Lack of leadership from the White House, and lack of courage in the Congress, have killed a great opportunity to reform Social Security.
What we're left with is Social Insecurity: younger workers cannot plan their financial affairs because they don't know what their Social Security benefits will be, or how much they will pay in taxes for them in the meantime. Today's middle-aged and young workers will certainly pay the price, beginning just a decade from now when taxes must be raised or benefits cut.
Because no real effort has been made to reform Social Security in 1999, and next year is an election year, no effort to change the system will be considered at least until 2001.
Yet the year began with high hopes that changes would be made to extend the life of Social Security beyond 2030. A presidential commission examining the future of the system concluded that without changes it is doomed. While they could not agree on a plan to save the system, they offered three approaches, any one of which is an improvement over the status quo.
But President Clinton, who had said saving Social Security was one of his goals, failed to select an approach and then work for its passage in Congress. And Congress, without leadership and pressure from the White House, refused to tackle the subject.
And the longer change is delayed, the greater will be the tax increases and/or benefit cuts needed to ensure continuation of the program.
And as long as workers cannot be sure of what benefits they will receive from Social Security, they cannot efficiently plan their saving and investment programs to supplement it. Middle-aged workers, in the meantime, can make these assumptions: that Social Security will be there for at least the next 30 years; that sooner or later, Congress will increase Social Security taxes and reduce benefits; and that Congress most likely will postpone these changes until the last possible moment, making them far more painful than if they were made now.
