You can make the case for Social Security's importance in two graphs. The first, from Jared Bernstein's new blog, breaks down Social Security's share of senior income by age. The upshot: Six out of ten new dollars in seniors' pockets comes not from pensions or savings, but from Social Security. It's really important.
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The second breaks down Social Security's share of total income by seniors' income. The upshot: For seniors with below-average savings, pensions and investment returns, Social Security provides eight of ten dollars in income. Again, it's really important.


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Now, these graphs* could be used to make the point that lawmakers must never, ever touch Social Security benefits. And that's an utterly defensible position. But it's not my position.

Social Security is really really important; however, it's not the only thing that's important. If you keep Social Security reform "off the table" in budget negotiations and put more pressure on representatives to concentrate their savings in domestic spending, health care and revenues, there's a greater chance we'll see gratuitous cuts in other parts of government or family paychecks.

Take effective tax rates for example. Higher effective tax rates means more of our income goes to the government and there's less left over to go into savings for retirement. If we let the Bush tax cuts expire next year, the typical family would suddenly owe about $1,000 more to the government (not including the payroll tax changes). Families would fork over that percentage of their salary every year for the rest of their working lives, relinquishing thousands and thousands of savable dollars. Is that better or worse for retirement than a phased-in cut to Social Security benefits? I'm not sure there's a correct answer.

As important as Social Security is, we can't think of it in a vacuum. It's part of a larger system of the federal government's ins and outs. The same way tax exemptions force us to have higher tax rates to raise the same amount of revenue, exempting parts of the budget from budget reform means we'll need larger changes to the rest of the government.


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*To be clear, I'm not really disagreeing with Bernstein here. I'm just using his graph to make a separate point.

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