Social Security Is Staring at Its First Real Shortfall in Decades. Big Cuts Could Follow. – The New York Times

“The trust fund surpluses were intended to provide a buffer that would give politicians enough time to show some fiscal responsibility,” said Robert D. Reischauer, a former Social Security trustee who was also head of the Congressional Budget Office and is now president emeritus of the Urban Institute. “But the

“The trust fund surpluses were intended to provide a buffer that would give politicians enough time to show some fiscal responsibility,” said Robert D. Reischauer, a former Social Security trustee who was also head of the Congressional Budget Office and is now president emeritus of the Urban Institute. “But the problem is that without an immediate crisis, the politicians don’t have to act. And really, they would rather sleep. So when the crisis eventually comes, as it will, it is likely to be much, much worse because of the delay.”

John Cogan, a professor of public policy at Stanford, said Social Security’s fundamental problem was that benefits had been rising faster than revenue. Cuts, he said, will be unpalatable but inevitable.

“The solution, I think, is to slow the growth in real benefits promised to future recipients,” he said.

Democrats in Congress have suggested[1] an increase in Social Security benefits, accompanied by higher taxes for the wealthy. In combination, the bill’s various measures would eliminate the program’s financial shortfall, according to projections by Stephen C. Goss, the chief actuary of Social Security.

Conservatives continue to push for sharp reductions in the size of Social Security as well as Medicare, saying the United States can’t afford the growing burden of the two “entitlement programs.”

“Entitlement programs in the United States have expanded more than tenfold since their inception, but workers are nowhere near 10 times better off as a result,” the Heritage Foundation said[2] in a May 20 policy proposal. The conservative think tank favors cuts to benefits and siphoning money from payroll taxes into individual investment accounts. That echoes an initiative that President George W. Bush once embraced[3] but Democrats blocked.

There are no signs of an imminent breakthrough, though Professor Cogan said that, as in the past, the impending prospect of benefit cuts “is likely to change the political atmosphere and make it possible to find a compromise.”

References

  1. ^suggested (www.nytimes.com)
  2. ^said (www.heritage.org)
  3. ^embraced (www.nytimes.com)

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