Protecting the Legacy of Social Security for Future Generations
Social Security reached a major milestone on August 14 — its 80th birthday. This moment gave all of us the opportunity to celebrate and reflect on the great history and importance of the program to workers and their families. President Franklin Roosevelt signed the Social Security Act into law on August 14, 1935, creating a safety net for our most vulnerable citizens, and protecting them from what he eloquently called the “hazards and vicissitudes of life.” Eighty years later, Social Security remains an essential part of the fabric of American life — providing income security for nearly 60 million people across the country today, including seniors, survivors, people with disabilities, and their families.
But, if we don’t take meaningful steps to strengthen the program for future retirees, the Social Security trust funds will run out of money before the program even reaches its 100th birthday. In fact, the Social Security Disability Insurance Program (SSDI) currently doesn’t have enough money to pay full benefits even for the next two years, which is why the Social Security trustees have warned that it “faces an urgent threat of reserve depletion, requiring prompt corrective action by lawmakers if sudden reductions or interruptions in benefit payments are to be avoided.”
Although the retirement program is in somewhat better shape in the near-term, the aging of the population and retirement of the baby boom population is leading to persistent deficits in that program — about $75 billion of deficits in this year alone. Without action, the combined trust funds will likely run out of funds in the early 2030s, leading to an immediate 20 to 30 percent across-the-board cut for all beneficiaries regardless of age or income. We can’t afford to let that happen, which is why lawmakers should work together to reach a bipartisan solution to fix the program’s long-term finances.
Luckily, there are many ways to strengthen Social Security for future beneficiaries. For example, lawmakers could slow the growth of initial benefits for higher earners, adjust the retirement age for growing life expectancy, adopt a more accurate measure of inflation for cost-of-living adjustments, raise the payroll tax rate, or increase the amount of income subject to the payroll tax.
The Committee for a Responsible Federal Budget has created an interactive tool, The Reformer, which allows anyone to design a plan that keeps Social Security sustainable for future generations.
Unfortunately, the longer we wait to act, the fewer choices there will be — and the more pain they’ll cause. If we want Social Security to prosper for another 80 years, the time to act is now.
Note: In honor of Labor Day, we have invited Maya MacGuineas and Nancy Altman as guest bloggers on Social Security Matters. We thank them for taking the time to share their narratives with our followers and allowing us to showcase the diversity of individuals in support of Social Security on this important holiday. Have a wonderful Labor Day Weekend!