Social Security: Low Hanging Fruit?
Social Security has been described as the "third rail" of American politics: if you touch it, you get burned. Now, it seems that touching Social Security might be becoming as easy for lawmakers as picking strawberries.
More and more, there is talk that Social Security reform is the new "low hanging fruit" in plans to deal with our structural deficits. As our long-term budget difficulties have become more publicized, lawmakers have started to realize that compared to fixing Medicare or making significant changes to our tax system, reforming Social Security is a walk in the park. The funding gap is much smaller than it is for Medicare and the options to solve Social Security's problems are clear and easy to quantify.
With the political climate turning towards attention to structural deficits--and even our current ones--it seems political leaders are finally getting the message. Granted, there have been no new major bipartisan proposals on the table yet, but just getting Congressional lawmakers to propose solutions in public has been difficult to come by. Not anymore though.
We mentioned House Majority Leader Steny Hoyer's speech at the think tank Third Way on the blog a few weeks ago. In it, he said "unfortunately, we can blame our long-term deficit on policies that are almost universally popular," and suggested raising the retirement age for Social Security (and possibly Medicare too, though he didn't specify) and indexing it to life expectancy. But he's not the only one talking about solutions.
Last week, in an interview with the Pittsburgh Tribune-Review, House Minority Leader John Boehner suggested raising the retirement age to 70 and indexing COLAs by prices instead of wages. Additionally he said "We need to look at the American people and explain to them that we're broke...If you have substantial non-Social Security income while you're retired, why are we paying you at a time when we're broke?"-- suggesting that he would favor more progressive solutions on the benefits side of the program.
It's very encouraging to see both the Majority and Minority Leader proposing specific solutions to Social Security's long-run finances. There already seems to be some common ground, and there are solutions that both sides of the aisle would find palatable. Specifically, there seems to be consensus on indexing the retirement age at least to longevity and reducing benefits for high earners (a few of the options in CBO's report). Let's hope that Congress uses some of these "compromise" options in a plan that puts Social Security back on balance.