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The Glaring Omission in Social Security's Latest Report

By Dan Caplinger – Updated Apr 29, 2019 at 2:04PM

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For years, policymakers have failed to deal with this oversight.

Social Security is a vital program for Americans, who count on the benefits that they receive in retirement or when they become disabled. With tens of millions of current recipients and hundreds of millions more expected to claim them during their lifetimes, the financial problems that Social Security faces are troubling for the financial health of the nation.

The latest report on Social Security's trust funds came out last week, and it revealed that the troubles in Social Security's futures aren't just going away. Yet the report also revealed another glaring problem that has now gone on for years: The two leadership spots that are supposed to be filled by members of the public remain vacant. Until public trustees take their role among the other members of the trust funds' governing body, the general public will lack the direct representation they deserve in having their interests in the future of Social Security acknowledged.

Social Security card folded into spread-out piles of money.

Image source: Getty Images.

How the Social Security trust funds work

From Social Security's earliest days, lawmakers understood that the program would need to hold public funds in trust for beneficiaries, and the laws creating Social Security called for a board of trustees to oversee those funds. At first, appointed government officials were solely responsible for the management of the trust funds, with the Secretary of the Treasury taking the key management role within the group.

More recently, though, legislators recognized that including members of the public among the trustees of Social Security's trust funds would ensure that average Americans would have a voice in the way the program operates. The Social Security reform commission led by former Fed chair Alan Greenspan in the early 1980s recommended naming two public trustees to join the board. In 1984, those two spots went to Mary Falvey Fuller and Suzanne Denbo Jaffe, and since then, several different pairs of public trustees have offered their service to the Social Security program.

Vacancies have been common in the past decade

Since the late 2000s, however, the public trustee role has gotten embroiled in political controversy. The Social Security trustees reports had no public trustees among their signatories between 2008 and 2010, as lawmakers in Congress refused to confirm President George W. Bush's reappointment of public trustees who'd served since 2000. Legislators did allow President Obama to name public trustees to participate in Social Security's report process between 2011 and 2015. However, subsequent political wrangling led to vacancies beginning in 2016 that remained open in the latest report.

The White House has made at least some progress in trying to resolve the situation, but it hasn't resulted in any final solution. Last year, President Trump announced his intent to nominate Bush administration Social Security Administration principal deputy commissioner James Lockhart to fill one of the posts, and reports suggested that congressional Democrats were looking for a suitable candidate to fill the other in order to meet guidelines requiring political balance between the two seats.

Why public trustees are critical

The idea of having public trustees helping to oversee Social Security trust funds is in line with the fundamental concept of a government of, by, and for the people. Current members of the administration face political pressures that can lead to impairments in judgment, favoring short-term patches over longer-term policy decisions. By providing an outsider's perspective, a public trustee can provide a useful check against misleading or erroneous information coming out in the report.

The results of the Social Security trustees reports have been consistent enough over the years that there's little reason to believe that there's any immediate issue about the veracity of the reports themselves. Nevertheless, the longer the board of trustees goes without having representation from the general public, the greater the chances that the reports on which millions rely to understand the financial condition of Social Security won't fairly address the concerns that typical Americans have about the program and its future.

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