A New Plan to Save Social Security for Another 75 Years
Policy + Politics

A New Plan to Save Social Security for Another 75 Years


Amid turmoil over the future of Obamacare, Medicare and Medicaid, a bipartisan coalition on Capitol Hill is renewing its call for creation of a blue-ribbon commission to recommend changes in Social Security to avert a long-term financial crisis.

It has been 35 years since a bipartisan Social Security commission led by Republican Alan Greenspan helped pave the way for a congressional agreement that extended the life of the retirement system by a half century.

Related: How the Democratic and GOP Platforms Clash Over Social Security Reform

Now, Rep. Tom Cole of Oklahoma, an influential and well-regarded House Republican, and Rep. John Delaney of Maryland, a moderate Democrat, have teamed up again behind a plan to create a similar 13-member panel. They will propose changes to prevent the massive trust fund from running out of money as early as 2034, the time today’s 49-year-olds reach normal retirement.

The Social Security crisis of the early 1980s during the Reagan administration was far more serious than the current financial challenges facing the system, and officials fearful the system would go belly up within two years. Today’s problems are less serious, as more and more baby boomers retire while fewer younger Americans are paying into the system.

According to the most recent trustees report issued in March, Social Security’s revenue shortfalls are continuing to mount and will total $1.4 trillion over the coming decade.

But tampering with the Social Security system is a high risk venture at best. Any serious proposals in recent years – such as raising the retirement age, slightly increasing the federal payroll tax, and altering the cost of living adjustments to save money -- have been met with fiery opposition from seniors’ organization like AARP and Democratic activists and lawmakers.

Related: Medicare and Social Security Worse than They Look

One of former Republican President George W. Bush’s worst political blunders was championing an idea in 2004 to partially privatize the system by creating individual savings accounts. Other Republicans who have advanced similar ideas since then did so at their own political peril.

What’s more, Republican President-elect Donald Trump campaigned on the promise that he wouldn’t consider cutting Social Security or Medicare in addressing the nation’s long-term debt, a sentiment shared by House Democratic Leader Nancy Pelosi of California and Senate Democratic Leader Chuck Schumer of New York.

But proponents of a new bipartisan commission insist it would create an “environment of compromise” where Democrats and Republicans could set aside their partisan differences and craft a new long-term plan for 60 million Americans that would avoid a 21 percent across the board cuts in benefits down the road if nothing is done to stabilize the system.

The commission plan is gaining backing form a number of fiscal conservatives groups, government watchdog organization and a smattering of moderate activists who are alarmed about Social Security and its impact on the long-term debt.

Related: GOP Cuts in Medicare May Be Next After Dismantling Obamacare

They are considering offering their plan again in March or April, when Congress and the new Republican president must face up to raising the debt ceiling – one of the most unpopular tasks that befall the party in power. By adopting the commission idea, lawmakers could demonstrate their concern about the retirement program and the mounting debt, but without having to take any action for at least another year.

Cole and Delaney stressed that their bill, which they first proposed in 2014, would not prescribe solutions to address the trust funds looming insolvency problem, and that the new panel’s charter would almost certainly steer clear of fundamental changes in the program. Cole said that they are only looking for fixes “around the edges” that would guarantee that future demands for retirement benefits don’t seriously outpace incoming payroll tax revenue.

“At the end of the day, if you don’t do entitlement reform, you’re not doing anything at all” to address the nation’s long term budget and economic problems, Cole said on Wednesday morning during a conference on Social Security on Capitol Hill sponsored by the Committee for a Responsible Federal Budget.

“I’m more interested in process than I am in the various proposals,” he said. “There’s a lot of different ways, particularly with Social Security. It’s a pretty easy problem to solve because it’s basically a math problem. We know how many people are turning 65, we know about what their life expectancy is, we know about what they paid in, you can predict the revenue flow pretty easily.”

Related: Social Security Trustees Project Trust Fund Will Be Tapped Out by 2034

“So as long as you’re not trying to make a huge philosophical point, like ‘I want private accounts’ or ‘I want an end to this,’ if you just want to fix the system, it’s a pretty easy way to get there,” Cole said, adding that the commission would have a year in which to reach agreement and submit its plan to Congress. “And frankly, it shouldn’t take them a year. We have enough proposals to really look at it and bargain it out. It should take a long weekend, to tell you the truth.”

Delaney campaigned for reelection in his western Maryland district this year advocating changes in the system to assure its long-term solvency, such as raising the income cap on the federal payroll tax and enhancing benefits for retirees and the very elderly, and Cole has advanced more conservative reform ideas of his own. “But we’re focusing on the process,” Delaney said.

Delaney said that he and Cole are attempting to replicate the success of the Greenspan commission in coming up with an approach that would extend the solvency of Social Security for another 75 years. “I’m incredibly confident that if this process is put in place, that well intentioned people who understand the program and are armed with the actuarial data that they need can put forth a program that actually strengthens the program and extends its life.”

The Cole-Delaney measure would create a bipartisan “Commission on Long-Term Social Security Solvency” with 13 members – including three each appointed by Republican and Democratic party leaders in the House and Senate and a chair appointed by the president. The commission would have one year in which to produce a report, and at least nine members would have to sign onto the recommendations before Congress could hold an expedited up-or-down vote.

Related: Harsh New Penalties for Social Security Fraud Are Coming

Since Trump and the GOP swept to victory in the Nov. 8 election, Republicans have vowed an unprecedented shakeup of federal entitlement programs, including repealing the Affordable Care Act and pressing for major changes and cuts in the Medicare and Medicaid health care programs for seniors and the poor. But during his campaign, Trump had promised not to touch Medicare or Social Security.

Cole’s and Delaney’s timing in renewing their call for a Social Security reform commission might prove to be overkill. Cole acknowledged that unless Trump has a change of heart, nothing is likely to be done about Social Security in the near term. “Frankly, we need presidential leadership,” he said. But Social Security has long been known as the “Third Rail of Politics” – touch it and you die.