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Social Security is one of America’s most successful government programs. It has helped millions of Americans avoid poverty in old age, upon becoming disabled, or after the death of a family wage earner. As President Bush has emphasized, “Social Security is one of the greatest achievements of the American government, and one of the deepest commitments to the American people.”1 Despite its successes, however, the program faces two principal problems.
First, Social Security faces a long-term deficit, even though it is currently running short-term cash surpluses. Addressing the long-term deficit would put both the program itself and the nation’s budget on a sounder footing.
Second, two decades have passed since the last significant changes in Social Security. Since then, as our economy and society have continued to evolve, some aspects of the program have become increasingly out of date. The history of Social Security is one of steady adaptation to evolving issues, and it is time to adapt the program once again.
Restoring long-term balance to Social Security is necessary, but it is not necessary to destroy the program in order to save it. To be sure, some analysts reject the view that Social Security’s projected financial problems are serious enough to warrant any changes right now.2 Others, in contrast, exaggerate the difficulty of saving Social Security to justify proposals that would shred the most valuable features of this exemplary program.3 Our view is that Social Security’s projected financial difficulties are real and that addressing those difficulties sooner rather than later would make sensible reforms easier and more likely. The prospects are not so dire, however, as to require undercutting the basic structure of the system. In other words, our purpose is to save Social Security both from its financial problems and from some of its “reformers.”
In this book we present a plan for saving Social Security.4 Our approach recognizes and preserves the value of Social Security in providing a basic level of benefits for workers and their families that cannot be decimated by stock market crashes or inflation, and that lasts for the life of the beneficiary. Our plan updates Social Security to reflect changes in the labor market and life expectancies. And it eliminates the long-term deficit without resorting to accounting gimmicks, thereby putting the program and the federal budget on a sounder financial footing.