Fiddling on Social Security

Social Security is the step-child of politics. None of the candidates wants to talk about the shaky finances of the program because any discussion invariably leads to the politically unpopular ideas of benefit cuts or tax increases.

The Nevada U.S. Senate race between Democrat Catherine Cortez Masto and Republican Joe Heck offers little encouragement of change to this political calculus. Both seem locked into the status quo, where the candidate promises to protect the program without providing any details of how. Nevadans deserve more than rhetoric.

Experts believe that Social Security will be unable to pay all of the scheduled benefits as soon as the early 2030s. Under the most optimistic outlook, the program’s trustees project the system reducing benefit levels beginning in 2034 because of insufficient resources — which means that the issue is not isolated to younger Americans. About half of the people turning 68 in the coming year can expect to be alive in 2034.

The year 2034 is not as far away as politicians would like to believe.

In response to these numbers, Cortez Masto has committed to defending Social Security from privatization. Keeping that promise should be simple enough because no one is proposing the idea. The Social Security Administration has not scored a single proposal which included privatizing Social Security since 2008.

No one is proposing such a change because the concept is cost prohibitive. Every dollar that is diverted from the program has to be replaced by a dollar from a different tax in order for existing seniors to collect benefits. This relationship means that a conversion of Social Security to a system of personal accounts might cost as much as $30 trillion. That measure is a present value number which grows over time faster than the system collects revenue.

On the opposing side of the ballot, Joe Heck’s website offers a conflicted approach to the program’s finances. On one hand, he appeals to those who believe that a serious national discussion on Social Security is necessary to ensure its strength over the long-term. At the same time, he has introduced a bill — the Seniors COLA Guarantee Act — which would spend the limited resources of the program even more quickly.

Neither candidate is pushing any reform that will materially change the course of the system’s finances. They are talking about pennies of solutions for dollars of problems.

Heck says he would consider changing the retirement age.

He believes that gradually raising the retirement age to 69 could extend the life and solvency of Social Security until after 2070. But according to the Social Security Administration, aggressively raising the retirement age to 70 would add about three years to solvency to the system.

Cortez Masto has suggested that comprehensive immigration reform would helped shore-up the program’s finances. She points to research from the administration that suggests these new Americans would have added $3 billion to the Trust Fund over the past year. The problem is Social Security added $500 billion in unfunded liabilities in 2015 solely because of the passage of time.

Time is kryptonite to Social Security because solvency is measured in windows of time. Every year the window of solvency shifts, replacing a relatively well balanced year such as 2015 with an expensive outer year. The passage of time accounted for nearly three-fourths of unfunded liabilities created in 2015.

Social Security is the largest expense in the federal budget. It affects the lives of millions. It should be a primary concern of voters even when its finances are healthy. Yet, it is struggle to see where progress on the issue will come from in this election.

Politicians are pouring millions of dollars into advertising that offers neither solutions nor threats to the program. It is money fueling an argument that fosters the delay which is killing the system. We aren’t kicking the can. We are watching it tumble downhill.

Brenton Smith is the founder of “Fix Social Security Now” (, which provides information on alternatives in the public debate on Social Security.

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