Social Security deserves better.
The program is the largest expense in the federal budget, accounting for nearly 25 percent of the federal budget. Yet, it will be lucky to draw 1 percent of the coverage in this election cycle.
Beyond its size, the system serves as a life line for many in our society, providing support that keeps millions above poverty. Any question about its stability should be a visible issue in any campaign.
The program serves the elderly and disabled who really don’t have a lot of alternatives to the system. These needs aren’t going away. With boomers retiring at a rate of 10,000 a day, these demands are growing geometrically. Gen X and Millennials have yet to become seriously involved in the discussion about how the nation will fulfill those needs.
The trustees who are responsible for financial soundness of the program have warned us for years that the system is not sustainable. The Congressional Budget Office has repeatedly explained to Congress the impact that the projected trends will have on the nation’s overall finances. Yet, Social Security struggles for electoral visibility with funding for Planned Parenthood.
Today, Social Security has made roughly $25 trillion of promises for which it does not expect to generate cash. For every dollar that the program has ever collected, it has created more than a $1.50 of promises that the system cannot keep. These figures do not come from doomsayers. The statistics come from the trustees who oversee the safety and soundness of the Social Security Trust Funds.
The program creates unfunded liabilities solely because of the passage of time. Currently, these unfunded liabilities accrue faster than the system collects revenue – in all forms. In other words, the system could have reduced benefits to zero in 2014, and the program’s finances would have still been in worse shape at the end of the year than the start.
Today, Social Security has made roughly $25 trillion of promises for which it does not expect to generate cash.Brenton Smith
Neither party has a plan. Democrats actually would like to expand the program, making the financing struggles even more tenuous. Republicans on the other hand would largely like to convince younger Americans to accept financial dysfunction as the norm.
Both sides provide proposals designed to mask the precarious position of the system. The Democrats have talked about increasing taxes to pay for Social Security. What they have not disclosed is that the country will be unable to tap that reserve of taxes for other priorities, like health care and education reforms.
Virtually all of the GOP has assured existing seniors that they will be unaffected by reforms to the system. What they have not revealed is how they intend to keep that promise. Given that people retiring in 2015 expect to outlive scheduled benefits, someone should ask what taxes the GOP plans to raise.
Governor Christie has repeatedly touted his detailed 12-point entitlement plan. The detail that he neglects to mention is that his plan solves only about half of the overall solvency issue in Social Security.
Jeb Bush is the only politician to emerge with a plan that statistically would allow Social Security to achieve solvency. He admits that his proposal depends heavily upon lowering the benefit levels of wealthier seniors. What he doesn’t disclose is that the word “wealthy” to him applies to people who are earning minimum wage today.
The system lacks sufficient resources today to assure existing seniors scheduled benefits. Yet, Senator Cruz not only assures seniors that their benefits will be protected but suggests to younger Americans that they will be able to keep part of their payroll taxes.
Senator Paul believes that the federal government “is taking money from the entitlements and then spending it immediately on other items.” The reality is that Social Security since 2009 hasn’t generated even a penny to spend on other items.
All of the GOP’s plans hinge on benefit reductions which in reality mirror the dysfunction of insolvency. There is no substantive difference between an indiscriminate benefit cut caused by insolvency and the benefit reduction caused by politics. The grand plan of the Grand Old Party explains to future retirees how their benefits will be reduced.
The issue of Social Security seems to have fostered the bipartisanship that we bemoan is missing from politics. Today both sides have agreed to ignore the issue.
All of this is known to the politicians, who ignore the warnings. Today we aren’t interested in whether the system implodes, but rather when. So long as that event does not fall before the next campaign, everything is good.
Editor’s note: This editorial originally published in The Des Moines Register, and may have been modified slightly for publication on IVN.