A recent article in The Herald cited the concerns of a retiree opposed to Social Security reform because it’s “too complicated.” Unfortunately, younger workers like me don’t have the luxury of relying on that answer – which is an excuse symbolic of the shoddy arguments of those reflexively opposing such reform.
One clear indication those opponents have erred is left-leaning elements of the press are opining against them. The Washington Post’s editorial page and New York Times columnist Nicholas Kristof have both chastised nay-saying partisans for obtusely refusing to debate the issue.
These partisans have been relying on two disingenuous claims to defend their refusal:
1) “Social Security will be fine until 2042.” In reality, Social Security’s trustees have said the program will begin running a cash deficit by 2018, meaning more benefits being paid out than payroll taxes coming in. Opponents claim at that point we’ll simply tap the Social Security Trust Fund, which will be solvent in theory until 2042. One problem: the Trust Fund isfunctionally empty.
True, it holds special U.S. Treasury Bonds. But turning those bonds into cash for Social Security to make up its deficit would require money from the annual federal budget (national defense, homeland security, Medicare, etc.). At the same time we read stories about current deficit challenges it is ridiculous to think we’ll simply dig deeper into the regular budget to pay for Social Security. 2018 is the date that matters.
2) Opponents describe personal accounts invested in mutual funds of stocks and bonds as “gambling” – a stunning, direct insult to every American who relies on a 401(k) or IRA for their retirement savings.
Such slander is intended to scare older generations, among whom personal investments in stocks and bonds were more rare and pensions in both the public and private sectors were more commonplace. Yet the true beneficiaries of such reform, younger workers, are already employed in a workforce where pensions are commonly unavailable, except for government employees whose unions are ironically opposing reform.
That irony gets thicker. While labor unions are some of the strongest opponents of personal accounts, they invest the assets of their own pension plans in what? Stocks and bonds. For example, CalPERS (California Public Employee Retirement System) is one of the stock market’s largest institutional investors.
In their zeal to score political points, opponents are likening the proven, long-term security and success of stocks and bonds – which millions of Americans already utilize for retirement planning – to a roll of the dice. Good people may disagree about personal accounts, but insulting a large portion of America’s workforce seems a peculiar tactic.
In citing the above points while refusing to debate, obstructionists are theoretically pandering to seniors – a curious twist given the universal agreement among reform advocates that those at or near retirement will not be affected by changes. Truthfully, however, refusing to deal with the issue now will actually harm Social Security beneficiaries otherwise unaffected by reform.
How? Consider the options we face in 2018:
Social Security faces $10 trillion in unfunded liabilities as a whole (accordingly, a reform package with a lower price tag is preferable). We could raise taxes, but huge increases to cover that gap would dramatically weaken our economy, further damaging the system’s finances.
We could cut other spending instead. Yet, strict cuts in federal spending to keep Social Security solvent would inevitably require deep reductions in Medicare – which already requires billions of dollars in subsidies from the general budget because of its existing financial problems.
Those cuts would penalize seniors otherwise unaffected by Social Security reform. Locally, some doctors in Snohomish County already refuse new Medicare patients because the system is financially strained. Such cutbacks to Medicare are not a prudent option.
Meanwhile, failing to reform Social Security irreparably harms younger workers as well – the children and grandchildren of today’s older generations. Reform opponents odiously tout the empty Trust Fund; but even if one believed the Trust Fund keeps us worry free until 2042, benefit cuts of 27 percent would be required at that point absent any reform. Reality is harsher given the true date of concern at 2018.
Would today’s retirees like a 27 percent cut in their Social Security check, or worse, with no hope to improve their benefits? Where would that leave them? Would they want to condemn their children and grandchildren to that predicament?
Consider that the next time opponents of reform obstinately refuse to debate the issue. Ignoring Social Security’s long-term financial health is not an acceptable option; and the cost of doing nothing will inevitably be paid for by younger generations. I’ll be bold enough to presume to speak for those workers when I say to reform opponents: stop obstructing and start debating.
Eric Earling is a 29-year-old married father of two. He lives in Lynnwood and currently works for the federal government.
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