As the great fiscal debate of 2011 heats up, it's discouraging that some top Democrats insist that Social Security be taken off the table, on the grounds that it's not contributing to the nation's debt crisis. Not so, says Syl Schieber, former chair of the Social Security Advisory Board. Schieber, who has co-authored a fascinating history of Social Security, also argues that such evasions would have been anathema to the program's creator, Franklin D. Roosevelt.
In a new policy brief for PPI, Social Security Reform: What Would FDR Do?, Schieber notes that Social Security is now paying out more in benefits than it's collecting in payroll tax revenues. To make up the difference, the system's Trust Fund is cashing in IOUs that the U.S. Treasury must borrow money to honor. That's adding to the nation's debt burdens today, not in the misty future. And if the history of past reform efforts is any guide, delaying fixes until 2037, when the Trust Fund depletes its assets will result in punishing tax hikes on tomorrow's workers.
In striking contrast, notes Schieber, FDR insisted on changes in his original proposal to ensure that Social Security would not impose big financial liabilities on future workers and the U.S. government. "Should contemporary progressives be any less scrupulous in rejecting political expediency and defending the principle of intergenerational equity?", he asks.
I hope you will give this timely issue brief a look and welcome your reactions.