SAN DIEGO – Robert Bixby, Executive Director of
The Concord Coalition, testified
today at a public hearing of the President’s Commission to Strengthen Social Security
in San Diego. As the leadoff witness on the
opening panel, “The Need For Reform,” Bixby emphasized that any credible plan
SAN DIEGO – Robert Bixby, Executive Director of
The Concord Coalition, testified
today at a public hearing of the President’s Commission to Strengthen Social Security
in San Diego. As the leadoff witness on the
opening panel, “The Need For Reform,” Bixby emphasized that any credible plan
for Social Security reform will involve hard choices:
“For over 60 years Social
Security has provided a vital floor of protection. Its broad range of retirement,
disability, and survivors’ benefits for millions of Americans makes it an important
issue for people of all ages. But changing
demographics render the current pay-as-you-go system fiscally unsustainable and
generationally inequitable over the long-term. Reversing this trend will require facing up
to some hard choices and making far-sighted decisions.
"Now is the time to begin
preparing for the aging of America by designing a retirement system that is both more
secure for the old and less burdensome for the young. Demographic and economic
circumstances will never again be so favorable for Social Security reform. However, the window of opportunity is rapidly
closing.
"Given demographic trends, the
economy in the future will be called upon to transfer a rising share of real resources
from workers to retirees. These resources will be much easier to find in a healthy growing
economy than in a stagnant one. The best way to achieve economic growth and increase real
income in the future is to increase savings today. Without new savings reform is a
zero–sum game.
"Social Security does not exist
in a vacuum. The challenge is to prepare for the demographic tidal wave that will
transform our work lives, our health care system, our economy, and our culture.
"The Concord Coalition has
noticed an unfortunate tendency to rush into a debate over the pros and cons of specific
reform options before fully considering the overall problem, and without stopping to
consider what will happen if we do nothing. Details of reform plans are, of course,
important. But before we can possibly agree as a nation on what the solution is, we need
to first define the problem.
"There is no free lunch solution. Each reform option involves trade-offs and each
comes with a fiscal and political price.
"But in 2008, the year the first
baby boomers will qualify for benefits, the annual cash surplus will begin to shrink, and
by 2016 the trustees project that Social Security’s cash flow will turn negative. In 2038, the trust fund will be depleted, leaving
Social Security with enough annual income to pay just 73 percent of benefits. Between 2016 and 2035 the system faces a cash
shortfall of approximately $4 trillion."
The full text of Bixby’s
testimony at the public hearing (http://concordcoalition.org/issues/socsec/old-doc/010806cssssdtestimony.htm),
and the full statement Concord submitted to the commission earlier this month (/issues/socsec/old-doc/0108socseccomissstatement.pdf;
requires Adobe Acrobat Reader), are available under “What’s New” at
Concord’s web site (www.concordcoalition.org).
The Concord Coalition is a
nonpartisan, grass roots organization dedicated to balanced federal budgets and
generationally responsible fiscal policy.
