Social Security trust fund reserves will be depleted in less than 10 years, but President Biden and former President Donald Trump offer only vague promises to protect the program as they doggedly avoid the notorious “third rail” of American politics.
Projections from the Social Security Administration showed that the entitlement program will be depleted in 2033, one year earlier than previously expected. The updated forecast is based on factors such as slowing economic growth and longer life spans.
An insolvent trust fund would result in a 23% cut in annual benefits for the program’s estimated 70 million recipients in 2033.
Because of fears of reduced benefits, voters rank Social Security as one of the most important issues of the November election. A YouGov poll in February asked voters to rank various issues, and Social Security was at or near the top. Respondents across all demographics, including age and political affiliation, said the issue was “very” or “somewhat” important.
Mr. Biden and Mr. Trump have cast themselves as protectors of Social Security, yet neither has offered a detailed plan for ensuring the program’s solvency.
“I think they have been incredibly specific about what they won’t do, which is touch benefits, but they have not been specific about what they will do,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
The Republican Study Committee has highlighted the benefit of the candidates’ strategic vagueness. The group of House Republicans offered a budget plan proposing a higher retirement age and lower Social Security benefits for high-income earners.
The plan did not call for any cuts or delays in retirement benefits, though it proposed cuts to Medicare despite strains on the program from America’s aging population.
The White House immediately accused Republicans of trying to cut Social Security. It said the proposal “rigs the economy for the wealthy and large corporations against middle-class families.”
Mr. Biden said the “extreme” proposal “shows what Republicans value.”
“Let me be clear: I will stop them,” he said.
Mr. Biden’s budget blueprint released early this month did not include a detailed plan for fixing Social Security. Instead, it simply said he would work with Congress “in a way that ensures no benefit cuts.”
The budget blueprint included a detailed plan to protect Medicare, another entitlement program that is equally popular but expensive. The blueprint included as much ink on improving Social Security Administration customer service as it did on strengthening the program.
During his 2020 presidential campaign, Mr. Biden vowed to save Social Security by increasing payroll taxes for people with annual incomes higher than $400,000.
That plan has been absent from Mr. Biden’s budget proposals since he took office. White House Office of Management and Budget Director Shalanda Young revived the idea during a conference call with reporters about the budget.
“If you make a million dollars in this country, you are done paying your Social Security taxes sometime in February,” she said. “Is that fair? We don’t think so.”
Mr. Trump has rejected the idea of a Social Security overhaul because any changes would hurt seniors. He recently suggested reining in spending on the program.
“There is a lot you can do in terms of entitlements, in terms of cutting, and in terms of also the theft and bad management of entitlements,” he said on CNBC without specifying where he would cut.
Democrats said Mr. Trump was talking about cutting the Social Security program. Mr. Trump sought to clarify his comments in an interview with Breitbart. “I will never do anything to jeopardize or hurt Social Security and Medicare,” he said.
During his presidency, Mr. Trump was similarly vague on Social Security. His fiscal 2021 budget called for billions of dollars in Social Security cuts, slashing the maximum amount of retroactive benefits for disabled workers and reducing Supplemental Security Income benefits for those living with other SSI recipients.
Congress rejected those proposals, and Mr. Trump never pressured lawmakers to act on the ideas. It was also the last time he proposed cuts in his budget.
During his 2020 reelection campaign, Mr. Trump again talked about cutting entitlements but didn’t offer specifics.
Joseph White, a professor who has studied Social Security reform at Case Western Reserve University, said neither party wants to talk about the issue because it is not in their political interest. With the fund’s depletion scheduled to be well past the end of either candidate’s second term, it’s much easier for them to dodge the issue.
“Democrats desperately want to change the subject from immigration, but they won’t change it to Social Security because you have to remind people there is a concern about one of the most important programs Democrat voters like,” he said. “It would be incredibly stupid for Trump to start the fight because it will give Democrats the chance to remind people he talked about cutting it.”
As Mr. White sees it, lawmakers have only three options to address the looming Social Security insolvency. They can raise taxes on the wealthy to cover the gap, make massive cuts now or gradually implement a roughly 2% cut annually over the next 10 years.
Ms. MacGuineas said the solution is not an either-or situation but will take a combination of factors, including raising revenue, lifting the payroll tax, raising the retirement age and slowing the growth rate of benefits for high-income earners.
Former Republican presidential candidate Nikki Haley floated the idea of changing the retirement age for Americans currently in their 20s and limiting Social Security benefits for wealthier Americans. Mr. Trump said her plan would force people to work into their late 70s or early 80s.
Democrats in the House and Senate last year announced a bill that would raise the minimum earnings subject to the Social Security payroll tax to $400,000 from its current level of $160,200. It would require those with more than $400,000 in investment income to contribute to Social Security the same way as those who earn wages.
Sen. Bernard Sanders, Vermont independent, and Sen. Elizabeth Warren, Massachusetts Democrat, have introduced a bill that would apply Social Security payroll taxes to incomes over $250,000 while having the wealthy pay taxes on their investment and business incomes.
Neither of those bills has garnered much support.
The Republican-led House Budget Committee this month advanced a resolution that would create a fiscal commission to look into spending cuts for health care and welfare programs.
Social Security advocates and the White House accused the Republicans of wanting to slash benefits to levels that would harm older and low-income Americans.
Last year, a group of 176 House Republicans advocated raising the retirement age at which full Social Security benefits can be accessed to 69. That idea also failed to garner much support.
Lawmakers can’t continue avoiding the Social Security issue because it is becoming a full-blown crisis, Ms. MacGuineas said.
“We are moving past the date where you can make smart reforms and moving into where it needs to be done desperately,” she said. “This is a clear situation of good politics being bad policy. Both candidates are trying to bash each other over the head with false allegations that the other will shred the program rather than put forward plans.”
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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