June 5, 2018 may prove to be an inflection point in American history. On that date, the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds delivered the Social Security and Medicare trust funds report to the Senate President and House Speaker. The report contained grim news:
Social Security’s total cost is projected to exceed its total income (including interest) in 2018 for the first time since 1982, and to remain higher throughout the projection period. Social Security’s cost will be financed with a combination of non-interest income, interest income, and net redemptions of trust fund asset reserves from the General Fund of the Treasury until 2034 when the OASDI reserves will be depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2092. The ratio of reserves to one year’s projected cost (the combined trust fund ratio) peaked in 2008, generally declined through 2017, and is expected to decline steadily until the trust fund reserves are depleted in 2034…
The Medicare program has two separate trust funds, the Hospital Insurance (HI) Trust Fund and the Supplementary Medical Insurance (SMI) Trust Fund. HI, otherwise known as Medicare Part A, helps pay for hospital, home health services following hospital stays, skilled nursing facility, and hospice care for the aged and disabled…
The Trustees project that the HI Trust Fund will be depleted in 2026, three years earlier than projected in last year’s report. At that time dedicated revenues will be sufficient to pay 91 percent of HI costs. The Trustees project that the share of HI cost that can be financed with HI dedicated revenues will decline slowly to 78 percent in 2039, and will then rise gradually to 85 percent in 2092. The HI fund again fails the test of short-range financial adequacy, as its trust fund ratio is already below 100 percent of annual costs, and is expected to decline continuously until reserve depletion in 2026.
Washington’s reaction? There was no significant response of any kind.
All was quiet in the Senate. The House was still. The President was far from silent. However, he busily tweeted about “fake news,” “Crooked Hillary,” the “NFL,” and much more. Not one keystroke on Twitter was devoted to the nation’s finances. Inane matters took priority.
The nation reached a similar crossroads before. Back in December 1981, Social Security was confronted with a deteriorating financial situation. President Ronald Reagan issued Executive Order 12335 which declared, in part:
There is established the National Commission on Social Security Reform. The Commission shall be composed of fifteen members appointed or designated by the President… The Commission shall review relevant analyses of the current and long-term financial condition of the Social Security trust funds; identify problems that may threaten the long-term solvency of such funds; analyze potential solutions to such problems that will both assure the financial integrity of the Social Security System and the provision of appropriate benefits; and provide appropriate recommendations to the Secretary of Health and Human Services, the President, and the Congress.
On January 20, 1983, the Commission delivered its report, along with concrete recommendations to address Social Security’s woes. Implementation of the report’s recommendations extended the solvency of the Social Security Fund for a generation. Now, 35 years later, under the growing pressure of the retiring Baby Boom generation, Social Security faces imminent and chronic deficits.
Washington is a vastly different place than it was 1981. Where one of the nation’s remarkable leaders resided in the White House, there is a deep leadership void. Where Congress could overcome partisan differences to pursue the nation’s interests, there is paralyzing polarization and a short-sighted belief that budget deficits don’t matter.
In 1981, the nation’s elected leaders could simultaneously tackle a deepening recession, severe inflation, an intensifying Cold War rivalry with the Soviet Union, and Social Security’s deteriorating finances. They could do so even as power was divided among the Democratic and Republican Parties.
In 2018, the nation’s leaders have difficulty adopting appropriations bills in a timely fashion, are leading a dramatic American retreat from the world stage, are enabling a U-turn into economically-destructive protectionism, and regularly engage in noisy blame-shifting as a substitute for carrying out the responsibilities of leadership. They fail to deliver meaningful policy outcomes, even as power in both the Legislative and Executive Branches is held by the Republican Party.
So, this time around there was no clarion call for action. There were no decisive acts of far-sighted leadership. There was no determination to overcome the nation’s latest challenge.
Instead, the President’s having disinvited the Philadelphia Eagles from a scheduled White House visit to celebrate the team’s Super Bowl victory dominated the headlines. Has the nation ever witnessed such pettiness? Has it ever witnessed such impotence when great leadership was required? Certainly, not during the last 50 years; possibly, never in its history.
President Reagan likely could never have imagined the dithering inaction of today’s crop of political leaders. He would mourn what the Republican Party has become after its having played a pivotal role in the nation’s renaissance from its 1970s-era malaise. He would be astonished at how the nation squandered its hard-won domestic and foreign policy gains of the late 20th century.
At the end of his Presidency, Reagan truly believed that God had blessed the nation. In his autobiography, Reagan wrote of his flight home from Washington:
I could take time to look out the windows of the airplane at the breathtaking beauty of our land–the emerald hills of Appalachia, the farms and small towns of the Midwest, the granite peaks of the Rockies, the rugged deserts of the Southwest, and, finally, the great metropolitan panorama of Southern California. It truly is “America, the Beautiful,” and God has, indeed, “shed His grace on thee.”
What would he think today? What would he do?
One thing is certain, Reagan’s faith in America and its people would remain undiminished. He would understand that full responsibility for the nation’s current predicament lies with its elected leaders for their having abdicated the responsibilities for which the nation’s people elected them.
Reagan would be no resigned passenger on a slowly sinking ship. He would never accept the descent of twilight on the American experiment.
Just as he did during the 1970s, he would wage the battle to change the nation’s inept leadership. He would take up the great cause to restore to the nation its bright future. And, just as he did during the 1980s, he would win that fight.
That’s what great leaders do. They make no excuses. They pass no blame. They retreat from no challenge.
Instead, they accomplish big things. Their achievements carve an enduring legacy in history.