Social Security crisis not so bleak

Given the eagerness by both major political parties to frighten the public about Social Security, it isn’t surprising that many young people do not believe the program will be around when they head into retirement.

Democrats exaggerated the Social Security problem in the late 1990s to head off Republican desires to spend the projected budget surplus on tax cuts. Republicans are now saying the program is in crisis to further their goal to partially privatize it.

To paraphrase Mark Twain, rumors of Social Security’s demise have been greatly exaggerated. Quite simply, Social Security isn’t in critical condition. The latest Social Security trustees’ report, which uses a lower than average economic growth projection, shows that the program can continue to pay retirees a full benefit until 2042. A Congressional Budget Office projection pushes that date to 2052. If there are no changes in the next 37 to 47 years, retirees would still get about 75 percent of promised benefits.

If it’s a crisis our nation’s leaders want to solve, how about health care costs? Skyrocketing increases (no exaggeration) mean Medicare could be broke by 2019. Meanwhile, experts say that in the coming budget year Medicaid spending will surpass state spending on elementary and secondary education.

That’s not to say that Social Security doesn’t need to be addressed, but there is plenty of time to calmly digest and disseminate accurate information before embarking on a solution. The program has been tweaked multiple times since the 1950s to ensure its solvency. And the current “crisis” is actually less daunting than it was in 1983, when the payroll tax was raised to adjust for the demographic shift we’re seeing today.

Cutting through the fog of partisan rhetoric, there is a worthwhile debate to be waged over the fundamental nature of Social Security. Should it be considered a pay-as-you-go social safety net for the nation’s elderly, or a retirement fund that is controlled by individual investors?

Backers of the status quo need to answer how the program can rectify the coming shortfall. Cut benefits? Raise the payroll tax? Take money from the general budget? Backers of privatization need to answer where the money will come from to cover current recipients as funds are diverted to private accounts. And they need to decide whether the government will bail out those whose investments go south, as has been the case in other countries that have partially privatized their retirement programs.

It’s a complicated problem, but contrary to urgent proclamations, there is no reason to be afraid or to rush into a solution.