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The Parent Trap

Social Security "reform" is being touted as fiscal liberation for the young. What will young families do when it condemns them to care for their elders.

PRESIDENT BUSH IS SELLING his partial privatization plan for Social Security to young voters as a replacement for a system that "won't be there"—so it's said—when they retire. But in the tortured tales of financial crisis, the effects of his proposal on future family life haven't often been mentioned. They should be. For it is not too much to say that Bush's plan, if enacted, would impose a "family responsibility system" for elder care. And down the road, that would tear many American families to shreds.

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Old age is a time of economic, physical, and psychological stress. People grow frail. They fall ill. They require medicine. They require care. They deplete their savings.

And while in the American family mythology of the "good old days" the burden of coping fell on a sturdy, middle-aged farmer or shopkeeper, in truth America's old were never well treated until Social Security came along. In great numbers, they died off, poor and alone, soon after they could no longer work. If elderly retirees were not a great burden on their families back then, it was because, in large part, they did not exist.

Franklin Roosevelt created Social Security in 1935, but for a generation benefits were low. Into the 1960s, almost one-third of the elderly lived below the poverty line. Then two things changed. The first was Lyndon Johnson's Medicare, in 1965, which lifted the capricious burden of health care costs for the aged. The other was the Social Security amendments of 1972, the result of a curious bidding war between Richard Nixon and Wilbur Mills (chair of the House Ways and Means Committee and a candidate for president) during the primaries. These amendments meant that, by the early 1980s, the poverty rate for seniors was below that of the rest of the population. By the end of the 1990s, it had fallen to just 10 percent.

The compound achievement of Roosevelt, Johnson, and Nixon had a rich benefit for families. America's elderly were no longer dependent on their adult children. This was especially terrific for seniors who did not have children. But it was also good for those who did—they were no longer obliged to come around, hat in hand, to their sons and daughters. And—a point often neglected—it was equally excellent for the offspring. They no longer faced the financial hazards of needy parents in old age, or the conflicts with siblings over who would pay for what.

Once the elderly were provided the means to enjoy long retirements, their life expectancies soared, and the proportion of the population living above the retirement age necessarily rose. When the government started picking up the medical bills, the health care industry also mushroomed, creating the cornucopia of services and treatments we have today. Thus, as Social Security lightened the burden on families, the total costs of care for the elderly shot up.

On whom did these costs fall? Answer: They were (and are) distributed over the entire working population by means of the payroll tax. The spread was not even. Those with incomes above the earnings cap paid a smaller share of income than those with lower earnings. Those with income from investments escaped contributing on that income. Still, everyone who worked did contribute. They did so whether or not they personally had living parents to support, whether or not their own parents were needy at any given time. The sharing out of the costs—one of the greatest national enterprises in history—made it possible for almost all of America's elderly to live long lives of modest comfort.

Social Security helped the family in two other important ways. It provided disability benefits for those who could no longer work, permitting them to keep their families intact. And for those who died young, it provided survivor's benefits that help a widowed parent raise her (or his) children. Today, about a third of Social Security benefits go to the disabled and to surviving spouses and their minor children. Of new beneficiaries, 20 percent are survivors, and more than 15 percent are disabled.

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