The Social Security trust fund will run out of money in 2033, according to a new projection that shortened the lifespan by three years from 2011’s report. The Medicare trust fund is now projected to run dry by 2024.
These projections assume nothing will be done between now and then. So, hold on, don’t panic just yet.
Maybe the best strategy is to panic and not panic, doing both in proper perspective.
Here’s what we mean.
It’s no surprise that in coming decades these valued social insurance programs will need adjustments to keep the dollars flowing. Neither Social Security nor Medicare were perpetual wind-up toys that could be properly energized and then never bothered with again. Over the history of both programs there has been occasion to make adjustments. In 1983, Ronald Reagan, the conservative icon, signed off on a plan to extend the life of Social Security by raising payroll taxes, a move that extended the program’s life by decades.
Our time is no less lacking for ideas that would see both Medicare and Social Security through their financial squeeze. For example, if the payroll tax cap on earnings above $110,100 was lifted, Social Security could easily be extended at least 75 years into the future, according to the Congressional Research Service. Likewise, the Affordable Care Act of 2010 seeks to prolong Medicare by significant cost-saving measures.
Like we said, don’t panic.
Unless, of course, you’ve been keeping an eye on the current state of U.S. politics. Then maybe we should panic.
Last year, congressional Republicans held the nation’s credit rating hostage while they delayed raising the debt-ceiling, a dangerous move that rattled markets and accomplished very little positive.
Compromise on the important matters of the day appears scarce. While it’s usual to blame all sides, it’s beyond argument that over the past three years Republicans have made non-compromise the order of the day. The declared vow to make Barack Obama a one-term president has meant that meaningful bipartisan cooperation toward solving problems is a no-no for Republicans in the U.S. House and Senate. For too many conservatives, news that social insurance programs are on the ropes has led them to call for hurrying their death. For these radicals, prolonging Social Security and Medicare is a step in the wrong direction.
This is not to suggest Democrats are without fault. Recommendations from President Obama’s debt-reduction commission have at times been held at arm’s length by the president, Democrats and Republicans. Few politicians are willing to bring the news that sacrifice — tax increases, program cuts or both — will be required to bolster Medicare and Social Security.
While not perfect, the Simpson-Bowles balanced plan of spending cuts and tax increases is a wholly adequate starting point for compromise. Yet, substantial dialogue has been absent during Obama’s term.
If this week’s news about the future of Social Security and Medicare will bring Republicans and Democrats to the table with serious ideas for prolonging both programs, that would be good news. Otherwise, our leaders will stand guilty of failing to lead.
What’s needed is a restoration of the American ideal that the nation is strengthened by working toward a common mission.