What would FDR do to fix Social Security? Maybe not what many of today’s Democrats might think.

With the Social Security Trustees Report to be released today, the question of how to fix the program gains new visibility on the national radar screen. Sylvester Schieber, a noted expert on retirement policy and former head of the Social Security Advisory Board, asks “What would FDR do?” The answers, I thought provide some real insight. Writing for the Progressive Policy Institute, Syl begins:

"In recent months, Jack Lew, director of the White House Office of Management and Budget, and Senate Majority Leader Harry Reid have asserted that Social Security is not part of the federal budget problem. The federal government’s biggest program, they say, has ample resources to cover legislated benefits over the next 25 years. Therefore, lawmakers need be in no hurry to tackle Social Security’s long-term funding gap."

"As a long-time analyst of U.S. retirement policy, I believe these claims are fatally flawed. In fact, Social Security’s financing costs already are adding to the federal government’s overall debt burden. Moreover, the longer we wait to rebalance the program, the higher the economic and political costs of the adjustments that must be made."

"From a progressive perspective, I find it disconcerting that, instead of strengthening Social Security for future generations, leading Democrats are instead finding excuses not to deal with the system’s real but quite manageable fiscal gap. Having studied and written about Social Security’s history, I can’t help but compare such evasions with the rigorous sense of fiscal responsibility and intergenerational justice shown by the system’s creator, Franklin D. Roosevelt."

Schieber then illustrates how Roosevelt might have felt about our current situation:

"In the early 1930s, Roosevelt openly criticized and opposed two popular national retirement plan proposals because they included financing that would create significant future liabilities for taxpayers and the federal government. In early 1935, as FDR reviewed the initial draft of the legislative package which established Social Security, he discovered the plan would result in projected cash deficits beyond 1960 and that the system would require outside funding beyond the payroll tax by 1980. He felt that it would be “dishonest” to set up a program that would create burdens for future congresses and presidential administrations to deal with, burdens that would limit their ability to manage the government’s fiscal operations or other obligations. He understood the fundamental truth of any publicly-financed, universal retirement system: the government’s costs ultimately would have to be borne by workers. FDR therefore demanded that his own administration’s Social Security proposal be altered so the program would be fully financed through the end of the projection period, then 1980, and be balanced at that time."

The whole article is really well worth checking out – very good stuff.

I myself asked what FDR would do, in the context of President Obama’s proposals to address Social Security, here. A common thread of both articles is how contexts have changed over time, even for those who see themselves as inheritors and protectors of FDR’s vision.