News that Social Security will pay out more money than it will bring in this year has economic analysts scrambling. Does this mean the death of the social security system? A stalwart of America's social services since it was first passed into law in 1935, social security includes unemployment benefits and other important strands of the social welfare fabric. What can we do?
- How Did This Happen? The New York Times interviews Stephen Goss, the chief actuary of the Social Security Administration. "The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program's revenue has fallen sharply, because there are fewer paychecks to tax."
- It's Doomed, So Is Medicare The Atlantic's Megan McArdle says, "This is the canary in the coal mine; if Social Security's finances are in trouble, Medicare's will also be looking worse. [...] This is how it starts--not with a bang, but with a moderate decline in revenues."
- Fixes Just Waiting for Implementation Brookings' William Gale is optimistic. "This is not a hard problem to solve. It can be done without imposing substantial hardship on taxpayers or beneficiaries." He suggests, "an expansion of payroll tax revenues, an increase in the retirement age, and a twisting of benefits to focus scarce resources where they are most needed. Of those, probably the single most important change is to raise the retirement age."
- This Means It's Broke Conservative blogger Ed Morrissey explains, "The program has no hard cash of its own. As it falls into the red, benefits have to be paid through borrowing, whether the SSA does it directly or Treasury does it indirectly. Congress spends it all every year in order to cover its own deficits, or at least make those deficits look better than they would otherwise."
- No Reform This Year The Atlantic's Derek Thompson makes the case, "The Democratic House and Speaker Nancy Pelosi have just delivered to Obama a political miracle with health care reform. Can you see the administration expressing its thanks by forcing the liberal House caucus to draw up a plan to cut benefits to seniors in a fraught election year?" he asks. "The whole thing just screams non-starter."