SOCIAL SECURITY: EASY TO FIX, BUT WHERE'S THE POLITICAL COURAGE?
November 14, 2006
Social Security's finances are precarious, says USA Today. With people living longer, the program pays an unsustainable amount in benefits and would already be in the red if not for contributions from the massive baby boom generation, now on the verge of retirement.
Fixing Social Security is actually not a particularly daunting challenge, at least not when compared with Medicare. Based on estimates from the non-profit National Academy of Social Insurance, these approaches could be tried in some combination:
- Raise the retirement age -- more than a third of Social Security's long-term funding shortfall would be solved by immediately raising the full retirement age to 67 (which currently applies to people born after 1959) and then gradually pushing it back to 70 for able-bodied workers.
- Slow the growth of benefits -- pegging the growth in future benefits to inflation, rather than to average wage increases, would also come close to solving Social Security's long-term problem; Bush offered a variation on this idea last year; he proposed slowing the rate of benefits growth for upper- and middle-income workers while keeping it the same for those on the lower rungs.
- The president's private investment accounts -- they encourage individual savings and could serve as a sweetener for wavering politicians if offered as an add-on to the current system rather than as a replacement.
Unless Bush and the new Congress follow through on their pledges of bipartisan cooperation, next year's Social Security statements will arrive with some different wording. Instead of saying the program will be in the red in 11 years, they will say 10 years. Then nine. The countdown continues, says USA Today.
Source: Editorial, "Social Security: Easy to fix, but where's the political courage?" USA Today, November 14, 2006.
Browse more articles on Tax and Spending Issues