The basic contours of Mitt Romney's approach to Social Security reform are coming into focus, and the results aren't pretty.
Because Romney insists that any change include no additional revenue, his strategy is forced to rely on excessive benefit cuts that would undermine financial security for future retirees. A much better approach would mix benefit reductions and revenue increases, as we have proposed in the past, and as polls show the public prefers.
For about two-thirds of elderly Social Security beneficiaries, the payments amount to more than half their overall income. These benefits are protected against financial-market fluctuations and inflation, and they last until death. So they are a crucial form of insurance, almost impossible to purchase, and they are particularly useful during and after periods of severe economic stress, like the one we have lived through these past few years.
Furthermore, Social Security isn't the core of our long-term fiscal problem. From now until 2050, if all benefits are paid despite the projected exhaustion of the Trust Fund, its expenditures will rise from 5 percent of gross domestic product to 6 percent, according to the Congressional Budget Office. Over the same period, Medicare, Medicaid and other federal health expenditures are projected to rise from 5.5 percent of GDP to 12 percent.