Social Security: Good, but Troubled

Americans overwhelmingly believe that the Social Security system has been good for the country, but some younger people express doubts. Overall, 79% say Social Security has been a good thing for America, with 18% calling it “very good.” This view is all but universal among those age 65 and older, 95% of whom call the program a good thing, 38% very good. Younger generations take a less uniform view of Social Security, however. While two-thirds of people under age 30 agree that Social Security has been good for the country, 22% say it has been bad and 13% don’t have a view either way.

While Democrats and Republicans may disagree on what, if anything, should be done to change Social Security, there is no disagreement over the basic value of the program to the country. Fully 83% of Republicans, along with 80% of Democrats, say the program has been good for the country.

Despite its good standing among the public, the Social Security system is clearly seen as troubled. When asked what one word best describes the Social Security program, “bankrupt” and “in trouble” came to mind more often than any others. Overall, 37% volunteered some word or phrase related to the future financial prospects of the program as the first thing that came to their mind; examples include “scary,” “unstable,” “disaster,” and questioning “will it be there?” Others used words that describe the program’s purpose (“retirement,” “money,” “elderly”), criticize its operation (“unfair,” “mess,” “inadequate”), or describe it favorably (“good,” “security,” “working”).

Again, there is a significant generational gap in the way Social Security is described. Seniors are less likely to think about the program’s future, and tend to describe the current program in positive terms. Younger respondents (under 30) volunteer almost nothing good about Social Security, and most frequently offer either concerns about the program’s future or criticisms of its current operation. The first thought of respondents between 30 and 65 tends to relate to the financial future of the program.

Social Security’s Financial Future

Two-thirds of Americans believe Social Security in its present form will run short of money at some point, while 26% disagree. About half of the public (51%) believes the system will run short within the next 30 years. There is a sharp difference of opinion on this issue between those who are already of retirement age and those who are younger. Nearly three-quarters of people under age 50 believe the system will run short at some point, and two-thirds of those age 50-64 agree. But seniors are more divided, with 49% foreseeing a shortfall and 38% believing the system is secure.

Majorities across party lines foresee financial problems for the Social Security program, though Republicans are more unified in this view than are Democrats. Three-quarters of Republicans say the system will run short of money to pay all of the promised benefits at some point, compared with 70% of independents and 59% of Democrats.

Prompt Action Supported

Nearly three-quarters of Americans want to see action on Social Security either “right away” (41%) or within the next few years (32%). A quarter are willing to wait longer than that (16% within the next decade, 9% further in the future). Social Security ranks among the public’s top policy priorities for the coming year. In a January survey by the Pew Research Center, making Social Security financially sound ranked third ­ behind only defending against terrorism and strengthening the economy ­ as the most important issue before the president and Congress.

As many Democrats as Republicans say changes need to be made right away (44% and 43%, respectively). But Republicans have a slightly higher sense of urgency overall; 78% of Republicans want change at least within the next few years, compared with 69% of Democrats.

Most Favor Targeting the Wealthy

Most Americans oppose changes in Social Security that would increase taxes or reduce benefits across the board. In fact, the only proposals that receive majority support are those that would concentrate costs ­ or benefit reductions ­ on the wealthy. By roughly two-to-one (60%-33%), most favor collecting Social Security taxes on all of a worker’s wages, rather than just the first $90,000 earned each year. Also popular is the idea of limiting benefits for wealthy retirees, favored by 58%.

Nearly three-quarters (72%) oppose raising the retirement age, and 64% are against the idea of lowering the amount by which Social Security benefits rise each year for changes in the cost of living. Increasing payroll taxes for all workers is also opposed by 56%, while 38% favor the idea.

There is broad agreement, politically and across age groups, in favor of collecting Social Security taxes on all of a worker’s annual earnings rather than just the first $90,000. This idea receives equal support (roughly six-in-ten) from Republicans, Democrats and independents. Both younger and older Americans support the idea at about the same rate. And as important, the idea gains as much support from people in the high-income households likely to be affected by this change as it does from lower-income households.

While also favored by about six-in-ten on average, support for limiting Social Security benefits for wealthy retirees ­ in essence, means testing ­ varies more across party and demographic groups. This draws more support from Democrats (63%) and independents (61%) than from Republicans (54%). Means testing also is more popular among people between the ages of 30 and 64 than among younger and older Americans. But again, despite being a measure that targets high-income Americans, limiting Social Security benefits for wealthy retirees gains as much support from high-income as from low-income households.

Two reform ideas that would not affect current retirees ­ increasing the payroll tax rate and raising the retirement age ­ are much more palatable to older Americans than to younger people. Nearly half of seniors (47%) favor raising the payroll tax rate, compared with barely a third of those between age 30 and 64. And 40% of people who have already reached retirement age favor the idea of raising that bar, compared with fewer than a quarter of those still under age 65.

Conversely, the idea of reducing the rate at which benefits increase over time is more popular among the young than the old, even though younger people ostensibly have more to lose over the long term from such a change.

Little Partisanship ­ Except on Private Accounts

Overall, partisanship is only weakly related to attitudes about Social Security reform with the exception of the one proposal that President Bush has personally supported ­ allowing private accounts. With the support of more than two-thirds of Republicans (68%), this proposal is viewed more favorably within the president’s party than any other tested. But just 29% of Democrats favor the idea of private accounts. In comparison with this 39-point partisan gap on private accounts, the party divide on other reform ideas is modest at best.

Politically, Democrats are somewhat more supportive of an increase in the payroll tax rate than Republicans (44% vs. 35%), while Republicans are more willing to accept an increase in the retirement age (33% vs. 20% of Democrats).

Tax Increases More Palatable than Benefit Cuts

In principle, Americans place a higher priority on preserving Social Security benefits than on preventing increases in payroll taxes. When forced to choose between these two options, 60% say avoiding any future cuts in benefits should be a more important consideration than avoiding any tax increases for workers and employers, while 30% say the reverse.

Not surprisingly, people age 65 and older are most likely to place priority on maintaining benefits. A majority of those under age 30 also favor avoiding future cuts in benefits, but a relatively large minority (38%) believe it is more important to avoid tax increases. Similarly, Republicans are more averse to the possibility of higher taxes than are Democrats. Even so, half of Republicans and 68% of Democrats place the higher priority on preserving benefits into the future.

More Aware of Bush Proposal

Compared with just two months ago, many more Americans say they have heard a lot about President Bush’s proposal to allow younger workers to invest Social Security taxes in private retirement accounts. This month 43% have heard a lot, compared with only 23% in December. Another 35% have heard a little, and only 21% have heard nothing at all. In December, roughly a third (33%) had heard nothing.

In December, only 10% of those under 30 had heard a lot about the plan; this number grew 10 percentage points to 20%. At the same time, however, the percentage of older Americans who heard a lot grew by 28 points (among those age 50-64) and 25 points (among those 65 and older). As a result, older Americans are three times more likely than younger people to have heard a lot about the proposed changes. Men are more aware than women, and more whites than blacks or Hispanics have heard a lot.

Awareness Fuels Opposition

While a plurality of Americans still favor Bush’s plan, support has been declining. Currently, 46% favor and 38% oppose the idea. Support has fallen from 54% in December, and from 58% in September. It had been as high as 70% in a poll of registered voters four years ago in September 2000.

In general, opposition to the plan to permit Social Security private accounts is much higher among people who have heard a lot about it than among those who are less familiar with it. Among those who have heard a lot about the proposal, 49% oppose the idea, compared with 30% of those who have heard little or nothing about the proposal. Younger people are more favorable toward the plan but ­ as a group ­ have heard less about it; among younger respondents, the level of awareness of the plan is unrelated to opinions about it.

Among those 65 and older, people who are most familiar with the private accounts proposal are more supportive than those who are less familiar. But even among those seniors who have heard a lot, opposition outnumbers support by a two-to-one margin. For the large group in the middle ­ those between the ages of 30 and 64 ­ people who are more familiar with the plan are significantly more opposed to it.

Individual Control Key for Supporters

People who favor the creation of private retirement accounts in Social Security most often cite the ability to have control over their money as a principal reason for their support.

Less common but still notable are references to reducing the scope and reach of government and obtaining larger benefits upon retirement. These patterns are evident when respondents are pres
ented with a list of possible reasons for supporting private accounts, or when they explain their reasoning in their own words.

In those open-end responses, 38% of supporters of private accounts mentioned something related to greater individual control, freedom, or responsibility. Within this category, the themes included having more options for what to do with their money, having the choice of whether to invest in the program or not, and the benefits of making people more accountable for their own decisions.

A second group of responses, mentioned by 13% of supporters of private accounts, cited limits on government, the fact that “it’s my money,” or the split between public and private as a benefit of the proposed system. Other common responses included the opportunity to make more money (12%) and the likelihood that personal accounts would ensure that something would be available at retirement (mentioned by 9% ­ perhaps because of a lack of faith in the current Social Security system). Just 4% say they favored the plan because it would help ensure the survival of the system.

Younger supporters of private accounts are much less likely than older people to offer a specific reason for their support. A quarter of those under age 30 gave no reason, and another 10% offered only a very general positive response when asked why they supported private accounts. In contrast, older respondents were much more likely to offer specific reasons for their opinions.

Opponents Cite Market Risk

When asked to describe, in their own words, why they oppose private accounts, a small plurality of 34% mention the greater risk that comes with private investments, including 12% who mentioned the stock market explicitly. Another 16% said that the public was unprepared to make informed decisions about their investments and might lose their money.

Nearly as many (14%) cited the danger that private accounts would pose for the Social Security system or said they were incompatible with the philosophy of the system. Only 4% cited the transition costs of the Bush plan, and a similar number (4%) said the system would be unfair because some people would benefit more than others.

As is the case for supporters of the plan, there are few partisan differences in the reasons offered for opposing private accounts. Among the very small number of young people who opposed the idea (just 42 individuals were asked the open-ended follow-up question), significantly fewer offered a substantive reason for their opposition.

Investing in Private Accounts

Overall, the public divides about evenly on the question of whether they would actually opt to invest in private retirement accounts, with 45% saying they would do so and 49% saying they would not. As with opinions on the plan itself, willingness to invest in private accounts also varies greatly by age.

A majority of those under age 55 (55%) say they would put money into private accounts, while most of those age 55 and older (70%) say they would not participate. (The White House has said that under the president’s plan, the current system will not change in any way for those born before 1950).

More than twice as many Democrats as Republicans say they would stick with the current system. But even among Republicans, a third say they would not invest in private accounts.

A plurality of respondents (44%) believes that the adoption of a system of private accounts would result in an increase in their Social Security benefits, and a solid majority of 57% think they, personally, would do an excellent or good job of making investment decisions and managing their accounts.

Most Americans, with the exception of those 65 and older, have a favorable view of their ability to manage their accounts, but only among those under 55 years of age does a majority believe that the accounts would result in larger benefits. Still, very few people, regardless of age, think their benefits would be reduced by a system of private accounts.

Predictably, experience with investing in the stock market is associated with greater willingness to put one’s own Social Security taxes into private accounts and also with a belief in one’s personal ability to manage the accounts. Among people who are not yet retired and who currently have money invested in the stock market, 57% say they would take advantage of private accounts in Social Security; among current workers who do not have money in the market, just 39% would use private accounts.

But personal experience with markets does not lead to a greater belief that private accounts would necessarily increase the benefits available upon retirement. Among those who currently have money invested in the markets, 51% think private accounts would lead to increased benefits, but so do 48% of those who don’t have money in the markets.

Bush Approval Weak, Except on Terrorism

Bush’s approval rating for his handling of Social Security is markedly lower than for any other issue. But on every other issue except for his handling of terrorism (59% approval), his ratings fall well below 50%.

On education and the environment, roughly as many approve as disapprove of Bush’s performance. On his handling of the economy, approval lags disapproval by 43% to 50%, about the same levels as in January. And on health care policy Bush’s ratings are lopsidedly negative, with only 36% of respondents expressing approval and 51% disapproving.

As in the past, there are vast partisan differences in evaluations of Bush’s job performance. More than 70% of Republicans approve of the president’s handling of all domestic policies except Social Security and health care, where Republican approval ratings reach 60% and 67% respectively. Democrats, on the other hand, overwhelmingly disapprove of Bush’s handling of domestic policies with fewer than 15% approving of his performance on the economy, the federal deficit, and health care, scarcely more than the 8% approving of his handling of Social Security.

Lowest on Social Security

Support for Bush’s handling of Social Security is highest among conservative Republicans, 68% of whom approve. But that is far below the 93% approval rating these Republicans accord Bush’s presidency overall. And among moderate or liberal Republicans the approval gap is the largest for any group: 78% approve of Bush’s handling of the presidency, but only 48% endorse him on Social Security. Among independents, 41% have a positive view of Bush’s overall job performance, but just 22% approve of his handling of Social Security.

As expected, Bush draws overwhelming disapproval on Social Security (85%) among those who oppose the idea of establishing private accounts in Social Security. But even among those who support that proposal, a third disapprove of Bush’s handling of Social Security while only about half (49%) give him a positive rating.

Bush also gets low marks for promoting his Social Security proposal. Nearly two-thirds (65%) say Bush has not clearly explained his plans for reforming Social Security, while just 25% say he has. Democrats and independents overwhelmingly believe Bush has fallen short in promoting his plan, but a narrow plurality of Republicans (46%) agree.

However, the public is also unimpressed with explanations by congressional Democrats for why they oppose Bush’s plan. By more than two-to-one (60%-26%), the public believes that congressional Democrats have not clearly explained the reasons for their opposition. Half of rank-and-file Democrats express this view, compared with just 37% who say congressional Democrats have clearly articulated their reasons for opposing Bush’s Social Security proposal.

Bush as Trusted as Democrats on Social Security

Roughly four-in-ten Americans (42%) say they mostly trust Bush’s statements on Social Security, which is lower than the number who trust the AARP or Alan Greenspan, but about the same as the percentage that generally trusts congressional Democrats (41%). Not surprisingly, trust in Bush on this issue is highest among those who approve of his presidency in general; even among those overall supporters who oppose his reform plan, about six-in-ten (61%) express trust in the president’s statements on the subject.

Those who support the idea of introducing private accounts into the Social Security system are most likely to have confidence in his statements on the subject; 62% say they mostly trust what the president says on the subject, although roughly a third (34%) say they do not. Among those who do not express an opinion about private accounts ­ 16% of the public ­ about as many trust Bush as say they distrust him on Social Security. Opponents of private accounts overwhelmingly distrust the president on this issue (79%).

AARP Widely Trusted

The public expresses considerable trust in the AARP’s statements on Social Security. Overall, 53% of the public, including half of those who support Bush’s plan for private accounts, say they mostly trust what the AARP has to say on Social Security.

Although a partisan divide is discernible, it is far smaller than on most other issues: 63% of Democrats trust the organization on Social Security, but so do 52% of independents and 46% of Republicans, including 41% of conservative Republicans. College graduates also give the AARP a strong endorsement, with 61% expressing confidence in the group’s statements on Social Security.

Trust in the AARP on this issue is highest among those nearing retirement (60% among the 50-64 age group). But while confidence is lowest among young people (43% of those age 18-29 say they mostly trust what it says on Social Security), that lower rating is accounted for by the fact that fewer in this group are familiar with the organization rather than by higher levels of distrust. Even among those under 30, more than twice as many mainly trust the AARP as distrust the organization’s statements on Social Security.

News Interest: Social Security in Context

With 31% very closely following the news about Bush’s proposal to deal with Social Security, this debate ranks slightly above most other major domestic policy debates of the last decade. Just over a year ago, 26% followed the Medicare debate very closely, and the same number followed Bush’s 2003 tax cut plan very closely. The last major domestic policy discussion to receive as much public attention surrounded Bush’s tax cut plan at the start of his first term in 2001.

The release of Bill Clinton’s health care reform proposal in September 1993 attracted considerably more attention than the current Social Security debate. In the weeks following the rollout of that plan, nearly half of Americans (49%) said they were paying very close attention, and interest remained high throughout the fall and into 1994.

One-in-four (24%) say the subject of Social Security’s problems comes up frequently in conversations with family and friends, and another 37% say it arises occasionally. Nearly four-in-ten say they hardly ever (28%) or never (11%) discuss the issue.

Despite efforts by the administration and others to engage younger people in the Social Security debate, so far the issue largely remains the focus of people age 50 and older. Just 14% of Americans under age 30 are following news about the Social Security policy debate very closely, as are just 26% of people in their 30s and 40s. By comparison, 45% of those age 50-64 are very closely following the news coverage, as are about half of those 65 and older. Similarly, people 50 and older are twice as likely as people under 30 (30% vs. 14%) to say that Social Security is a frequent topic of conversation among friends and family.

Rating Press Coverage of Social Security

Overall, Americans are very critical of media coverage of the Social Security discussion so far. Most say the coverage has been only fair (33%) or poor (31%). About a quarter rate the news coverage as good (24%) and only 4% give a rating of excellent.

About four-in-ten (39%) believe that press coverage of the issue has been fair, while 27% say coverage has been too critical of Bush’s proposals and nearly as many (24%) think it has not been critical enough. While Democrats and Republicans mostly fault press coverage of Bush’s plan, there is a predictable divide over whether coverage has a pro- or anti-Bush slant.