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Social Security and the Middle-Class Squeeze: Fact and Fiction about America's Entitlement Programs

At the outset of his second term, President Bush's proposal to partially privatize Social Security has touched off a debate of enormous proportion. Disentangling the rhetoric and hyperbole from fact is essential for anyone trying to evaluate the potential merits of pitfalls of the plan.Leonard and Mark Santow--a father-and-son team who integrate two different political viewpoints (fiscally conservative and socially liberal, respectively)--remind us that any discussion aboutSocial Security and other "entitlement" programs, such as Medicare and Medicaid, must be pursued in the context of their history and of current economic policies that are becoming increasingly unfriendly to the overburdened middle class. Reflecting a shared belief that government can and should work to further the common good, the Santows look beyond the partisanship that characterizes so much of our public debate over critical issues, and offer specific recommendations for improvingSocial Security, Medicare, and Medicaid in socially responsible ways that serve to relieve some of the stress on the middle class and promote upward mobility. Synthesizing mountains of data and explaining sophisticated economic concepts in layman's terms, the Santows expose myths about how entitlementprograms actually work, arguing, for example, that while the financial state of Social Security gets most of the press, Medicare and Medicaid are in much more serious trouble. Moreover, they are highly critical of privatization plans, demonstrating that similar programs have failed in other countries and that such plans are programs are neither fiscally nor socially sound. If the American people value the common commitments that these programs embody, we will need to see them as a package, and fund them accordingly. In response to this challenge, the Santows integrate conservative and liberal viewpoints to propose a package of reforms that includes both tax cuts and increases and an overhaul of the government's economic forecasting system. Featuring a timeline of key events since Franklin Roosevelt signed theSocial Security Act in 1935 and an appendix of data tables, the authors offer a primer for concerned citizens, policymakers, educators, students, and finance professionals--anyone with a stake in designing a system that pays for these essentialprograms in an equitable manner and contributes to our collective prosperity.

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