News that Social Security will pay out more money than it will bring
this year has economic analysts scrambling. Does this mean the
death of the social security system? A stalwart of America's social
services since it was first passed into law in 1935, social security
includes unemployment benefits and other important strands of the social
welfare fabric. What can we do?
- How Did This Happen?
The New York Times interviews Stephen Goss,
the chief actuary of the Social Security Administration. "The problem,
he said, is that payments have risen more than expected during the
downturn, because jobs disappeared and people applied for benefits
sooner than they had planned. At the same time, the program's revenue
has fallen sharply, because there are fewer paychecks to tax."
Doomed, So Is Medicare The Atlantic's Megan McArdle says,
"This is the canary in the coal mine; if Social Security's finances are
in trouble, Medicare's will also be looking worse. [...] This is how it
starts--not with a bang, but with a moderate decline in revenues."
Just Waiting for Implementation Brookings' William Gale is optimistic.
"This is not a hard problem to solve. It can be done without imposing
substantial hardship on taxpayers or beneficiaries." He suggests, "an
expansion of payroll tax revenues, an increase in the retirement age,
and a twisting of benefits to focus scarce resources where they are most
needed. Of those, probably the single most important change is to raise
the retirement age."
- This Means It's Broke Conservative blogger Ed Morrissey explains, "The program has no hard cash of
its own. As it falls into the red,
benefits have to be paid through borrowing, whether the SSA does it
directly or Treasury does it indirectly. Congress spends it all every
year in order to cover its own deficits, or at least make those deficits
look better than they would otherwise."
- No Reform This Year The
Atlantic's Derek Thompson makes the case,
"The Democratic House and Speaker Nancy Pelosi have just delivered to
Obama a political miracle with health care reform. Can you see the
administration expressing its thanks by forcing the liberal House caucus
to draw up a plan to cut benefits to seniors in a fraught election
year?" he asks. "The whole thing just screams non-starter."
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