Endangering Social Security — and America’s fiscal future
No question: The election of 2018 is about what kind of country we want to be. But our president’s war on social comity obscures another long-term threat to our democracy — our bipartisan failure to stabilize our entitlement programs and, more broadly, to prevent our public finances from imploding.
The tip of our fiscal iceberg is Social Security. As baby boomers crowd the system, it absorbs resources for other urgent priorities, present and future. According to the Committee for a Responsible Federal Budget, Social Security will begin running deficits before reaching insolvency by 2034. At that point, the choices become drastic cuts in benefits, massive tax hikes, or slashing other programs — or all three.
The only responsible fix is to address the problem now, reassuring all Americans that the system is sound, while minimizing the impact on benefits for those nearing retirement. By contrast, the draconian measures necessitated by delay would punish future generations — cutting benefits, the 2018 report of the Social Security Trustees estimates, by 21 percent in just 16 years.
Instead, both parties have embraced a fiscal fecklessness reminiscent of late-Imperial Rome.
The GOP’s malpractice is prodigious — and obvious. Their fixation on massive tax cuts has created a budgetary time bomb — most recently, the Office of Management and Budget calculates, by creating annual deficits exceeding one trillion dollars. They justify this profligacy by conjuring fantastical growth projections which, once they failure to materialize, will require a fiscal straightjacket that strangles existing programs while preventing new ones altogether.
For Republican ideologues, this is not an accident, but a stroke of brilliance, reflecting the famous aspiration of the anti-tax crusader Grover Norquist to make government so small that conservatives could drown it in the bathtub. On this basis alone, many Republicans wish Social Security ill. Others simply wish the problem away — intimidated, quite often, by Democratic accusations of callousness toward the elderly.
By contrast, Democrats are the party of Grandma and Gramps, noisily dedicated to protecting their benefits while sheltering these beloved seniors from unpleasant realities which might cloud their twilight years. Such as the fact that the system, if not fixed, will screw their kids and grandkids. By their calculated exploitation of scare tactics and strategic silence for electoral gain, the Democrats have helped infect the discussion of entitlements with a pervasive political cowardice. Just as pernicious is their irresponsible political calculus surrounding budgetary matters: because the Republicans have sold tax cuts by advancing a potentially calamitous fantasy of economic growth, Democrats should promise sweeping new initiatives without addressing how to pay for them.
As Robert Samuelson notes, “The irony is that the pro-government (Democratic) party is, quietly, weakening government by its staunch support of Social Security and Medicare, which systematically squeezes other programs . . . We are passing along to our children a governmental apparatus that invests heavily in the past and short changes the future.” The perverse result, Samuelson argues, is that “liberals and progressives have become unwitting instruments to squeeze or cripple many vital government programs.”
Both parties need to reimagine Americans as sentient adults. In terms of entitlements, that means making modest revisions in the social contract to reflect our changing demographics. With respect to our public finances, it means squarely facing that we must prioritize, and pay for, government programs which provide security and stability for our citizens at large — now, and in the future.
How do we reestablish contact with reality? Start with Social Security. Some superficially plausible solutions are unfair: Drastically raising the retirement age punishes Americans in physically demanding jobs. Substantially cutting benefits harms low income workers. Privatizing Social Security investments exposes the vulnerable to unacceptable risk.
Budget expert Alice Rivlin suggests better approaches. Gradually increase the amount of wages subject to payroll taxes. Change the cost-of-living adjustments for benefits to more accurately reflect inflation. Slightly reduce the growth in benefits for the top 25 percent of beneficiaries. Raise the minimum benefit for lower wage earners, and grant the most vulnerable elderly a modest increase. Such measures could right the system without serious social dislocation, while staunching its fiscal damage overall.
The cadre of Americans most concerned with such reforms, the young, are also the natural audience for addressing our larger budgetary landmines — specifically, that increasing levels of debt cripple economic growth and strangle programs like debt relief and affordable college.
Trillion-dollar deficits lead nowhere but to political calamity and societal ruin. The political character test is clear: keep trolling for short-term advantage in a present that is unsustainable, or start advocating policies that provide for America’s future.