Supporters of the health care overhaul benefited from the bill's scope and the medical system's complexity. Who could know if they personally would be better or worse off in the short term from the law's passage? Seniors saw big proposed cuts to Medicare, but were assured that closing the “doughnut hole” in prescription drug coverage would save them a couple hundred dollars. Families knew that proposed insurance mandates would increase policy premiums, but would income-based federal subsidies offset those higher costs?
Despite these nuances, most Americans understood that the health care bill fundamentally changes our health care system for the worse. They realized that by adding bureaucracy, creating costly new mandates, and expanding coverage while trying to squeeze down costs, the health care law will ultimately create a less innovative, lower quality, more expensive health care system..
If politicians couldn’t confuse Americans into supporting health care reform (a majority opposed the bill at passage and continue to do so today), they’re certainly in for trouble with Social Security reform. Compared to health care, Social Security is a straightforward issue.
All working Americans pay Social Security taxes. Though technically employers and employees split the burden, most people recognize that Social Security consumes 12.4 percent of their total compensation, because the deduction is visible on their paychecks. Social Security taxes are capped at a certain income level ($106,800 in 2010). And when someone reaches retirement age, Social Security begins paying a monthly benefit, which is based on total lifetime earnings. Therefore, the amount you get back relates to how much you pay in.
The most complex part of the program is the “Trust Fund.” For decades, Social Security payroll tax revenues exceeded required benefit payments. The Social Security Administration (SSA) took this extra revenue and loaned it back to the general treasury, receiving in return government bonds that accrued interest.
Periodically, politicians would howl that Congress was “raiding” Social Security's Trust Fund, because the extra payroll tax money ultimately was used for general government spending and masked the size of the deficit. Members of Congress would introduce laws that claimed to somehow wall off Social Security's surplus, with Al Gore most famously (and disingenuously) calling for a “Lock Box,” as if such a thing could have really been crafted.