EDITORIAL: Results could help set course for Social Security reform

Tuesday’s election results will determine more than control of the House and Senate for the two years. They will also play an important role in setting a course for addressing the nation’s looming entitlement crisis, particularly when it comes to Social Security.

Ignoring the program’s structural problems — the default setting in D.C. — becomes more difficult with each passing month. The 33 senators elected this week will all be in office in 2032, when the Social Security Trust Fund faces insolvency. Avoiding the matter as a means of political survival isn’t an option.

Absent reforms, benefits will drop in fewer than six years by 22 percent — or $482 a month for a Nevada retiree, according to the Committee For a Responsible Federal Budget. The cut would hit nearly 550,000 Silver State residents.

“While time to shore up the nation’s trust funds is quickly running out,” the committee noted in a recent news release, “there are many trust fund solutions available to policymakers to increase revenues and slow the growth in program costs. Both revenue and spending changes will need to be on the table, and likely part of the final solution.”

Among the proposals: raising the retirement age, increasing the payroll tax, boosting or eliminating the payroll tax cap, reducing benefits for high earners, modifying annual cost-of-living adjustments or allowing workers to siphon a small portion of their contributions into private investment accounts.

It’s worth noting that, in 2005, President George W. Bush proposed the latter, which was shelved after fierce resistance — some might say demagoguery — from Democrats. Yet, two decades later, recent modeling by Andrew G. Biggs of the American Enterprise Institute concludes that the reform would have boosted benefits for low-income workers while addressing two-thirds of the program’s long-term funding gap.

It was a missed opportunity killed on the altar of political opportunism.

There are, however, signs of hope. In July, a group of Senate Democrats and Republicans proposed the creation of a seven-member advisory board that would draft a bill to keep Social Security solvent for 50 years. Congress would then take up the proposed legislation. Any such reform would probably include a mix of several different proposals rather than relying on one solution, such as tax hikes. It would also almost certainly shield most retirees and those nearing retirement age from significant benefit reductions.

Yes, it would be optimal if members of Congress had the courage to do their jobs and reach a consensus on reforms necessary to shore up Social Security. But if an advisory board is what it takes to break the inertia, so be it.