Social Security: Will It Survive? Part 2
Will Social Security survive? This is a question that every sixty something year old is asking. Last week, we discussed the Social Security Board of Trustees 2015 report. Basically, either taxes need to increase 20 percent or benefits need to be reduced by 20 percent in order to shore it up for the next 75 years.
Of course, there are some very intelligent folks who believe these projections are overly optimistic. They include Gary King, a professor at Harvard; Andrew Biggs of the American Enterprise Institute and many others.
Suffice it to say that much more will need to be done because Congress isn’t going to address these concerns now. If past history is any precedent, I’d say it will be the 11th hour before any steps are taken. Obviously, by then more drastic action will be required.
Although it will probably not be as “good” of a deal as it is today, I believe Social Security will survive.
Here are two reasons why:
- The American people get what they want. According to the Census Bureau, there are 79 million Americans over age 55. That represents a third of the voting age population by my calculations. They care very deeply that Social Security survives, and their elected officials are keenly aware of this fact.
- We’ve fixed it before. In 1983, I was 2 years old. My biggest concerns were getting fed on time, having clean underpants, and playing with lots of noisy toys. Little did I know that just 200 miles to the south, Ronald Reagan and the Democratic Congress were tackling something very important to my grandparents.
Social Security was so precarious that benefit checks may have stopped the very next year. But disaster was avoided. The payroll tax was increased and the age to collect full retirement benefits was raised. Also, for the first time in our history, certain Social Security benefits became taxable for retirees with incomes over certain thresholds. These changes have kept the program going until now.
So I’m hopeful that we can come together and repair Social Security again. I also hope that the increased burden doesn’t fall on any one group. It shouldn’t fall on just the young or the old, or the rich or the poor. This is an American problem. We need to come together and solve it.