EDITORIAL: Report again highlights need for entitlement reform
Neither of the two presumptive major party presidential nominees wants to seriously discuss Social Security. But political cowardice is no substitute for statesmanship. The longer Congress does nothing, the worse the problem gets for retirees and those nearing retirement.
On Monday, the Social Security trustees released their annual report on the fiscal state of the program. The news could have been worse, but it wasn’t good. Absent reform, recipients will see benefit cuts beginning in 2035. That’s a one-year improvement from last year’s analysis, but the looming cliff remains in view.
The report on Medicare was a bit better. The government health-care program for the elderly is now expected to remain solvent until 2036, five years later than was projected last year.
Simply put, however, these programs aren’t sustainable long term without congressional action. Without that, Social Security will be able to deliver only 83 percent of promised benefits in 11 years, while a dozen years from now Medicare will have the funds to cover just 89 percent of Part A benefits.
But President Joe Biden, his likely Republican opponent Donald Trump and most members of Congress have no interest diving into the deep end of the entitlement debate for fear of angering seniors, who tend to vote. Yet paralysis has consequences and will make it more difficult to phase in any fixes.
Mr. Trump insists vaguely that he will “protect” Social Security and Medicare. Mr. Biden has not yet presented a specific proposal, but he has implied that raising taxes on high earners might shore up Social Security.
Yet tax increases alone won’t address the structural problems. Social Security was created as a generational transfer program. As the American population ages, fewer and fewer workers now must cover the benefits of more retirees, leading to fiscal challenges regardless of tax hikes. Further decoupling contributions from benefits for high-income workers also risks eroding political support for the program.
Other proposals include raising the retirement age and slowing benefit increases.
It’s worth noting that reforms likely would not fall on seniors who are currently collecting benefit checks or those within a few years of retirement. That would be an undue burden on those with minimal financial flexibility.
House Republicans say they’ll convene an independent commission to study and recommend solutions. That’s better than nothing, but we’ve seen that dog-and-pony show before to no end. In the meantime, Mr. Biden and Mr. Trump have an obligation to present voters this fall with detailed plans on what they would do in their lame-duck terms to address the entitlement crisis.