Congress went about its business Tuesday, seemingly oblivious to the massive time bomb ticking in the corner. Will reality set in before the explosion? Voters must demand explanations.
This week, the Social Security Administration issued its annual trustees report on the fiscal state of the program. The news isn’t good. The Social Security Trust Fund is projected to run out in late 2032, three months earlier than previously expected. At that point, the report noted, Social Security will be able to pay only 78 percent of retirement benefits. Medicaid is projected to run dry in 2033.
“Washington is sleepwalking into a retirement crisis,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, “allowing our nation’s most important trust funds to go insolvent at the expense of over 70 million beneficiaries who count on these programs.”
The Social Security crisis stems from the program’s inherent structural deficiencies and evolving demographics. Social Security uses incoming payroll tax revenue to pay for current benefits. In 1960, there were 5.1 workers for every beneficiary. That number is now 2.7. The Trust Fund is tapped when payments exceed incoming taxes.
Ms. MacGuineas’ organization calculates that, if nothing is done, looming Social Security benefit cuts would affect nearly 17 percent of Nevadans, or more than 544,000 residents. The average retiree would see a monthly reduction of $482, or an aggregate of $3.1 billion less each year.
The current sorry state of affairs is a depressing example of what happens when elected officials elevate political expediency and survival over responsible governing. The entitlement crisis has been simmering for decades. Yet members of Congress are deathly afraid to take the necessary steps toward reform for fear of alienating a powerful voting bloc. Inaction, however, has only worsened the problem.
While members of both parties bear the blame, Democrats have been particularly aggressive over the years in hammering Republicans over any proposed reforms, while offering few reasonable solutions to this looming math problem. (See: the “toss Granny out of the wheelchair and over the cliff” attack ads.)
It’s unlikely that Congress will allow the cuts — particularly for current retirees or those nearing retirement age — given the fallout. But absent real reforms to put these entitlement programs on more stable financial footing, the alternative will likely be to simply move money around or more borrowing. The former would be like re-arranging the deck chairs on the Titanic. The latter is ludicrous as the national debt hurtles toward $40 trillion.
At this point, everything should be on the table. Does Congress have the will. Will voters demand action? Tick-tock.
