A bipartisan opportunity
Published 12:01 am Sunday, January 30, 2011
Despite the buddy-buddy seating arrangements at last week’s State of the Union address, neither political party appears ready to make meaningful progress on reducing the deficit.
Yes, formal budget proposals are still pending. But so far, the president and congressional leaders are essentially talking about fighting a wildfire with squirt guns, and aren’t even aiming at the biggest flames.
Until they can engage in earnest, good-faith discussions that include reforming the biggest spending programs, and adopting a more simple, rational and effective tax system, serious deficit reduction will get kicked further down the road. Denial of the inevitable consequences will continue, as our day of reckoning draws closer.
Progress will take true bipartisanship, not a top skill of either party. Perhaps what the White House and congressional leaders need is an accomplishment to serve as an ice-breaker, an issue from which both can experience what it feels like to make decisions that are unpopular, but that they know are necessary for the nation’s long-term stability. Something for which a credible, bipartisan blueprint already exists. Something from which neither side gains political advantage.
Something like Social Security.
Let’s be clear: Social Security isn’t out of money. Far from it. Although the government has borrowed the program’s $2.5 trillion surplus to pay for other programs, the securities in the trust fund are backed by the full faith and credit of the U.S. Treasury.
The problem is that as baby boomers retire, and as high unemployment has fewer payroll taxes rolling in, the surplus is beginning to shrink.
The nonpartisan Congressional Budget Office reported last week that if no adjustments are made, the surplus will be gone by 2037. At that point, the money coming in will only be enough to pay 78 percent of current benefits, the CBO projects.
The co-chairs of the president’s bipartisan deficit-reduction commission have already offered a plan to slowly fix the problem, with minimal pain. It would ensure the retirement program’s long-term solvency by slowly raising the cap on income subject to Social Security taxes (it’s currently at $106,800 and would rise to $190,000 in 2020), indexing the retirement age to life expectancy (the retirement age for full benefits would rise from 67 to 68 in 2050, then to 69 in 2075), and slightly reducing benefits for the wealthiest 50 percent of retirees.
It’s a fair, straightforward and gradual way to address a demographic shift that’s already underway. Bipartisan support of it, even with some modifications, by leaders in the House and Senate would solve one major fiscal challenge, while providing evidence that at least some of our elected leaders can see past the next election.
And hope that our biggest problems might actually be surmountable.
