Social Security’s Problems Are 20 Years Away, Not 75 Years

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

Matt Yglesias is unimpressed with Dick Durbin’s proposal for a new commission to insure the long-term solvency of Social Security:

If people want to waste their time on this, I don’t have a huge objection to the idea of somewhat higher taxes and somewhat skimpier benefits, but I think it’s pretty silly. Recall that 75 years ago was 1937. Any minute spent in 1937 worrying about actuarial projections about 2012 as opposed to, say, Adolf Hitler or the Great Depression would have been a minute wasted.

….The deal worth trying to make on Social Security would be a deal that found a way to take the program outside the somewhat fantastical realm of trust fund accounting. Assessing the “affordability” of a social insurance scheme in terms of the state of its associated accounting instruments rather than the capacity of the economy to carry the load is very misleading. The actually policy question at any given time is what share of national resources should go to raising the living standards of the elderly.

I don’t want to make this blog into Social Security Central, especially since I’m not super committed to finding a deal right this second. Still, this deserves some pushback. First, we aren’t talking about a 75-year horizon. The latest projection from the trustees shows the Social Security trust fund running out of money in 2033. That’s only 20 years away, considerably closer than Matt’s own retirement, which I assume he’s already planning for. At that point, Social Security benefits will suddenly drop 25% unless we do something about it.

Now, this projection might be wrong. The Great Recession has done a lot of damage to the trust fund projections, but we won’t be in a recession forever. And these projections have been inaccurate before. However, although these are all arguments I’ve made myself in the past, I no longer believe I was right about them. The truth is that 20 years isn’t a long time, and it’s unlikely that the projections are off by more than a decade at most. This is a problem that’s worth addressing.

Second, getting outside the realm of trust fund accounting is precisely what a deal would be about. Regardless of what you think about the trust fund, it’s only going to last another couple of decades. After that, Social Security will have to be properly financed on a cash basis. This means that tax income in any given year needs to match benefit payments in that year. That’s what this entire issue is about.

So: a Social Security deal would allow the program to operate without the trust fund, and it would keep the program solvent beyond the current trust fund exhaustion date of 2033. It would also probably make it solvent for the rest of the century, but that’s just icing on the cake. This is a problem that’s worth spending time on.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate