What we need to save Social Security and probably won't get

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It has been nearly 40 years since Congress was able to find common ground on the future of Social Security. While millions of people depend on the system as a lifeline, politicians have done little to slow the erosion of the program's finances.

If the projections in the latest trustees report come to pass, the program without change would pay promised benefits into 2033, at which point the incoming revenue would be sufficient to cover roughly 77% of promised benefits.

That is not a long time, considering that the Social Security Administration expects someone turning 79 today to live long enough to feel the impact of these changes.

Many Americans mistakenly believe that this outlook means the nation has 10 years to think about the problem. It doesn't. The forecast isn't a guarantee. It is a stern warning about what might happen even in a robust economy.

The truth is that if the economy doesn't cooperate, the consequences of Social Security will arrive sooner and hit harder than anyone expects. No one knows when benefits might be reduced, nor how much. At this point, no one even knows how the government would allocate a systemwide reduction of benefits to the individual.

In reality, the train is larger, moving faster, on less stable tracks. Since 2019, the size of the gap between what Social Security has promised and what it expects to pay has grown by nearly $10 trillion — more than 40%.

Another way to look at that change in the size of the concern since 2019 is: For every $1 that the program has collected in payroll taxes, it has generated roughly $2 of promises that no one expects it to keep.

It is possible, of course, that Congress will find the common ground to make those promises good, but the prospects of a resolution dwindle as the size of the problem grows.

To illustrate, Democrats last August proposed new legislation under the "Social Security 2100" brand. Back in 2019, that brand of legislation meant that the program would pay higher benefits into the next century — more than 80 years. In 2021, the sponsor of the legislation claimed that his revised proposal would provide only five years of expanded benefits and keep the program solvent for four extra years.

The effectiveness of the changes declined in part because the problem that it hoped to solve had grown by $6 trillion between 2019 and 2021.

As a presidential candidate in 2016, Donald Trump promised that economic growth would offset the need for benefit reductions or higher taxes. His vision was the economic Holy Grail, a painless solution for Social Security. In reality, the program's actuarial balance declined by 25% during his presidential term despite an economy with the lowest unemployment rate in 50 years.

There is only one fact about Social Security on which all experts agree. The longer we wait, the harder it gets. Today, we are now looking at a rate increase of 3.61% to keep the program solvent because about 15 years ago, Congress couldn't muster the resolve to increase the payroll tax by 1.92%.

One thing should resonate in the mind of every voter. If Congress wouldn't tackle the problem when it was small and required gradual change, one must ask why anyone believes that a future Congress will undertake the task when challenges are larger and the cost great.

The passage of time is financial cancer to Social Security.