EDITORIAL: Programs go broke as pols dither

If a tree falls in the forest and scores of politicians are around to witness it, how long can they pretend they didn’t hear it? The answer: decades and counting.

On Wednesday, the Social Security and Medicare trustees issued their annual reports on the states of the two entitlement programs. The news was grim, as it has been for some time. Does anybody in Washington care?

The reports reveal the acceleration of financial problems for both programs. Social Security will be insolvent by 2033. Raiding the disability trust fund will give it an extra year. Medicare’s hospital insurance trust fund will also run dry up by 2033.

If nothing is done, Social Security recipients can expect to see a 23 percent across-the-board benefit cut within a decade, and hospitals that take Medicare will endure an 11 percent cut in reimbursements.

The popularity of these programs can’t disguise their systemic problems. Contrary to popular belief, Social Security recipients aren’t simply getting back their own money. Most people receive far more in benefits than they paid in taxes. It’s a pay-as-you-go model: Current workers pay for current retirees. The ratio of workers to recipients has fallen consistently for many years, exacerbating the shortfall for both Social Security and Medicare.

In addition, disability payments make up an increasing financial obligation for the government.

Elderly Americans have long been reliant on these programs — in 2022, 27 percent of American seniors reported that Social Security is their only source of income — and they have traditionally been reluctant to embrace reforms for fear of losing benefits. Politicians, likewise, have avoided making the difficult choices that loom ahead for fear of the electoral consequences. But inaction is no longer an option.

“It’s time to start telling the truth when it comes to Social Security and Medicare,” said Maya MacGuineas, president of The Committee for a Responsible Federal Budget. She added, “Demagoguing this issue may be politically expedient, but it will ultimately prove ruinous for tens of millions of Americans that rely on the programs.”

Indeed, the longer that Congress fails to act, the more likely draconian measures will be necessary. “Implementing changes sooner rather than later,” the Social Security trustees noted, “would allow more generations to share in the needed revenue increases or reductions in scheduled benefits.”

Borrowing money to stanch the red ink will only hasten the nation’s fiscal demise, further threatening the programs and their recipients. Any reforms should exempt those currently receiving benefits or nearing retirement age, but nothing else should be off the table, including investing a portion of the trust fund in the stock market or allowing individuals to do the same with a small percentage of their contributions.

Any fixes — from tax hikes to benefit adjustments to tighter eligibility requirements — will surely anger powerful special-interest groups. The status quo, however, represents a larger danger. It’s well past time that congressional Democrats and Republicans stopped using entitlements as a tool with which to bludgeon each other and instead took a bipartisan, statesman-like approach to craft solutions that will put both these entitlements on more sustainable fiscal footing for decades to come.