Industry Voices

Barry’s Pickings Online: Intimations of Mortality

Michael Barry questions whether there is a lack of commitment to Social Security as a social insurance system, but rather a desire to use the opportunity presented by the Social Security “crisis” to cook up more schemes for re-distributing income from “rich people.”

By PS | October 31, 2016
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PS_Barry_JCiardielloArt by J CiardielloThe easiest way to solve the Social Security “crisis” is to raise the retirement age. I put “crisis” in quotes, because I’m not totally persuaded Social Security is in that much trouble. But, according to the 2016 Social Security Administration (SSA) Annual Report, “[t]he Trustees project that the combined [retirement and disability] trust funds will be depleted in 2034.” 

As President Obama said in 2012 in his first debate with former Governor Mitt Romney: “Social Security is structurally sound. It’s going to have to be tweaked the way it was by Ronald Reagan and Speaker – Democratic Speaker Tip O'Neill. But it is – the basic structure is sound.” What President Reagan and Speaker O’Neill (in 1983) did was … raise the retirement age.

In 2010, the bipartisan Simpson-Bowles Commission leaders recommended:

[I]ndexing the retirement age to gains in longevity. The effect of this is roughly equivalent to adjusting the retirement ages by one month every two years after the NRA reaches age 67 under current law. At this pace, the NRA would reach 68 in about 2050, and 69 in about 2075; the Early Eligibility Age (EEA) would increase to 63 and 64 in step.

Just to be clear: This proposal is to raise the age from 67 to 69 by 2075—almost 60 years from now.

Workers broken down by physical labor 

Many, however, strenuously oppose any increase in the Social Security retirement age. This split is explicitly partisan. Notwithstanding the recommendation of the President Obama’s bipartisan budget commission leaders and of President Obama himself (in that quote I just gave above), Democrats emphatically oppose a Social Security retirement age increase. Their 2016 party platform states, “We will fight every effort to cut, privatize, or weaken Social Security, including attempts to raise the retirement age, diminish benefits by cutting cost-of-living adjustments, or reducing earned benefits.” Republicans are more oblique, but the implication is clear. Their platform states, “Of the many reforms being proposed, all options should be considered to preserve Social Security.”

When you float the idea of an SS retirement age increase by Democrats, the pushback looks like this (quoting Hillary Clinton from a February 2016 speech):  

Right now if you look at who draws Social Security for the longest time, people who have worked hard for many years, people who are often really broken down by the physical labor or the repetitive labor that they've done. Their lifespan is much lower than the lifespan of people like you and me who had a different sort of life, made our monies different ways, didn't have to work that hard. So right now the average death age for a lot of Americans and Latinos and African-Americans is lower than the average death age of whites. And that's lower still than the age of people who are affluent and well educated. So raising the retirement age would very well eliminate a lot of hardworking people from getting much Social Security at all. I will not do that. I want people to have the best possible older years. So that is ruled out to me. [Emphasis added.]

And this argument has a certain appeal: there does seem to be something fundamentally unfair about raising the Social Security retirement age for individuals with shorter life spans. Let’s consider it a little more fully.

NEXT: “Data”