No, I'm not dusting off my copy of a Hemingway novel I read in college about 40 years ago (or the John Donne work that inspired the title). Instead, my reading lately has focused on the news.
In mid-March, Stephen Ohlemacher wrote "Social Security to start cashing Uncle Sam's IOUs" for The Associated Press. Ohlemacher pointed out that this year, for the first time since the 1980s, Social Security retirement benefit payouts will exceed the taxes collected - by nearly $29 billion.
In all the years when Social Security taxes exceeded benefits, the federal government just spent the excess and issued Treasury bonds to Social Security representing the amount borrowed from the fund (which add up to a staggering $2.5 trillion in debt). As Walt Kelly famously wrote, "we have met the enemy and he is us."
Then, in Walt Podgurski's Insurance Newscast, there was this article: "Most People Believe that We Are Not Prepared for Increase in Longevity and Number of Old People." My first thought was, hey, "old people" are a lot older than they used to be. Then I read the article and started having that horror movie feeling that something terrible is stalking me, and, really, all of us.
This article covered a January Harris Poll in which members of their interactive polling group were asked for views on how our nation will be able to handle the costs generated by an aging population as Baby Boomers grow older and experience longer life spans than previous generations. This situation, which will result in increased costs for retirement income benefits and post-retirement health care, is exacerbated by the fact that to pay these costs the government will need to get at least $2.5 trillion to repay the debt to Social Security.
The Harris Poll indicated that those surveyed preferred public policies that encourage people over 65 to continue working, given that other options included higher taxes and/or lower benefits. The fact is, the Medicare fund is projected to run short of money a generation before Social Security retirement benefits (check this out at www.ssa.gov). The current forecast is that Social Security must start to deflate benefits in 2037 and Medicare will be in this position in 2017.
Both headlines are framed, in my mind, by the health care reform legislation, in which millions of people are promised benefits in the future. Even though, as a friend of mine observed, the taxes start now and many of the benefits start later, the amount of funding is sure to be inadequate because, like Social Security and Medicare, it's easier to push problems (especially added taxes) into the future ... a future already littered with public debt and unfunded promises.
So here we sit, with the expectation that our population of individuals over age 65 expected to grow in a "senior boom" for the next 20 years or more, living with a national retirement system that was based on life expectancy of about 70 versus today's expectancy of 85 or so (and remember, life expectancy means 50 percent of the individuals will reach that age and beyond). Those reaching 85 will have another 10 years or more, meaning that about 25 percent of today's 65-year-olds will live to age 95, all else being equal. We have to wake up to the fact that difficult choices between more taxation, lowered benefit expectations, and deferred retirement ages - or all three - must be made soon. Let's return to Donne's famous reflection: "therefore, never send to know for whom the bell tolls, it tolls for thee." I would add, for thee and me, unless we start making the hard choices.
