The last time the Social Security trust funds were in imminent danger of being insolvent was 1983. We are once again faced with the idea of reduced benefits in 15 years or so unless there is some sort of compromise in Congress to change the trajectory of the trust funds, similar to what happened in 1983.
Things are much different today than in 1983. Political ideology has always been present, including in 1983, but divisiveness seems to be at an all-time high compared to 1983. The major players in the compromise of 1983 were President Ronald Reagan, a Republican, and Speaker of the House Tip O’Neil, a Democrat. These two officials had many differences, but at the end of the day came together to make a deal and respected one another. This seems unlikely in today’s climate, but if Social Security is going to be saved, this will have to change.
For years we have heard stories about Social Security’s funding crisis, but it is important to realize we have time, much more time than they did in 1983. Back then, Social Security estimated it would be unable to continue to pay full benefits by July of 1983. The legislation that Reagan and O’Neil worked on wasn’t signed by Reagan until April 20, 1983.
This time around, Social Security estimates it will be unable to continue to pay full benefits by 2033 or 2034 (projections can change from year-to-year), but by looking to the past we can get ideas about how to save Social Security’s future. Bipartisanship played a large role in the legislation passed in 1983. In the House of Representatives, 80 Republicans joined 163 Democrats in voting yes for a 243-102 majority. In the Senate 32 Republicans were joined by 26 Democrats to successfully pass the bill 58-14. There were many Senators and members of Congress who decided to skip the vote for various reasons.
Bipartisanship was just one major reason why the legislation was successful. Another reason was that measures of the bill enacted were phased-in over a number of years so there was no immediate shock to the system. Changes that were made in 1983 included a gradual increase of the retirement age that would not impact people for decades to come, and mainly impacted people who would not be able to vote for another decade. Some people claim that this just puts the burden on future generations, but Social Security has always been a program where future generations pay benefits for past generations, this is reciprocated by every future generation.
The changes are likely not going to be universally accepted, but if bipartisan support is there, and both parties of Congress agree to a solution, it may just be able to satisfy enough people to keep Social Security solvent for many years to come.
