Republicans must take Social Security seriously – Twin Cities
We have reached the point in the midterm election campaign where Democrats insist that Republicans are eager to destroy Social Security. The usual ploy is to take the spurious comments of one or two Republicans and pretend they represent a secret, sinister plan.
In October 2018, Senate Republican Leader Mitch McConnell observed that “there is a bipartisan reluctance to address rights changes.” His Democratic counterpart, Chuck Schumer, said he had “shown who the Republican Party really is”. Schumer even convinced some reporters to buy the spin McConnell had said “the GOP will push to cut Medicare, Medicaid and Social Security spending” if he retained control of the Senate.
In the election a few weeks later, Republicans extended their control over the Senate. They have not decided to remove any of these programs.
Republicans are not plotting to undermine Social Security. They don’t even have a plan to fix it. Which is too bad, because profits continue to grow beyond program revenue. Andrew Biggs, a colleague of mine at the American Enterprise Institute and former commissioner of the program, calculates that the monthly benefits for an American retiring today, even accounting for inflation, are about a third higher than they were for those who retired 20 years ago. .
If we want benefits to continue to increase as planned, we need to have widespread tax increases. But most people would rather keep their taxes low and save for themselves. For this to work, we need to moderate the growth of benefits so that they keep up with inflation but don’t grow much more.
Ideally, a minimum benefit sufficient to lift all seniors out of poverty would be established at the same time. The current program, surprisingly enough given the amount of money it spends, does not provide this protection.
Republicans do not talk about such reforms. Instead, Senator Ron Johnson of Wisconsin, running for re-election, said Social Security should become a “discretionary” government-funded program in each year’s budget. Senator Rick Scott of Florida has proposed requiring all government programs, presumably but not explicitly including Social Security, to obtain affirmative renewal every five years. Arizona Senate candidate Blake Masters said in the primaries, “Maybe we should privatize Social Security. Private retirement accounts, get the government out of this.
These comments are the basis of the Democrats’ current scare campaign. But none of these ideas are going anywhere. McConnell specifically disavowed Scott’s. And Masters disowned his people: “I don’t want to privatize Social Security,” he said after winning the primary.
What these proposals demonstrate is not that the program is in political danger. This is because the taboo against questioning the program has discouraged serious reflection on how to reform it.
Masters’ first thought echoed a Republican argument from nearly 20 years ago. The George W. Bush administration wanted young workers to have the ability to invest a portion of their Social Security contributions in personal accounts.
It was an extremely controversial proposal that failed to pass a Republican Congress. But it made more sense then than it does today. At the time, the program’s payroll taxes brought in enough revenue to cover retiree checks while funding new accounts. The surplus has raised the possibility that we may begin to transition to a new system before the baby boomers retire.
None of this is true now. Over 30 million baby boomers have already retired and the surplus has turned into a deficit. The premise of Bush’s plan is therefore no longer true. The masters started it anyway because Republicans haven’t thought about how to fix Social Security since that plan failed.
The other Republican ideas aren’t much better thought out. If we demanded a vote to renew Social Security every five years, it would almost certainly become a ritual. Subjecting the program to the annual budget process could in theory reduce the growth of benefits over time, but it could also lead to a bidding war that would increase this growth.
If Congress and the President had the will to moderate benefit growth to keep in line with incomes, they could simply legislate to change the benefit formula. This approach, unlike changing benefits every year, would make retirement income more predictable for beneficiaries.
The Democrats can’t really be blamed for taking the overtures the Republicans gave them. But seniors and those expecting to retire in the next few years need not worry about the program being in jeopardy from Republicans. It’s the younger ones who have to worry that neither party wants to control program spending.