A new report by Charles Blahous and Robert Reischauer, who up until last year were the public trustees of Social Security and Medicare, highlights the financial challenges facing both programs as part of a new initiative at the Bipartisan Policy Center (BPC).
The public trustees play a vital role in ensuring objective oversight of Social Security and Medicare’s finances. The two public trustees are the only ones who are not members of the president’s administration, and by law one must be a member of the opposing party.
Blahous, a Republican, and Reischauer, a Democrat, were re-nominated for a second 4-year term by President Obama in 2015, but their nominations lapsed after inaction by the Senate.
The Trump administration has taken no action to fill these positions, suggesting that they may remain vacant for the foreseeable future. When the trustees release their official annual report, which is expected next month, the public would benefit from the independent review Blahous and Reischauer can provide.
Their first report at BPC offers a list of 13 items to look out for in the trustees’ annual report, including whether any of the programs’ “trust funds” are nearing imminent depletion and what “sizes of adjustments to benefits and/or taxes are needed to restore Social Security and Medicare to long-term solvency.”
Blahous and Reischauer caution against using far-off trust fund depletion dates to justify inaction, saying: “Undue focus on trust fund depletion dates conveys the misimpression that action can be put off until depletion is imminent, when in reality policy options at that point will be severely constrained.”
Social Security and Medicare are the largest programs in the federal budget and are the fastest-growing, projected to account for the vast majority of growth in non-interest spending over the next two decades.
As Blahous and Reischauer note in their new report, both programs also face significant financial shortfalls. These will necessitate politically difficult changes in dedicated revenues, benefit levels, or some combination of the two in the next few years.
It is thus critical that the public and policymakers have access to independently confirmed estimates of the programs’ finances to inform political and policy debates. With their demonstrated commitment to analytical integrity during their tenures as public trustees, Blahous and Reischauer should be an excellent source for such analysis in the future.