That Congress will need to act to assure the solvency of the Social Security and Medicare programs is clear. The Social Security board of trustees re-emphasized the point with the announcement on April 23 that the trust fund for disability insurance will be exhausted in 2016 while payments from the old-age/survivors insurance trust fund will exceed noninterest income this year. (Noninterest income comprises what workers/employers pay in FICA, taxation of benefits and payments from the federal treasury to offset payroll tax exemptions. Interest income provided $114 billion to the fund in 2011; payouts in 2012 are expected to total $760 billion.)
It's also clear that the current Congress will do nothing, not with a polarized federal election campaign under way.
Unfortunately, it's also clear that the polarized election campaigns will generate rhetoric intended more to confound than clarify the issues in both programs.
As U.S. Senate candidate Ed Case suggests in an interview with The Maui News this week, it is politically disadvantageous to be honest about what needs to be done, when all possible actions impact some segment of the voting constituency.
The National Academy of Sciences in a 2010 report on the condition of the national economy, "Choosing the Nation's Fiscal Future" (www.nap.edu/catalog.php?record_id=12808), pointedly noted the problem of political decision-making on the country's finances:
"A fundamental obstacle to dealing with the nation's long-term fiscal problem is that all solutions are painful. Thus, leaders who advocate them may well be voted out of office, especially if the voters are not well informed about the problem.
"Poorly informed voters are vulnerable to demagoguery, such as: (1) there is no long-run problem that cannot be solved by economic growth or immigration; (2) solving it through growth is possible only if you avoid any tax increases; and (3) any cut in promised benefits or increase in taxes will cause unacceptable suffering.
"These claims ignore the facts that one can get a long way to a solution by reducing the rate of growth of benefits, rather than cutting them outright, by raising taxes, or with a judicious mix of benefit reductions and revenue increases."
Other analysis have been published analyzing the failing financial conditions of Social Security and Medicare, but most are based on ideological assumptions. "Fiscal Future" offers a non-ideological analysis of the causes as well as possible solutions that acknowledge different constituencies will be affected by the spectrum of options that run between cutting benefits to increasing tax revenues. It doesn't help that organizations catering to segments of the voting population, such as the AARP that opposes any cuts in benefits, offer adamant positions rather than informative analysis of the issues.
Presidential candidate Mitt Romney takes a small political risk in proposing reductions in benefits by increasing the age for eligibility in eight years and reducing growth in level of benefits for higher income retirees (www.mittromney.com/issues/social-security). But his platform does more than the Obama/Biden campaign, whose website (www.barackobama.
com) offers no proposals for assuring the solvency of Social Security. The White House website does have a statement that President Obama "will not accept an approach that slashes benefits for future generations."
The term "slashes benefits" is discreet political phrasing. Beyond a few radical libertarians, no one is proposing major benefit cuts. As "Fiscal Future" suggests, most viable solutions will involve "a judicious mix of benefit reductions and revenue increases."
That is, preventing the insolvency of the Social Security trust fund will require something out of everyone - beneficiaries receiving payments or close to the age of tapping the system, as well as the workers and employers who are funding those benefit payouts and expecting in time to be beneficiaries themselves.
Voters choosing representatives holding hardened positions on either end of the spectrum of options will not solve the problem.
* Edwin Tanji is a former city editor of The Maui News. He can be reached at hakumoolelo@earthlink.net. "Haku Mo'olelo," "writing stories," is about stories that are being written or have been written. It appears every Friday. This discussion will continue on The Maui News blog: mauinews.com/page/blogs.listAll/display/41/Edwin-Tanji.html.
