In silent movie sawmill rescue scenes, somehow the steadily moving sawbed never quite makes it far enough. The hapless victim is always saved in the nick of time. This came to mind in when reading new Congressional Budget Office predictions for Social Security. It came out just before Christmas.
Everyone knows the fiscal sawmill blade is spinning. Regardless of the mythology surrounding Social Security, it is a pay-as-you-go system. At $905 billion in fiscal 2016, it’s about half again larger than what the nation spends on defense. CBO points out that since 2010, Social Security outlays have exceeded payroll takes and the funny money — Treasury interest payments paid on Social Security Administration bonds.
Tossing all of its economic predictions and expected benefits payments into its big fiscal sausage maker, CBO finds the disability payments trust funds will run out in 2022. Regular old-age insurance trust funds will hold out until 2030.
For Congress the options are the same as they’ve always been. It can:
Cut or reduce future growth of benefits
Raise payroll taxes in any of several ways
Revolutionize Social Security in some way with better private investment options, means testing for receiving benefits, trimming back to just retirement, or Lord knows what.
Do nothing and simply keep piling on national debt.
In its somnambulant state over Social Security for the past 16 years, Congress has taken the fourth option. The last time a president and Congress got together to do something about it was in 1983. Whether that was such a great deal you might say remains debatable. It taxed benefits for some, which is really the money going in circles. That “some” has included a steadily increasing percentage of beneficiaries. It pushed the tax increases into the future. Whatever its benefits, the 1983 reform is moot now because — if you trust the CBO projections — there’s nothing but swelling deficits in the future.
I hope President-elect Donald Trump and the 115th Congress will do something fresh. Most current and all future federal employees will rely on Social Security for part of this retirement income, as will just about everyone else. Enough commission and think tank reports and ideas already exist to fill the shelf space of the Encyclopedia Britannica (if they still even print it).
As an aside, the Social Security Administration’s inspector general found rising wait times for people visiting SSA offices. This is a reminder that as a “retail” agency that interacts directly with Americans, Social Security needs ongoing care, attention and adequate budgeting as an administrative matter. As those millions of us boomers join the ranks of beneficiaries if we choose to, let’s hope the answer to rising Social Security outlays won’t be gutting the agency operationally.
No one wants runaway taxes. No one wants runaway deficits. No one wants retirees to starve in their third-story catwalk condos in aging Florida developments. The stupid and tiresome description of Social Security as a political “third rail” may apply, but it doesn’t absolve the pols from taking it on.