Happy 90th Birthday Social Security! The Social Security program has provided a financial foundation for millions of American retirees, and now faces one of its most significant challenges since Franklin D. Roosevelt signed it into law in 1935. 

Roosevelt signed the Social Security Bill into law on August 14, 1935, only 14 months after sending a special message to Congress on June 8, 1934, that promised a plan for social insurance as a safeguard “against the hazards and vicissitudes of life.”

While the milestone offers an opportunity to reflect on nine decades of ensuring dignity in retirement, the celebration is tempered by mounting concerns about the program’s long-term sustainability.

Social Security’s trust fund is projected to run short of money by 2033, creating what economists describe as an urgent fiscal crisis. With fewer workers supporting more retirees, Social Security  is on an unsustainable path, reflecting the demographic reality of an aging America where baby boomers continue retiring in record numbers while birth rates have declined.

Around the end of the baby boom in 1960, the average number of children born to a woman was 3.6; by 2020, that number had declined to 1.6. The decline in fertility rate means that the working generation is getting smaller relative to the generation receiving benefits.

Simultaneously, more Americans are getting older and living longer. In 1960, an individual who reached age 65 was expected to live to 80; today that person is expected to live to 85.

Without Congressional action to address the shortfall, the 74 million Americans who currently receive Social Security benefits may face a potential financial catastrophe.

The program’s 90th birthday should serve as both a celebration of its remarkable success and popularity among Americans as well as a wake-up call for policymakers.

According to recent polling by AARP, Social Security is deemed important by 96% of Americans, with little difference among age groups and political party affiliations. Nearly two in three retired Americans say they rely substantially on Social Security, while another 21% say they rely on it somewhat. 

Social Security has weathered numerous challenges over its 90 years, adapting to changing demographics and economic conditions. For example, back in 1983, President Ronald Reagan and Congress enacted reforms that fast-tracked planned payroll tax increases, hiked taxes for wealthier retirees, and extended the retirement age, buying extra decades of solvency.

It is clear that the time has come again. The solutions, while politically challenging, are well-understood by economists and policy experts. Options include benefit cuts, which would require reductions, or increasing payroll tax revenues. Other proposals involve raising the cap on wages subject to Social Security taxes, gradually increasing the retirement age, or adjusting the benefit formula for higher earners.

The Brookings Institute, as an example, offers a proposal that would achieve solvency for the Social Security program over a 75-year period without introducing new revenue sources.

The irony is stark— a program designed to provide security is itself insecure. Social Security has weathered numerous challenges over its nine decades, adapting to changing demographics and economic conditions. As it enters its tenth decade, the program’s survival will depend on whether today’s political leaders, specifically Congressional members, will demonstrate the same foresight it took to create it 90 years ago.