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>> SOCIAL SECURITY IS IN
TROUBLE, AND ITS PROBLEMS WILL
ONLY GET WORSE.
>> AND YET THE LAST TIME THAT WE
ACTUALLY ADDRESSED THIS ISSUE
ACTUARIALLY WAS IN 1983.
RONALD REAGAN WAS PRESIDENT, TIP
O'NEILL WAS SPEAKER OF THE
HOUSE.
ASK THEY MADE THE ADJUSTMENT --
AND THEY MADE THE ADJUSTMENTS
THAT WERE NECESSARY THAT WOULD
EXTEND THE LIFE OF SOCIAL
SECURITY.
NEIL: ALL RIGHT.
OF COURSE, HE WAS REFERRING TO
THE SO-CALLED GRACE COMMISSION.
PETER GRACE WAS THE AUTHOR OF
THAT WORKING VERY CLOSELY WITH
THE REAGAN ADMINISTRATION TO F
SOCIAL SECURITY.
WHATEVER THEY PUT IN PLACE,
INCLUDING HIGHER TAXES AND
DEALING WITH AN AGING
POPULATION, ALL OF THAT MIGHT
HAVE COME TO PASS HERE.
I WANT TO STRESS THIS IS NOT A
CRISIS YET, BUT IT COULD BE.
WHAT THEY'RE SAYING IS THE
SOCIAL SECURITY TRUST FUND WILL
LIKELY BE DEPLETED BY 2034.
SO IT HAS ENOUGH MONEY RIGHT NOW
TO DEAL WITH WHATEVER MONIES ARE
HANDEDDED OUT THROUGH THEN --
ARE HANDED OUT THROUGH THEN AND
EVEN AFTER THAT TIME.
BUT AGAIN, IT BECOMES A LITTLE
BIT LIKE LOOKING FOR COINS UNDER
COUCH CUSHIONS AFTER THAT.
THE COMMITTEE FOR A RESPONSIBLE
FEDERAL BUDGET, HOW BIG A DEAL
IS THIS?
WE GET NEWS THAT THE MEDICARE
HOSPITAL INSURANCE FUND WILL BE
DEPLETED EVEN SOONER, BY 2026.
WHAT'S GOING ON?
>> WHAT'S GOING ON IS THAT WE'RE
MANY TROUBLE AS A NATION.
2034 MAY SEEM VERY FAR OUT, BUT
IT'S ACTUALLY QUITE CLOSE.
THIS IS A RETIREMENT PROGRAM, IF
YOU THINK ABOUT IT, AND IT'S
ONLY A FEW YEARS AWAY.
NEIL: SO WHAT HAPPENED?
I MEAN, I KNEW WHEN THEY STARTED
RAISING TAXES AND THAT WAS PART
OF THE EFFORT HERE TO SHORE UP
THE MONEY COMING IN AND THE
REVENUES COMING IN, THE
PROVERBIAL LOCK BOXES AND
EVERYTHING ELSE.
THE LOCK BOX IS GONE?
WHAT HAPPENEDSOME.
>> WE FIXED THE PROGRAM IN 1983,
AND THAT BOUGHT US 50 YEARS, BUT
NOW OUR 50 YEARS IS ALMOST UP,
AND WE DIDN'T DO ANYTHING.
WE'VE KNOWN SINCE THE EARLY
1990s THE PROGRAM WAS OUT OF
BALANCE, AND WE HAVEN'T DONE
ANYTHING IN THE LAST 20 YEARS TO
TRY TO BRING IT BACK INTO SHAPE.
NEIL: AMONG THOSE THINGS WE CAN
DO IS RECOGNIZE THE FACT THAT
AMERICANS ARE LIVING LONGER NOW.
A LOT OF PEOPLE GET CONCERNED
ABOUT THAT AND SAY, WELL, WAIT A
MINUTE, WHY ARE YOU DOING THIS
TO ME?
YOU CAN GRANDFATHER THESE AGE
CHANGES IN AS THEY DID DURING
THE TIME OF RONALD REAGAN.
WHAT ARE SOME BASIC THINGS THAT
COULD BE DONE SIMILAR TO WHAT
WAS DONE BACK IN '82 AND '83?
>> WELL, LOOK, WE'RE LIVING
LONGER, SO RAISING THE
RETIREMENT AGE, I THINK, IS A
SMART IDEA.
BUT THAT'S NOT GOING TO GET IT
ALL DONE.
WE'RE ALSO GOING TO HAVE TO MAKE
SOME CHANGES TO THE BENEFIT
FORMULA.
WE CAN DO THOSE PROGRESSIVELY,
AND WE'RE GOING TO HAVE TO BRING
IN NEW TAX REVENUE.
WE'RE PAST THE POINT WHERE
EITHER SIDE CAN HAVE THEIR
SOLUTION.
FOR EXAMPLE, SCRAPPING THE CAP,
THAT WOULDN'T FIX IT ALL, PRICE
INDEXING BENEFITS, THAT WOULDN'T
FIX IT ALL.
WE'RE PROBABLY GOING TO NEED
SOME KIND OF COMBINATION.
NEIL: DEMOCRATS SAY SCRAP THE
CAP BECAUSE ALL OF A SUDDEN
PEOPLE WHO, YOU KNOW, CAP OUT AT
THEIR CONTRIBUTIONS WOULDN'T AND
IT DOES THE TRICK FOR MEDICARE,
IT'LL DO THE TRICK FOR THIS.
WHAT DO YOU MAKE OF THAT, AND
OTHERS SAY THAT'S A PAINLESS WAY
TO DO IT.
YOU SAY --
[AUDIO DIFFICULTY]
>> IT WOULD HELP.
IT'S DEFINITELY NOT PAINLESS.
IT WOULD HELP, BUT IT'S JUST NOT
ENOUGH.
SCRAPPING THE CAP WOULD GET US
ABOUT EIGHT YEARS OF SURPLUSES
AND MAYBE 30 OR 40 YEARS OF
SOLVENCY.
NEIL: IS THAT RIGHT?
>> IF WE'RE GOING TO INCREASE
THAT CAP, WE NEED TO COMBINE IT
WITH SOME REDUCTIONS IN THE
FUTURE GROWTH OF BENEFITS.
NEIL: THE OTHER OH IDEA THAT
CONCERN -- OTHER IDEA THAT'S
BEEN BANDIED ABOUT IS MAKE IT
MEANS TESTED SO THAT IF YOU'RE
WEALTHY, YOU SHOULDN'T GET IT.
NOW, A LOT OF PEOPLE COME BACK
AND WRITE ME, E-MAIL ME, I'M
SURE I'LL GET THAT FOR EVEN
RAISING THIS NOW.
I'VE POURED A LOT OF MONEY INTO
CAREER, AND YOU JUST CAN'T TAKE
THE RUG OUT FROM UNDER ME, NO
MATTER HOW WEALTHY YOU THINK I
AM.
>> LOOK, THERE'S ONLY A FINITE
AMOUNT OF BENEFITS.
EITHER WE NEED TO RAISE PEOPLE'S
TAXES, CUT THEIR BENEFITS OR A
MIX.
AND THIS IS A GOVERNMENT
PROGRAM, AND IT'S FOCUSED ON
HELPING SENIORS STAY OUT OF
POVERTY.
SO I DO THINK IT MAKES SENSE TO
AT LEAST SLOW THE GROWTH OF
BENEFITS FOR THE VERY HIGHEST
EARNERS.
BUT I WANT TO EMPHASIZE, AGAIN,
HOW CLOSE THIS PROBLEM IS.
ON CRP.ORG, WE HAVE A TOOL WHERE
YOU CAN CHECK, AND, NEIL, YOU'LL
BE 76 YEARS OLD WHEN THE PROGRAM
IS INSOLVENT, AND YOU'RE GOING
TO GET A 22% BENEFIT CUT AT THAT
POINT.
WE JUST CAN'T KEEP DELAYING
THIS.
NEIL: I REALLY WISH YOU HADN'T
DONE THAT, BUT I'M VERY GRATEFUL
YOU DID.
[LAUGHTER]
IT IS RIDICULOUS, YOU KNOW?
THIS IS FIXABLE.
IT'S NOT, YOU KNOW, ROCKET
SCIENCE.
BUT DO YOU THINK PART OF THE
PROBLEM, REAL QUICKLY, IS THAT
WE'VE BUILT INTO THIS AS A SOLE
MEANS OF SURVIVAL IN OUR
RETIREMENT YEARS WHEN IT WAS
SUPPOSED TO BE PART OF THE
THREE-LEGGED STOOL WHEN IT WAS
FIRST BROUGHT UP BY FDR ALONG
WITH PENSIONS AND SAVINGS, THAT
THAT WOULD PROVIDE FOR OUR OLDER
YEARS?
WHAT HAPPENED?
>> I THINK THERE'S THIS MYTH
THAT SOCIAL SECURITY IS SOMEHOW
SACROSANCT.
THE TRUTH IS MOST PEOPLE ARE
SAVING FOR RETIREMENT IN OTHER
FORMS, AND WE NEED TO ENCOURAGE
OF THAT.