The roots of the public pension mess are easy to understand: The money set aside wasn't enough to cover promised retirement benefits.
Compounding matters was a failure to adjust the equation before a math problem morphed into a fiscal monster.
Social Security could find itself in the same predicament unless policymakers apply the lessons from the pension crisis.
If they act responsibly, which means acting quickly, they can ensure the solvency of Social Security for decades to come by making relatively minor adjustments to revenue, benefits, eligibility or, perhaps, all three.
A week ago, the Obama administration issued an annual financial report on Social Security, forecasting that the retirement trust fund will be exhausted in 2033, three years sooner than was projected a year ago.
The report cited two primary factors: Taxable earnings dropped 1.6 percent because of the weak economy, and recipients were granted a 3.6 percent cost-of-living increase.
Even so, Social Security collected $69 billion more in revenue and interest last year than it paid out in benefits. And, as Commissioner Michael Astrue pointed out, Social Security could continue to pay about 75 percent of benefits due after 2033 even if no adjustments are made.
"That's not acceptable, but it's still a fact that there will still be substantial assets there," he said.
This is an election year, so chances are Congress and the presidential candidates will squabble over which party will throw seniors to the wolves rather than addressing the projected shortfall. But the sooner they address Social Security, the easier it will be to set it on a healthy financial course.
It's been 29 years since the last significant change. At that time, Congress raised payroll taxes and gradually increased the age for eligibility to prepare for the baby boom generation's retirement.
Within a decade, it was clear that further adjustments would be required. Making those changes would still be relatively easy — and, considering the volatility of Social Security forecasts, it may make sense to develop a fix over several years.
The picture will improve on its own when the payroll tax reduction expires, a step Congress needs to allow when the economy gets stronger.
The next step could be a gradual increase in the payroll tax rate, though we'd prefer to see an increase in the wages subject to payroll taxes, which are currently capped at $110,100 a year.
If Congress doesn't act soon, less attractive options such as reducing benefits and further increasing the age of eligibility may be required. Resorting to either would be a monumental political failure.
The same forecast showed the Medicare hospital trust fund running dry in 2024. The day of reckoning would come eight years sooner without $500 million in savings from President Barack Obama's health care reform law, underscoring the risks involved if it's overturned by the U.S. Supreme Court.
Solutions may be obvious, but any changes to Social Security and Medicare are politically risky. But changes are necessary, and now is the time to make them.