Op-Ed: What's your plan to save Social Security?
Social Security Op Ed
There’s one question that should be put to every candidate in next year’s Congressional elections. Because what’s at stake is not just another seat in the House or Senate, but the future of one of America’s most trusted programs.
That question is, “What’s your plan to save Social Security?” According to its own trustees, the program’s retirement trust fund will run dry in 2033. At that point, the law requires that benefits be reduced to conform to available revenue. This would represent a 21 percent across-the-board cut, costing the typical couple retiring that year about $16,500. And the longer we wait to solve this funding gap, the harder and more drastic the changes will need to be to ensure its solvency for generations to come.
Social Security remains a vitally important federal program, with 67 million Americans receiving benefits from the program and, for 42 percent of seniors, Social Security provides the majority of their total income. But it’s also the “third rail” of politics, with politicians on both sides of the aisle outcompeting each other to assure voters that they won’t do anything to “touch” Social Security.
As a result, no other issue is used more to fear monger voters through scare tactics and misinformation. It’s only when Americans demand truth and concrete, bipartisan solutions that our elected leaders will feel compelled to step up to the challenge of maintaining the promise that Social Security will be there in full for future retirees.
There is peril in continuing to kick this can down the road and relying on the promise of distant answers. In 2010, when payouts first exceeded revenue (and therefore began cutting into the trust fund’s reserves), a 12 percent reduction in total benefits over the following 75 years, or a 14 percent increase in taxes, would have done the trick of ensuring solvency during that timeframe. To do the same today, total benefits would need to be reduced by 24 percent, or taxes increased by 31 percent. The numbers only get worse with more delay. Acting now would allow for more gradual changes, giving workers and retirees time to prepare and spreading the impact more equitably across generations.
Critics of reform often warn that any changes amount to slashing benefits. But Social Security was designed for a very different demographic reality. In 1950, there were more than 16 workers supporting each beneficiary. Today, there are fewer than three, and by 2035, the ratio will fall to two. People are living longer, having fewer children, and each new cohort of retirees receives higher benefits, even adjusted for inflation, than prior cohorts based on how benefits are calculated. And most retirees will receive 20 to 30 percent more in benefits over their lifetime than they paid in payroll taxes. These trends are not ideological—they’re simple facts. Reforming Social Security isn’t about taking something away—it’s about making sure the promise can still be kept for future generations.
And there are a number of policy combinations and bipartisan proposals put forward over the years that can help ensure a feasible path to solvency for Social Security. For example, raising more revenue for the program —such as by adjusting the current cap on payroll taxes set at roughly $176,000 a year is often put forward as sensible idea. Changing how benefits are calculated to be more progressive, thereby slowing the growth of benefits for those at the wealthier end, as well as slowly raising the retirement age decades in the future, are other common-sense ideas.
But it is sad to hear so many younger Americans speak of their firm belief that Social Security will not be there for them when they retire. It will, in some form, but to maintain the essential retirement security it currently provides, we need policymakers to level with the American people about the challenges the system faces and voters should reward them for their candor and courage. With the right policies, we can modernize the program, promote economic growth, and protect future retirees. The question is not whether Social Security is worth saving. It’s whether our leaders are willing to tell the truth and do what it takes to save it.
Michael V. Murphy is Senior Vice President and Chief of Staff at the Committee for a Responsible Federal Budget
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