We usually associate a mountain of debt with our massive and growing federal deficit. But the cartoon also illustrates what is calculated to be in store for our Social Security system unless we make changes. Click on this line chart to see “Social Security Revenues and Outlays, 2010-2085.” As the Committee for a Responsible Federal Budget (CRFB) states, this graph “shows outlays and revenues of the Social Security program projected for future years, with revenues staying flat and outlays increasing significantly.” The post and graph summarize main points of The 2010 OASDI Trustees Report, released August 5. The CRFB’s Analysis of the 2010 Social Security Trustees Report provides added insights and emphasizes again the point that Social Security is on an unsustainable path. Let’s quote from the CRFB summary:
According to the Trustees report, Social Security will run a cash flow deficit of $41 billion (0.3 percent of GDP) this year, will return to small surpluses in 2012-2014 of a few billion dollars a year, and then will begin running increasing deficits from 2015 onward. By 2020, the system will run a cash flow deficit of over $100 billion (0.4 percent of GDP) and by 2030 it will have a shortfall of nearly $460 billion (1.2 percent of GDP).
Shortly before the Congressional Budget Office (CBO) released The Long-Term Budget Outlook which is also discussed by CRFB here and which the CBO director also summarized in his blog. The director notes:
All told, CBO projects, the aging of the population and the rising cost of health care will cause spending on the major mandatory health care programs and Social Security to grow from roughly 10 percent of GDP today to about 16 percent of GDP 25 years from now if current laws are not changed.
(The emphasis on Social Security is mine.)
Following this dismal report, the CBO published Social Security Policy Options, also summarized by CRFB. This report’s Figure 3 is the source for the the line graph referenced above, and here for good measure is another version of the same:
The CBO devised 30 policy options to deal with the projected Social Security deficits, and again the director’s blog provides a summary of these options that fall into five categories:
All of these options would require sacrifice of some kind, but we don’t have the option of continuing on our current path. As the director explains:
In 2010, for the first time since the enactment of the Social Security Amendments of 1983, Social Security’s annual outlays will exceed its annual tax revenues, CBO projects. If the economy continues to recover from the recent recession, those tax revenues will again exceed outlays, but only for a few years. CBO anticipates that starting in 2016, if current laws remain in place, the program’s annual spending will regularly exceed its tax revenues, and beginning in 2039 the Social Security Administration will not be able to pay the benefits currently specified in law. If revenues were not increased by that point, benefits would need to be cut by about 20 percent to equalize outlays and revenues.
And all of this prelude brings us to a recent comment made by Lynn Woolsey. She, jointly with her Progressive Caucus co-chair, wrote a letter to President Obama’s deficit commission demanding no Social Security benefit cuts or reductions in coverage age:
We write to express our strong opposition to any potential proposal from your commission that would undermine Social Security by reducing benefits, increasing the retirement age, or privatizing elements of the program.
Social Security runs an annual surplus of $100 billion, and is by law prohibited from incurring any debt that would contribute to the national deficit. Because Social Security is not the cause of our national deficit, attempts to reduce it by cutting benefits would be misguided.
For 75 years, Social Security has been a promise to the American people that if they work hard and pay their share, they will have a financially secure retirement. This promise includes Supplemental Security Income (SSI), survivor benefits and retirement benefits. In communities across this country, Social Security benefits are often the only thing helping families maintain a decent standard of living. We will not allow the commission to reduce Social Security payments, especially during an economic downturn that has wiped out trillions of dollars in net worth around the country.
These so-called progressives. Note especially paragraph two above where they insist an annual $100 billion surplus exists. Now look again at the CBO assessment:
In 2010, for the first time since the enactment of the Social Security Amendments of 1983, Social Security’s annual outlays will exceed its annual tax revenues,
Again, emphasis mine. But this is a perfect example of where Lynn Woolsey and others in Congress refuse to accept the fiscal facts of life and want to continue profligately spending. Rep. Woolsey would apparently rather crash Social Security while maintaining full benefits than take reasonable actions to preserve it long term. This is fiscal irresponsibility we cannot afford. We cannot be represented by an ideologue who refuses to understand the practical realities of our precarious financial predicament both currently and in the foreseeable future.