Can Congress gets its act together to fix Social Security?
Will Social Security become yet another victim of today's raging partisanship? Credit: AP / Jenny Kane
Bad news for the retirement set arrived this past week: Social Security faces a funding shortfall.
The looming gap described in the program trustees' annual report was not itself news. Similar warnings have been issued for years. What's different is that the due date was accelerated by a year, from 2033 to 2032. That's a mere six years away.
If nothing is done before then to address the problem, Social Security's combined trust funds for old age and disability recipients will only cover about 83% of scheduled benefits. The fallout would be seismic.
In the past, I would react to such dire projections by preaching patience to the doomsayers. I would blithely and confidently pronounce that Congress will act when it has to, just as it did in 1983 when Social Security faced another serious shortfall. No group of federal lawmakers, I would declare, would be irresponsible or dumb enough to diminish the nation's largest social insurance program which happens to benefit primarily the nation's most loyal group of voters.
Now I'm not so sure.
Now I wonder whether Social Security will become yet another victim of today's raging partisanship — a poison that has largely obliterated the instinct to collaborate on critical matters that once was a hallmark of Congress. Now I wonder whether the rancor between our political parties will lead them to touch what Speaker of the House Tip O'Neill and aide Kirk O'Donnell in 1982 famously dubbed the third rail of politics. The metaphor was apt. Touching Social Security by reducing benefits was seen as political suicide; O'Neill was among the major players in shoring up the program in 1983. I wonder whether today's performative politicians in their gerrymandered seats see a similar urgency, or whether progressives want to salvage something they see as expanding income inequality.
The stakes are just as high. Nearly 90% of Americans 65 and older receive a Social Security benefit, according to the Social Security Administration. More than 40% of those beneficiaries get more than half their income from Social Security. The check is more than 90% of income for 12% of men and 15% of women 65 and up who are recipients.
The anticipated 2032 benefits cut of 17%, should no action be taken, would be catastrophic for many seniors already struggling in an increasingly unaffordable economy.
There is more motivation for a self-interested Congress to act: Boomers are about one-fifth of the nation's population. The youngest will turn 64 in 2028, the next presidential election year. In the 2024 election, voters 65 and over had the highest turnout rate — 75%.
There is no lack of solutions. Ideas, in fact, abound. Congress could increase or eliminate the $184,500 limit on earnings subject to the Social Security payroll tax. Fringe benefits could be subject to the payroll tax. The tax rate itself could be hiked modestly. Raising the age at which one can collect full benefits, especially for higher earners, could be appropriate as life expectancy for older Americans keeps rising. More controversially but indisputably effective: Raise legal immigration levels to increase the number of taxpaying workers, a serious problem in an aging country with a low birth rate.
A lot will depend on who is sitting in the White House from 2029-2033. Will the winds emanating from the Oval Office be at the backs or in the faces of reformers? They all should remember that Social Security is a compact between Americans and their government, and between all Americans. We pay into the system throughout our working lives in return for a guaranteed income in retirement. Many people, myself included, slavishly check their benefits reports year after year trying to determine the best time to retire. Many of those decisions are based on the projected Social Security income.
Our obligation to seniors is profound. Congress has six years to meet it, and to prove that bipartisanship is still possible.
Columnist Michael Dobie is a retired member of the Newsday editorial board.
Michael Dobie is a retired member of the Newsday editorial board.
