Social security: robbing Peter to pay Paul
The fact that the US social security system will have to borrow from one of its smaller trust funds this November so that its regular old-age pension checks can be mailed out on time underscores the need for basic reform of the nation's largest federal entitlement program. Last year President Reagan urged Congress to scale down future social security benefits precisely to help ward off the type of robbing-Peter-to-pay-Paul bookkeeping now going on within the beleaguered system. Congress failed to act on those recommendations, but did authorize the stopgap interfund borrowing. Mr. Reagan, for his part, appointed a bipartisan presidential commission on social security that was directed to issue its proposals after the November elections.
Simply speeding up future social security payroll tax increases will not bring about the long-range structural changes needed to restore the system to soundness. Looming down the road are fundamental problems, including a smaller work force covering a larger and larger retirement-age pool; the fact that future retirees (who are now teenagers) will receive back less than they contribute to the system in taxes (while their elders on average receive far more than they pay in); and the spiraling costs of the medicare program. Will the presidential commission - and Congress and the White House - muster the courage and bipartisan resolve necessary to put the system on a sound footing? Among reform proposals are these:
* Raising the retirement age; changing the formula for future increases in benefits, by linking it to the Consumer Price Index or the average increase in wages, whichever is less in any given year.
* Integrating federal workers into the social security system; taxing social security benefits, which would have the effect of leaving benefits with those persons most in need while taking some benefits away from older persons in high-income brackets; removing the medicare program from the social security system and financing health care programs through general revenues.
When federal programs have to be kept afloat by tapping one fund to pay another, it is time for responsible action.