Social Security is a vital program for tens of millions of Americans, but a financial crisis for the program is looming. For a long time now, those who follow Social Security have predicted that a major financial disruption will hit around the mid-2030s, and both current and future recipients of Social Security benefits could see devastating cuts without further action. Even with the American public becoming increasingly nervous about the future of Social Security, Washington gridlock has thus far remained an insurmountable impediment to finding a solution.
For several years, the public hasn't even had a voice among the trustees of the trust that holds Social Security's asset reserves. There are supposed to be two members of the public named among the six trustees, but those spots have been vacant for years. Below, we'll go into more detail about the role that the public trustees are supposed to play -- as well as why two people who used to fill those roles have taken it upon themselves to volunteer to provide the same sort of information that they used to give in their official capacity.
How public trustees got onto Social Security's trust fund
Social Security's trust fund didn't always have public trustees. Indeed, for much of the first half-century of the program's existence, only appointed government officials were entitled to a seat among the trustees of the trust fund. Today, the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services are the three cabinet-level trustees, and the Commissioner of Social Security fills a fourth seat.
When Social Security reform last happened, in 1983, former Fed chair Alan Greenspan led a commission that recommended two public trustees to join those overseeing the trust fund. The commission's hope was that including members of the public would boost confidence among everyday Americans about the trust fund's management. Mary Falvey Fuller and Suzanne Denbo Jaffe took their spots as the first public trustees in 1984, and subsequently, replacements were named on a regular basis.
Over the years, political wrangling has led to vacancies in the post. From 2008 to 2010, no public trustees were listed, as the White House and Congress couldn't agree on who should fill the seats of the departing public trustees. A similar situation occurred in 2016, and as of the most recent trustees' report, the public trustee spots are again listed as vacant.
What the most recent public trustees have said
But the expiration of their terms in 2015 hasn't stopped Robert Reischauer and Charles Blahous from making their views known. Shortly after the most recent release of the trustees' report, Blahous and Reischauer issued an open letter through the Bipartisan Policy Center. In the letter, the two former public trustees discussed what they saw as the key findings of the report:
- The Social Security trust fund is expected to draw down its fund balances beginning this year, starting what most see as a downward spiral that will eventually led to the depletion of the trust fund.
- Even though the date at which financial troubles for Social Security are expected to begin has stayed stable, the fact that it's getting closer will make it more difficult for lawmakers to remedy the problem.
- Solving the problem currently would take either a 21% boost in tax revenue, a 17% cut in benefits, or some combination of the two.
Overall, the two former public trustees said that the trustees' report used appropriate methodologies and assumptions in coming to its conclusions. Yet they still think that the public trustees have a role to play:
[T]he process [of developing the trustees' report] would benefit greatly from the participation of public trustees, to provide bipartisan independent oversight of assumptions and methods, to substantiate public confidence in the trustees' findings, and help explain the details of the projections to lawmakers, press, and the public. Even more important, however, is that lawmakers take seriously the trustees' warnings about the increasing urgency to repair the programs' [Social Security and Medicare] financing shortfalls.
Finding a solution
Many skeptics question whether lawmakers will ever be able to resolve Social Security's financial crisis. Yet the experience in the early 1980s showed that under pressure, Washington can come up with solutions. Back then, though, it took an independent commission to accomplish that. The public trustees to Social Security's trust fund play a similarly bipartisan role, and the sooner new public trustees are named, the faster they'll be able to get to work to provide the insight and determination necessary to get the program's problems solved.