Social Security is the oldest and most popular federal income support program, and after more than 80 years, it might seem as permanent as the pyramids. But the pharaohs did better long-range engineering than the architects of the New Deal did. A 2015 Gallup Poll found that 64 percent of millennials don’t think the program will be able to pay benefits when they retire. The other 36 percent may not have been paying attention. The doubts are similar among those in the 30-to-49 age range.
The fearful ones have good reason to be concerned. Right now, the program provides retirement and survivors’ benefits to some 50 million people. Every year since 2010, Social Security revenues, excluding interest earned, have been lower than payouts, and things promise to get worse. Last week, the system’s board of trustees reported that it is still on track to insolvency.
In the past year, the program’s unfunded liabilities have grown from $11.4 trillion to $12.5 trillion. Given current trends, the Social Security retirement fund is expected to run out of money in 2034, a mere 17 years from now. The very modest good news is that’s the same year it was expected to run out in last year’s report. We’re moving, but the cliff we’re headed for is not.
The problem is simple. Our leaders have been piling up unfunded liabilities. Politicians have been far more eager to channel benefits to retirees and disabled people than to impose taxes to pay for them.
The Social Security payroll tax rate has not increased since 1990. But in the interim, the giant baby boom generation has begun its migration into retirement. Because of rising life spans, they will be collecting checks for many more years than their parents and grandparents did.
The trajectory of the workforce — the taxpayers who finance the benefits — is not matching this growth. In 1990, there were 3.4 workers per retiree. Today, there are 2.8. By 2035 — barring, say, a flood of young immigrants — there will be about two.
Each year, the choices get worse. The best time to address this looming crisis was long before now. The next best time: ASAP.
FROM AN EDITORIAL IN THE CHICAGO TRIBUNE