation in terms of federal dollars expended. Is Social Security worth preserving and strengthening, or should it be substantially changed or cut back?
To begin with, what do we get from Social Security for such a huge expenditure?
First of all, we have members of Seekers who are drawing retirement checks. I'll start getting one in about a year. Such checks are important income support for most recipients. For two-thirds of elderly households, Social Security retirement checks provide more than half of their income. For twenty-one percent, such checks provide all of the family income. I'm fortunate in that Social Security will pay me about as much as each of the two pensions I have. The Social Security check will make up the difference so that I will have as much income when I retire as I currently have. I was fortunate that for much of my employed life I had more employer contributions to my pensions than to my Social Security.
The Social Security safety net is growing in importance as the fundamental and secure source of income for the elderly because both savings and pension income are declining. This is troubling because Social Security was designed to be one part of a three-legged stool, the other two legs being savings and pensions. It's the public part that is doing well while the private legs are doing worse. Recent massive losses to employer funds set aside for pensions due to hostile takeovers, plain old fraud, and company failures, remind us of the bad old days in the early decades of the 20th century when private pensions presented one disaster after another.
Social Security was not created as an alternative to private savings and pensions but as a fundamental insurance program for the elderly to protect against poverty. And it's worked. The poverty rate for the elderly has fallen from 35 percent in the 1950s to less than 10 percent today.
The funding formula for Social Security has been carefully balanced toward reaching several goals. Even though it is true that the more you paid in Social Security taxes the higher your retirement benefit, it is also true that the benefit is proportionally better for lowest income workers and retirees which is fundamental to the anti-poverty goal. Furthermore, the money paid for Social Security taxes, if you counted it as a contribution to the average private pension, actually gave back a higher income in benefit checks.
This money's worth comparison is surprising for many and is due to two fundamental things about Social Security. First of all, Social Security is very efficient in three important ways. It is efficient in gathering income because it is part of the already existing income tax gathering process. Social Security is a very simple tax to administer. Secondly, the cost of managing Social Security investment is very low because it is all invested in U.S. Treasury instruments that are like bonds. Finally, the process of disbursing the benefit checks is simple because the several benefits are all based on nation-wide formulas and rules that apply to everyone.
The second fundamental advantage of the Social Security program is that it is social insurance and is only paid to those who are alive. For example, my former boss, Jay Lintner, died at 65. He got very little income from Social Security. The benefit of all the taxes he paid go to the rest of the people in the Social Security benefit pool, not to his heirs. So, even though Social Security is designed as social insurance against poverty for the elderly, it is competitive with private pension plans so long as you think of it in terms of income for those retirees who are alive. Furthermore, and significantly, Social Security is far more stable and secure than any private pension plan.
There has been a lot of well-financed scare mongering about Social Security by those who have opposed it since its inception. This intentional campaign to mislead the public has been quite successful and even many fairly well-informed progressive people have come to believe that Social Security wont be there for them when they need it. This well-organized lie should be seen for what it is, a dishonerable scandal. (The details of clarifying this scandalous lie may be found in my paper, Is Social Security Safe.) Though Republicans, beginning with the president, are particularly at fault, there have been some leading Democrats who have contributed to this misinformation campaign.
However popular Social Security has been with the majority of people in the United States, there have been those who have opposed it since its inception as the worst example of big government, high taxes, and social spending. The last major reform, in 1983, began with President Reagan proposing major cuts in Social Security retirement and disability payments in response to what was a real financial crisis in Social Security funding.
From 1935 to 1983 Social Security was primarily on a pay-as-you-go basis with a low level of trust funds that served more like a checking account than a savings account. The income from the workers of those years paid for the retirement of workers in those years. The ratio of workers to retirees was very high, in significant part because only a small percentage of people were living past 65 and because workers who had first come into the system had not yet retired. (You can read about this in my paper Understanding Social Security.)
Instead of following the lead of President Reagan, a bipartisan compromise was worked out in 1983 that made modest changes in the program such as raising the retirement date from 65 to 67, which is just now phasing in, and slightly raising taxes. The changes were sufficient, as it turned out, to create rapidly growing Social Security trust funds. The trust funds grew by about $150 billion dollars last year and are currently worth about $1.5 trillion dollars. The latest report of the Trustees of Social Security project solvency through 2042, which means solvency all through the time that the Baby Boomers are retiring. If the economy stays as strong as it has stayed, on average, for the last sixty years, the Trustees project that Social Security would be solvent indefinitely.
The current attempt to privatize Social Security is not needed to save Social Security. If Social Security did need saving, privatization would be like pouring gasoline on a fire. The core idea of privatization is that money would be pulled out of the basic financing pool for Social Security and transferred to individual accounts managed, in one way or another, by Wall Street. Most of the critique of this proposal has focused on the riskiness of investing in the stock market and on the administrative wastefulness as well as the profit to investment managers. I agree with both critiques but think it is more important to point to the protection of the basic social insurance concept. When money goes out of the Social Security pool into private accounts it goes on to individual heirs upon the participants death, not back into the common pool. This important defunding of the common pool strikes at the basic formula which has served so well as an anti-poverty strategy while also making the value of a Social Security retirement benefit competitive with average private pensions for those who are alive.
In short, what we have here is fundamental ideological competition between those who would protect the existing Social Security structure in the interests of the common good and those who would take money from Social Security to further advance the interests of those who do not need the fundamental anti-poverty protection offered by Social Security. Let's be clear. The structures of the United States economy and taxes have been moving steadily over the last twenty-five years toward substantial financial increases for the most wealthy and stagnation or loss for most people in the United States. The wealthy do not need Social Security and some wealthy resent it simply because it is a tax, not merely a personal tax on a trivial portion of their personal income, but a tax they have to pay for employees. For those who are fighting an increase in the minimum wage, fighting overtime pay, cutting back on health insurance and pensions for workers, reducing the commitment to workers that comes with paying Social Security taxes is a consistent position. The various privatization schemes are intended as a first step towards breaking up commitment to the basic structure of Social Security and transferring more money into the hands of private investors. This includes getting more people to think about their self-interest from the point of view of being an investor instead of from the point of view of being a worker.
From my point of view, what we are talking about here is sin, capital S and little s. This is a bit of sin that the Bible, both Hebrew Scripture and New Testament, is clear about. Honor your father and your mother is one of the 10 Commandments. Caring for widows and orphans is not an option, it is a duty.
Congratulations you poor!
God's domain belongs to you.
If you stand with me on this I pray that you will do at least something to contribute to the tide of opposition to all attempts to privatize Social Security. Become informed. Talk about it in your conversational networks. And please write your Representatives and Senators. What you do to protect Social Security just might be the most important thing you do this year to show solidarity with the poor.
If you oppose what I have said this morning I hope to stay in conversation with you and learn from you. If this sermon proves controversial, then I hope Seekers can construct a fair, open, and helpful structured conversation so that we may all grow together.
Note for internet audience. Three of my basic Social Security papers are copied below.