This Week's Duel
Chris says, "I would argue that we can."
I say, "Get your head out of the sand before you die of sediment inhalation."
I concede that many people -- perhaps even most -- will get something from Social Security. But there is no way to accurately factor it into your retirement plans. Will the benefits be enough for the dentures, or a monthly visit to Denny's?
We're talking about a program that is facing insolvency, a program that in 14 years is projected to be paying out more than it is taking in. The problems are non-negotiable. And since there is no reason to believe that these problems are going to get fixed anytime soon, the safe thing to do -- when you sit down with your budget, your portfolio, a Foolish retirement calculator, and your blankie -- is to assume that Social Security will not be adding much to your retirement income.
My worthy adversary says, "The adjusting of the program's finances is a matter of political will."
More accurately, it is a case of political "won't." Anything political involves politicians, and they first and foremost have to stay in office. Therefore, the issue gets relegated to the back burner year after year because no one wants to lead the charge for tough reform. Reduced benefits and higher taxes -- or program overhaul -- will have to happen sometime, but why should today's politicos sacrifice their Capitol Hill offices for a problem over a decade away?
This past year was an interesting study on how effective politicians are at Social Security reform. In January of 1999, the Republican leadership announced that Social Security should be a priority, and challenged the president to join them in the fight. Clinton proposed some solutions -- such as investing surpluses in the stock market -- in his State of the Union address. Do an Internet search on Social Security and notice that many congressfolks had a lot to say about the program's woes.
So what did politicians actually do in 1999?
Nothing. As John Rother of the American Association of Retired Persons (AARP) said recently, "Congress missed the chance to save Social Security this year." It was all a lot of huff and puff that did nothing to replace Social Security's straw house with bricks.
Furthermore, politicians are congratulating themselves for at least not dipping into Social Security surpluses (as Congress has done for years, which is a whole other can of worms). However, an analysis by the nonpartisan Congressional Budget Office shows that $17 billion of Social Security surpluses will indeed be tapped once the dust settles on the budget. It's probably no big surprise, though, that we cannot count on a politician's accuracy any more than his follow-through, at least when there are elections afoot.
As Business Week's Howard Gleckman observed, "Nowadays, Washington politicians all worship at the Shrine of Our Lady of the Perpetual Election Cycle. Social Security reform has gone nowhere because many congressional Democrats see gridlock as their ticket to control of the House and because some Republicans see it as their key to the White House."
My point is not to assail congresspeoples (not entirely, at least), but to point out that the nation's fragile nest egg is being used as a political football.
What to do? If you agree with Chris, do nothing. Relax, wait for the dawning of your golden years, and learn to like generic macaroni and cheese. However, if you agree with me, click here and here (but after you cast your vote for the Duel victor) and tell your congresshumans about your concerns. After all, changing "won't" to "will" is a most Foolish thing to do.
This Week's Duel