Ten Things to Keep in Mind When Discussing Social Security Reform
January 2, 2014
Followers of politics may have noticed a recent push from the left to expand Social Security benefits above and beyond the current-law growth schedule (which itself remains unfinanced). While expanding a popular program carries an obvious political utility, any reasonably careful analysis of Social Security reveals the idea to be highly problematic at best. Listed below are 10 factors to bear in mind whenever proposals to change Social Security benefits are discussed, says Charles Blahous, a senior research fellow for the Mercatus Center, a research fellow for the Hoover Institution, and a public trustee for Social Security and Medicare.
- #1: On the positive side, these proposals acknowledge that the Social Security benefit formula should be changed.
- #2: Social Security benefits are already increasing substantially under current law, and would continue to increase under various proposals to maintain solvency.
- #3: Unless current-law benefit increases are substantially slowed, younger workers will shoulder unprecedented cost burdens.
- #4: The left's latest proposals embody a conscious effort to recast the Social Security debate by adopting a policy position well outside of longstanding mainstream opinion.
- #5: Looking solely at Social Security benefits is uninformative; a meaningful analysis must compare both ends of the equation -- the taxes it collects from workers as well as the benefits it later pays.
- #6: Further increasing Social Security benefits does not increase total resources available to finance retirement income.
- #7: Further increasing Social Security benefits for current participants would worsen existing inequities.
- #8: Social Security benefits and cost burdens are already increasing faster than participants' pre-retirement income.
- #9: Social Security benefits and costs have already risen to the point of destroying many individuals' ability and incentive to save.
- #10: Social Security benefits are already growing so fast that Americans' reliance on Social Security for retirement income increases even as national incomes rise.
Source: Charles Blahous, "Don't Worsen Social Security's Soaring Cost Problem," Economic Policies for the 21st Century, December 23, 2013.
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