There have been plenty of money issues at the Social Security Administration over the past decade, but it may actually be worse than the agency is letting on, according to new studies.
A report from two Harvard and one Dartmouth academic printed in the Journal of Economic Perspectives found that the Social Security Administration’s Office of the Chief Actuary has underestimated retirees’ life expectancy and made other errors to make the system look better than it actually is.
Another paper from Political Analysis, authored by political scientist and director of Harvard’s Institute for Quantitative Social Science Gary King, said predictions since 2000 have been less than spot-on. This is thanks to civil servants within the agency responding to political polarization of the SSA by resisting outside pressures, including technical experts.
“While they’re insulating themselves from the politics, they also insulate themselves from the data and this big change in the world –people started living longer lives,’’ King said in the report. “They need to take that into account and change the forecast as a result of that.”
The actuary for the SSA has underestimated declines in mortality for those 65 and older, as well as overestimating the birth rate and thereby the number of new workers who will be able to pay for benefits in the next two decades. With both SSA’s retirement arm and SSA disability arm already in dire financial straits, this could end very poorly for the agency if it is not fixed quickly.
