Berkowitz on Social Security's History

DATE March 1, 2005 ACCOUNT NUMBER N/A
TIME 12:00 Noon-1:00 PM AUDIENCE N/A
NETWORK NPR
PROGRAM Fresh Air

Interview: Edward Berkowitz discusses the history of Social
Security and the current debate about its future
TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

As Americans debate the future of Social Security, it's helpful to understand
its past. My guest, Edward Berkowitz, has written about the history of Social
Security in several books, including "America's Welfare State: From Roosevelt
to Reagan." He's a professor at George Washington University, where he directs
the program in history and public policy.

When Social Security was created in 1935, it was part of a package of
legislation called the Social Security Act. I asked Berkowitz to describe
what was in the package.

Professor EDWARD BERKOWITZ (George Washington University; Author, America's
Welfare State: From Roosevelt to Reagan"): Well, it was a very big bill, but
the part that we call Social Security was a program where workers would pay in
a certain percentage of their wages, and their contributions would be matched
by their employer. So they pay, say, 1 percent of the first $3,000 of their
wages, and that would be matched by the employer. And they would be
considered as buying into an insurance plan, and then when they reach
retirement age, which was agreed to be 65, they could receive benefits from
this. And that was the basic idea behind the plan. The--you're buying an
insurance policy, in a sense, from the government, and it's going to cover you
when you get to be of age to retire from the labor force.

GROSS: What about the idea of a 50-50 split, that the employer would match
the employee in the amount of money that was put into Social Security?

Prof. BERKOWITZ: Well, they needed money. That was the key thing here; they
needed a source of money. So they just tried to figure out the best way they
could get it from. And I think this 50-50 arrangement is something that had
some precedent in private pensions and elsewhere. But I think it was just a
convenient way to make it look like both sides are putting in something, both
sides are contributing and creating some sort of a partnership between the
employer and the employee. There's been a lot of debate since then about
whether that's a good arrangement or not, whether they should be paying the
same amount. At some points there's been some discussion maybe the employer
should be paying a little bit more than the employee, but that's been the
traditional arrangement.

GROSS: How did employers react to this new tax that they had to pay?

Prof. BERKOWITZ: Well, it turns out that when they started--the bill was
passed in 1935, and it was set up so that the first payroll deductions were
going to come in 1937--after January 1st, 1937. And the first benefits were
supposed to be paid in 1942. So in that first time of taking out the money
from the paychecks of the employees, there was a lot of squawking about all
the accounting they'd have to do and how it--this worthless kind of benefit.
And even some of the employers actually put a little thing in the envelopes
where they'd give the people pay which said, `You know, we don't really want
to do this, but this is something the government is making us do,' and
implying this is kind of like theft; that the government is taking away from
the workers' wages.

They were not thrilled. They were not thrilled about keeping Social Security
accounts. And there was a lot of resentment on the part of the employers, who
thought that they were being saddled with all this paperwork for a very
dubious social benefit.

GROSS: Well, what about workers? How did they feel about being required to
pay a Social Security tax?

Prof. BERKOWITZ: And the workers, also, were not all that thrilled about it.
They questioned that they would ever get money. After all, in 1935, nobody
had ever gotten any money from the Social Security plan. And they faced a
period, if they were relatively young, of paying in from 1935 to 1942--that's
seven years--without, really, any assurance that they would get a benefit.
So they were a little bit dubious about this, particularly when they saw other
people getting welfare benefits that were paid for by the state and the
federal government that were paying just as much as Social Security would pay
and were easier to get and had fewer restrictions, in many ways. And they
thought--a lot of people said, `What's the point of this?' And then you add
to that the fact that in 1937, when these deductions started coming out of the
workers' paychecks, it sort of took away, drew back, some of the purchasing
power in the economy. So there was a recession, which some people called the
Roosevelt recession. And all those things together made for a great deal of
controversy and a lack of popularity, I think, of this program. You know, if
you talk about it today, it's like the third rail of politics, but it
certainly wasn't the third rail of politics in the very early days.

GROSS: Well, it sounds like Social Security was politically unpopular in its
infancy. How was it even passed through Congress in the first place if it was
so unpopular?

Prof. BERKOWITZ: Well, that's a good question. I think that, for one thing,
Roosevelt had a lot of built-up popularity after 1934, so he had a little,
like, money in the bank. It's sort of the way President Bush says today,
`I've just gotten this election victory, and I've got money in the bank, so
I'm going to do this.' That's one way that it was passed. But the other way
it was passed is that it wasn't passed on a stand-alone vote. There were
quite a few people that were willing to stand up and say, `We don't like this
particular part of the bill.'

But it was a huge bill; had all sorts of things for lots of people. It had
welfare benefits for the elderly. It had welfare benefits for the blind, for
dependent children. It had public health measures, it had unemployment
measures, it had crippled children's measures. So there was something in
there for everyone. And what Roosevelt said was, `OK, take it or leave it.
This is, like, an omnibus package, and it's something that I care a lot about,
and I've put a lot of priority on it.' And so given that incentive and the
fact that it had all this other stuff in it, the bill was able to pass
relatively overwhelmingly.

GROSS: How did Social Security go from being politically unpopular to being
what's been called the third rail of politics? You know, you touch it, and
it's going to kill you. You gotta leave it alone.

Prof. BERKOWITZ: Right. It's--and that certainly wasn't the case before
1950. But in--1950, I think, is the key date here, which actually, by the
way, is the year I was born and a lot of other baby boomers were born. So
we're like the television generation; we're also the Social Security
generation in a sense. But the--after 1950, Congress kind of took the program
in hand and raised the level of the benefits and expanded coverage, so that,
where before a congressman someplace in rural Texas would have on interest in
the program at all, after 1950, because the coverage was expanded, his
constituents were going to be affected. So there was a tremendous increase in
the sort of number of people that were interested.

And when the benefits got to be larger, as they were after 1950, it meant that
the welfare benefits that the states were paying, which were benefits that
were--you had--to get them, you had to prove that you were poor--those
benefits were now smaller than the Social Security benefits. And so, all of a
sudden, 1951 comes along and Social Security is a bigger program than welfare
for the first time, and it's on its way to being popular. And then in 1952,
someone makes a discovery, which is that the way the program was structured,
the accounting methods that were used, it was possible to raise benefits
without raising taxes. That was a key discovery. And once that was possible,
it became immensely popular. You could raise benefits without raising taxes
or without raising taxes very much. And it seemed like a very, very good
deal.

And now--and as the program goes on, more and more people are benefiting from
it. It develops a stronger constituency, until eventually, by the end of the
1950s, it becomes this third rail of politics. It's such a popular program
that if you mess around with it, you're taking your political life into your
hands.

GROSS: Social Security was designed to be self-perpetuating. How did it
start running into financial trouble?

Prof. BERKOWITZ: Well, when Roosevelt started in 1935 with the program, he
made a big point of the fact that we--I--he always wanted to have enough money
collected through taxes to pay benefits in perpetuity, forever. And even
though people knew that that was--the program was going to cost more in the
future than it did at present because there's going to be more people who
qualified for pensions--even though they knew that, they thought they could
build up a large surplus. And, essentially, the program did quite well through
the 1930s when it had a huge surplus; 1940s, huge surplus; 1950s and into the
1960s. But the 1970s were a difficult time. I think that's kind of where the
problems came in.

In 1972, when Richard Nixon was president, the Congress decided to do two
things: One, it raised benefit levels by 20 percent, which is quite a big
benefit jump, more than the usual one; and it also indexed benefits to the
rate of inflation. They talk about COLAs--you know, the cost-of-living
adjustments; those were legislated in 1972. And that meant that the--when the
prices went up, benefits would go up, basically. The benefits were keyed to
the consumer price index. That made the program very dependent on the state
of the economy, and the then '70s were just a prescription for disaster. The
unemployment rate went up, so there were less people paying into the program
than was expected. And, most importantly, the inflation rate went way up, so
that benefits were much higher than expected. And that led to a funding
crisis.

So in a mature program after 1972, when the cost-of-living adjustments were
put in, you begin to have the ingredients that lead to financial trouble.
Since then there have been periodic financial troubles that have affected the
system.

GROSS: And there's also been surpluses.

Prof. BERKOWITZ: There have. Right now there's a surplus, for example.
That's a--'cause we're in the situation now sort of like we were in 1935,
where in 1935 there were a lot of people paying in and very few people getting
benefits. During that same time, there weren't that many people being born,
so--'cause of the Depression. You know, it had the effect of lowering the
birth rate. So those people, when they got to be old, they did not add too
many costs to the system. Everyone now realizes that--this problem with the
baby boomers looming ahead, so one of the plans was to collect money in
advance of that. That's why--what's happening now. Not that many people are
retiring from this 1930s group of people, and the program is taking in more
than it's spending; we're building a surplus now. But we know that in the
future, there's going to be these baby boomers and others that are going to
retire and that there's going to be more demands on the program, and it's
going to create financial stress.

GROSS: What has the government done with the surplus Social Security money
over the years?

Prof. BERKOWITZ: That's always been a very controversial matter, as to what
exactly happens. The--it was--in fact, in the 1930s, the--that was one of the
big points of opposition to the program: that it was going to have this huge
reserve of money. And people said it's an incredible amount of money; it's
eight times the amount of money in circulation, it's more than the value of
all the property. And they said, `And what really happens with all that
money?'

And there was--a conservative columnist wrote in the 1930s--he said, `What
really happens when this money gets collected?' He said, `Do you really think
that this is going into some kind of insurance contract and so on? No. It's
actually just being collected just like any other government money. It could
be spent on, you know, a ship for the Navy. It could be spent on a desk in
Washington. It's just being spent like any other money, and, therefore, when
it comes time to go back and get this money, it won't be there. It's like the
government is lending money to itself, and it's spending the money as it goes
along.' So that was one criticism. And then I think you hear echoes of that
today; that this--was does it mean to have a surplus when it's really just
going to pay for, you know, the war in Iraq or whatever we have going at the
moment?

GROSS: My guest is historian Edward Berkowitz. He's written several books
about the history of Social Security, and he directs the program in history
and public policy at George Washington University. We'll talk more after a
break. This is FRESH AIR.

(Soundbite of music)

GROSS: We're talking about the history of Social Security with Edward
Berkowitz. He's written several books on the subject and is a professor of
history at George Washington University.

In the 1980s, the conservative think tank The Heritage Foundation and the
libertarian think tank the Cato Institute attacked Social Security. How did
they enter into the picture, and what were their criticisms?

Prof. BERKOWITZ: Well, they entered into the picture in this kind of chaotic
period at the end of the '70s, which I'm sure a lot of people can remember
that terrible feeling of the economy with inflation and other economic woes.
It really was a pretty bad time. And if you remember the baby boom, you
probably--you might remember this as the period just about the time that you
were trying to get a job, and you couldn't get a job and so on. So there was
a lot of economic distress. And what happened at that period of time was that
in 1977, Jimmy Carter comes into office, and he passes legislation which he
thinks will be kind of a fix for Social Security; you can increase the Social
Security taxes and everything. And he thought the crisis would be averted.
You notice it's 1977 that he does that 'cause he wants to do it as far away
from an election time as possible.

But then there was those--the terrible second oil shock that occurred at the
end of the 1970s, when the economy just really tanked. And there was a--by
the early '80s, there was a real financing problem in Social Security. During
this period of time and--during the '70s, during the 1980s, the conservative
opposition to Social Security is growing in lots of different places. And so
there is a major drive that begins in 1981 when Ronald Reagan is president,
and he talks about changing the program. But it doesn't succeed. And what
happens is that the program essentially remains the same. In 1983, Congress
comes back again and says, `We're not going to touch this third rail of
politics,' and makes some adjustments but doesn't really change the program.
And I think this is all fueling this conservative resentment that people are
not facing up to the problems. They're saving Social Security; they're not
being realistic.

And so they begin to develop this sort of campaign to say, `We have to start
talking about private savings. You know, let's start with a 401(k) plan and
kind of get people used to the idea of saving their own money for retirement
and sort of build up a campaign in which the Social Security itself will be
undermined.'

GROSS: How much of this anti-Social Security campaign in the early 1980s was,
you know, philosophical and ideological, and how much of it was financial?

Prof. BERKOWITZ: I think it's both. There's no question that the people at
the Cato Institute are--sincerely believe that the government should not be in
the retirement business, you know. They should be in the Iraq War business
maybe but not the retirement business. So that's ideological. But like any
other coalition, it's got parts. And another part where--people at the State
Street bank and other financial centers are saying, `Gee, you know, this--if
the government sort of steps down in this field, we can step up, and we'll be
able to sell annuities, securities, private accounts.' So they're like
the--they're the monetary push here. And so you've got the ideology and the
money that are pushing together and cohering into a movement.

GROSS: And are you talking about the 1980s or today?

Prof. BERKOWITZ: I think it starts in the 1980s and builds up. You know,
it...

GROSS: So the financial industry is a part of this alliance in the 1980s?

Prof. BERKOWITZ: Yes, I think so, just kind of coming on, just in the--just
embryonic, just forming. But they're going to be the ones that push this idea
of private Social Security and the argument being that, `Well, the public
system's broken and hopeless. You can't fix it, so this is the better way to
go about it.'

GROSS: Well, an argument that was being led by think tanks, like Cato and The
Heritage Foundation, has really become much more politically viable and
popular now. And, you know, if you look at the Bush administration, his
associate commissioner for retirement policy, Andrew Biggs, who's actually
been traveling with President Bush--traveled with Bush while Bush was touring
to promote his Social Security plan. Biggs is the former assistant director
of the Cato Institute's Project on Social Security Privatization. So you have
this direct link between the thinking at the Cato Institute and the Bush
administration on Social Security.

Prof. BERKOWITZ: That's absolutely right, and it's really quite remarkable,
that development. I mean, that's what we're seeing, really, for the first
time. And, you know, you go back to when Ronald Reagan was president--and he
was certainly a conservative, he was certainly eager to kind of advance the
cause of privatizing Social Security. And David Stockman, who was his
director of the budget, talked about that--this with him, and he was very
enthusiastic about it. But as soon as the political handlers around Ronald
Reagan started hearing about that, they said, `I'm sorry. You know, the
president's not going to make this announcement. The president's not going to
push this idea. If you want to have the secretary of Health and Human
Services guy,' a fellow named Dick Schweiker, who was a senator from
Pennsylvania--`if you want to have him push that plan, fine. But the
president, he doesn't want to get too far out in front.' And he suggested
there was--there should be a commission to study the thing, you know, and then
whole thing got taken away from him. That was in the Reagan period when, you
know, in many ways there was a big interest in conservative thought. He
couldn't get very far.

What's amazing now is that this--President Bush, who--in his first term, he
also had a commission and sort of delayed a little bit. But now he's actually
making this his number-one thing on the agenda. He's coming into alliance
with these conservative people and saying, `No, I'm going to be up front about
this. I'm not doing this because it's something I have to do, but I want to
scoop it under the rug.' He's saying, `No, this should be front and center.
We should change the whole nature of Social Security.' That really is
remarkable. That is really a changing point. That's a 21st century moment as
opposed to a 20th century moment and quite unprecedented.

GROSS: What do you think are some of the factors that are making that
possible?

Prof. BERKOWITZ: I think that--a couple of things: One is that the--I think
people's minds, particularly youngish people, people that are maybe in their
20s and 30s--they saw that big, roaring stock market of the 1990s, and that
gives them this idea that the stock market is kind of a--is a benevolent
thing, kind of gets a--it's a tiger you can ride on, and it's not going to
turn around and bite you back. It just did--it's a very benevolent thing
that's going to keep paying benefits. That's one thing that's going on.

And I think there's been--a further thing is this--there's been this constant
kind of erosion, like this water dripping and eroding away a surface; that the
Social Security is not a good deal for young people. And if you hear this
often enough--`It's not a good deal for young people, it's not a good enough
deal'--`I zero it out when I talk to my financial counselor,' people say and
all this sort of thing. That has finally kind of--you know, has cumulatively
produced slowly an effect, and we're now seeing this--the results of that
effect.

GROSS: Edward Berkowitz directs the program in history and public policy at
George Washington University. His books include "America's Welfare State" and
"Social Security and Medicare: A Policy Primer." He'll be back in the second
half of the show. I'm Terry Gross, and this is FRESH AIR.

(Soundbite of music)

(Announcements)

(Soundbite of music)

GROSS: Coming up, more on the history of Social Security and the current
debate about its future. We continue our conversation with historian Edward
Berkowitz. Also, rock critic Ken Tucker reviews "The Great Destroyer," the
new album by the trio Low.

(Soundbite of music)

GROSS: This is FRESH AIR. I'm Terry Gross. We're talking about the history
of Social Security and the current debate about its future with Edward
Berkowitz. He directs the program in history and public policy at George
Washington University. He's written several books about Social Security,
including "America's Welfare State: From Roosevelt to Reagan."

There was a paper published in 1983 by two people from the Cato Institute, and
it basically charted out a path to privatize Social Security. And among the
things that it mentioned along the path were that IRAs should be made more
inviting so that they could introduce people to privatized retirement accounts
and kind of, like, get their toe in the water in terms of thinking of their
retirement money in a different way. And this article also, you know,
advocated for legislation that would make it possible to put more money in
IRAs and, you know, a climate that would make for good interest rates for IRAs
and so on.

And then the article also advocated for this, that individual accounts for
each person participating in the Social Security program should be
established, and once a year, you should get a statement on your account. And
the idea was that that would show you how little money you'd be getting back
and it would help convince you that a personal account, a private account for
retirement, would pay a lot better than Social Security money would.

What--do you think that any of this has been followed? I mean, I know we do
get statements from Social Security now, telling us what we've paid in and
what we can expect to get back. Does that have anything to do with this 1983
article?

Prof. BERKOWITZ: Well, the 1983 article is one of these things that's
floating around on the Internet now and in Washington. It's interesting that
Social Security is this big question now and that this--a lot of things are
kind of floating around, and this is one of them that somebody discovered.
But it's one of those things that the reason it's so interesting is that it
seems to predict exactly what happened. There's no way they could have known
in 1983 that that was actually going to happen, but a lot of it is dead-on,
you know, about establishing the IRAs, establishing these individual account
statements and so on. They were actually very correct about predicting what
was going to happen. I don't think they were dictating what was going to
happen. I think this is one of those--kind of a lucky thing.

And, you know, there was a lot of things that the liberals would have agreed
with. The individual account statement, for example, that we get in the mail,
is something that Senator Moynihan pushed, and his idea was that if you get
this individual account, you're not going to feel badly about Social Security,
you're going to feel better about it. You say, `Oh, here it is in writing.
I'm going to get X number of dollars.' So you can see how the liberals
thought that was a good thing. The conservatives will say, `No, but you'll
say, "I'm only going to get a small amount of money, and, therefore, I'm going
to just take the whole thing with a grain of salt."' But I--but so
there's--there were--some of these things happened just because there was both
liberals and conservatives that wanted them.

But the thing about that 1983 article is that it's just so prescient. They
really--they knew what was going to happen, and it looks, in retrospect, to be
this master plan. I doubt it really was a master plan, but it was just one of
those things that they kind of hit it on the head.

You know, we get these--I'm a professor, and we get these statements from--we
have TIAA-CREF, which is a private pension plan, and they send us these
statements, too. I have to say, it looks very impressive. They're telling me
I'm going to get all this money when I retire. And in very small print, it
says they're actually not guaranteeing I'm going to get that amount of money,
but that this is the projection. Those projections are often very, very rosy.
I think it's very impressive to a lot of people that, you know, they're going
to get a lot of money in the future.

GROSS: There is a difference, though, if your retirement account through
TIAA-CREF is in the stock market, you might not necessarily get the money
back. It's going to depend on how the market does.

Prof. BERKOWITZ: That's exactly...

GROSS: You might do a lot better than you thought. You might do a lot worse.

Prof. BERKOWITZ: Right. And, in fact, if you talk about private pensions,
like TIAA-CREF, what I'm asked to do--and I'm--I don't know if I'm smarter or
dumber than the average guy, but I'm reasonably educated, and a PhD. I know
about this subject. At any rate, they asked me to decide how much of my money
I should put in the stock market, how much of this money I should put into
money market. I don't have a clue how to do that. And it actually is kind of
worrisome to me that the--in my case, so if I make the wrong decision, I make
the wrong decision.

But if we're talking about Social Security, and I'm offered some sort of
option, do I want the high-risk option, the low-risk option, do I want to put
the money into stocks, do I want to put the money into some other form of
equity, other forms of value, I must say, it will be very, very perplexing for
people to be able to figure out. I mean, I really do worry about that, and I
don't think I'm being patronizing, and I'm not saying that people aren't smart
or capable, but it's just a very hard thing to be able to predict something
like that.

The other thing about this is with TIAA-CREF, I just get this because it's
part of my job and it's pretty automatic. But my phone service is not so
automatic, and I'm called all the time by these phone companies that--they're
asking me questions, you know, switch to this phone company, switch to that
phone company. And that's peanuts compared to the Social Security accounts.
Boy, that would be--if private people are allowed to make those kind of sales
pitches, I think you can forget about dinner for a long time.

GROSS: You studied the history of Social Security. You've studied its ups
and its downs, its periods of popularity and unpopularity. Based on your
studies of the system over time, how much of a financial crisis do you think
the system is in now?

Prof. BERKOWITZ: Well, the question about a financial crisis requires
somebody to be very knowledgeable about the future, which actually nobody is.
I'll just start by saying that, that we have no idea what the immigration
rate's going to be in the future, what the inflation rate's going to be in the
future, what the rate of economic growth is going to be in the future, so it
is very hard to say, which is--I realize is a cop-out. But there definitely
is a long-term problem in the sense that at some point, maybe in 2038 or
whenever, there's going to be a time when the system is going to pay out more
than it takes in.

I personally think that if we have a defined benefit plan which guarantees
benefits, I think we can come up with the money. I think we can come up with
it relatively easily. And it's one of the really disturbing parts of this
whole conversation that we're having now, is that people are so convinced that
the system's going bankrupt, and they're so convinced that it's dire, so that
they say, `Well, it's not even worth thinking about other ways of trying to
shore it up,' and it's just not true. It's just not true. There is--you
know, the worst-case scenario--worst, worst, worst-case scenario--would be
that the program would be only able to pay three-quarters of its benefits,
which that wouldn't be a good thing, but that's the worst-case. And I don't
think that the communication on this has been particularly good. I think we
could sit down and pool all of our resources of people that are knowledgeable
about actuarial estimates and that kind of thing, and demographers and
economists, and we could come up with some measures that would ease that
shortfall and make this guaranteed benefit continue to be a good guarantee.
That's where I come down on this.

And I think the president is not exactly misleading us. He's not leading us
properly on this particular issue. He's kind of, like, building up a sense of
fear on the one program that really works quite well. It's kind of ironic
that that should be the one that he singles out.

GROSS: My guest is historian Edward Berkowitz. He's written several books
about the history of Social Security, and he directs the program in history
and public policy at George Washington University. We'll talk more after a
break. This is FRESH AIR.

(Soundbite of music)

GROSS: We're talking about the history of Social Security with Edward
Berkowitz. He's written several books on the subject and is a professor of
history at George Washington University.

What do you think are some of the difficulties we're facing now in trying to
talk about Social Security in an honest way? Because, you know, whenever a
subject becomes really politicized, everybody gets in with their agenda, and
it's hard to just talk straightforwardly about the issue, 'cause there are so
many other agendas coming into play. So do you see, like, the whole politics
surrounding Social Security as obscuring what some of the real issues are?

Prof. BERKOWITZ: Yes, I think that the politics are getting in the way. I
think that the way that I would solve this problem is to say, `OK, what do we
think the shortfall's going to be? What do we--and if we do measure X, if we
change the way the cost-of-living adjustments, or COLAs, are computed, how
much would that save us? If we expand coverage, how much would that save us?
If we raise retirement age by a year, how much would that save us?' so on.
We're not--that's--that would be the way to, in a calm way, to make the best
estimates we could of those things and begin to take the measures that would
help to save the program.

And I think that we're kind of missing the point here in a lot of the debate.
I mean, the big thing about Social Security is is it's a defined benefit
program. It promises you benefits of a certain amount. That is the question:
Do you want to keep a defined benefit program? Is that something that's good,
that there should be this defined benefit, or would you rather have a defined
contribution program where you put money in of a certain amount and then
you'll have to see what happens? And if we can just make the decision that we
would like to keep this defined benefit program, then we could begin to look
at this other policy wonky kind of stuff, you know, with the cost-of-living
formulas and so on.

And rather than making ...(unintelligible) of this grand ideological crusade
that, `Now is the time to save the American state by privatizing it, by
understanding that we need to take individual initiatives.' And I think it's
irresponsible for people who take that view that we have to sort of change the
American state. They have to at least make an effort to get the facts
straight about the financing situation without trying to scare people.

Now I think I know why this is happening in a sense; that, you know, the
Democrats, who were the big advocates of Social Security for a very long time,
they used to beat the Republicans over the head with this every election
period. The Republicans would say, `Oh, gee, I want to raise benefits by $6.'
The Democrats would say, `OK, fine. We think $6 is good, but we'll raise it
by $8.' And the poor Republicans would just get beat over the head every
time.

And they--and in 1980s, when Tip O'Neill was the speaker of the House, he saw
that the one issue he could have that had real traction with President Reagan
was Social Security. And when President Reagan said, `I think we ought to
eliminate the early retirement benefits,' Tip O'Neill said, `Ah, this is our
moment.' You know? `We're going to get these guys. We're going to just play
up this issue.' So the Republicans just feel hammered, hammered, hammered all
those years when the Democrats were in the majority in Congress. And so they
say, `Well, now turnabout's fair play, and we're going to now demagogue this
issue a little bit.' But in the meantime, we've go this incredibly important
social institution that's being put under more stress than it needs to be put
under.

GROSS: But, you know, a lot of people truly want to totally change the Social
Security system. They would prefer the private or personal accounts. They'd
question whether it's the government's role to be in the position of providing
Social Security in the first place. So do you think this is a good time, you
know, to have that kind of larger debate of: Do we want this system anyway?
Putting aside the financial crisis issue, is there really a financial crisis?
Is it solvable? Is it not solvable? But just looking, like: Is this a
system that we want?'

Prof. BERKOWITZ: Right.

GROSS: I mean, has there ever been a debate like this before outside of 1935?

Prof. BERKOWITZ: Well, certainly there was in 1935, whether we want to have a
system like this. I think that between 1935 and 1950, there was a lot of
discussion about whether this is the kind of system we want. There's been a
lot of discussion since then about, `How much of a system like this do we
want? I mean, do we really want to have these disability benefits, or
should'--the disability insurance was something the private sector tried to do
and lost a lot of money trying to do. So when the government came in, people
said, `Well, if the private sector lost a lot of money, you're going to lose a
lot of money, too.' We've had discussions like that. Medicare, we've had the
discussion about, `Oh, the government comes in, and that's the end of cost
controls, and medicine's going to lead to huge inflation.' We've had these
kind of discussions before, whether there should be more private initiative in
individual parts.

But I don't think--this is a--since 1935, I think this is the biggest time
when we've sort of had the big philosophical debate, `Do we need it, or don't
we?' Problem is that we already have this institution. It's already paying
out benefits. Even the president doesn't want to fight with people that are
born before 1950. And I just think that we can talk about how good private
pensions are. We can talk about the need to have strong private pensions.
But I think that I'm not so sure this is the right time to have this
discussion about eliminating this base, this Social Security base.

GROSS: Why not?

Prof. BERKOWITZ: Well, I think that it's just too important. When it comes
right down to it, we're not talking about some 32-year-old guy who works on
Wall Street and, you know, has a lot of discretionary income. There are many
people, maybe the majority of people, that are on Social Security, that's
their only source of income. It's not just about a person. It's about that
person's father. It's about that person's children.

And if you take my case, for example, I'm 55 years old. I have a father who's
on Social Security. So these decisions that are being made are affecting
these other generations as well as me, and affecting my children as well. One
of the things I can get from Social Security is survivors benefits. Should I
die, my kids would get money under the system. That's not something I would
want to fool around with too much, that guarantee. If I become disabled, I
would get benefits, and my family would get benefits. That's not something
you want to fool around with too much. There's a lot of protection that's
being applied right now to me, to my parents, to the generation that my
children belong to that I think we need to kind of keep this thing intact and
use it as always was the plan, that it's part of a larger scheme in which we
have private pensions and we put the private pensions on top of the Social
Security. But I just think we need that base and that Social Security is as
good a way to provide that base as possible.

And in addition to all of that, if we were to eliminate Social Security, the
government might still have to step into this situation, because it's going to
have to come to people's aids if they're in need. This is the way to do it,
and I don't think we should undermine it.

GROSS: You're a professor of history, who's written extensively on the
history of Social Security. Do you find that you're taking on a different
role now, now that the country is debating the future of Social Security?

Prof. BERKOWITZ: I do. It's interesting that every time there's a big social
policy debate--and I can think of maybe three big ones in the last
generation--the Nixon welfare reform proposal in 1969; the Clinton health
proposal in the 1990s; and now the Social Security proposal--that people start
scrambling, you know, for the history, and they want to know the history, and
it really matters to them what the history was. They don't really want to
know the history, what actually happened, if there's such a thing, but they
really want to support their point of view, and so they go back, and they ask
historians, `You know, when the Clinton health plan was being debated, this
fact checker from The New Yorker called me up and said, "Do you think that the
Clinton health plan is the biggest thing since the Social Security Act of
1935?,"' which was a very subjective thing, and I had some sort of answer.
But all of a sudden, people wanted to kind of touch base with the historians.
And we're seeing this now, that people are trying to touch base with
historians, because they're trying to maneuver the past to make it look as
good as possible to their view of the present. They want to maneuver the past
for political purposes.

So a good example of this is that one of the things that's running around on
the Internet is this idea that President Roosevelt--whom everyone seems to
accept as a good person--President Roosevelt was actually in favor of these
private pensions, such as George Bush proposes. And to arrive at this point,
the person that put this idea forward sort of truncated things from a speech
and so on. So there's a lot of interest in that, you know, `Did President
Roosevelt really believe in this? What did he really believe in?' Somehow,
people feel better if President Roosevelt can sort of be used to make more
solidly the opinions that the people have now, so that things really are
changing.

There's a tremendous amount of interest in Social Security, that the president
has really succeeded in putting this at the top of the agenda, and there's
more interest in it now than certainly in my adult lifetime.

GROSS: Can you think of an example in which people who want to preserve the
Social Security system are using history in a slightly false way to support
their own point of view?

Prof. BERKOWITZ: Yes. I think that the supporters also are eager to make
history come out as good as possible. One way is that suddenly, Franklin
Roosevelt is this amazing prophet. And I think that people are just sort of
finessing that point. They're presenting this kind of the omniscient
President Roosevelt who understood what was going to happen in the future.
That's just not true. And it's certainly not true that President Roosevelt
would have foreseen the development of, say, Medicare, or even been in favor
of Medicare as it now exists. But people tend to take people from the past
and just prop them up as poster children for their own political point of
view.

Another thing that the liberals perhaps are doing is, if the president is
overstating the dangers of the financial problems that Social Security faces,
the liberals maybe are guilty of the other extreme, which is to say, `No, it's
all fine.' And if they're not careful, they're giving this impression that,
`It's all fine, just trust us, you know. We know what to do. We've run the
government in the past, and we're basically capable people. Just trust us.
We know how to do this.' I think that's very wrong. I think they have a
similar obligation to say, `No, yes, we have, in the past, had financial
problems in Social Security. We have figured out ways to overcome them. There
are definitely real financial problems out there. We're not--and we are--do
not necessarily have all the answers and so on.' There has to be much more of
an open point of view perhaps than has been expressed. There's kind of a
smugness on both sides now, and we have to open up this debate a little bit
and let both sides kind of negotiate a little bit. Maybe the whole tone will
improve.

GROSS: I want to thank you so much for talking with us.

Prof. BERKOWITZ: My pleasure.

GROSS: Edward Berkowitz directs the program in history and public policy at
George Washington University.

Coming up, slow core is picking up the pace. Rock critic Ken Tucker reviews a
new CD by the trio Low. This is FRESH AIR.

(Soundbite of music)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Review: New CD "The Great Destroyer" from Low
TERRY GROSS, host:

Low is a trio from Duluth, Minnesota, whose music was originally dubbed slow
core for its medium tempos and grinding guitar sounds. But as rock critic Ken
Tucker says, Low's new album, "The Great Destroyer," is, at once, faster, more
melodic and more engaging than anything they've released so far.

(Soundbite of "California")

LOW: (Singing) See your reflection in the mind. You keep your revelations
wide-eyed. They knew just where to draw the line. You let them get you every
time. Though it breaks...

KEN TUCKER:

Slowly, steadily, much like the music they're best known for, Low has become
one of the most dependably surprising revelatory rock bands. On this, their
seventh full-length album, they make intense self-consciousness, songs about
writing songs, about the reaction of those songs among each other and their
friends and foes sound like a voyage of discovery, like setting forth "Into
the Sea."

(Soundbite of "Into the Sea")

LOW: (Singing) I can walk into the sea, and I can choke away all the
memories. Do I have to stay alive just to keep our dresses white? You've
come to me in dreams with all the other pretty things. You tell me 'bout a
savior and how his soul lives on forever.

TUCKER: Early on, Low makes one of its rare attempts at an actual
commercial-sounding song, this hybrid of Peter Gabriel and Talking Heads
called "Monkey."

(Soundbite of "Monkey")

LOW: (Singing) Oh, my, my, little white lies. I swear I'm gonna make it
right this time. It's not the radio--turn it way down low--telling me things
I do not know I know. Tonight, you will be mine. Tonight, the monkey dies.

TUCKER: I wouldn't call "Monkey" a compromise or, Heaven forbid, a sellout,
but it also doesn't have the gut punch of the band's new raw sound on display
with great glory in "Everybody's Song."

(Soundbite of "Everybody's Song")

LOW: (Singing) Live your life, a stupid life, a stupid life, a stupid life.
Nobody does it better. Breaking everybody's heart, taking everyone apart.
Breaking everybody's heart, singing everybody's song.

TUCKER: On that tune, drummer Mimi Parker slams the drums to emphasize the
lyric about how cruel it is to break hearts. She seems to be trying to break
the drums to emphasize the point. Meanwhile, husband-singer-guitarist Alan
Sparhawk is clawing the strings and harmonizing with anguished earnestness.

The band is also great at conveying a alone-in-a-crowd feeling over a full
seven minutes of the album's serene climax, "Broadway (So Many People)."

(Soundbite of music)

LOW: (Singing) Last night, just north of Houston, Broadway, so many people.
Through your third-story window, I see my favorite record store. Where is the
laughter? Where is the laughter?

TUCKER: Near the very end of the album, Alan Sparhawk says, quote, "I took my
guitar and threw down some chords and some words I could sing without shame."
And in the song, he ends up burning his guitar after getting a chilly
reception. Still, he insists, the music lingers on in the air. It's in
ethereal, poetic moments like this that Low remains one of the most dreamily
imaginative of bands, not, as their album has it, great destroyers, but great
creators.

GROSS: Ken Tucker is film critic for New York magazine and FRESH AIR's rock
critic. He reviewed Low's new album, "The Great Destroyer."

(Soundbite of "Alone")

LOW: (Singing) So I took my guitar, and I threw down some chords and some
words I could sing without shame.

(Credits)

GROSS: I'm Terry Gross.

(Soundbite of "Alone")

LOW: (Singing) ...for some friends but they all said the same. They said
music's...
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