Guest Column
Here’s the high cost of doing nothing to fix Social Security | Column
Congressional indecision is costing the program $700 billion a year and more in unfunded liabilities.
Social Security's issues only compound each year as Congress fails to act.
Social Security's issues only compound each year as Congress fails to act. [ JENNY KANE | AP ]
Published Jan. 21, 2022

There is a high cost of leaving things undone. That’s why lawmakers need to turn their attention to the long-term stability of Social Security.

Brenton Smith
Brenton Smith [ Provided ]

According to the latest trustees report for the Social Security trust funds, the gap between what the program has promised and what it expects to pay is $19.8 trillion. The Social Security Administration believes that someone who is 75 will on average live long enough to feel the consequences of that gap.

The driver of the financial imbalance is the passage of time. Year in and year out, Congress wrings its hands but produces no action to ensure the long-term stability of a program on which millions depend. Just in 2020, that indecision cost the program about $700 billion in unfunded liabilities. It cost just as much last year, and will cost even more in 2022 if lawmakers continue this pattern of neglect.

This is the cost of doing nothing.

Inaction comes at a cost for Social Security
Inaction comes at a cost for Social Security [ Provided ]

While $700 billion may not sound like a lot in the overall picture of the government’s finances, keep in mind that is the cost for one year, and Congress has done nothing for nearly 40 years. According to the Social Security Administration, congressional inaction since 1983 accounts for nearly two-thirds of the gap between what Social Security has promised and what it expects to be able to pay. The passage of time is nothing short of programmatic cancer to the venerated public pension.

Why is time so important? Policy gurus measure the system’s ability to pay benefits over a 75 year period, which is sufficient to get most of the existing voters through the system. The unavoidable consequence of this approach is every year presents the problem of Social Security in a new and unconsidered way as we extend the time window.

It is important to understand that we aren’t kicking a can down the road. The crisis in Social Security is more like a snowball rolling down a hill getting bigger with each passing year. In fact, the size of the problem we face has tripled in size since 2009.

Unfortunately, this is not just a 5- or 10-year trend. The impact of time on Social Security is a mathematical certainty where the longer we wait the harder any solution becomes to implement.

The math behind that statement is pretty simple. We have a retirement age frozen in time, which means that lifetime benefits provided by the system increase as people live longer. Thus, sensible reform starts with indexing the retirement age, enabling the system to provide a reasonable constant length of time in retirement from generation to generation. This isn’t a benefit reduction. The change is benefit containment.

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How might “indexing” work? If the Social Security Administration is correct, this change would mean that someone who is 42 would have a retirement age of 68, and would receive benefits for about the same amount of time as someone retiring today.

At this point, about $4 trillion of the problem we face today comes from the expectation that Congresses far in the distant future will be unable to agree upon increasing the retirement age despite visibly growing life expectancies. This assumption isn’t a financial measure of failure of the program. It is a cost of broken politics.

Until Congress indexes the retirement age it is impossible to distinguish between the financial gaps created by the system and those created by the prospect of failed politics.

It is not possible to fix a problem that you do not understand.

Brenton Smith writes on the issue of Social Security reform with work appearing in Barron’s, Forbes, MarketWatch, TheHill, USAToday, and more. He can be reached at