Writing for e21, Social Security public trustee Chuck Blahous asks whether it is too late to save Social Security as a self-financing program, meaning an independent system that supports itself from payroll taxes rather than general tax revenues.
Blahous points to three roadblocks to reform: first, the Baby Boomers are now beginning to retire, rapidly increasing costs for the program; second, neither political party has shown the ability to compromise, which will be necessary under most foreseeable political circumstances; and third, many political leaders fail to treat Social Security’s financial problems with the seriousness they deserve.
Social Security has gained political strength by being independent and self-financing, but over time the payroll tax increases or benefit reductions needed to restore solvency may be more than our political processes can handle. As a result, it may be inevitable that Social Security ends up financed with general tax revenues, ending the claim that Social Security is an ‘earned benefit” and making the program compete with the rest of the budget for resources.
Blahous says, “If this all happens, and renders tomorrow’s Social Security benefits less secure than today’s, it would be a tragic irony: the outcome would have been brought about largely by supporters of Social Security having countenanced the tactics of delay to the point that the program’s unique political protections could no longer be preserved. Those who care about the Social Security program need to clearly understand the consequence of this ongoing neglect; that time for a realistic financing solution has nearly run out.”