Young people often ask me whether Social Security will be there for them. My answer has traditionally been: Yes, it will be there. It will probably pay less than it is currently promising you. You should not expect a generous return on your contributions. You may have to pay more in payroll taxes. But the basic structure of the program is likely to remain intact.
Recent events require a reassessment of this answer. Chances are now markedly increasing that Social Security will eventually cease to operate as the self-financed, earned-benefit system that Americans have long known it to be.
Many recent statements by public officials express a mind-set in which fiscal repairs to Social Security might be deferred for years. Administration officials play down the urgency of action by pointing to still-growing balances in the program’s trust fund. A recent Senate bill would erect steep procedural barriers against many measures to improve system finances. Even the Senate majority leader recently asserted that Social Security could be safely left alone until “two decades from now.”
If these statements are indicative of near-term policies, Social Security is in very deep trouble.
(photo credit: Center for American Progress Action Fund)