Jason Furman writes:

The first major public policy issue I worked on in the White House, almost 30 years ago, was President Bill Clinton’s call to “save Social Security first.” Though the fund wasn’t projected to run dry for another three decades, the country seemed gripped by the issue. A few years later, George W. Bush felt strongly enough about the looming crisis that he spent much of his political capital pushing a strategy to resolve it.

This week the Social Security trustees announced that the trust fund for retirees and survivors will be exhausted in just six years. That’s six years before tens of millions of Americans could see their benefits cut by 22 percent. The crisis is closer than anyone in the Clinton or Bush years ever imagined we might let it get. People who receive Social Security haven’t taken to the streets in outrage — perhaps because they know from experience they will be spared. It’s everyone else who will be made to pay.

Instead of fixing the problem, America is likely to just kick it down the road again, drawing on other parts of the federal budget to pay for the shortfall in this one. The rest of the budget, however, is already strained and getting more so by the day. Putting additional pressure on it will mean less money for children’s education, cancer research, the infrastructure we need to power economic growth — and many other things we need.

Both Mr. Clinton and Mr. Bush warned that the closer the Social Security fund got to insolvency, the worse the options would be for real and lasting change — and the greater the constraints, both politically and economically. An aide to House Speaker Tip O’Neill once called Social Security reform the third rail of American politics: Touch it and you get electrocuted. That was because at the time he said it, roughly 20 percent of the voting age population was receiving Social Security benefits, too big a population for politicians to risk alienating. In six years, that chunk will be about 30 percent.

Sure enough, now that we’re getting close to the cliff, instead of pumping the brakes, politicians from both parties are actually pressing harder on the gas pedal. [Continue reading…]