Friday, August 15, 2008

My Social Security Plan

Howard Gleckman complains that Obama has declined to commit political suicide by promising to raise taxes and cut Social Security benefits, in order to extend the SS Trust Fund beyond its currently estimated depletion date of 2041.

Here's my plan to extend the Trust Fund: wait a year and a half. In March 2010, a Trustee's Report will come out, written under Obama-appointed Trustees. The new Trustees--who, unlike the Bush Trustees, actually want the program to continue to exist--will very likely adopt the recommendations of their Technical Panel and bring their immigration assumptions in line with experts' projections.

The current Trustee projections assume immigration levels will fall from their current levels to just over a million per year by the middle of the century. This assumption was always dubious, and today the Census Bureau came out with its official estimates projecting double that level, two million per year.

As Dean Baker notes, with immigration at this level, 30 percent of the projected Social Security shortfall would be eliminated. So just hang tight! The future of Social Security is looking better all the time. Now about that productivity growth estimate ...

(Thanks to Bruce Webb for the reference to the Technical Panel Report.)

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