The Social Security trust fund is on a trajectory to run dry in 2033, the government reported last week. That’s three years sooner than last year’s estimate.
When that time arrives, if nothing changes, receipts will only be sufficient to pay about 75 percent of promised benefits to retirees. Workers who are in their mid-40s today will be retiring then.
So is Social Security in crisis? Not today, but unless action is taken by Congress to fix it, it will be.
And there lies the chicken-and-egg conundrum we’ve been facing for years: Is our political system capable of addressing a big problem before it becomes a crisis, or must it wait until the crisis is upon us?
Opting for the latter makes the solution more painful, its consequences less controllable. Yet that’s become the likeliest scenario, by default.
The bipartisan Bowles-Simpson debt reduction commission outlined a straight-forward, gradual path to putting Social Security on solid footing. It called for indexing the retirement age to longevity, a logical move toward sustainability. The retirement age would reach 69 in 2075. It would raise the cap on the amount of income taxed by Social Security — again, slowly. And it would use a lower inflation gauge to compute benefit increases, and actually trim benefits over time for higher-income earners.
It died, along with the commission’s other sensible ideas for cutting the deficit, when the congressional “supercommittee” failed to reach agreement on a grand compromise last year. Since then, liberals and conservatives have largely retreated to their own ideological bases, favoring symbolism and sound bites over substance.
Which in one year has gotten Social Security three years closer to crisis.
Medicare, meanwhile, is in even worse shape. Trustees estimate its hospital insurance trust fund will be depleted in 2024, the same estimate as last year.
Solutions to that problem seem even harder, with Democrats making the puzzling charge that the GOP wants to “end Medicare as we know it.” (Um, it’s on an unsustainable path. Isn’t ending it as we know it, at least in part, essential?)
Republicans, including presumptive presidential nominee Mitt Romney, favor a Medicare system that subsidizes a portion of seniors’ health insurance, eliminating a guaranteed benefit. They decry any thought of health-care “rationing,” then pretend that’s not what their plan delivers, in part.
Americans aren’t unwilling to sacrifice. Today’s politicians seem to underestimate that. Those who are willing to act like leaders and embrace practical solutions to these problems, rather than waiting and being forced to act, might be surprised by the response.
That would require Democrats to compromise on benefits, and Republicans to compromise on taxes. It’s called leadership, and its absence truly is bringing us closer, year by year, to a genuine crisis.
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