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In Our View: Social Security Far From Secure

Lawmakers must work to ensure continued health for vital program

The Columbian
Published: August 17, 2015, 5:00pm

It was a mixed bag of an 80th birthday party, with celebrants expressing concern about the long-term health of the honoree. As America’s Social Security system turned 80 on Friday, long-running questions about the solvency of the program were at the forefront.

The issue: Projections suggest that Social Security’s retirement trust fund has enough money to pay full benefits until 2035, after which the program would collect enough in payroll taxes to hand out about 79 percent of expected benefits. The disability trust fund, meanwhile, is expected to run out of reserves in late 2016, triggering an automatic 19 percent reduction in benefits. The shortfalls are a result of changing demographics and simple math: In 1960, there were more than five workers paying into the system for every beneficiary; today, there are fewer than three, and in 20 years there will be about two workers for each person receiving benefits.

The problems are well-known and are easily predictable — a fact that requires Congress to alter its typical mode of operation and act before the situation turns into a crisis. Alas, partisan demagoguery often gets in the way of sensible solutions.

Many Democrats in Congress have prodded President Barack Obama to increase Social Security payments. To which Sen. Orrin Hatch, R-Utah and chair of the Senate Finance Committee, said: “Where are they going to get the money? They don’t ever seem to give any consideration to how deeply in debt our country is and how difficult it’s going to be to get out of it.”

Dealing with Social Security and ensuring some measure of financial protection for retirees, the disabled and survivors is going to require more reasoned solutions. The first should be to increase the income cap on Social Security taxes. Social Security is funded by a 12.4 percent tax on wages — half of it paid by employees and half by employers — on the first $118,500 of a worker’s wages, a number that is adjusted each year for inflation. When the cap was instituted in 1983, it was designed to exempt 10 percent of total income; with increasing income inequality, it now exempts 17 percent of income. According to the program’s trustees, gradually increasing the payroll tax to 14.4 percent over 20 years would eliminate about half of Social Security’s budget shortfall.

Other tactics also are worthy of discussion, including raising the retirement age at which benefits may be collected. But the importance of dealing with the problem should not be open for debate. As Carolyn Colvin, acting commissioner of the Social Security Administration, said: “Remember, these are our most vulnerable population. These are the elderly who helped build this country. These are the disabled who certainly did not wish to become disabled.”

Nearly 60 million Americans collect monthly Social Security payments, a number that is expected to grow to 90 million over the next two decades. The average monthly payment is $1,221, and about two-thirds of retirees derive at least half their income from Social Security. For retirees, this is a return on the investment they paid into the system during their working years; for the disabled, it is an indication of a nation that believes poverty is not an acceptable option for our most vulnerable citizens.

For eight decades, Social Security has played a crucial role in providing a safety net. As Ronald Reagan explained, it is “a monument to the spirit of compassion and commitment that unites us as a people.” Now it is up to Congress to begin working on a bipartisan compromise that will ensure continued health for the program.

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