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Q&A: Social Security

Understanding the Social Security crisis.

Question: Please help me understand the Social Security “crisis.” Social Security originally was meant to become self-sufficient (no tax dollars involved). It was working on that premise until Congress “borrowed from” or “raided” the Social Security trust fund and immediately made the system unsustainable. If this is true, why can’t we as citizens direct Congress to pay that debt (with interest) back to the trust fund, with the understanding that the fund will no longer be available for the general needs of the government? I realize that the nation’s demographics have changed, but we should be able to have a tax revenue-neutral system that is sustainable.

A problem I have with your Trust Fund for America (TFA) idea is that it is administered by the federal government. That means the government can change the rules whenever it’s politically expedient to do so. Having a large sum of money sitting in a trust fund to support future retirees might be too much to resist if our elected leaders could get to it simply by changing the rules. I am a retired federal worker, and I’m always concerned that the government can unilaterally change the retirement contract they made with me when I joined their ranks in the early 1960s.

Ric: Your understanding of Social Security is incorrect. It was never “self-funding” without tax dollars. Rather, current workers pay substantial taxes — more than 12 percent annually — and their money is given to current retirees. For many years, more money went into the system than was paid out, and the excess went into a piggy bank for future use.

But in recent decades, the demographics have shifted; we now have fewer workers and more retirees. As a result, the amount collected in taxes is insufficient to pay the retirees — so the money in the piggy bank is being used. By 2030, that piggy bank will be empty. The designers of the program in the 1930s didn’t anticipate this problem, partly because they didn’t project that life expectancies would be lengthening the way they are. A new approach is therefore needed, which led me to envision TFA.

I can certainly understand your angst about having the government manage the program I designed. That’s why I recommend a blue-ribbon panel be appointed by the president and Congress.

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