Poll: Faith in Social Security system tanking

By Danny Johnston, AP

Jane Roswick pauses during her shopping trip to a Little Rock Wal-Mart store at a Social Security Administration information table near the store’s pharmacy Feb. 20, 2008.

By Susan Page, USA TODAY

WASHINGTON — Battered by high unemployment and record home foreclosures, most Americans seem to have lost faith in another fundamental part of their personal finances: Social Security.

A USA TODAY/Gallup Poll finds that a majority of retirees say they expect their current benefits to be cut, a dramatic increase in the number who hold that view. And a record six of 10 non-retirees predict Social Security won’t be able to pay them benefits when they stop working.

Skepticism is highest among the youngest workers: Three-fourths of those 18 to 34 don’t expect to get a Social Security check when they retire.

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The public’s views are more dire than the calculations of Social Security’s trustees. Last year, they projected the system would begin running in the red in 2016, as the Baby Boom generation retired, and the trust fund would be exhausted in 2037.

Even then, Social Security — which celebrates its 75th anniversary next month — could finance about three-fourths of current benefits through the payroll tax.

The downbeat outlook reflects "all the attacks on Social Security that we have this total crisis in the program," says Alicia Munnell, director of the Center for Retirement Research at Boston College. What’s more, she says, "the fear and distrust as a result of the financial collapse and the Great Recession has spilled over into people’s expectations generally, that you can’t count on anything."

Well-informed or not, public attitudes could affect the debate over what to do about Social Security, a subject that is likely to be raised when President Obama’s deficit commission delivers its report in December.

"It makes it easier to make some of the changes that we are inevitably going to have to make," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "We could make changes and still have people collecting more in benefits than they’re expecting to see."

So far, however, resistance hasn’t eased against steps such as raising the retirement age or increasing Social Security taxes. The only policy options that command majority support are imposing the payroll tax on all the wages of higher-income workers — the amount is now capped — and limiting benefits for wealthy retirees.

Confidence in Social Security has significantly eroded since 2005. The percentage of retirees who predict cuts has jumped by 24 points, even though benefit levels have never been cut for current retirees. In that time, the number of non-retirees who doubt they’ll get benefits has risen by 10 points.

The poll of 1,020 adults, taken July 8-11, has a margin of error of +/–4 percentage points.