Social Security, FEMA disaster assistance, and other safety nets.

A colleague – one whom I greatly respect – recently challenged me. “Bill,” he said, “you like to write op-eds. You need to write an op-ed that sets people straight on social security.”

!!! More than one red flag here. First, this is an era in which no one “sets anyone straight.” That is not, nor will it be, the name historians give to this age. If anything, our time might more appropriately take the mantle of The Age of Polarization, or perhaps more simply, The Great Confrontation. Never before in history have positive statements, or declarations, or opinions generated more controversy. Thanks to the Internet and all its technological extensions and cultural baggage, any thought of any worth will generate controversy, will spawn counterexamples, will excite resistance.

Unless it is ignored…perhaps the worst of all 21^st-century fates.

[Here’s another way of looking at today’s tendency to question…in many respects it’s a good thing. Maybe…it’s a sign that “we are all scientists,” in the sense that President Kennedy meant during the Cold War when he visited Berlin and famously proclaimed, “Ich bin ein Berliner.” Why? The scientist’s stock in trade is to question everything…data, observations, the logic of arguments, the assumptions in the mathematics, the inferences. So, when you pick up today’s newspaper, or log onto your news websites, or turn on Fox or MSNBC, and are immediately blasted by argument and controversy, do what you sometimes do first thing in the morning when you’re greeted by that blast of wintry air. Reflect on how wonderfully bracing it all is! Breathe deeply. Allow yourself to feel joy. Tell yourself, “This is how it feels when things are going well.”

Oh.

You wish it were a tad more civil? So do we all. But look at it this way…we’re surrounded by 7 billion people who care. They’re not worn out. They’re not burnt out either. They’re still feeling the passion.

And the truth? You still feel it too.

But back to setting people straight on social security.]

The second red flag? Chances are good, you thought of it long before now. The fact is, if you’re reading this, chances are excellent you know more about social security than I do. You know the history, you know the criticisms, you know the controversies. It affects you and your future, and you’re on it. You should be writing this piece, and I should be reading it. I’ve got no credential or standing here. Don’t know the political science or history or theory of social security. How could I change minds on this, of all subjects?

But my colleague had in mind something far less ambitious. [Want more background on social security, from authoritative sources? Click here to get started. By social security, he’s referring informally to the Old-Age, Survivors, and Disability Insurance (OASDI) Program.] Back in 1935, when Social Security was first implemented, it was intended to limit the risks we all face: old age, poverty, disability, and the threats faced by widows and orphans. My friend’s main point is that social security benefits were never intended to be pensions, or to replace pensions – in the sense that they reflected a benefit to a worker proportional to what that worker had earned, or in the sense they were intended by themselves to enable that worker and his/her spouse to live in comfort. And they’re not meant to take care of our every insurance need either. Instead, the benefits are intended to be something much less. They are to provide a minimal source of funds – a floor – to elderly who might otherwise be wholly indigent. Social security shouldn’t be evaluated by a pension yardstick. And [here was my friend’s point], some of the adjustments that politicians are contemplating, and that the constituencies behind them are supporting, don’t make so much sense when we keep these origins in mind. As I recall [and I’m almost certainly butchering what he really had in mind – he ought to write is own op-ed!], one particular aspect he had in mind were efforts to increase the taxation of the benefits. He felt that dimension had already been built into the structure of the pay-in and the payout, and didn’t need to be factored in a second time.  

[An additional aside. Because social security involves individual contributions, many people would not lump it in the same category as true social safety nets. They would reserve this term for food stamps, a variety of cash contributions and subsidies, provided to the very poorest, whether chronic or transient or those in special circumstances – facing disabilities, or ethnic discrimination, or incapacitated by drug use, etc.]

But the safety net label comes from something originally more specific, more limited in application. When I was growing up, the term would refer to the net many trapeze artists would use to protect themselves should they fall from a height. Some used the term to describe to the trampoline firemen might hold to catch someone jumping from a burning building.

In both these cases, it’s pretty clear that the role of the safety net is to provide an alternative to death. The safety net saves your life. But it won’t necessarily leave you whole. You can easily be injured. But you’re alive.

Closer to the subject matter of this blog?

The same is true with respect to FEMA disaster assistance. Many of us hold on to the thought that should we be hit by an earthquake, or flood, or wind damage from a hurricane or tornado, that FEMA will make us whole.

That hope is misplaced. Here’s the official FEMA word, from their website: “Disaster assistance is money or direct assistance to individuals, families and businesses in an area whose property has been damaged or destroyed and whose losses are not covered by insurance. It is meant to help you with critical expenses that cannot be covered in other ways. This assistance is not intended to restore your damaged property to its condition before the disaster.[boldface added]

While some housing assistance funds are available through our Individuals and Households Program, most disaster assistance from the Federal government is in the form of loans administered by the Small Business Administration.”

Pay particular attention to this last point – that most disaster assistance from the federal government is in the form of loans administered by the SBA. Politicians remind us frequently that small businesses are the engines that drive job creation. But in disasters, they’re often casualties. That’s because they’re fragile in the first place. Statistics vary from source to source, but most experts tell us something along the lines of “90% of small businesses fail in the first five years.” So when flooding or some other hazard hits the office, or store, or work site, the business is gravely endangered. Or, alternatively, if the hazard hits the customer base, the business is in this circumstance equally gravely endangered. And those SBA loans? Like other loans, they require collateral, usually the owner’s home. Experts who’ve studied the implications of this report that such loans often prolong the agony, the small business owner winds up, after a period of months or years, losing both home and business.

So if we’re in the business of social engineering, and we are, then like it or not, there’s a lot of work ahead…both for social security, and for disaster assistance.

I’m not certain of much, but I’m pretty certain my colleague’s going to be disappointed if he sees this. It’s not an op-ed (it’s only appearing here in the blog instead of a major newspaper). It doesn’t say what he wanted.

Are we all set straight?