August is a bittersweet time in Washington. On one hand, since Congress is out of session, taxpayers can breathe a sigh of relief. Lawmakers have taken a break from finding absurd new uses for our money. On the other hand, members of Congress once again take a break from their job of fixing serious issues facing our nation in favor of vacationing, fund raising and maybe attending a few town hall meetings.
The solvency of Social Security is one problem that’s getting worse each and every day that lawmakers spend sipping Mai Tais rather than putting their noses to the grindstone.
The most recent report of the Trustees of the Social Security trust funds revealed a dire reality. Social Security’s retirement trust fund is on track for insolvency in 2034. If the fund is allowed to run out of money, beneficiaries will only receive only a portion of the retirement benefits they expect – just pennies on the dollar.
In fact, optimistic estimates predict that in just 20 years, Americans will collect just 71 percent of the Social Security benefits they were promised.
Many older Americans rely on Social Security for their financial security. Two-thirds of seniors depend on Social Security for a majority of their retirement income, and one-third of seniors rely on it for at least 90 percent of their income. Since lawmakers seem unwilling to consider superior market-based plans to overhaul America’s federal retirement savings system, shoring up the solvency of Social Security is an absolute necessity for seniors.
Despite this, Congress has done absolutely nothing to fix the problems plaguing Social Security that have put the program on the road to insolvency.
A new report released by Our Generation, a nonprofit representing the voice of taxpayers, found that just a few small changes and commonsense reforms by members of Congress and the Obama administration can make the Social Security retirement fund solvent for years to come and pave the way for more structural changes in the future.
Moreover, since Our Generation’s recommendations do not increase the retirement age, decrease benefits or raise taxes, even the most timid federal lawmakers should be able to stomach the reforms.
The effort to make Social Security solvent must begin by funding the program with real money and increasing transparency for beneficiaries.
First, Congress must wall off the trust fund and use only payroll taxes to fund the program. It’s only sensible to fund Social Security with payments made to Social Security.
Next, Congress must replace money that has been taken from the trust fund with real cash. Currently, the trust fund holds a pile of IOUs, rather than stacks of actual cash. While some politicians dispute this fact for political purposes, beneficiaries only need to look to the most recent government shutdown, where there was the possibility that checks would not be sent out because there was no money in the coffers.
Third, legislation is needed to change the law so that the Social Security trust fund is no longer raided and filled with promises to pay and is, instead, filled with real money.
Further, in order to prevent budgetary shell games, Our Generation recommends that any Social Security reform legislation include a section that states that any IOUs in the trust fund should be counted as part of the national debt. Congress would also be wise to add the funding of Social Security to the unified federal budget. These two steps would increase transparency and help American taxpayers understand whether or not the Social Security trust fund is on solid footing or running in the red.
Social Security is a program that retirees have come to rely on, and rightly so. Older Americans spent their lives paying into the program based on the promise that they would one day receive the benefits they paid for.
When Congress returns from vacation, politicians owe it to the hardworking Americans entering their Golden Years to reform the Social Security program in meaningful ways that will protect the retirement security of seniors.
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