Social Security
Preamble to the 1935 Social Security Act
Dan's View
Unfortunately, the evidence is overwhelming that Medicare is facing bankruptcy. Social Security's surpluses will begin to decline in 2011, and within a few short years after that, turn into growing deficits as more and more Baby Boomers retire. The latest report from the Social Security and Medicare Trustees suggests that the Federal Hospital Insurance Trust Fund or Medicare Part A – which pays for hospital and other institutional care and is funded by the Medicare payroll tax – will run out of money by 2020. In addition, Medicare Parts B and D – which pay for physician bills, outpatient services, and now prescription drugs – will have to be increasingly subsidized by general income tax revenues, making the program less and less self-financed through payroll taxes and premiums. For example, the new Medicare prescription drug benefit was originally estimated and promised to only cost $400 billion over 10 years. By September 2005 the estimate had increased to $720 billion over 10 years. And in January 2007, the Administration increased that estimate even further to approximately $964 billion from 2007 to 2016. Furthermore, Social Security’s surpluses will begin to decline in 2011, and within a few short years after that, turn into growing deficits as more and more Baby Boomers retire.
It is clear to me that we cannot ignore the impending financial crisis facing Medicare and Social Security any longer. It is also clear to me that we have to move beyond the partisan political rhetoric and special-interest scare tactics, or Congress will never be able to move ahead with bold Medicare and Social Security reforms. I believe one way to accomplish this is to establish a National Commission on Entitlement Solvency, which would be charged with developing and proposing to Congress and the President a benefit-and-revenue structure that ensures the long-term solvency of Medicare and Social Security. Such a commission was called for in the “Social Security and Medicare Solvency Commissions Act” (H.R. 3724), that was introduced during the 110th Congress. Unlike commissions of the past which just issue reports that sit on a shelf, H.R. 3724 required Congress to take action on the proposals put forth by the National Commission on Entitlement Solvency. In my opinion, this represented a good way to cut through the politics and finally save Medicare and Social Security for today’s seniors as well as our children and grandchildren.
Another idea that I think we need to resurrect is the idea of a Social Security “lock box.” Last Congress I supported the “Savings for Seniors Act” which called for placing any Social Security surplus funds into a Social Security Surplus Protection Account – preserving them from being spent until Congress determines that most appropriate investment vehicle to maximize the financial return on these taxpayer dollars. This was just one “lock box” proposal, but I firmly believe this kind of solution is worth considering.
If we do not restructure Social Security, our options are limited; we can substantially raise taxes; drastically cut spending; or increase the national debt in order to honor our commitments. This is not just about fixing a government program; it's about every American's retirement security. I support responsible reform measures that allow younger workers to take ownership of their Social Security retirement benefits through voluntary personal accounts, while at the same time protecting the benefits of current retirees. Americans save for retirement through 401Ks, 403Bs, IRAs and other investment instruments; it should not be taboo for future generations to do something similar through Social Security. Working together we can protect current retirees, and still allow future generations to invest in their own futures.
To be clear, I oppose measures that would cut Social Security benefits to those already receiving them or those about to receive them.
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