Social Security Reform: The Longer We Wait, the Harder It Gets

Bradley C Bower

Brenton Smith ([email protected]) is a policy advisor with The Heartland Institute.

Social Security reform has been largely dormant for 40 years as politicians from both parties have talked diligently about the program’s long-term outlook while assiduously avoiding taking any action to deal with it.


The sad truth is the longer we wait, the harder it gets. Given the passage of time, a person turning 76 years old today expects, on average, to outlive the system’s ability to pay scheduled benefits. It only gets harder from here. That statistic should draw the attention of our elected officials, but it has done little more than get fingers pointing.

To those in Washington, the answer isn’t to fix Social Security. It is to change the role it plays in our lives.

Social Security has one feature that has allowed the program to endure over time: earned benefits. The idea that people have paid for their benefits has allowed the program to pay benefits despite the financial problems of the broader government. Right now, in Washington, politicians are haggling over where to make cuts; everything is on the table—except Social Security.

The reason is payroll taxes, a bedrock feature of the program designed by the program’s chief champion: President Franklin D. Roosevelt.

How important is the link between what we contribute to the system and what we collect? FDR rather sensibly said, “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions.” He designed Social Security so that it would not be confused with the public dole, or in modern parlance, a welfare program.


FDR created the framework of earned benefits to protect the program from those “damn politicians.” He wanted to ensure that the needs of the elderly would not have to compete for resources with the other priorities of the government in a debate about who does and does not need benefits.

If we allow politicians to sever the tie between payroll taxes and benefits, all that is left is a welfare program that Congress would nominally call “Social Security” for those nostalgic voters who hold some emotional attachment to the name.

Today, there are a range of politicians offering to give you more money from Social Security. What they are not telling you is that higher benefit payments are the price of your legal and moral rights to benefits when you retire. Whether it is $20 or $200 more per month, it is not worth it. It is just a shiny bauble.

Keep in mind, whatever the politician promises you today can be taken away in the future by other politicians because none of these manufactured benefits come with a legal or moral right to the money. In the end, all you will have is a political right to vote for the guy who will stuff the most cash in your pocket.

There are proposals on both sides of the aisle that would reshape Social Security by financing the program from the federal government’s General Fund. For example, senators are quietly talking about borrowing $1.5T to form a “sovereign wealth fund” that would generate revenue for the program.


It is a fancy new name for an age-old concept: bail-out.

The interest on that fund is $60 billion per year, which is no different from giving the program a cash infusion from the General Fund. That cash infusion opens the door to future politicians who want to reduce benefits because the program is “driving our deficits.”  The legal and moral protection that seniors now enjoy will be gone.

Imagine for a minute that the hedge fund concept works. The unavoidable outcome of that success will be younger voters demanding more benefits. They will argue to double the size of the fund, as a means to provide relief from the payroll tax.

If you think the long-term outlook for Social Security is perilous now, just wait. It is likely to get worse before it gets better.


The opinions expressed in guest op-eds are those of the writer and do not necessarily represent the views of


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