Publisher's Perspective

The phrase “everybody talks about the weather but nobody does anything about it” is widely attributed to Mark Twain, although he never claimed to have originated it. It’s not in his writings, and versions of it were in general circulation years before the first recorded mention of him saying something like it.

No matter: the thought is a good one and has been applied to many other situations to express the futility in recognizing a problem but being unable to act on it. That’s been the case even with Social Security, which has a well-recognized funding problem that has gone unaddressed for decades.


The difference is that addressing that problem is not a question of ability, but of willpower. And the consequences go far beyond being inconvenienced by heat or cold or rain or the lack of it.

The last time Social Security faced a similar problem, in the early 1980s, a bipartisan commission laid the groundwork for a law that among other things brought more money into the program by raising the payroll tax and requiring that newly hired federal workers pay into the program through a new creation called the Federal Employees Retirement System. It also made benefits partially taxable above certain income levels, steering that money back into the program, and phased in an increase in the age for drawing full benefits.

Even then, it was recognized that the fix was not permanent. At the time, the Baby Boom population bulge was just entering its peak earning years, with more money being paid in than was being drawn out and building up a surplus in the trust fund over three decades. But inevitably workers become retirees, which began a decade ago for that generation.

For the last dozen years, Social Security has paid out more than it has taken in from payroll taxes, and the surplus will be exhausted in about the same number of years into the future. At that point, the program will be taking in only about 75 percent of what it needs to cover projected outlays.

This is not a theoretical exercise for what already is some 65 million beneficiaries, many of whom rely on it as a major, if not the only, source of their retirement income. Nor is it something that can just be glossed over. Notes a recent Congressional Research Service report:

“Under current law, Social Security does not have authority to borrow from the general fund of the Treasury. Therefore, the program cannot draw upon general revenues to make up the difference between incoming receipts and benefit payments when the program no longer has asset reserves to draw upon.”

“The Social Security Act does not specify what would happen to the payment of benefits scheduled under current law in the event of Social Security trust fund depletion. Two possible scenarios are (1) the payment of full monthly benefits on a delayed basis or (2) the payment of partial (reduced) monthly benefits on time.”

The solution is straightforward enough: increase income, slow the growth of outlays or both—preferably in some combination to lessen the pain of any one change. There are many ways to approach each. To name just a few, the age for drawing full benefits could be increased yet again; the payroll tax could be raised or applied to more income; and inflation adjustments could be limited.

Every year that date ticks a little closer and the options get a little more painful as neither political party wants to take responsibility for action, obvious as the need for it is. The idea of a bipartisan committee providing the political cover to actually accomplish something significant seems rather quaint today, sort of like a story about a bet on which of two frogs can jump farther.

But there is a stirring in a Social Security reform bill that has drawn some bipartisan support in the House. The measure was the subject of a favorable hearing in December, a possible prelude to trying to advance the bill this year either as a freestanding measure or as an attachment to another bill.

The measure would bring in more money by reinstating the 6.2 percent payroll tax, which for 2022 cuts off at $147,000 in earnings, for earnings above $400,000. Sponsors anticipate that later legislation would be enacted to make income between the two levels also subject to that tax.

Other features of the bill however would increase outlays. It would use a more generous formula for determining benefits; base inflation adjustments on an index tailored to the spending patterns of retirees, also resulting in a projected increase; set a new minimum benefit for those with low career earnings; end the waiting period before receiving disability benefits; and extend children’s dependent benefits to age 26.

And of particular interest to current or future retirees under the Civil Service Retirement System, it would eliminate two reductions in Social Security benefits also enacted as part of the last reform—the “windfall elimination provision” and the “government pension offset”—which reduce Social Security benefits of those receiving annuities from a retirement program that does not include Social Security, such as CSRS.

Whether all that could be done and still put Social Security on a stronger financial footing is yet to be determined. Making earnings above $400,000 subject to the payroll tax would just be a start. But at least it would be a move from talk to action.

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