Social Security on Brink of Collapse, Dramatic Changes Coming – Some With ‘Bipartisan Support’
Dale Coberly: This is part 2 of a comment I began July 18 on Angry Bear. It is a reply to an article appearing on the internet by Andrew Herrig at wealthynickel.com under the title.
“With Social Security on Brink of Collapse, Dramatic Changes Coming – Some With ‘Bipartisan Support,’” WEALTHY NICKEL, written by Andrew Herrig.
The first part of my commentary noted that Herrig ignores that Social Security can fix itself simply by raising the payroll tax one tenth of one percent each year for a few years. This is not “brink of collapse”: With no fix at all, Social Security would still be able to pay benefits out of its payroll tax income. Those reduced benefits would not be best policy, but the reduced benefits would still be more in real dollars than they are today.
This part will be mostly comments on the “fixes” Herrig says have bipartisan support.
Herrig says
- Raising the Payroll Tax Cap
Overall Support: 81% (Republicans 79%, Democrats 78%)
Currently, only the first $147,000 of income is subject to the payroll tax. A proposal to raise the payroll tax cap to $400,000 would go a long way to closing the budget gap. Researchers estimate this fix alone would eliminate 61% of the shortfall. An overwhelming majority of both Republicans and Democrats in the survey supported this proposal, which may embolden policymakers to put forward legislation that would sign this into law.
There has already been some movement in Congress, with one proposal by Bernie Sanders and Elizabeth Warren to increase the payroll tax on all income over $250,000, including capital gains. Another proposal called Social Security 2100: A Sacred Trust would increase the payroll tax cap to $400,000 on earned wages.
I say
What is wrong with raising the payroll cap is that the cap was created so that very high earners would not have to pay more into Social Security than it was worth to them. Roosevelt knew that if the rich were forced to pay more than it was worth to them, they would simply destroy Social Security because they had the political power to do so.
Those very high earners already pay more into Social Security than lower income workers. They pay 12.4% of their wages just like low-income workers. But 12.4% of a hundred and sixty thousand dollars (the current cap) is more than 12.4% of 50 thousand dollars.
The rich person pays 20,000 dollars per year for his Social Security, and the average person pays about 6,000 dollars for his. If that average person is not self-employed he only pays three thousand dollars, and his boss pays the other 3000 dollars. [Presumably the boss is a “rich” person.]
A poor person making 20,000 per year would pay about $1240 and his boss would pay the other $1240.
The 50k worker will get a pension of about 20k per year in adjusted dollars (that is adjusted for inflation, and with an effective real interest that comes from the growth in the economy). The rich person will get a pension of about 40k per year.
The rich person’s pension is bigger, because he paid in a lot more: The average worker paid 6000 per year for 40 years, or 240,000 dollars, to get a pension of 20,000 per year for 20 years (average life expectancy in retirement) or about $400,000.
The rich person paid in 20,000 per year for 40 years, or 800,000 dollars, to get a pension of 40,000 per year for 20 years, or 800,000 dollars.
That is, the average worker gets a pension that is one and two thirds times as much as he paid for it [in adjusted dollars], while the rich person gets back only about exactly what he paid in. Actually, both of them do a lot better than this. That “paid-in” is more than they actually paid in:
Social Security adjusts what they paid in in order to pay effective interest of about 5% to cover inflation and a modest real rate of return. Also, both of them will see their pension increased every year to cover the cost-of-living increases during retirement. I have seen some people want to discount the correction for inflation as not “real,” but any time you try to save for the future you have to first meet the cost of inflation. And it is not all that easy to find a “safe” investment that will pay a reliable 2% real interest.
The actual amount an average worker paid in from 1985 to 2020 was about 146 thousand dollars. After adjustment, Social Security calls this 56 thousand per year times 35-year times .12.4%=243 thousand dollars and uses that number to calculate his pension at about 22 thousand dollars per year. That times 20 years is 440 thousand. So he will get 440 thousand dollars in benefits for which he paid 146 thousand in taxes, so he gets back 3 times as much as he paid in…. not counting cost of living adjustments over the twenty or more years he is retired.
Note the SSA counts his working wage as 56 thousand per year and pays a pension of 22 thousand for a replacement rate of 39% [trustees report says 40%, but there are enough small variables going on that this counts as a “check” and not a “disproof” of what we are saying here]
Meanwhile, the very low earner is getting a pension check of about 70% of his working wage. So he pays in about 6% of a $20,000/year wage, or about 1200 dollars for 40 years or $48,000 to get a pension of 14,000 dollars per year, times 20 years equals about $280,000 or about 6 times as much as he paid in [in adjusted dollars…already almost twice what he actually paid in taxes].
The following is from another source. coming from AARP. –How Much Social Security Will I Get? (aarp.org). The numbers are different from mine because the years being looked at are different…but not so different that it changes anything.
AARP says “To calculate your benefit, Social Security determines your lifetime average monthly income, adjusted for historical changes in U.S. wages, and applies a formula that slices that monthly figure into three portions and gives the most weight to the lowest one. (The parameters change annually; for people who become eligible for retirement or disability benefits in 2023, the low portion is the first $1,115 of monthly average income.) The result is that the less you earned while working, the more of your income Social Security replaces.
In an June 2022 analysis, Social Security actuaries calculated the replacement rate for hypothetical retirees across a wide income range. For workers who claim benefits in 2023 at the age of 66 and 6 months — the full retirement age for people born in 1957 — they found that the replacement rate would be:
- 75.3 percent for someone with “very low” career earnings (defined as an average of $15,006 per year).
- 54.8 percent for someone with “low” average earnings ($27,011 per year).
- 40.7 percent for someone with “medium” average earnings ($60,024 per year).
- 33.6 percent for someone with “high” average earnings ($96,039 per year).
- 26.7 percent for someone with “maximum” average earnings ($147,775 per year).
This does not look “regressive” to me. Unless you are a liberal economist for whom “regressive” is a magic word meaning “unfair to the poor no matter what the pay back is.”
Note that none of the “raise the cap” plans actually solves the SS actuarial defict problem, and none of their sponsors actually look at what the actual payback is, it being so much more fun to “demand the rich pay their fair share.” Nor do they understand that the rich already think they are paying more than their fair share, thus giving the bad guys an issue they can win on simply be being more truthful than the “good” guys.
I need to stop here.
Note that the payroll cap already increases every year. It goes up by the increase in the average wage. (Technically it could go down, but it never has). Average wage index is (generally) more than Consumer Price Index and certainly higher than the median wage increase.
[The use of AWI, a single number, to stand in for the change in the distribution of wage increases is one of my peeves with Social Security.]
May I add that if you insist on considering “raise the cap”, you actually have another decision to make. Are you going to include the income above the cap in the calculation of a retiree’s benefits? If yes, you don’t close much of the gap. If no, you just make Dale’s point about the value to the high income beneficiary more obvious.
Thanks Arne.
I probably did not address this issue as carefully as I might. Please keep helping fill in the gaps.
While waiting for this Part 2 to appear, I have finished writing my comments on the rest of Herrrig’s “bi partisan proposals.” Coming soon to a theater near you, I hope.
For those who are interested I am going to post Part 3 here as a comment. It should make more sense in the company of Part 2 above than it would as a stand alone post a week from now.
These are the rest of the “bi partisan plans” that Herrig presents, with my comments.
Herrig says
2. Reducing Benefits for High Earners
Overall Support: 81% (Republicans 78%, Democrats 86%)
Those beneficiaries who earned a higher salary during their working years are also the ones who most likely have other ways of funding their retirements, such as through pensions, 401(k) accounts, and other savings.
One proposal that received a large majority of bipartisan support would reduce benefits for the top 20% of earners and eliminate 11% of the shortfall. While workers who make more money would still get a larger benefit than others, it would be less than in the current program.
I say
This has the same problem as raising the cap. High earners would get less than they paid for, and would work to destroy SS entirely.
Herrig says
3. Raising the Retirement Age
Overall Support: 75% (Republicans 75%, Democrats 76%)
One of the first changes to the original Social Security program enacted in 1983 was slowly increasing the full retirement age from 65 to 67. With people living and working longer on average, one proposal would seek to raise the retirement age slightly to 68. This change would reduce the budget shortfall by 14%.
I say
This is the same as reducing benefits for everyone, both rich and poor. Moreover it is based on the idea that we are all going to live longer. We are NOT ALL going to be living longer. Raising the retirement age would mean some people would never get to retire at all. And people who are not dead yet might still be too sick to work And that is not only people who do hard physical labor. Office work can kill you, even if your boss does not find someone younger and smarter than you, willing to work cheaper. This is probably the most evil “plan” being considered.
Most of all: if you paid for Social Security yourself you should be able to retire any time, for any reason you want, when you have paid in an amount actuarily sufficient to pay for your life expectancy in retirement (shorter for poor people than it is for rich people who may like their jobs, with their higher incomes, and be glad to keep working).Rich people can’t understand why a poor person would want to retire at all.
continuing
4. Increasing the Payroll Tax Rate
Overall Support: 73% (Republicans 70%, Democrats 78%)
Currently, the payroll tax rate that funds Social Security stands at 6.2% of wages, up to the first $147,000 earned. Increasing the tax rate to 6.5% would eliminate 16% of the estimated shortfall.
I say
This apears to be a straw man. They (bi-partisan experts) gleefully point out that a 3 tenths of one percent increase in the tax would fix only 16% of the estimated shortfall. But raising it 2%will more than eliminate the entire shortfall forever. This is the one fix they don’t want you to know about. Two percent of your wages is nothing you would notice… and the money does not go into a government black hole. It earns interest and comes back to you more than 3 times over to pay for your groceries when you can no longer work.
Herrig says
5. Raising the Minimum Benefit
Overall Support: 64% (Republicans 59%, Democrats 71%)
Many lower-income earners rely on Social Security to provide most if not all of their income in retirement. Surviving on the current minimum benefit of $951 can be extremely difficult. Most Democrats and Republicans supported a proposal to raise the minimum benefit for someone who had worked for 30 years or more to $1,341, which would increase the shortfall by 7%.
I say
I don’t know if that is 7% of the needed 2% tax increase or 7% of the expected 20% shortfall in benefits without the tax increase. They are the same thing but can lead to very different ways you feel about it. Assume that is 7% of the 2% otherwise needed increase in your payroll tax or about two tenths of a percent of wages. This might be a good idea, but only if the workers pay for it themselves. Try to remember that we are talking about future wages which will be 20 to 50% higher than today’s, depending on when the needed tax raise is finally phased in. That means the worker would pay two tenths of one percent of their wages to assure they would at least get that higher minmum benefit. Most workers would not see a higher benefit. Note that a worker who only makes 20k per year currently gets a pension of about 14k. This is well above the minimum. I suspect the person who qualifies for that 1k minimum benefit per year has found a way to live without paying into SS. There may be justice here, or it may be just another scam. Needs to be looked at hard.
Herrig says
6. Changing Cost of Living Adjustments
Overall Support: 55% (Republicans 55%, Democrats 59%)
There are many different measures of inflation used by the government. Currently, Social Security benefits are adjusted annually based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, some argue this is not the best measure of inflation for the unique expenses incurred by older adults and instead favor using the Consumer Price Index for the Elderly (CPI-E). Making that change to help bolster the household budgets of the elderly would increase the shortfall by 12%.
I say
Since this contemplates raising the benefits, i have no objection, as long as the workers pay for it themselves. Maybe a good idea since other, private, pensions seem to be letting people down, but a ten percent increase in benefits may not make enough difference to be worth it for those people who see SS as insurance against real poverty and not the promise of a middle class lifestyle after retirement. It looks like something less than an extra two tenths of one percent of payroll or about two dollars per week one time raise in the workers tax.
Herrig says
7. Increasing Benefits for the Very Old
Overall Support: 53% (Republicans 53%, Democrats 56%)
While a small majority, there is still bipartisan support for increasing benefits for the very old. Increasing benefits for those over 80 by 5% would increase the budget shortfall by 5%, but it would help retirees cover mounting costs as they age.
I say
Since this raises benefits I have no objection. but the money should really go to paying for Medicare…so retirees do not have to have part B deducted from their Social Security check as they do today. it is insane to charge the elderly for insurance they could have paid for at a lower rate while they were still working and had the money.
Herrig says
Americans are Willing to Save Social Security, But is Congress?
While Congress has proposed most of the above survey options in some form or fashion, there is yet to be consensus on the path forward.
“Many politicians think that addressing the problems of Social Security is a ‘third rail’ so they have persistently avoided taking action,” noted Steven Kull, director of the PPC. “But large bipartisan majorities say they are ready to take tough steps to secure the Social Security program for future generations.”
While uncertainty remains about how to solve Social Security funding woes, one thing is certain – the clock is ticking, and time is running out.
I say
what they mean by hard choices [“tough steps”] is “hard on you but easy on us.”…if we can stampede you into letting us cut your beneifts because “time is running out.”
Time is running out on the chance to raise the tax by easy steps. But even waiting and taking one big step in 2035 will not be all that hard…if the people understand what the actual costs and benefits are.
end of part 3. end of post/comment
the federal government should reduce ‘discretionary’ spending to no more than 6% of gdp.
pentagon is now about 3.8%!
continued massive borrowing for items that need to be authorized every year is more dangerous than social security going along…..
paddy
i try to respond to comments as a courtesy if nothing else. but i have no idea what you are talking about.
I have missed paddy’s point also or at least some what.
too much federal expenditures go to war preparation.
war investment shoves resources away from better uses.
see eisenhower’s 1961 military industry complex speech.
and there are inefficiencies in other non entitlement spending.
I think the fixes discussed to ss, raise revenue or reduce outlays apply to the side of us spending not created by fdr
the ss “problem is a broader event, than the mechanics of the ss trust mechanism.
Or read Paul Kennedy’s The Rise and Fall of the Great Powers. There is a long history of Guns or Butter.
paddy
this begins to help me understant you, i think. but assertions are not arguments and i have reasons to doubt that your assertions can be turned into actual policies that work, given all the complex feedbacks, political and economic.
i prefer to, if i can, talk about actual current policy and then only to show the actual numbers that most people don’t know about while offering limited speculations about the consequences of changing a current policy that works.
to be fair…to me…most of the commenters to my posts come here to express their own favorite theories based on no knowledge whatsoever and less thought.
https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDNdLCJkYXRhIjpbWyJjYXRlZ29yaWVzIiwiU3VydmV5Il0sWyJOSVBBX1RhYmxlX0xpc3QiLCI1Il1dfQ==
June 30, 2023
Defense spending was 55.4% of federal government consumption and investment in January through March 2023. *
$959.2 / $1,732.1 = 55.4%
Defense spending was 20.6% of all government consumption and investment in January through March 2023.
$959.2 / $4,649.8 = 20.6%
Defense spending was 3.6% of GDP in January through March 2023.
$959.2 / $26,529.8 = 3.6%
* Billions of dollars
https://fred.stlouisfed.org/graph/?g=newv
January 30, 2018
Federal Government Consumption Expenditures & Gross Investment as shares of Gross Domestic Product, Defense and Nondefense, 2007-2018
[ The total is currently 6.5% of GDP. ]
Social Security is not about to collapse and will only be strengthened from here. The Social Security system as Franklin Roosevelt understood is fundamental to and essential for American democracy.
https://fred.stlouisfed.org/graph/?g=17iev
January 30, 2018
Age dependency ratio for United States, * 1992-2022
* Older dependents to working age population
ltr
“dependent ratio” is expected to be two workers for each retired person exactly what is projected in the Trustees Report, and exactly what is included…calculated from that report…in my proposed fix of raising the payroll tax 2% from worker plus 2% from employer.
Coberly,
The work you are doing is simply terrific. I am quite grateful.
Terrific…
ltr
thanks. i needed that.
Coberly,
I read all of your report and analysis twice, with care and setting down notes. Again, the work you have done is most important and thorough.
Terrific work, for which I am grateful.
Please continue.
As recipients, Mrs Fred & I hope Soc Sec lasts for as long as needed.
We will keep contributing the extra taxes that we owe from having ‘extra income’.
Our kids will keep on contributing as long as they have to (with my self-employed daughter paying extra of course, as has my son from time to time.) They too have separate retirement plans.
Dobbs
you can think of it as “extra taxes” or you can think of it as not getting the tax break that low income retirees get on their pension. you would pay full taxes on a private pension.
the self employed tax is the rate required to make Social Security work,,,which as I tried to show…returns you three times as mucha as you pay in. if you work for someone else, half of your needed “tax” is paid by your employer. “economists say” that the half he pays is “really your” money that he would have to pay in wages if he did not pay it as “his” share of your social security tax. it makes a difference to you how you think of these things. it makes no difference at all to the reality.
My long-time (now defunct) former employer used to make a big deal about ‘burden rates’ and how much extra they had to lay out for each & every employee. I understood their thinking but it didn’t impress me much.
Now, long after they went under & I am receiving Soc Sec benefits (in addition to the modest pension they provided), I appreciate them more.
Much of the ‘logic’ behind Social Security policy has to do with what was deemed necessary to get it enacted, over GOP objection which still persists unfortunately. It really does not make a lot of sense & never did. Having self-employed people pay twice is in that category.
dobbs
self employed people do not pay twice. empoyees pay for half. employers pay for half. if your kid thinks that’s unfair, he should go to workfor someone else.
Dobbs
you are right about the logic (words) necessary to get it passed. one reason i try to get you to look at the reality behind the words you scare yourself with, or convince yourself that someone else got the biggest piece of the burfday cake.
“makes no sense” to you does not mean “makes no sense” to someone who knows what they are talking about. “works” makes even more sense to me.
The benefit structure is not regressive, but if revenue from the system is used to fund the general budget, it’s fair to point out that that would be regressive. Our prior major reform did exactly that for decades. The case that increasing the tax rate 2% has a lot of advantages makes sense. But starting in that direction while an enormous Trust Fund balance is not yet redeemed doesn’t. Dale can tell us another thousand times that SS is not involved in the deficit or debt, but the proposed timing of his favorite plan happens to relieve the Treasury pretty much just like redemption of the TF was part of the deficit, probably to be added to debt. Holding a high TF balance is regressive and redeeming to pay benefits isn’t.
Flat-rate ‘taxes’ can always be considered regressive. That includes FICA.
The added requirement that self-employed people also pay the employer’s share only makes it more so.
Having a salary-cap does only makes it worse. But the rationale that paying into FICA means you are entitled to benefits makes little sense for highly-paid folks.
Dobbs, highly paid folks get their money back with interest, just like the folks who are lowly paid by their highly paid employers. if you insist on thinking about it the way you do, you will only make yourself sick. you will not change the reality.
if you do change the way it works, you will change the reality. and you will not like the results.
maybe this will help: back in the day when you could buy a piston for your Ford for about four dollars, I had to pay about sixty dollars for a piston for my Mercedes. I suppose you could call that unfair.
I guess you could also say that having to pay ten times as much now for stuff than you did a couple of decades ago is a sign of prosperity. But the less well-off folks have to struggle with this a lot more than the wealthy do.
That’s life.
I’m faced with a $600 bill for new rear shocks for my vintage Saab.
Fortunately I can still get them, it seems. Never for $60 though.
flat rate taxes can be considered regressive by people who are word-bound and care nothing about what the “tax” is doing…such as buying the “poor” worker three to six times as much as he paid in “tax” while buying “the rich” only about a 2% real return plus an insurance payment he will not collect unless he unexpectedly gets poor along the way to getting rich.
you seem to be unhappy with “paying more” than you think you should, and unhappy that the “regressive tax” makes you pay less than you should.
ordinarily i don’t fuss too much about logic… but really….!
Eric
NO revenue from Social Security taxes is used to “fund” the government. The “surplus” taxes collected so the Boomers could pay for their own retirement were LENT to the government and are rright now being paid back with interest, to do exactly what they were collected to do. People who do not understand normal financial behavior seem to have a lot of trouble understanding this. The boomers needed to pay the “extra” in advance, because of the size of their generation, the normal pay as you go system would not provide the cash needed for the boomer retirement “automatically” from the following generation as they paid in advance for their own retirement. This is really really hard for most people to understand. because they refuse to learn enough and then sit dow and think it through. even when i try to guide the through it. which i did not do in this post, because it was too long already. but i have done it hundreds of times over the last fifteen years,
ss boomers excess contributions were like quantitative easing which happened as boomers excesses declined in gfc and the demographic changes
now fed does what ss excess bill purchases did.
jury out on how the money and banking effects play out
what Alan g’span worried in ‘90’s
paddy
now i’m back to “hunh?” care to explain what you mean?
Coberly:
That is a guns or butter philosophy. Every country which has spent more on war or defense than the domestic economy has become a second rate country.
I watched a video last night where Ron Johnson started off saying almost exactly what I said here…rich people pay more for Social Security… which is true. then he segued into the lie…claiming SS was the nanny state taking your money away because they didn’t trust you to take care of your own retirement yourself. That is a lie because he did not mention that the rich get back what they pay in …just not as much as those who are not rich, in the same way that people who have a fire get more money back from their premium than people who do not have a fire. And he ignored that poor people CANNOT manage their own retirement because, among other reasons, rich people cheat them out of their wages and out of their savings. Social Security is the government…created by the people to protect them…stepping in and managing (not paying for) their retirement savings to protect them from losing it to accidents inherent in capitalism or the predation of the more successful capitalists…while still preserving the benefits of a free enterprise system.
But then the hosts of the program, “progressives” came in and sneered at Johnson, not because they saw through his lies, but because they called the truth he started with a lie “because” they said, the Rich do no pay as much as a percent of their income as the poor. Their idea being that if a poor man pays five dollars for a loaf of bread, the rich man should pay fifty dollars for a loaf of bread, because that would be the same “as a proportion of his income.” They kept up with this nonsense laughing and sniggering like the liars on Fox News.
what we have is a politics of deep lies and liars on both sides. and poulation eager to believe the lies according to what makes them feel good. somehow believing that you are being cheated feels good to people.
Historically, this is true, but at this point in time the GOP desire to eliminate SS is more of an ideology. I should say they want to eliminate the security part of SS.
The poor receive more because SS is a floor and they were already closer to the floor than the rich. Not even a full floor, because it was not intended to be the sole income of retired workers.
well, the “ideology” comes from their fear that the poor will take away all of their money, which fear the progressives are doing nothing to dispel.
this ideology began long before there was social security. the rich were then “robber barrons’ and the poor were the robbed. they invented stories like Robin Hood and occasionally revolted putting fear into the minds of the rich at a time when everyone knew the deal and it was easy to be honest about. but a few generations of telling themselves lies made it easier for them to remember the “ideology” than the facts behind it. which are still the same facts. there are the rich and the poor, they will always be with you. each needs the other, but each hates and fears the other. to the extent that the rich see that the poor are not treated too badly, they have less to fear.
but that seems hard for them to remember.
Jane
I think you are right about the security but i try not to get too deep into their psychology. It is true that it is easier to manipulate people who have no security.
But it’s also true that people who feel secure are more productive. They make more money for the rich as well as for themselves. But “the rich” have never figured that out.
Or maybe they have. But since they already have as much money as they need, they prefer to keep the poor poor and afraid. They, the poor, tend to get uppity when they are not made afraid.
Deep in psychology: my observation of junior bosses, who are not rich, get most of their pleasure in life from dominating their underlings. I suspect that is true further up the ladder.
But I feel better if I just stick to facts… so I try to explain things to Dobbs, who prefers his own understanding of them.
And I disagree with Coberly about some of his Soc Sec notions, but not about the importance of keeping it going. I’d like it to be a better program, but the GOP is not going to allow that any time soon.
Take some consolation in statements by GOP leaders (i.e. Mitch McConnell) that they/he appreciates the importance of Social Security, to the electorate. This is presumably not a rock-solid commitment exactly.
Dobbs
no, it’s not. is a guy in a mask saying pay no attention to what i am doing. i am only here to fix the plumbing.
Historically, this is true, but at this point in time the GOP desire to eliminate SS is more of an ideology. I should say they want to eliminate the security part of SS.
[ Really nice comment. ]
There isan article on the American Prospect today discussing the coming debate between the “we have to destroy SS (as meaningful retirement insurance for Americans) in order to save it (as a meaningless balance sheet called “Social Security).
vs
those [including the folks at American Prospect] who want to save it by taxing the rich, so they can destroy it later the way they destroy all welfare programs by underfunding and means testing.
I’d think I had failed to explain this here, if there wasn’t so much evidence that the powers and parties are ignoring it because it is so much fun to fight over the spoils. Literally as in spoiled meat.
GOP rivals open door to cutting Social Security for younger people
Washington Post – July 22 – behind a pay wall
Ron DeSantis, Mike Pence and Nikki Haley propose curbing spending on the program without affecting seniors
Three of Donald Trump’s rivals for the 2024 GOP presidential nomination are pushing for cuts to Social Security benefits that would only affect younger Americans, as the party’s leaders grapple with the explosive politics of the retirement program.
In comments on Sunday as well as in interviews earlier this year, Florida Gov. Ron DeSantis (R) said Social Security will need to be revamped — but not for people who are near or in retirement.
Former vice president Mike Pence and former South Carolina governor Nikki Haley have taken similar positions since launching their presidential campaigns. From the earliest days of his 2016 run, Trump has vowed not to touch either Social Security or Medicare — a break from GOP orthodoxy that has shifted the party’s views — and has more recently hammered DeSantis for wanting to cut the program. …
As the Republican Party becomes increasingly reliant on older voters for support and as Trump continues to exert heavy influence over the party’s beliefs, GOP policymakers have followed the former president’s lead in steering clear of proposals to cut the program, with House Speaker Kevin McCarthy (R-Calif.) ruling that out in debt ceiling negotiations earlier this year with the White House. …
Economists of both parties agree that Social Security and Medicare, the health insurance program for the elderly, face funding crises if Congress does not act to shore up their finances somehow, either by reducing benefits or raising taxes. If no reforms are enacted, Social Security benefits for an estimated 60 million people will be cut by 20 percent starting in 2033, according to the most recent report of the Boards of Trustees of the Social Security and Medicare trust funds. Medicare also faces automatic benefit cuts as soon as 2031, the report says. …
There were hints ‘in the air’ back into the Gerald Ford/Jimmy Carter era that Social Security was ‘in trouble’ and that maybe the guv’mint was not going to do much/enuf to fix it.
That is, ‘we have these wonderful new IRA/401K programs for you to take advantage of’ ‘where you can secure your retirement income on your own. With some tax inducements to do so.’
Mrs Fred & I took the hint. So did many others, but not enuf really. And many found it necessary to pull money out, alas.
Now it seems that the GOP is just going to cut/gut benefits for future recipients.
At least this should not come as a surprise. But feel free to be disappointed.