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Social Security Problems Not a Crisis, Most Say

By Richard Morin and Dale Russakoff
Washington Post Staff Writers
Thursday, February 10, 2005; Page A01

Most Americans are certain Social Security will go bankrupt but are not ready to embrace changes that would shore up the system's finances, according to two surveys by The Washington Post, the Henry J. Kaiser Family Foundation and Harvard University.

Seven in 10 Americans agree with President Bush that Social Security eventually will go bankrupt if Congress fails to act, though most predict that the system will not do so for at least two decades. Yet while Bush has warned of a crisis in Social Security, barely one in four Americans believes that a crisis exists.

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Social Security Knowledge Poll (pdf)
About the Survey

This is the 12th in a series of survey projects conducted jointly by The Washington Post, the Henry J. Kaiser Family Foundation and Harvard University. The three sponsors worked together to develop the survey questionnaire and analyze the results. The Post and Kaiser, with Harvard, are publishing independent summaries of the findings; each organization bears sole responsibility for the work that appears under its name. The Post and the Kaiser Family Foundation, a nonprofit organization that conducts research on health care and other public policy issues, paid for the surveys and related expenses. The project team members from Kaiser included Drew E. Altman, president; Mollyann Brodie, vice president for public opinion research; and Rebecca Levin, research associate. Harvard project team members included Robert J. Blendon, a professor at the School of Public Health and John F. Kennedy School of Government, and John M. Benson, managing director of the Harvard Opinion Research Program.

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Social Security

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More broadly, the polls raise serious doubts about whether Americans are willing to make the choices necessary to fix the system's financial problems. Solid majorities reject both increases in payroll taxes and decreases in retirement benefits, except for the wealthy. Experts agree that without new revenue coming in or less flowing out as benefits -- or both -- the Social Security system will not be able to pay all its promised benefits, perhaps as early as 2042.

Other recent samplings of public opinion have gauged support for Bush's restructuring plan and other proposals for change, but these polls sought to measure what people knew about Social Security and how misinformation about the program is shaping policy preferences. The polls also tested how subtle changes in the way proposed changes are described can produce major shifts in public opinion.

A majority supports the president's proposal to allow Americans to invest part of their Social Security contributions in stocks or bonds, although opinions on this and other aspects of the president's plan frequently are weakly held and easily moved.

For example, Jerry Traylor, 58, a retired government worker who lives in Newell, Ala., said he supports Bush's proposal for personal accounts, asserting that "a person would have more interest in their own money and their future in retirement if they could invest in stocks."

But like nearly half of those surveyed, Traylor wrongly believed that the costs of creating personal accounts would be negligible. Told that the Bush administration estimates the government initially would have to borrow more than $700 billion to set up such a system, he was incredulous. "That seems very excessive," Traylor said. "I would be less inclined to favor it if it costs that much. That much money could serve a lot of good purposes."

That cost estimate proved to be the most effective of four arguments against Bush's proposal tested in the polls. While 56 percent said they support a plan for individual investment accounts, more than half of those said they would be less likely to do so after hearing the estimate. More than four in 10 supporters wavered when they heard that personal accounts would not, by themselves, reduce the financial problems facing Social Security.

Those opposed to Bush's plan were consistently more resistant to changing their view -- about one in four did -- when confronted with four arguments supporting his proposal.

Taken together, the polls found that the debate over Social Security reflects the sharp divisions of the presidential campaign, and that Bush enters the fight without a clear mandate on the issue. The surveys also found serious misunderstandings about Social Security that could be exploited by either side to shape opinion as the debate evolves.

Facts vs. Beliefs

Americans badly underestimate the share of the federal budget spent on Social Security, and most incorrectly believe that retirees, on average, receive less in benefits than they contributed to the system. And about half of those who support the president's plan incorrectly believe it would protect people from losing retirement money they invested from their personal account.

Perhaps most significant, about seven in 10 Americans believe that the cost of living has been rising faster than wages over the past 20 years, although the reverse is true. This belief probably shapes policy preferences: The same percentage wants to peg initial Social Security benefits to the cost of living, as Bush reportedly wants, instead of the current formula, which pegs them to wage increases. That change would result in significantly lower guaranteed benefits for future generations, according to both supporters and opponents.

Danny Burke, 49, a laid-off maintenance mechanic in Granite City, Ill., who said he struggles to make ends meet, believes based on experience that prices are rising much faster than wages. "Just go to the grocery store and look at a can of corn," he said. "I used to get four for a dollar; now it's five for $2."

But Robert Mitchell, 40, who owns a carpet-cleaning business in Nixa, Mo., correctly said wages rise faster, also based on what he sees. "My parents worked like dogs, and we had one TV and two old cars. Now every person I know has two brand-new cars and a plasma TV," he said.

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