Letter to Rep. Hastings on Social Security Comments
|Written by Dean Baker|
|Monday, 03 October 2011 15:15|
The Honorable Doc Hastings,
Dear Representative Hastings,
At a recent town hall in your district you said that Social Security needs “significant reform” and, among other things, that people are living longer and that the ratio of workers to beneficiaries has changed.
As a matter of fact, changes have already been made to Social Security. Based on the recommendations of the National Commission on Social Security Reform in 1983, Congress increased the normal retirement age to 67 and Social Security taxes were raised. This was done precisely because the commission recognized that people were living longer and the ratio of workers to beneficiaries was getting smaller. This in turn led to the growth of a large surplus in Social Security. This surplus was used to buy bonds and now Social Security holds more than $2.6 trillion in government bonds.
The result of these changes is that the Congressional Budget Office’s projections show Social Security will maintain full solvency through the year 2038 with no changes to the current system. Even after 2038, the program will still be able to pay about 80 percent of full benefits from then on.
As a member of Congress, I hope that you will be careful to present the situation more accurately in future statements to your constituency and the general public. If you would like any additional background on the program, I would be happy to assist you.