B’nai B’rith is cautiously optimistic about news in the trustees report. While we expect headline makers may focus on the projected shortfall dates for Social Security—in particular for the disability program—as well as for Medicare, the overriding story of the report is one of income and surpluses of which most governments or programs would be envious. Though there is reason to be concerned about the programs into the future, there is no reason to legislate by panic.
“In short, Social Security itself has an enormous surplus of nearly $3 trillion, and it has brought in another $40 billion more than it spent in 2013 alone. Medicare also gained two years before it is projected to have trouble financing benefits, pushing the new date to 2026, which is terrific news,” B’nai B’rith International President Allan J. Jacobs said. “We are all aware that Social Security needs more money in the future if it is going to continue to assist people, but that’s not an emergency. It has nothing to do with the current flurry of deficit reduction proposals. We should talk about solvency, separate from deficit reduction, and when we do we must emphasize solvency and adequacy,” Jacobs continued.
B’nai B’rith is deeply committed to both Social Security and Medicare’s ability to adequately meet the needs of their beneficiaries, while also being able to cover their long-term expenditures. More and more we find that after the Great Recession, these programs provide bedrock health and income security to older Americans and the disabled, and without them millions would live in abject poverty.
Reform of these programs to ensure their long-term solvency should be done in a less heated environment that recognizes thoughtful and reasoned bipartisan efforts. There are two most important takeaways from the report: Social Security is solvent and running a surplus, and Medicare is getting healthier because of changes made in the last few years.
This is a claim most governments would take pride in making. Social Security has enough money saved and flowing in to make full payments until 2033 (and to pay more than three-fourths of benefits after that date, even if none of the current options were enacted—an unlikely scenario). Finding revenue to fund benefits in those out years is feasible and must be the goal. The shortsighted approach would be to cut benefits and make solvency and austerity priorities, rather than focusing on adequate benefits to keep elders out of poverty.
We also caution policymakers against potential calls for cuts to the disability programs because of the shortfalls in the Disability Insurance Program. This issue has been dealt with in the past and can be dealt with now by shifting a relatively small portion of the trust fund into this account.
“We know times are tough and the federal budget is tight, but Social Security and Medicare keep people out of poverty and in retirement or on disability. Cutting benefits to make the system solvent could leave its beneficiaries destitute. This doesn’t make sense,” B’nai B’rith International Associate Vice President Mark D. Olshan said. “Workers and families pay into these systems as a social insurance policy against poverty in old age or disability. We need to stop apologizing for spending Social Security taxes on Social Security benefits. And we should also take a moment to see the good news: We are already bending the Medicare cost curve and improving that system’s outlook for the future.”