Many voters have said during this election season that they want a president who "tells it like it is." At the March 10 Republican presidential debate, the candidates were given an opportunity for such candor when the politically treacherous subject of Social Security was raised. With Social Security, "telling it like it is" requires recognition of several difficult realities including the following ones.

#1: Social Security faces a large and growing financing shortfall. According to the latest trustees' report, Social Security faces a financing gap roughly equal to 21 percent of its scheduled tax collections or 16 percent of scheduled benefits over its 75-year actuarial valuation window. Even corrections of this large magnitude would produce only a temporary solvency finding, leaving program finances on an unstable course such that the shortfall would begin to re-emerge the very next year after the fix. Correcting the program's total structural shortfall would require larger adjustments, equal to roughly 33 percent of scheduled taxes or 23 percent of scheduled benefits.

Importantly, Social Security's current shortfall is already much larger than the one corrected in the landmark 1983 amendments, the most comprehensive program financing reforms ever enacted. Today's is larger on its face (2.7 percent of taxable worker wages vs. 1.8 percent) but the actual difference is much greater, a fact disguised by a change in the trustees' actuarial methodology between then and now. Today's shortfall is nearly double that of 1982 -- even relative to today's larger tax base -- if measured with 1982 methods.

Read the full article at Economics 21: Telling It Like It Is About Social Security