Social Insecurity

By Ruben Navarrette Jr.

Oddly enough, the debate over Social Security is not – as it should be – about how to fix it. Rather, it is about something that should be by now beyond debate: Whether it needs fixing at all.

And as the two sides square off, one’s political affiliation, if any, means less than the generation you are part of. In the Social Security debate, whether one is willing to believe we’re faced with a long-term crisis in need of defusing has a lot to do with where you’ll be when the bomb goes off.

And when is that, exactly? Without a tune-up, says President Bush’s Social Security Commission, the current system will start sputtering around 2016 – when, for the first time, the incoming revenue from payroll taxes will fall short of what is needed to cover the benefits to be paid out. It will run on fumes for a while, feeding on the interest of about $1.1 trillion in government bonds – and then eventually on the bonds themselves. Then, around 2038, what is perhaps America’s most beloved social program will finally unravel, reaching the point where the revenue rolling in from taxes will amount to enough to cover only three-fourths of the benefits due.

If, in 2016, one expects to be at leisure – in a retirement community, on a golf course, or in a motor home traveling the country – one may think there is little reason to be concerned and even less cause to tinker with the system in any way that means tightening one’s belt. So what if Social Security has to live off reserve funds after 2016? That leaves 22 years until the checks stop arriving in the mail. Don’t worry. Be happy.

But then there are today’s teen-agers, college students and young workers who, in the year 2016, will probably be on the job, handing over payroll taxes into a “bust fund” that will probably never return anything back to them. Polls have shown that, for them, there is some appeal to the idea that something should be done now to prevent a foreseeable, and unavoidable, crisis.

So too believes the 16-member Social Security Commission, unveiled in May and under fire by July.

In its recent interim report, the commission, co-chaired by former Sen. Daniel Patrick Moynihan and AOL Time Warner vice chairman Richard D. Parsons, astutely diagnosed the problem and bravely said out loud what economists, demographers and policy analysts have said for years: Social Security is not secure. In laying out the case for the projected shortfall, the commission, made up as it is of both Democrats and Republicans, cited the “relentless truth of ascending life expectancies and declining birth rates.”

The commission also mentioned the equally relentless truths of the impending exit from the workforce of 70 million baby boomers beginning in about 2010 and the subsequent impact on a system which, when monthly payments began in 1940, saw each retiree supported by 42 workers. By 2050, analysts predict, that burden will shift onto the shoulders of just two (extraordinarily heavily taxed) workers. Equally true is that, in the likely scenario that those two workers cannot hold up their end, the possible results include still higher payroll taxes, cuts in benefits for those already retired, an increase in the national debt, etc.

Without yet saying what it believes should be done (that will come in its final report later this year), the commission laid the foundation for what will likely be one of its final recommendations – allowing individuals the option of siphoning off one-sixth of their payroll deductions into private investment accounts that will likely yield healthier returns than the present system.

Concerned labor unions, and many of the Democratic politicians whose strings they pull, warn that even partial privatization would only make a bad situation worse.

Matt Moore disagrees. As a Social Security specialist for the Dallas-based National Center for Policy Analysis with many years of payroll deductions ahead, Moore has both a professional and personal stake in getting this right. The 25-year-old supports privatization as a way of fixing a problem for which he and his generation are ultimately responsible. Either way, he insists, whatever options exist, they don’t include the option of doing nothing.

“The commission is right,” Moore said. “There is no security in the current system.”

Believe it. Look at the numbers. Listen to the brave. Don’t be happy. Worry.

Ruben Navarrette Jr.

Ruben Navarrette, Jr., a frequent spokesman and commentator on Latino issues, is an editorial board member of the Dallas Morning News and the author of "A Darker Shade of Crimson: Odyssey of a Harvard Chicano." Read more of Ruben Navarrette Jr.'s articles here.