Alice Rivlin, writing for Brookings (she’s also a member of the deficit commission)
If no crisis is projected in the Social Security fund itself for 27 years, why should Social Security be part of the current deficit discussion? I see at least three reasons. First, this is the best time to put Social Security on a sound sustainable track. The only better time would be last year or any year before that. Workers need to know that Social Security will be there when they need it so that they can make other retirement plans on top of a secure base.
I can’t agree with this statement more. Since Social Security is basically the labor force subsiziding the retired, it is essential that those workings have confidence that their time will come too when they reap the benefits of the system that currently lowers their earned income.
It evokes a statement that Amity Shlaes said to me when I was fortunate enough to speak with her one day. Part of the problem today is the notion of “all pain, and no opportunity.” Yes we are in a depressed economy, but now is the time to lay the groundwork for sustainable future growth. Now is the opportunity. If you think that we are going to want to reform anything (or that there will be political will to do so) when times are good, then you haven’t been living here the past 20 years.
I would only ask that Rivlin think outside the box on this one. Reforming Social Security as it is means you are necessarily confined to two policy tools: reducing benefits or increasing taxes. I would advocate for partial or full privatization of the system, but I recognize my views are out of the mainstream. Besides, old people are dedicated voters – their benefits aren’t going anywhere.
But we can all at least come together around questions that need to be answered. “Is age a factor for which government aid shoud be doled out?” “What is the role of income and assets at retirment in determining benefits?”