Social Security passed a threshold last week that might get some hard decisions made in Washington, D.C. Might.
In an annual review released Tuesday, the system’s board of trustees said trust fund distributions will exceed income in 2016. The fund will continue to be depleted until it is exhausted in 2037. Those milestones advanced one year and four years, respectively, from last year’s estimates.
These projections fluctuate almost every year, with scolds of various ideological stripes piping up on just how dire the situation really is and what we need to do to solve it.
What makes the last report unique is that first number: 2016. That puts the first shoe to drop in Social Security’s walk toward insolvency within the term of a potentially incumbent president. It would be the second term, mind you, of a possibly re-elected President Obama, but still a foot fall on his watch.
The president has not said much about Social Security. Go to the White House Web site and you find little more than the usual platitudes about protecting Social Security and its recipients, a pledge to work toward a bipartisan solution to the system’s solvency issues, and absolute opposition to privatization.
On an action agenda a mile long, Social Security is a long way down the queue.
Look much higher up and you will find Medicare, the subject of a separate trustees report also announced Tuesday. Medicare is already running a deficit and will reach insolvency in 2017. Here, Obama is concentrating much more attention because he believes the answer to Medicare’s woes lies in curing the broader health care system and its incredible inefficiencies.
“It’s a wake-up call,” said Health and Human Services Secretary Kathleen Sebelius. “And it’s another sign that we can’t wait for real, comprehensive health reform.”
Not a peep from the White House or the Cabinet on Social Security.
How curious that a program like Social Security with a relatively simple set of parameters begs for attention while Medicare, with more variables than a blizzard of snowflakes, is everybody’s policy darling.
There is some willingness out there to get on with it, even some realism about the choices that will have to be made. Republicans like South Carolina Sen. Lindsey Graham have told the administration they will help work toward solutions. In the House, Majority Leader Steny Hoyer of Maryland uttered the phrases “more revenues,” “restrain the growth of benefits,” and “raise the retirement age.”
He must have been in earnest, because the liberal Campaign for America’s Future jumped all over him, saying Congress may have squandered the Social Security trust funds surplus on tax cuts for the rich or bank bailouts. Huh? The Campaign gets an “A” for obfuscation.
The National Committee to Preserve Social Security and Medicare also attacked the economic assumptions made by the trustees. The group concluded its analysis with an appeal that the cost of living increases retirees receive each year be locked in by new legislation. This year’s COLA was 5.8 percent because of the tremendous jump in energy prices during the first half of 2008. Because those have fallen away, there is a likelihood there will be no COLA for 2010 or 2011.
The committee says that’s unfair, given steeper out-of-pocket medical costs, as if the administration was not working on that problem. And as if unnecessary COLAs would not hasten the system’s insolvency.
Maybe Social Security’s problem is that it works too well. About $800 billion came in the door last year, $625 billion went out, 51 million got their checks on time, and the administrative expense was less than 1 percent. Even after 2037, it could still pay 75 percent of promised benefits if no changes are made.
There won’t be many of today’s incumbents around by then to explain the sudden discount. Seems it all started back in 2016.
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