The future of the Social Security system: Part one

Stephen Lovejoy, Michigan State University Extension - August 25, 2015

Questions, myths and facts.

A recent report from a distinguished group of former Federal Government leaders debunks several myths about our Social Security system. This report was released on August 14, 2015, which marked the eightieth birthday of the Social Security program, which was established in the Social Security Act of 1935.

Over the past 80 years, Social Security has provided important cash benefits and income security to seniors, survivors, individuals with disabilities, and their families – including to nearly 60 million people today. In a series of Michigan State University Extension news articles, Professor Stephen Lovejoy will report on the details of this analysis and discuss the myths and facts about our Social Security system.

As this report makes clear, Social Security is on a financially unsustainable course – and is not on track to be able to pay full benefits through its hundredth birthday. In 2014, the program paid $73 billion more in benefits than it raised from taxes. As more of the baby boom population retires and Americans continue living longer, that gap is projected to grow – depleting the trust fund reserves of the disability program late next year and the old age program in the early- to mid-2030s. Failure to address the gap between spending and revenue could result in an immediate 19 percent cut to all workers with disabilities, and a 20 to 30 percent across-the-board cut to retirees.

Sadly, instead of identifying solutions to prevent depletion of the trust funds, many commenters have relied on myths and half-truths to avoid having a conversation about the necessary choices. In subsequent articles, the following eight myths covered in that report will be discussed:

Myth #1: Social Security does not face a large funding shortfall
Myth #2: Today’s workers will not receive Social Security benefits
Myth #3: Social Security would be fine if we hadn’t “raided the trust fund”
Myth #4: Social Security cannot run a deficit
Myth #5: Social Security has nothing to do with the rest of the budget
Myth #6: We don’t need to worry about Social Security for 20 years
Myth #7: Social Security reform is code for slashing benefits, especially for the poor
Myth #8: Social Security is too hard to fix

Hopefully, these articles will lead to discussions about the choices we as Americans must make over the next few years concerning financially securing the Social Security system for present and future generations.