August 25, 2005
Members of Congress should spend the last half of their August recess studying up on Social Security and return ready to take action, says Sean R. Tuffnell of the National Center for Policy Analysis.
Tuffnell gives a refresher course on why reform is needed, saying we only need to know three numbers: 77 million, 2017 and 11 trillion. Consider:
- Some 77 million baby boomers are about to go from the paying-in window to the pay-me-now window; that flood of new retirees will nearly double the number of people collecting benefits.
- By 2017, Social Security will be paying out more in benefits than it collects in payroll taxes to fund those benefits; 12 years from now, Congress will have to make difficult decisions about which taxes to raise and which programs to cut so money can be generated to redeem the obligation bonds in the Trust Fund.
- In 2042, the system will run out of obligation bonds and can only fund three-fourths of its promises; attempting to fund the benefit promises being made solely with the current funding source at current rates would leave us $11 trillion short this year, with an additional $600 billion if we wait until next year to deal with this problem.
Tuffnell says the problem really is simple. Any program built on the concept of one generation's benefits funded by the taxes of succeeding generations of workers cannot survive the twin threats of longer life expectancies and lower birth rates.
Source: Sean R. Tuffnell, "Unmet Challenge," Washington Times, August 24, 2005.
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