Social Security is running out of money. Here’s how to fix it.

This is the year Social Security starts paying out more than it brings in. Which could become very expensive, for those of us who hope to retire someday.

The pension program for retired workers, their survivors, and the disabled built up a trillion-dollar reserve, back when the economy grew faster, and retirees didn’t live so long. But with employers hiring less, and more workers retired, Social Security is selling its big pile of Treasury bonds to keep the checks coming, for a while.

Last Tuesday, the plan’s trustees warned they expect that money will run out in 12 years. When that happens, under current law, they say Social Security will have to cut payments to retirees, by about one-quarter — forget about cost-of-living bumps — and survive on what it still collects from workers and their bosses.

For decades, a dwindling pool of workers has been supporting an ever-growing number of baby boomer retirees. COVID-19 has exacerbated trends — cutting the number of working people paying into the system, while increasing the number who have left the workforce and begun collecting from it.

All of which means Congress and the president may have to do something painful — raise Social Security taxes, or trim payments, hike the retirement age, or do all of these at once. Which they have, in the past: notably in 1983, when President Ronald Reagan joined the Democrats in a deal to boost contributions a little, and slowly raise the age for “normal” retirement to the current 67, making the system more solvent, at least until that generation of Washington politicians was safely dead.

» READ MORE: Social Security fund now expected to be depleted sooner, program’s trustees say

Unfortunately, Reagan and Congress were unduly optimistic about the system’s future. As Social Security historian Sylvester Schieber points out, the growth in income disparity has thrown an unexpected curveball into the system, as it releases the ultra-wealthy from payments after their incomes exceeds the tax cap (currently $142,800). Removing the cap would produce a gusher of money, but it strikes at the notion that Social Security checks should have some relationship to money paid in.

What to do?

The trustees have posted a lot of suggestions:

And yes, that would be hugely expensive. Social Security would end up consuming about $1 for every $6 in workers’ gross pay. Up from the current $1 for every $8.

Of course, smaller or later-life Social Security checks would also be terrifically unpopular. Which is why changes tend to get made quietly, over time.

Sens. Mitt Romney (R., Utah) and Joe Manchin (D., W.Va.) headed a bipartisan list of colleagues who in April called for a national Social Security fix-it commission of experts, like the one that recommended the 1983 changes, instead of debating what to do on the floors of Congress, under the heat of cameras and the threat of poisonous party politics.

Isn’t 12 years a long way off? What’s the hurry?

The longer we wait, the less money the program will have left. Wait until it’s about to go broke, and the cuts will have to be a lot larger, or the bailout a lot more expensive, or we’ll have to repeat it very frequently. According to Schieber, a former chair of the system’s advisory board, another reason for a current predicament is that Congress used to tinker with Social Security quite often, only to lose its nerve after the early 1980s fixes.

Can’t we just borrow the money? That might be a way out. But the system is currently barred from deficit funding. To change that would undo another of the guiding and popular principles of the system — that it is a pay-as-you-go system, not welfare, but one in which people earned their payments.

Some senators — lame-duck Pat Toomey (R., Pa.), for example — also still warn that borrowing has a fiscal price. Sooner or later you end up pumping so much money into the economy that you inflate prices, which slows new hiring, makes incomes worth less, and creates pressure for more government help. Indeed, in recent talks, for example to the York Rotarians last month, Toomey has accused the Democrats of using borrowed money to fund ever more ways to make the middle-class more dependent on government help.

Of course, Social Security itself, which Toomey praised among other early 20th-century reforms in that same talk, faced enormous opposition from some conservative Republicans when it was new. Sun Oil Co. boss Joseph Pew even tried to convince professors at Pennsylvania’s Grove City College, which his family funded, not to participate in Social Security, on grounds it eased the natural moral pressure that forced people to work and save. (He was disappointed that only two economists agreed and refused payroll deductions.)

Some people would actually benefit if Social Security payments were cut. Notably, winners would include big investment firms, which could count on attracting more savings from the minority of workers who feel they can afford to set aside significant income for retirement.

But not all conservatives opposed Social Security. Friedrich Hayek, a godfather of libertarianism, in The Road to Serfdom, praised worker-funded retirement and insurance plans — though he warned that attempts to socialize the cost beyond participants would provoke bitter opposition.

That, of course, is the problem facing Washington today: Who pays for our most expensive benefits — not just Social Security, but also Medicare, and highway spending, both of which are also running out of long-term funding? Just the users, so many of whom have less to spare? Or all Americans, including the most successful? How to balance funding and spending, and how to make it fair?

This is the stuff we should expect our candidates for federal office to be addressing, and proposing realistic solutions, many of which we won’t like.