The debt and budget deal tweaks Social Security to close loopholes benefitting wealthier recipients.
To their credit, former-Speaker Boehner and Majority Leader McConnell shepherded the debt and budget deal through both Chambers and to the President for his signature. As a result, the government has avoided defaulting on its debt and greatly reduced the likelihood of a government shutdown in the next two years. The deal has its shortcomings and critics – every legislative compromise does. But the noise being made by deal’s main detractors – anti-spending Republicans – should not drown out one small piece of good news: Social Security reform.
Social Security is badly in need of reform. It suffers from at least four major flaws, including: (1) it has been rhetorically transformed from an “insurance” program to an “entitlement,” which makes it more costly and difficult to change; (2) it is financially unsustainable; (3) it provides benefits to wealthier retirees who do not need them at the expense of younger and poorer Americans who do; and (4) it does not keep all older Americans out of poverty.
The debt and budget deal does not address all of these flaws, but it does close two loopholes that make the program more expensive. These loopholes also tend to benefit somewhat wealthier recipients. Although these reforms will cover less than 1% of Social Security’s shortfall over the coming decades, they are a step in the right direction. For younger Americans and those who believe that any meaningful spending reform must address the so-called entitlement programs, the debt and budget deal is a small win that should be celebrated by writing Members of Congress to thank them for their efforts and encourage them to enact more reforms.