Working to find actionable solutions to the nation's key challenges.

Blahous and Reischauer: Why this Social Security budget nightmare must be resolved now


Monday, July 10, 2017

Share on FacebookTweet about this on TwitterShare on LinkedInPin on PinterestShare on TumblrEmail this to someonePrint this page

Lawmakers in Washington are consumed in bitter partisan battles over healthcare, tax, budget, and infrastructure policy, disputes that threaten to sever any remaining threads of bipartisanship. But when the Trustees of the Social Security and Medicare trust funds release their 2017 reports, expected this summer, the nation will be reminded that we face an even more consequential policy challenge: How to ensure that Social Security and Medicare will be able to provide reliable support to the millions of elderly and disabled Americans who are counting on benefits. Bipartisan cooperation and trust are essential to meeting this challenge.

The House Ways and Means subcommittee on Social Security has set a hearing for Friday July 14 on the status of the trust funds.

In their 2016 reports, the Trustees warned that the trust funds supporting disability, hospital and retirement/survivors benefits would be depleted in 2023, 2028, and 2035, respectively. The reports also outline the size of the benefit cuts that would occur if the trust funds are allowed to run out. Disability benefits would be cut by 11 percent, hospital insurance payments would be reduced by 13 percent and retirement/survivor’s benefit reductions would be an unthinkable 21 percent. There is no reason to think that their 2017 reports will tell a fundamentally different story…

It is difficult to imagine any bipartisan solution that will not require some balance of increased taxes and, at least for some, moderation of benefit growth. We and the other members of the Bipartisan Policy Center’s Commission on Retirement Security and Personal Savings certainly found this to be true when developing consensus Social Security policy recommendations.