Why Social Security is in the state it is

In a word, politics. In another word Congress.

We talk about the bad stuff caused by the influence of lobbyists and yet Congress seems immune to the influence of the Social Security Trustees. Following are the recommendations from the Trustee Reports for 2021 and 2010. Notice any similarities?

The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them. Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits. Social Security will play a critical role in the lives of 65million beneficiaries and 176 million covered workers and their families during 2021. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.

2021 Trustee Report

The Board of Trustees have not had a public trustee since 2015 the administrations having failed to appoint them.

The projected trust fund shortfalls should be addressed in a timely way so that necessary changes can be phased in gradually and workers can be given time to plan for them. Implementing changes sooner will allow the needed revenue increases or benefit reductions to be spread over more generations. Social Security plays a critical role in the lives of 54 million beneficiaries and 155 million covered workers and their families in 2010. With informed discussion, creative thinking, and timely legislative action, present and future Congresses and Presidents can ensure that Social Security continues to protect future generations.

2010 Trustee Report

Members of Congress have no trouble suggesting trillions in new spending, new programs to please every type of voter, new ongoing liabilities, but when it comes to dealing with current liabilities, telling Americans the truth, there is near silence. And too many Americans accept it all with hands out for more.

5 comments

  1. On April 20, 1983, as he signed the Social Security Amendments Act of 1983 into law, President Ronald Reagan stated, in part:

    “We promised that we would protect the financial integrity of Social Security. We have. Time and again, benefits were increased far beyond the taxes … that were supposed to support them. The changes in this legislation will allow Social Security to age as gracefully as all of us hope to do ourselves, without becoming an overwhelming burden on generations still to come.“

    Since then, not so much. However, the 1983 Social Security legislation had obvious shortcomings. Less than 10 years later and continuing until today, a succession of presidents have confirmed that the promised benefits were not sustainable at current funding levels:

    November 5, 1993: President Bill Clinton, by Executive Order #12878, created the Bipartisan Commission on Entitlement Reform (the Danforth Commission) to evaluate entitlement programs, specifically Social Security and Medicare. The Commission never reached consensus and couldn’t get all members to agree on even an Interim Report. Subsets of the commission members made their own proposals. None gained any traction, nor action.

    February 5, 2005: President George W. Bush made a reform recommendation to add personal accounts and change the COLA. These proposals triggered great criticism and no action was taken.

    In 2010: President Barack Obama created the bipartisan National Commission on Fiscal Responsibility and Reform (often called Simpson-Bowles) to recommend fiscal reform including recommendations regarding Social Security. The Commission first met on April 27, 2010. Despite widespread popular support, the report failed to get enough support to send it to Congress for approval.

    June 1, 2016: President Barack Obama reminded us that Social Security’s finances needed strengthening. “We should be strengthening Social Security. It’s time we finally made Social Security more generous and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned.” No proposal was ever made.

    The Social Security/Medicare Trustees project that the OASDI (Old Age Survivors and Disability Income) trust funds will be depleted in 2032 – 2034 and that the Medicare Hospital Insurance trust fund will be depleted in 2025 – 2026.

    As recently as October 17, 2018, President Donald Trump was quoted by the Associated Press as stating: “I’m not touching Social Security.”

    So, it seems obvious that our presidents and congressional leadership have known about inadequate funding of Social Security and Medicare trusts for decades and have failed to take action to either reel in promised benefits or to increase funding via taxation.

    Dick, per your note, I contacted my senators, Sherrod Brown and Rob Portman, here in Ohio, and self-nominated myself to be a Social Security/Medicare Trustee. You should contact your senators in New Jersey – as we need two public trustees to provide guidance from outside the beltway.

    Two Public Trustee positions on all three Boards were created in the 1983 Social Security Amendments, based on a recommendation of the Greenspan Commission aimed at increasing public “confidence in the integrity of the trust funds.” The two public trustees are nominated by the President, confirmed by the Senate, and may not be from the same political party. They serve for a term of 4 years, but may continue to serve after their term expires until the next annual report is issued or successors are confirmed, whichever occurs first.

    I have voted in both D and R primaries here in Ohio since 2008. So, I can swith-hit – filling the role of whichever party you are not a member of.

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  2. 2033 is a long time off in Congress terms. They will work on SSA after the next election. The hang up is the increase in taxes that will be needed and benefits will probably start later. This creates a howl from AARP and the like. There is no stomach for the fight. Borrowing the necessary funds is much easier per the average congress person.

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    1. That’s what we have been saying for the last ten Congresses. If they had taken action ten years ago the tax increase would be hardly noticed.

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  3. As long as a significant number of people believe the earth will become uninhabitable within 15 years, worrying about Social Security seems moot. Of course, it is utter nonsense to believe the earth will die, but there is no collective wisdom in Congress to address genuine problems.

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