Retirement: Social Security’s fiscal woes
I’ve got some bad news for anyone hoping to retire someday, said Nolan Finley in The Detroit News. The annual report from the trustees of Social Security and Medicare shows that both programs “have accelerated their race toward the brick wall of insolvency.” Social Security will spend more money this year than it takes in for the first time since 1983. Without drastic changes, the Social Security Trust Fund is now expected to be depleted within 16 years, going bust by 2034. Things are even grimmer when it comes to Medicare’s Hospital Insurance Trust Fund—Medicare Part A—which is projected to run out of money by 2026, three years earlier than previously expected. At 63, I’ll probably still collect my benefits, but “I feel for the generations behind me. There seems no chance they’ll ever collect anything.”
That’s nonsense, said Mark Miller in Reuters.com. “It is true that Social Security and Medicare face financial challenges,” but even if nothing is done, Medicare would be able to pay out 91 percent of promised benefits in 2026, while Social Security could pay out 77 percent in 2034. Restoring the fiscal health of both programs by tweaking benefits and taxes wouldn’t be hard, “whenever politicians decide it’s time to act.” Among other things, said Michael Hiltzik in the Los Angeles Times, Congress could bring in more money by eliminating the cap on payroll taxes used to fund Social Security, currently set at $128,400. But Republicans refuse to do that, and are “doing their best to cut the legs out from under both programs” by cutting taxes and cracking down on immigration. We’ll need plenty of immigrants to pay into the social safety net.
Democrats aren’t blameless, said Robert Samuelson in The Washington Post. “For decades, liberals have accused anyone who suggests benefit reductions as being cruel, uncaring, and immoral.” But our spending on both programs is unsustainable in the long run. Social Security and Medicare made up 42 percent of federal spending in 2017, and are increasing faster than almost any other part of the budget. Soon, they will consume most of our spending. To fix Social Security and Medicare, taxes will have to increase, but the retirement age has to be raised and benefits reduced for people who don’t need them. Since neither Democrats nor Republicans have the political guts to do anything now, we’ll pass the problem on to our children. “Shame on us.”