The great debate about the solvency of the Social Security Trust Fund and whether future, Baby Boomer retirees will receive their fair share of retirement benefits because of dwindling resources misses the point that there is an ethical obligation to make promised payments. Those of us who are nearing retirement age are counting on the payments to provide all or part of our retirement income. We even receive a statement each year that tells us what our monthly payment will be in the future based on the date when we first draw out retirement funds. Are we now supposed to ignore those statements because of the financial status of the Fund? That doesn’t seem fair to me.

Social Security was originally established during the presidency of Franklin D. Roosevelt in 1935. It was designed to keep seniors out of poverty. The program also rewards years of hard work and accomplishments at a time when those with a strong work ethic are a vanishing breed in our society. Moreover, the payments have become increasingly more important to many who have seen their private pension plans cut back by their employers or even disappear.

As of the end of calendar year 2008, the accumulated surplus stood at just over $2.4 trillion. Most estimates are that current receipts will continue to exceed expenditures until 2017. Thereafter, there will be a shortfall that will be made up by withdrawals from the Trust Fund. The Trust Fund will gradually be drawn upon to cover the difference between tax receipts and benefit payments. It will be completely depleted by 2042 (according to the Social Security Administration) or 2052 (according to the Congressional Budget Office).

How do we fix the problem? First, let’s be clear that it is probably going to be even worse because of recent high levels of unemployment – 9.6% (14.9 million jobless) in August 2010 that rises to at least 11% when discouraged workers are added in. Since a large portion of the working population are not drawing a paycheck and Social Security payments are not being made, a greater shortfall in the Trust Fund should be expected and outflows may exceed inflows before 2017. Virtually none of the conversation about the stability of the Fund accounts for the additional shortfall. No one really knows when or even if the unemployment rate will significantly decline. Pundits have been wrong so often about economic recovery that we should discount anything they say about the matter.

The obvious solution is to either raise the social security tax rate that now stands at 6.2% for both the employee and employer (12.4 % in total) up to a maximum of $106,800 of income or increase the base amount. Notably, the Medicare deduction of 1.45% (2.9% in total) is not limited by any base amount. The fact is social security is now a regressive tax. If you earn $106,800 you will pay 6.2% and a maximum of $6,621.60 will be withheld from your paycheck. On the other hand, if you earn say $250,000, you will pay the same $6,621.60. That works out to be 2.65% of your income. This doesn’t seem right. The best way to handle the situation in a fair manner is for the $106,800 cap on employee payments to be eliminated. The 6.2% rate should stay the same so as not to burden the neediest in our society. Also, the employer portion should remain capped at the $106,800 salary per employee since many small business owners may be hit with a larger individual social security payment or self-employment tax and they shouldn’t be forced to also make an extra payment for employees earning more than $106,800. To do otherwise could stifle business growth and negatively affect the economic recovery.

What is the measure of a society? Years ago Hubert H. Humphrey, the 38^th Vice President of the U.S. who served in the Lyndon B. Johnson administration and was the 1968 Democratic presidential candidate, asked this question, he said, because there is a maxim that says "a nation is judged by how it treats its most vulnerable citizens." This is the full quote:

"The moral test of government is how it treats those who are in the dawn of life, the children; those who are in the twilight of life, the aged; and those in the shadows of life, the sick, the needy and the handicapped.”

Future generations may judge our society by the way we treat seniors in their golden years, and a social security system making dependable payments is an essential ingredient of our efforts. After all, we all will retire some day and our quality of life will be enhanced by a sound and reliable system.