For decades, those pushing to reform Social Security have been derided as alarmist and uncaring. The progressive view was that the program had plenty of funding. Now, via Investor’s Business Daily, it’s increasingly obvious that something has been very wrong for years:
For the first time since Social Security’s cash crisis in 1983, the program can’t afford to pay full benefits for its youngest crop of new retirees through life expectancy, government data show.
The hastening of the Social Security Trust Fund’s demise to 2033 means that workers just becoming eligible for Social Security at age 62 face steep future benefit cuts if they live to the average life expectancy, now about 84.
Those abrupt benefit cuts of about 25% a year for today’s 62 year olds and workers nearing the early retirement age would come at an especially bad time — late in life when savings have dwindled and health care bills are on the rise.
Even with this new reality, some continue to let political concerns outweigh moral ones:
A common argument on the left, recently espoused by AFL-CIO head Richard Trumka, is that benefit cuts for those who have paid into the trust fund would be unfair — some even say fraudulent.
“There is no justice at all in considering cuts to prepaid, earned-benefit programs like Social Security,” Trumka wrote in a recent op-ed.
The situation is pretty dire, no matter what Trumka or others claim:
Under current law, a worker who just turned 62 would face a 25% benefit cut once the trust is spent in early 2033. If that worker claims benefits at 62 and lives to the average expectancy of 84, she would face the equivalent of a 1% cut in lifetime retirement benefits.
Workers now 61 would, on average, lose the equivalent of a half year in benefits and face a 2% cut in lifetime benefits.
Workers now 55 would, on average, lose two full years’ worth of benefits, the equivalent of a 9.2% cut in lifetime benefits.
As Social Security continues to head towards bankruptcy, the American people must push our leaders in Washington to make smart, moral, necessary reforms to the program. Those who oppose Social Security reform claim it would harm those impacted, but not reforming the program in the near future will harm program participants and all Americans far worse.