7. Problems in the future.
Although the expected large numbers of elderly in the near future
will place a strain on the system without some adjustments, Social
Security is a great success story. It has, in fact, reduced the
amount of poverty among the elderly, disabled workers, and their
families. But with the anticipated surge in numbers of elderly,
it is almost certain that some changes need to be made in order
to pay full planned benefits to tomorrow’s beneficiaries.
There is much debate over what kind and extent of changes are necessary.
It is hard to find information that is not slanted in one direction
or another, or outright manipulative. It is critical, however, for
voters to be fully informed about all aspects of the Social Security
issue. This is a complex problem for which there is no quick or
simple fix.
At this time all of the Social Security Trust Funds have large surpluses.
Despite an economic downturn of several years, until 2003 collections
continued to exceed benefits being paid out. That situation will
change around 2016, when benefits paid out begin to exceed taxes
paid in, as baby boomers retire and there are fewer workers for
each retiree. This was anticipated. That is why the trust funds
were initiated and why they have been accumulating surpluses so
that funds would be available to cover this eventuality. It now
appears, though, that surpluses will be inadequate at some point
in the future.
Various projections have been made, the most optimistic being that
the Trust Funds will never run out. The most likely projection at
present is that Social Security would be able to pay full benefits
until about 2042, and then, if no changes are made, will be able
to pay about 70% of projected benefits. Despite threats of imminent
disaster just a few years ago, however, until 2003 surpluses continued
to grow and projections became brighter each year. After several
years of recession, last year (2003) there was neither an increase
nor decrease in the surplus.
Whether or not surpluses experience some growth, it is realistic
to assume that some changes will need to be made to fully protect
future beneficiaries. It is not helpful to have alarmists forecast
doom in order to further their own agendas, or for Pollyannas to
deny that any problem exists, or to have the situation so politicized
that no reasonable compromise is likely. Knowledgeable commentators
have repeatedly pleaded with lawmakers to take action immediately,
while relatively minor changes could assure the financial stability
of the basically strong program, but time continues to slip by while
the future Hangs in the balance.
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