Social Security is in trouble. Everyone knows that. In less than twenty years, 2033, the Social Security fund is expected to run out of money. Even sooner, the Social Security Disability Insurance fund, started during the Eisenhower administration in the 1950s, is expected to run out of money by 2016.
Barack Obama is proposing transferring money from the main Social Security fund to the disability fund to keep it afloat. Some Republicans in Congress want to cut benefits instead. Transferring funds is the more responsible action to take while alternatives are discussed, but it doesn’t address the long term solvency of Social Security.
The only options are either raising taxes or cut benefits. With a tax rate of 6.2% for employees and employers, there isn’t much stomach to raise the contributions to the fund. There also isn’t any stomach to lower the benefits. Something has to give.
Some Republican candidates for President, namely New Jersey Gov. Chris Christie and former Florida Gov. Jeb Bush, have proposed some suggestions. Christie wants to implement benefit cuts for those making over $80,000 and completely eliminate benefits for those making over $200,000. Bush wants to gradually raise the retirement age from 67 to 69, with the early retirement age raised from 62 to 64.
The Obama administration can kick the can down the road so that saving the Social Security Disability Insurance fund doesn’t become a political game during the upcoming presidential election, but it is a can that the next President must pick up. The sooner a solution for Social Security’s woes are found, the less extreme the measures will be needed to set it straight. If we wait until the term that follows the 2020 Presidential election, then there is barely going to be a decade to fix the program. At that point, the solution will force a painful overhaul.
For Bush and Christie, they are showing the courage to address an issue that is rarely a winning issue for any candidate. Everyone supports Social Security. No one wants to sacrifice for it. Yet, that is the only path to fixing it.
The extremes of the right and left have their own plans. The right would like to privatize social security. Thankfully, that idea seems to have come and gone, although there are many adherents still touting it. The left is holding hard against raising the retirement age because that is viewed as a burden for the working poor. They have a point, but social security wasn’t intended as a social welfare program for working men and women. It is for the retired, the disabled and the young. It can’t be jeopardized for everyone in order to benefit the few. Helping the working poor should be left to other programs.
The Social Security Act of 1935 originally provided retirement benefits for those who reached the age of 65. Eighty years later, life expectancy has increased from 60 to 80 years. However, the standard retirement age has only been raised a couple of years. With a declining birth rate reducing the workforce, it is obvious that something needs to change.
Raising the benefit age is politically unpopular, but demographically realistic. There may need to be an increase in tax rates and a lowering of benefits too. Whatever the solutions, it is an issue that needs to be a hot topic on the campaign trail. It probably won’t. Instead, the campaign coverage will float around a fake Benghazi scandal, which restaurants a candidate visited or the most recent gaffe.
Fixing Social Security is one of the prime issues facing the next President. It is going to take unpopular, courageous proposals. Bush and Christie have opened the door, now is the time for the rest of the Republicans and the Democrats to offer their suggestions.