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Social Security’s birthday

by Congressman Nick Smith

 

This month, Social Security turned 78.  It was enacted in August 1935 to reduce poverty among the elderly.  The program has been enormously successful in achieving its mission and ranks among the most popular of all government programs. Over the years Congress has been generous in adding more benefits to the program. Social Security is now at risk because there are an increasing number of people receiving more benefits compared to the fewer number of workers paying in. The 15.3% of what a worker earns (the payroll FICA tax) no longer is enough to fund those benefits.

Over the last three years $150 billion extra was needed. The Trustees of the Social Security Trust Fund predict that this cash-flow deficit will need another $450 billion from the general fund between 2013 and 2018. The government owes the money to Social Security, but still, it is evident that we won’t be able to transfer such large sums from general revenues without slashing many other programs – from defense to education to health care, criminal justice and so on.

The Trustees reported that the growing cost of Social Security and Medicare now account for 38 % of federal expenditures. Future unfunded liabilities for the two programs have been previously calculated to be a staggering $72 trillion. The Trustees said it in their report; legislative changes are necessary to avoid disruptive consequences for beneficiaries and taxpayers”. If Washington takes action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.

The President and Congress can make this a good birthday year by taking decisive action during this session of Congress to keep Social Security solvent.  It is an understatement to say it won’t be easy. In the past, Republicans and Democrats felt there was a political advantage to criticize suggestions from the other Party. It is important the public needs to better understand the problem if legislators are to act. But it’s the President that must lead on this to get the message out and minimize partisan politics. There is still time to make this a good birthday year for Social Security. Its future is in our hands.

 

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