I think it's important to repeat this excerpt from the testimony of Steve Goss, Social Security's Chief Actuary, at a Congressional hearing in December 2011:
Sustainable solvency can be restored for the Disability Insurance program with ... [A] simple tax-rate reallocation between OASI [Old Age and Survivors Insurance] and DI [Disability Insurance], as was done in 1994, could equalize the financial prospects of the trust funds. We estimate that temporarily raising the Disability Insurance program’s share of the 12.4-percent OASDI payroll tax rate from 1.8 to 2.2 percent for 2012 through 2024 and to 2.0 percent for 2025 through 2029 would make scheduled benefits payable for both OASI and DI beneficiaries until 2036....
[T]he baby boomers already moved from young ages (25-44) in 1990, where few were disabled, to older ages (45-64) in 2010, where many more are disabled. Thus, the 20-year demographic shift in the age-distribution of the population has already occurred for DI. ...
As a result, the number of workers per DI beneficiary is expected to be relatively stable in the future. This means that restoring sustainable solvency for the DI program will not require continually greater benefit cuts or revenue increases. A one-time change to offset the drop in birth rate is all that is needed to sustain the DI program for the foreseeable future.
You don't need to gut the program. Just do a simple reallocation, something which has been done in the past. It's a temporary problem. Don't over-react.
Since politicians can't make decisions lasting longer than a few months at a time, any change lasting 16 years can hardly be termed temporary and is doomed for failure.
ReplyDeleteor we could just start tossing boomers into the la brea tar pits ;)
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ReplyDeleteSimple solution: "A one-time change to offset the drop in birth rate is all that is needed to sustain the DI program for the foreseeable future." Oh, did I mention it has been done before in 1994.. How does a one-time change become the habit of taking from the worker bees and giving to the non-worker bees?? Remember, if we weren't paying Federal welfare we would have enough money to go around to all that have contributed.. "It's a temporary problem. Don't over-react." Right, keep drinking the kool-aide..
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