Charles Blahous, a research fellow with the Hoover Institution, a senior research fellow with the Mercatus Center, and the author of Social Security: The Unfinished Work, is a "public Social Security trustee." He has an excellent piece laying out how the options are narrowing for dealing with the huge Social Security mess in our future. The piece is titled "Is it Becoming Too Late to Fix Social Security's Finances?"
The whole thing is worth reading and the graphs are illuminating.
Social Security's future, at least in the form it has existed dating back to FDR, is now greatly imperiled. The last few years of legislative neglect -- due to a failure of national policy leadership coming just as the baby boomers have begun to retire -- have drastically harmed the program's future financial prospects. Individuals now planning their financial futures, whether as taxpayers or as beneficiaries, should be pricing in a substantial risk that the federal government will not be able to maintain Social Security as a self-financing, stand-alone program over the long term. If Social Security financing corrections are not enacted in 2013, or at the very latest by 2015, it becomes fairly likely that they will not be enacted at all.
Thus if Social Security finances are to be repaired, someone must dramatically compromise: either progressives must accept substantial benefit growth reductions, conservatives substantial tax increases, or both. Unfortunately as I will show below, we are already long past the point where there is precedent for a compromise of this magnitude.
Notice that he wrote "benefit growth reductions," not "benefit reductions." Could the system be saved with no tax increases and simply a freezing of real benefits? He doesn't say but my gut feel is that the answer is yes.
Getting more specific:
The historical high-water mark for a comprehensive bipartisan rescue was the 1983 Social Security amendments. The program was then saved from the brink of insolvency. Benefit checks had literally been just months away from being interrupted. Both sides agreed on the urgency and immediacy of the crisis, yet very nearly failed to reach agreement.
The program's long-term shortfall in 1982 was measured as 1.82% of the program's tax base. Today it's measured as 2.67% -- much larger even on the surface. Yet many don't realize that the trustees' methodologies were changed in 1988 to make the shortfall appear smaller. If we still measured as was done in 1983, today's shortfall would be 3.5% of the tax base -- nearly twice as large as the 1983 gap.