IMO, this article is simply wrong. The truth is, Social Security is in a lot of trouble and it'll have to be fixed - and much sooner than 2041. The fund goes cash flow negative in 2018. This means that on that date, there will be no Social Security surpluses to reduce the Federal budget deficits. Instead, Social Security will be ADDING not subtracting from the Federal Deficit! On top of this, Medicare will be broke even sooner (so some of the "Social Security Surplus" will probably have to be shifted to cover that deficit). After 2018 the size (and percentage) of the Federal Deficit that will result from Social Security Deficits just go straight up. The problem, is that the Social Security Deficits will be so large that the Federal Government will probably not be able to pay benefits well before the theoretical date of 2041. Even during the Clinton Bubble years, the Federal Budget Surplus was really a deficit if the Social Security Surplus were removed. If Bush can't get Social Security reform pushed through, nothing will get done till after 2008. If Democrats win in 2008 they won't be able to turn around immediately and say that Social Security will be doomed without immediate action, because they'd get absolutely hammered in the 2010 midterms and certainly the 2012 Presidential campaign. Which means that the system wouldn't get fixed till 2013-2017, which will probably be too late.
Frankly, progressive indexing would be better than lifting the salary cap on FICA. And really, why should those with higher incomes (who presumably are more able to have real private retirement accounts: IRAs, 401's and 403b accounts or private/public pension plans) see REAL increases in their SS Old Age Pensions - as opposed to keeping pace with salaries of those paying their benefits? |
