“Augmented reality” needed for Social Security funding shortfall

That’s Dr. Eli Peli, pictured on the right. Dr. Peli is Senior Scientist and the Moakley Scholar in Aging Eye Research at Schepens Eye Research Institute, and Professor of Ophthalmology at Harvard Medical School. And the device that Dr. Peli is wearing is an augmented-reality system he invented.

In reporting on his research, the New Scientist magazine says, “augmented reality techniques can dramatically improve the sight of people with tunnel vision” , a condition, which narrows a person’s field of view.

That’s tunnel vision in the context of medicine. We have our own tunnel vision in our political economy. I define it as the inability for us to deal with more than one public policy issue at the same time. The reasons why are beyond the scope of my expertise, but here is a striking example of tunnel vision in the benefits world in which I reside.

It’s that while the health care debate rages (and I use that word intentionally) on, resolving the Social Security system’s long-term funding shortfall is apparently out of sight, out of mind. In Dr. Peli’s terms, the issue is in our peripheral vision.

According to the 2009 and latest Social Security Trustees’ report, the program’s long-term funding shortfall currently amounts to negative 2.00% taxable payroll. This means that the program would need additional revenues equal to 2 percent of taxable payroll for each year over the next 75 years to match the projected future current-law costs over that time frame. Without changes, the program ultimately will be able to pay only about 75% of benefits promised under current law.

The options are described in new research conducted by the Employee Benefit Research Institute (EBRI), an organization about which I have previously written. EBRI is a private nonprofit research institute based in Washington, D.C. that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby or take policy decisions.

EBRI’s research study, Social Security Reform: How Different Options Might Affect Future Funding, discusses a range of possible reform options, all of which have been part of various reform proposals over the last two decades, and draws upon data presented in the annual Social Security Trustees’ report referenced above.

The options are basic:

  1. Reduce benefits (by lowering the scheduled increase in future benefit levels by changes to the benefit formula, or by raising the normal retirement age), or
  2. Raise taxes (by changing the amount of earnings that are taxable and used for the calculation of benefits under Social Security) and changes in benefits taxation.

The degree to which any of the options presented in the study would improve the long-term funding status of Social Security depends on how much emphasis policymakers might place on a specific provision. And when they do so.

Dr. Peli, we need you.


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