Social Security: Bring back the balanced budget amendment
By Amy Moritz Ridenour
posted April 1998
If federal spending and revenue trends of the last three years continue,
the United States will be able to pay off its entire national debt in
15 years, says Wisconsin Congressman Mark Neumann.
That's good news for everybody, but especially anyone who depends upon
As many Americans realize, the government has borrowed from (read: "spent")
the Social Security Trust Fund since LBJ was in the White House.
Unless that money is repaid, or Social Security is reformed, Social Security
checks will start bouncing the first day the amount being paid into Social
Security is less than the amount being paid out. With baby boomers
approaching retirement, that date will surely come by 2012, or as early
Recent good news regarding the budget gives those still hoping to receive
Social Security in decades to come reason for optimism. It is too
soon, however, to rest easy.
One reason for pessimism is that President Clinton still advocates raiding
the Social Security Trust Fund. In his 1998 budget he proposes "borrowing"
another $95 billion, in part to fund new spending programs.
No new federal spending program is as important as restoring Social Security.
The government can afford to stop borrowing from Social Security, and
now it can even afford to start repaying money it borrowed in the past.
One way to put Social Security back on its feet would be to pass a Balanced
Budget Amendment to force politicians to stop borrowing from Social Security.
Americans will recall that, in 1995, following probably the longest continuous
debate in the U.S. Senate since the filibuster of the 1964 Civil Rights
Act, a Balanced Budget Amendment failed by one vote. Backers were
bitter, pointing to votes against the amendment by senators who ran for
office promising to support it. Senators such as Harry Reid of Nevada,
Byron Dorgan and Kent Conrad of North Dakota and Minority Leader Tom Daschle
of South Dakota replied that the Amendment would have been approved if
it had included provisions stopping federal borrowing from the Social
Security Trust Fund.
Things have changed a lot. What was fiscally improbable in 1995
-- passage of a balanced budget that did not borrow from Social Security
-- is now within easy reach. Passage of a Balanced Budget Amendment
that mandates balancing the budget without borrowing from Social Security
is now easily possible and a wise move. Doing so would put off Social
Security's bankruptcy until 2029 or so and impose fiscal discipline to
prevent massive government deficit spending in the future.
Passage of an Amendment would strengthen Social Security, and it needs
the help. In 1955, there were 8.6 workers for every Social Security
recipient. In 1995, there were 3.3. By 2040, there will be
no more than two. A January 1998 study by The National Center for
Policy Analysis found that when todayıs 20-year-olds reach retirement
age, their government retirement benefits may consume as much as two out
of every three dollars earned by those still working.
Equally sobering is a February 1998 poll by the National Center for Women
and Retirement Research at Southampton College of Long Island University,
which found 24 per cent of baby boomers have not made plans to ensure
their financial retirement security. A January-February 1997 survey
of non-retired Americans by Public Agenda found that 46 per cent of all
Americans have less than $10,000 saved for retirement, including 30 per
cent of Americans aged 51-61 and 40 per cent of those aged 33-50.
76 per cent of the general public thought they should be putting aside
more money for their retirement and 68 per cent said they could save more
if they tried.
Americans aren't saving as much as they should, even though a majority
say they have little confidence in Social Security. A September
1996 Polling Company survey found only 21 per cent of Democrats, 21 per
cent of Republicans and 17 per cent of independents are either "extremely"
or "very" confident that Social Security and Medicare will exist
throughout their retirement. A famous 1994 poll by the Generation
X group Third Millennium found that 28 per cent of Generation Xers believe
Social Security will exist when they retire -- while 46 per cent of them
believe in UFOs.
Clearly, many of the same Americans who say they have little faith in
the reliability of Social Security are still planning to rely on it.
Policymakers have a lot of good ideas for ensuring the future of Social
Security, including a partial privatization plan that would make Social
Security permanently secure, guarantee benefits for current retirees and
actually raise benefit levels for future generations. But the best
way to get started on comprehensive Social Security reform is with a Balanced
Budget Amendment to the Constitution. It will stop the federal government
from raiding the Social Security Trust Fund, and force the federal government
to stop deficit spending once and for all.
Amy Moritz Ridenour is president of The National Center
for Public Policy Research, a Capitol Hill think tank which can be
found at http://www.nationalcenter.org.
This essay originally appeared in a NCPPR mailout.