Social Security is a problem today because, today, the surplus of collections is dwindling. This is because more people are retiring than entering the workforce. When a person retires, they stop paying into social security and start collecting from it. So in one step they decrease the amount of money put into social security and increase the amount that must be paid out. In order for the surplus to not be effected by this, someone must enter the work force and start paying the payroll taxes that were lost when the person retired, and someone must die to stop collecting the social security check that now goes to the newly retired person. If just one of those things doesn't happen, the surplus dwindles.
This aggravates congress and the president because, despite the fact that social security is supposed to be a trust fund, the surplus is not held in trust. Instead, the congress and the president spend it on the general budget in exchange for (essentially) a bunch of IOUs. So, when the social security surplus dwindles, funds available for spending in the general budget dwindle. Maybe this is why the senate voted unanimously to reform the program. There are three ways to resolve this problem:
- Decrease spending on existing programs
- Increase taxes
- Spend on loan - e.g. increase the deficit
In 2018, the surplus will have dwindled down to nothing, and the social security administration will have to start calling in those IOUs. At that point, not only will the congress and the president no longer have extra cash to spend, they'll have to pay back the cash that they spent. In other words, the general budget will be responsible for funding social security (see the above 3 ways that this can be accomplished). In 2042, the congress and the president will have paid back all of the IOUs, and the amount received in payroll taxes will be less than the social security payments, and the social security fund will be broke.
But there are clearly problems long before we ever get there. Justifying, I believe, the call to reform social security. I think it's clear that we need to get out of the "pay as you go" system. Its viability fluctuates with the size of the population, and it's too easy for congress and the president to appropriate any surpluses and spend them. I'd much rather see us use private accounts, even if this is done through forced savings. At the very least, this will prevent the congress and president from spending the surplus. They can't spend it because it's not their money.