WASHINGTON — As Congress agonizes over health care, an even more daunting and dangerous challenge is bearing down: how to shore up Social Security to keep it from burying the nation ever deeper in debt.
What to do about mushrooming government payments as millions of baby boomers retire? How about a giant federal Ponzi scheme? That might work for a while.
But wait. That’s pretty much the current system. Social Security takes contributions from today’s workers and uses them to pay the old-age benefits that were promised to retirees. But there are serious concerns about how long that can last.
President Barack Obama has said he’ll tackle Social Security and related “entitlement” programs when the health care overhaul is resolved. But the anger and intensity of that debate could complicate his effort.
Failure on health care could make it harder, if not impossible, for Obama to successfully tackle overhauling Social Security, Medicare and Medicaid.
The raucous health-care debate is “a bad omen for any change in social policy,” said Ross Baker, a political scientist at Rutgers University who’s a former Senate aide.
“We had a remarkable 25-year run in terms of the economy. We had this wonderful demographic holiday, where the baby boomers were moving through their main earning years,” said William Gale, co-director of the nonpartisan Tax Policy Center.
“Now, the economy’s in tatters; the boomers are ready to retire; the world is sick of our debt. The problems are much bigger,” said Gale.
With baby boomers working, Social Security has produced a surplus that has helped finance the rest of the government for the past quarter century. But that will change soon.
Trustees of the system recently said that in 2016, money paid out in benefits will start exceeding the tax dollars flowing in.
At that rate, Social Security will be completely depleted in 2037, the trustees said.
