WASHINGTON – Beyond the thick curtain of finger-wagging last week over huge deficits and an unsustainable debt, a familiar battle resurfaced over the future of Social Security.
“For those under 55, we have to start a transition to a new system that will save America from bankruptcy and a lower standard of living,” Rep. Jeb Hensarling told Hardball host Chris Matthews on Monday. “Part of the social contract is going to have to be re-engineered.”
To privatize or not to privatize, that is the question.
The Social Security system is sagging under its own weight. When it runs out of money, around 2037, that will trigger drastic, automatic benefit cuts of 24 percent – painful, but so is every solution that might be adopted now, from higher payroll taxes to delaying the retirement age.
So the lack of consensus is understandable, if maddening.
One idea Republicans have kicked around for years is to let younger workers shift some Social Security taxes into personal investment accounts. President George W. Bush pushed it in 2005. Let workers younger than 55 divert up to two-thirds of their payroll taxes and buy stocks and bonds.
The idea went nowhere, and the stock market crash later in Bush’s term left critics smug.