Keeping Social Security Fair
Proposals to extend the retirement age to 70 as part of the effort to keep Social Security solvent through the next century would impose unforeseen inequities, according to the General Accounting Office, Congress’ investigative arm. Most hurt would be blue-collar workers, who make up 40% of the labor force between the ages of 53 and 63 and whose productive work lives are limited by the higher statistical chance that they will suffer a serious physical ailment than white-collar workers. Also disadvantaged would be minorities, especially black men, whose life expectancy is shorter than that of white men.
These considerations, as well as what would certainly be a storm of political opposition if further extending the qualifying age for full Social Security benefits became a real possibility, probably mean that the notion of raising the retirement age has become a nonstarter.
At first glance it seemed to make a lot of sense. Because Americans are living longer than ever they are drawing Social Security benefits for many more years. That, and the approaching tidal wave of retirements by tens of millions of post-World War II baby boomers, is what threatens to wipe out the system’s surplus and plunge it into deficit unless a major rescue effort is agreed to.
What most Americans still don’t quite understand is that Social Security is a pay-as-you-go program. In 1960, 5.1 workers contributed to the program through payroll taxes for every retiree drawing a monthly check. Today the ratio is 3.4 workers for each beneficiary, and in little more than 30 years it will be only 2 to 1. Foreseeing the problem, Congress several years ago ordered a gradual increase in the eligibility age for full benefits, starting in 2003 and topping out at 67 in 2027. But life expectancy over the same period is also projected to rise by two years, from 77 to 79, meaning the average number of years in retirement will remain the same.
Based on what the GAO told it, Congress will probably be disinclined to tinker any further with raising the benefits eligibility age. The necessary consensus for assuring Social Security’s solvency will have to be based on other ideas. Despite what younger workers profess to fear, there’s no doubt the system can and will be kept adequately funded for generations to come. The political imperative is to assure Americans of all ages that the steps finally adopted are fair, fiscally responsible and in everyone’s interest.
