By J.D. WhitlockSummer Bruin Columnist
A recent poll taken by Gen X group Third Millennium found that
almost twice as many 18- to 34-year-olds believe in UFOs as believe
in the long-term existence of Social Security.
Estimates of the demise of Social Security range from the year
2010 to 2030, with the 2030 guess counting on the money in the
Social Security Trust Fund to delay the crash. The only problem is,
there’s no money in the Social Security Trust Fund because Congress
continues to spend it all.
Either way, the difference is of little relevance for the
average Bruin – Social Security will be toast by the time we retire
if the status quo continues to reign.
In order to finance the boomers’ retirement at a level equal to
today’s benefits in the year 2010, we will need to shell out about
a quarter of our income in payroll taxes. Why? Because in 1950
there were 16 workers paying taxes for every retiree collecting
benefits. Today, three workers support each Social Security
recipient. In 30 years, the figure will be two to one.
In addition, longer life expectancies and automatic cost of
living adjustments mean that the average Social Security recipient
today collected all that he/she paid into the system (with
interest) in the first few years of retirement. Everything after
that has been hoisted onto the backs of a younger generation.
As we are all quite aware by now, our generation is the first
ever in this country to face a lower average standard of living
than our parents. We certainly do not need to add to this burden by
carrying the cross of a Social Security disaster.
We might expect that our pal Newt Gingrich, Mr. Fiscal
responsibility himself (except when it comes to military
procurement contracts in his own district), would be hot on this
issue. After all, part of the Contract with America is about
guaranteeing "our children" the opportunity to have a realistic
shot at the American Dream, right?
Maybe not. Gingrich recently called the problem with Social
Security, "an abstraction that is 25 years from now."
The Democrats aren’t much better. Their traditional "offend no
one" strategy while talking about constructive change hasn’t failed
them yet (or they haven’t noticed yet). Common sense proposals on
Social Security from moderate, bipartisan groups are routinely
trashed by the White House.
Why this hypocrisy? Go figure. The AARP (American Association of
Retired Persons) is the country’s largest, and arguably most
powerful, lobbying group. Suggesting that Social Security needs an
overhaul is the political equivalent of jumping on a live hand
grenade on Capitol Hill today. Older Americans vote; we don’t.
This situation can be handled a few different ways:
1) We can sit on our collective backsides now and in 20 years
sacrifice our lifeblood to pay obscene payroll taxes.
2) We can sit on our collective backsides now, and in 20 years
vote the payroll taxes down and kick our parents out into the
street.
3) We can demand that a realistic plan be developed and put into
place NOW that will cushion the blow to future beneficiaries and
create a sustainable cash flow for Social Security.
The reason timing is so critical is that the burden needs to be
shared with the boomers, and that means something needs to be done
soon, before they start retiring.
Let’s take a quick poll. Survey says … door No. 3. What are
some of the options?
Test Social Security benefits. We hand out billions of dollars
to the well-to-do elderly while slashing social programs for
children. What kind of society operates like this?
Benefits should be ratcheted down incrementally in proportion to
income over a set amount, say 10 percent of benefits lost for every
$10,000 of annual income over $40,000. This is an idea that is
gaining acceptance for all federal entitlement programs as budget
balancing has (finally) entered the realm of mainstream political
discourse.
Raise the retirement age. The retirement age is the same today
as it was when life expectancy was 10 years lower than it is today.
Even a modest increase, to 67, would mean huge savings.
The IRA option. One proposal suggests that workers pay about
half of what they do now into the system to provide for low income
elderly, and the other half into mandatory IRA-like accounts. This
would keep the government’s hands out of the cookie jar, and
guarantee that workers today would see at least some of their money
when they retire.
In closing, a few words of magnificent wisdom from former Sen.
Paul Tsongas, co-founder of the Concord Coalition, a grass-roots
bipartisan organization dedicated to eliminating budget
deficits:
"As someone who goes to campus and gives speeches, I think the
retirees would be well-advised to spend a little more time with the
young and get a sense of how strong their feelings are about
this."
"It’s not a choice between an adjustment today and keeping
things as they are forever. It’s really a choice between an
adjustment today or waiting for the cataclysm to happen, at which
point the young will rebel and you will see politicians running on
an anti-retiree platform."
Gosh Paul, couldn’t have said it better myself. Listening, Newt
& Bill? Listening, AARP?
Listening, fellow Bruins?
Whitlock is a graduate student in the School of Public Health.
His column appears monthly. You can e-mail him at
71055.3136@compuserve.com
The struggle for balance
If Social Security is to survive, the post-baby boomer
generation must initiate fiscal policy changes.