DEC 14, 2023
Marc Goldwein is senior vice president and senior policy director of the Committee for a Responsible Federal Budget. Chris Towner is policy director at the Committee for a Responsible Federal Budget. They recently wrote an opinion piece for DC Journal, an excerpt of which is below.
In just 10 years, Social Security will be insolvent. Some politicians think we can ignore the problem or grow our way out of it — but that’s a recipe for disaster.
Without action, the law calls for an immediate 23 percent across-the-board benefit cut upon insolvency. That’s a $17,400 cut for a typical 67-year-old couple retiring in 2033 and an even more devastating cut for current low-income retirees who count on the program.
Politicians would be clamoring to avoid this cut in a more normal world. Democrats would be focused on how to get more revenue into the system. Republicans would advocate for bringing cost growth under control. The two sides would agree on the need to target any changes on those who can afford them most and would be open to compromise for the greater good. And both would demand we act soon to stave off this potential crisis.
Sadly, the real world is far more dystopian. In the State of the Union address earlier this year, President Biden declared Social Security should be “off the books” for discussion. Former president Donald Trump has similarly promised not to touch Social Security. And in a recent Republican presidential campaign, half the candidates gave bogus do-nothing answers for how to save it.
Read the entire piece here.
Committee for a Responsible Federal Budget
QUINNSCOMMENTARY 
Liked the long list of suggested changes.
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There is a bipartisan solution that would be acceptable to all Americans.
It starts with telling the people the truth: (1) All benefits come from taxation, we can’t promise more and send the bill to the French, (2) By definition, some must pay more, sometimes much more than they will ever receive, so that others can receive benefits in excess of their taxes, (3) This is an intergenerational transfer of wealth, where Congress has pinned a debt on future generations – just as the silents and baby boomers funded the benefits for the greatest generation, so must Gen X and Gen Y fund the Baby Boomers – unless somehow magically, Congress wants to change that scheme.
The solution requires the above admissions, and confirmation to those who are already retired and those who are still working that you, all of us, didn’t pay enough in taxes. The next step is simply to come up with alternatives, sort of a grab bag of new taxes and reductions in benefits – a variety of options.
Then, you implement the change in five steps:
1. First, you change the system from an entitlement to a contractual relationship, so that individuals are confident that there is a benefit, backed by the full faith and credit of the American government (all taxpayers taken as a group),
2. Second, you freeze the current benefit formula, so that you have a stable, non-moving target, so that any increase in benefits, when Congress is out buying votes, comes as welfare or some other program,
3. Third, you raise taxes for everyone, both those who are working and those who are no longer working, but who didn’t pay enough taxes when they were working,
4. Fourth, you give every American alternatives to the increased taxes – to the extent you would rather take a cut in benefits, or have some combination of increased taxes and benefit cuts, so be it,
5. Fifth, the prices for each of the alternatives in part 4 are loaded” for anti-selection, and then the prices are adjusted each year based on actual experience. The prices are set so that the program will be adequately funded, sustainable, from an actuarial basis, measured as of the next year, in three years, in five years, in ten years, in 20 years, in 25 years, in 50 years, and in 75 years (essentially, for everyone alive as of the evaluation date),
6. Sixth, each and every American gets an annual notice each November, to confirm the added taxes, always shown as a separate number in addition to the other features, where every American can change their mind and select a different combination of increased taxes and/or reductions in benefits each year.
I have found that if you get to “pick your own poison”, where you were told the truth, where it is confirmed that taxpayers/beneficiaries must fund everything, that it is a contractual relationship, that the benefit is defined, and cannot be taken away or reduced (except by your own action), and that you get to choose your alternative, that there will always be a greater level of acceptance – at least when compared to what Congress/Reagan did in 1983 which was a bunch of arbitrary changes, mostly designed to buy votes (one time changes for beneficiaries, a lifetime of changes for everyone else, and no contractual commitment).
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Interesting, I think I may use some of this.
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Don’t be so self centered on the needs of the old people!
It’s a much larger problem than just the Social Security program. Congressionally approved mandated programs already on the books can not possible be fully funded in the next decade or two. Taxes would be prohibitive to fully fund the existing programs. And the existing federally administered programs won’t be cut. Exorbitant defense and national security funding won’t be cut.So what is the answer??? I guess let the dominos fall! Yea…. that’s it…just let the dominos fall……oh well…..
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Spending by the Departments of HHS and SS spend three times as much as DOD.
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I guess you believe the numbers accuracy of the “Congressional Budget Office”?
And that it’s not motivated to be misleading to put out less disatrous figures to save their jobs so as to sustain continued excessive federal spending?
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What happened to BIDENS plan to tax incomes over 400000? That would bring in a fresh pile of cash. Given the annual increases in taxable incomes for SSA, the gap between 160000 and 400000 would be closed by 2034
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You’ll have to ask your member of Congress. If that change is made Social Security remains insolvent. The trust funds will run out in 2046 at which point all beneficiaries will face a sudden 7% benefit cut.
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If the Congress allows the cuts to SS you’ll see a lot of Congressmen hanging from the top of the Capitol.
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All ponzi schemes eventually unravel but this one has the feds taxing and printing money. No insurance company or pension fund could manage to survive managed like we have managed this collolus.
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