It's true that the fiscal outlook for Social Security, which has about $18 trillion in unfunded liabilities, is not nearly as bad as the fiscal outlook for Medicare, which has a long-term shortfall five times as big. Simpson's controversial comments nevertheless reflect some important truths.
First, Social Security is neither a pension fund nor a means-tested assistance program for the needy. It is a pay-as-you-go system of transfer payments that takes money from relatively poor workers and gives it to relatively affluent retirees.
Second, despite all the talk of a "$2.5 trillion surplus," Social Security is indeed "in trouble," thanks to a shrinking ratio of workers to retirees and repeated raids on its revenue by legislators looking for easy spending money. The year of reckoning is not 2037, when the program's imaginary "trust fund" is expected to run out -- it is now, since the cost of benefits already has begun to exceed annual revenue. There is nothing in the trust fund but IOUs from the federal government, which can be redeemed only through cuts in other programs, more taxes or more debt.
Third, entitlement reform -- including Medicare cuts as well as changes to Social Security -- will be fought tooth-and-nail by the AARP, the National Organization for Women and other denialist defenders of the status quo. That much was confirmed by the reaction to Simpson's complaints about charges of "ageism" and "sexism," which were cited as further evidence of his ageism and sexism.
Alan Simpson violated a taboo last week when he likened Social Security to "a milk cow with 310 million tits." But contrary to the dictionary-deprived critics who accused him of sexist vulgarity, the former Wyoming senator's transgression had nothing to do with his use of a perfectly acceptable synonym for teat. Simpson's real sin was "belittling a bedrock program," as the AARP put it -- i.e., showing insufficient reverence for a sacred cow.
To Simpson's detractors, it is self-evident that a man who supports entitlement reform has no business serving on, let alone co-chairing, a presidential commission devoted to fiscal responsibility. But anyone who takes an honest look at the federal budget can see how crazy that position is.
Just three entitlement programs -- Medicare, Medicaid and Social Security -- account for two-fifths of federal spending, representing 10 percent of gross domestic product. Without reform, they are expected to consume half of the budget and about 20 percent of GDP by 2050.