In a Seattle Times column by Froma Harrop, Dean Baker is quoted regarding his preferred plan for Social Security: wait and see how big a problem it turns out to be.
What should we do about Social Security? "I would just say, 'Let's sit on this,' " Baker answers. If come 2030 Americans see problems looming, he adds, "we can do something."Here is the Social Security Trustees best guess of what "sitting on it" until 2030 would mean. The current 75-year Social Security deficit is 1.7% of payroll, meaning that and immediate and permanent increase of 1.7% in the payroll tax, from 12.4% to 14.1%, would be sufficient to restore solvency for 75 years. (An equivalent immediate and permanent benefit reduction would do the same.)
With each passing year, an additional year of deficits is added to the 75 year calculation, thereby increasing the size of the deficit. This tends to increase the shortfall by around 0.06% of payroll each year. Therefore, our best guess of the 75-year actuarial deficit in 2030 would be around 1.32% of payroll higher than today's, for a total of around 3% of payroll. This would require an immediate tax increase of 3%, to 15.4%, or equivalent reduction in benefits.
Moreover, while there is a great deal of uncertainty regarding Social Security's future finances, this uncertainty isn't a reason for delaying action. Remember that things could turn out worse than the Trustees project, not only better than projected, and people would be willing to act sooner or even over-balance the program in order to avoid this unlikely but adverse outcome.