Two words:
Means testing................
What needs to be done is ALL personal federal income taxes collected on Social Security must be recredited to Social Security and not just dumped into the General Revenues.
Means testing turns it into a welfare system, rather than a state pension system. Like all welfare systems, it punishes the productive and prudent: if you paid your social security taxes all your working life and had the foresight to properly save for your retirement, you don’t get social security. If you were improvident and have almost no retirement income from your investments, you do. Bad idea.
The only way to keep faith with those who paid into the system and fix it, in the sense of preventing social security from dragging the whole economy into its grave when it collapses, is to gradually increase the eligibility age until the system is functionally abolished:
First, be honest and just merge the Social Security system with the general Federal budget. The smoke and mirrors of the “Trust Fund” which contains nothing but IOU’s from the Federal government serves no purpose but to deceive the general public.
Second, fix a schedule for increasing eligibility age based on current age. I propose for every year a person is below 60 years of age at the time reform legislation goes into effect, the eligibility age be increased by two months. Folks 60 and older would become eligible under the current schedule: 62 for any benefits, 66.5 for “standard” benefits, 70 for maximum benefits and a requirement that they start drawing benefits. I (at 54 year of age) would have to wait a year longer. Someone now 48 would have to wait two years longer; a newborn would have 72, 76.5 and 80 as the eligibility ages. Do the same with Medicare eligibility.
When Social Security was initiated, the age for benefits (there was only one) was 65, but the average life-expectancy was 61.4. Now the average life-expectancy is 78.3. Maybe the drift upward in eligibility ages could be stopped and the system preserved in perpetuity if folks couldn’t draw Social Security benefits until they were 3.6 years older than the average life-expectancy, but I’d rather see us eventually scrap the whole thing move to a Chilean-style pensions system (though that requires not just fixing Social Security, but a simultaneous fix of the pension system: day-one vesting and full portability of all pension contributions, like what us academicians have thanks to Andrew Carnegie.)