Lawmakers looking for ways to trim the federal deficit can cut defense spending and even raise taxes if they have to. But they have found they'd better not touch Social Security. This year, Social Security will dispense about $265 billion - more than one-fifth of all federal spending. But the program was untouched in the deficit-reduction package enacted last month. And new budget rules make Social Security virtually untouchable in the future. The reason has much to do with the political power of the elderly, but also with the program's overall popularity, analysts and lawmakers say. ``It's a real gut issue,'' said Sen. John D. Rockefeller, D-W.Va. Both Social Security and Medicare, the health care program for the elderly, are ``enormously popular programs,'' noted Henry Aaron, director of economic studies at the Brookings Institution. ``The public opinion polls indicate that people would prefer to cut the deficit in any other way.'' That explains why, as lawmakers were voting billions of dollars in new taxes and defense cuts to cut the budget deficit last month, Social Security recipients being were told their benefits would increase 5.4 percent in January. The Bush administration announced this month it was looking at ways to shift government benefits from the wealthy to the poor, but it specifically excluded Social Security. Rep. Ron Wyden, D-Ore., noted that ``members of Congress are still pretty sensitive'' after having to repeal the Medicare catastrophic illness program last year after an outcry by senior citizens who didn't want to pay for it. The program was designed to protect the elderly from financial ruin if they were struck by a devastating illness. A fight over Medicare cuts was one issue that delayed last month's budget agreement. In the final version, Medicare takes a $42 billion hit over five years. About $10 billion of that comes from beneficiaries' pockets. Social Security and Medicare are widely considered the most effective government programs ever to improve the lives of senior citizens. A 1988 Census Bureau report said Social Security benefits lifted 15 million elderly citizens out of poverty in 1986 and cut the poverty rate among the elderly from 47 percent to 14 percent. ``It's done a fantastic job of reducing poverty among the elderly,'' said Robert Ball, former Social Security commissioner. ``About two thirds of beneficiaries get more than half their income from Social Security.'' Social Security and the hospital part of the Medicare program are funded in the same way - with a payroll tax held in a trust fund earmarked solely for that program. Neither program is run like welfare; benefits are given to rich and poor alike. Rather, the criteria are related to age or disability, plus a person's lifetime contributions to the program. ``It's precisely the fact that they're not programs for the poor that gives these programs their unifying force,'' said Gary Burtless, a senior fellow at Brookings. ``People think they have paid and now they're entitled'' to benefits, Aaron said. Judy Schub, senior economic lobbyist at the American Association of Retired Persons, said the elderly tend to think of their Social Security benefits as money that was put away for them, ``that there's a piggy bank with my name on it.'' However, the system is an inter-generational plan, with today's recipients receiving far more than they ever paid into the system. Current workers are paying those benefits. After financial troubles in the early 1980s, Social Security benefits were scaled back in 1983 and other changes were made to keep its trust fund solvent. Now there's a large surplus, and Sen. Daniel Moynihan, D-N.Y., tried this year to reduce the Social Security payroll tax so that money from the program would not grow so quickly and be used to mask the size of the federal budget deficit. His effort was unsuccessful, but others in Congress did succeed in removing the program from the calculations used to determine the federal deficit. That means that cutting Social Security won't help the deficit. Medicare, however, is facing mounting pressure, as inflation in medical costs continues to outpace overall inflation. The reserves in the Medicare hospital insurance trust fund are shrinking and the fund faces bankruptcy in 13 to 15 years unless action is taken, according to the 1990 annual report of the program's Board of Trustees. Ball said he is mindful of Social Security's popularity and the political risk in touching it. ``Changes should be made in Social Security from time to time ... to bring it up to date and make it a better program,'' said Ball, a member of the Social Security Advisory Committee at the Department of Health and Human Services. But, he said, ``The changes should be made for sound Social Security policy, not to reduce the deficit.''
