I read with some interest today’s Washington Post commentary A Social Security Fix for 2008 by former Social Security commissioner Robert M. Ball. He claims that there’s a way to solve the Social Security problem without cutting benefits and without raising taxes.
He’s flat out wrong.
Mr. Ball spends about 2/3rds of his commentary decrying the current state of Social Security. And there’s no denying that he makes his point – Social Security is in bad shape. Rising Medicare costs are being deducted from Social Security payments and the age of eligibility is gradually increasing, effectively cutting benefits in the process. But Mr. Ball fails to point out the single largest problem that Social Security faces, namely the great demographic earthquate that’s starting as the Boomers are hitting retirement age.
His three point solution to “saving Social Security” doesn’t do a damn thing. He wants us to increase the maximum amount of earnings covered by Social Security because it’s been sagging in recent years. He wants Congress to allow the Social Security Administraiton to invest up to 20% of its holdings in securities, but offers no means by which to defray the potentially massive losses should the markets (stock and bond) crash and burn. And he wants to pay for keeping Social Security up and running by re-allocating some of the money brought in by the estate tax (aka the Paris Hilton tax) to Social Security instead of putting it into the general fund.
OK. But that doesn’t actually solve the Social Security problem. The problem with Social Security was calculated to be about $3.7 trillion over the next 75 years (not the $11 trillion shortfall that Bush claimed in 2005). Over the same period, the Center for American Progress estimates that the revenues from the estate tax will offset only 40% of that 75 year cost, or about $1.5 trillion. And this is assuming that Mr. Bell’s first suggestion doesn’t happen.
As a country, the United States faces a major problem – we cannot afford all the programs we have now, today, and will be even less able to afford them in the future. Allocating money from the estate tax directly to Social Security means that the general funds are no longer available for Medicare, or Medicaid, or decarbonizing our carbon economy. Borrowing from Peter to pay Paul is hardly sound financial advice, and that’s what Mr. Bell is advocating.
What we need are leaders, and commentators, who are willing to advocate for the hard choices that we’ll need to make as a country. Mr. Bell has illustrated quite pointedly that, prior experience notwithstanding, he is not qualified to be that advocate.