Half of all American workers today live on an economic tightrope, protected by no safety net other than Social Security. But this net is frayed, and the Social Security trust fund is predicted to begin drying up in 2040 if changes in its structure are not made.
Just as troubling, Medicare trustees report that the government's health-insurance program may go bankrupt even earlier. They predict this trust fund will run out of money by 2018— a steeper decline than previously reported unless Congress enacts reform.
The looming failures of these vital programs must be stopped. A calm, level-headed approach is needed. It is not yet a crisis, but it will be if left unaddressed.
There is still time to act. We believe Congress should create a permanent, bipartisan commission to study and recommend ways to keep these programs in the black.
It has been 26 years since an independent commission was created to study Social Security's solvency, and 24 years since it reported recommendations to Congress. The commission, headed by Alan Greenspan, acted quickly. Its January 1983 report led to amendments, signed into law by President Reagan, that are credited with preventing the Social Security trust fund from going bankrupt later that year.
We maintain that a new commission could be just as effective as Greenspan's, but with a permanent mandate. We propose a commission that would conduct independent, actuarial reviews of the system every five years, and propose remedies to the Congress, which would be required to act on them quickly.
The price of inaction is too great. Consider these sobering facts:
- Of the 47 million Americans who receive Social Security, 20 percent have no other source of income.
- The private sector is unlikely to provide a safety net. Instead of adding to worker security, employers— including many industry leaders— are cutting retirement benefits, not adding to them.
- Women are especially at risk. They earn less than men, live longer and are often out of the workforce when raising children. Consequently, they have less money saved up and less protection.
Demographic forces will continue to strain Social Security and Medicare, with Baby Boom retirements adding to imbalances between revenues and expenditures. The simple fact is that the money will run out if changes are not made.
We believe that an Entitlement Commission would provide a measured response to the risks facing Social Security and Medicare, and by doing so preserve them over time.
We know what the broad options are. What we don't know is what the right mix would be, and this is where an independent review is needed.
Creating an independent commission would not be a quick fix. Quick fixes, we believe, are not appropriate. There should be no sharp turns, no jarring course corrections. Instead, we need a long-term means of monitoring the systems' health, built on a foundation of bipartisanship and independence.
Our proposed commission would:
- Make recommendations to the President and Congress, every five years, on a benefit and revenue structure that ensures the adequacy and solvency of these programs.
- Consist of 15 members who, like Greenspan, would be selected for their financial expertise. Of these, seven would be selected from the majority party, seven from the minority party and one from an independent, non-affiliated party.
- Make recommendations only when two-thirds of its members are in agreement.
Have its recommendations acted on quickly— Congress must vote within 120 days of receiving commission reports.
When President Franklin Delano Roosevelt signed the Social Security Act in 1935, he recognized that it would be impossible to ensure 100 percent protection for all Americans.
"But," he said at the time, "we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age."
These fundamental risks still exist today. It is our aim to protect our citizens by protecting Social Security and Medicare. We must ensure that the wealthiest nation on the planet takes care of all its citizens, rich and poor alike. We've got to increase the odds that a healthy Social Security and Medicare will be around for future generations of Americans. We believe this commission will do just that, in a way that brings Democrats and Republicans together.