The Full Retirement Age
The Full Retirement Age
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Tag: Social Security
Biden and Trump Try To Wish Away the Looming Entitlement Crisis
“Contrary to what Trump and Biden imply, it is impossible to “protect” Social Security and Medicare by doing nothing. Inaction will guarantee automatic benefit cuts in less than a decade.
In 2033, according to the latest projections, Social Security’s trust fund “will become depleted,” and “continuing program income will be sufficient to pay 77 percent of scheduled benefits.” Two years before then, Medicare’s hospital insurance trust fund “will be sufficient to pay 89 percent of total scheduled benefits.””
https://reason.com/2024/03/27/biden-and-trump-try-to-wish-away-the-looming-entitlement-crisis/
Biden Says He’ll Make the Wealthy Pay More To Fix Social Security. Here’s Why That Won’t Work.
“Under current law, the payroll tax that funds Social Security is capped so that, for this year, only the first $168,600 in earnings are subject to it.
Raising that cap—or eliminating it—is frequently discussed as one possible solution to Social Security’s approaching insolvency. That seems to be the idea that Biden was gesturing towards in his speech.
On its face, this isn’t necessarily the worst idea. The cap is completely arbitrary, so there’s no principled reason why all earnings shouldn’t be treated equally. And there’s no doubt that raising the cap would generate more revenue to help keep Social Security afloat. The Congressional Budget Office estimates that applying payroll taxes to higher income levels could raise $1 trillion in revenues over a 10-year period (though the amount of revenue would depend on how the cap was altered, and whether benefits increased as well).”
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“raising or eliminating the payroll tax gap doesn’t come close to solving the long-term Social Security shortfall. It might generate $1 trillion over 10 years, which is a lot of money, but it doesn’t come close to the $2.8 trillion deficit the program is expected to run over the next decade.
“Eliminating the tax cap would either raise benefits as well (reducing the proposals’ savings), or—if the accompanying benefits are canceled—turn Social Security into a true welfare program by delinking contributions and benefits,” writes Brian Riedl, a senior fellow at the Manhattan Institute and former Senate budget staffer, in a recent piece debunking some common myths about Social Security reform. “Moreover, eliminating the cap would not bring permanent solvency or avert the need for benefit changes….The system would return to deficits by 2029. Lawmakers would still need to reform benefit levels and the eligibility age.””
https://reason.com/2024/03/07/biden-says-hell-make-the-wealthy-pay-more-to-fix-social-security-heres-why-that-wont-work/
Trump just opened the door to Social Security cuts. Take him seriously.
“During his 2016 campaign, Donald Trump called for a ban on all Muslim immigration to the United States, the targeted assassination of terrorists’ family members, the overturning of Roe v. Wade, the repeal of the Affordable Care Act, and enormous corporate tax cuts.
And voters considered him the most “moderate” Republican candidate in more than four decades.
To the extent this perception had any basis in reality, it reflected Trump’s genuine moderation on one highly salient issue: Unlike many of his GOP predecessors, the mogul emphatically opposed any cuts to Medicare and Social Security. This likely made it a bit easier for ideologically conflicted older Rust Belt voters to pull the lever for a Republican.
As president, Trump never pursued large cuts to Medicare or Social Security benefits and implored his party to avoid them during the debt ceiling fight last year.
Since the days of FDR, Democrats have profited from their reputation as the more stalwart guardians of entitlement benefits. Trump’s triangulation threatens to nullify that critical source of partisan advantage. President Joe Biden has therefore sought to portray Trump’s avowed support for Social Security and Medicare as fraudulent. And on Monday, the presumptive GOP nominee bolstered the president’s case.
In an interview with CNBC, Trump said that he was open to cutting entitlement spending. Then, his campaign said that he wasn’t.
Trump’s reflections on public policy tend to bear only a loose resemblance to coherent thoughts. And his remarks about entitlements on CNBC Monday were no exception. In that exchange, anchor Joe Kernen told Trump that “something has to be done” about entitlement costs, then asked if the former president had changed his mind about cutting “Social Security, Medicare, [and] Medicaid” in light of the rising national debt.
Trump replied:
So first of all, there is a lot you can do in terms of entitlements, in terms of cutting, and in terms of, also, the theft and the bad management of entitlements — tremendous bad management of entitlements. There’s tremendous amounts of things and numbers of things you can do. So I don’t necessarily agree with the statement.
Biden pounced on Trump’s words, posting a clip of the Republican’s answer and vowing that no cuts to entitlements would be allowed “on my watch.” The Trump campaign replied, “If you losers didn’t cut his answer short, you would know President Trump was talking about cutting waste.”
This rebuttal is disingenuous. Trump plainly stated that there was a lot that the government could do “in terms of cutting” entitlements and “also” in terms of combating “theft and bad management of entitlements.” What precisely the former president is referring to when he alleges that Social Security, Medicare, and Medicaid are rife with theft, bad management, and waste is unclear. And neither he nor his campaign has produced any actual evidence of such improprieties.
This said, it’s also true that, by the end of his answer, Trump was evincing disagreement with Kernen’s statement that entitlements needed to be cut. So, one could reasonably argue that, as with so many of Trump’s statements, his musings on entitlement reform were too suffused with internal contradictions and baseless demagogy to have any concrete meaning.
Yet Trump’s gaffe is not the only reason for voters to fear that a Republican victory in November could lead to leaner Social Security benefits.
For one thing, Trump spent his entire presidency trying to cut Medicaid, an entitlement program that provides not only health insurance for low-income Americans, but also long-term care for older voters. And he has tried to cut Social Security benefits for disabled and low-income people.
For another, the GOP’s avowed fiscal commitments cannot be reconciled with preserving Medicare and Social Security in their present forms. Congressional Republicans are committed to enacting trillions of dollars worth of new tax cuts, perennially increasing defense spending, and balancing the federal budget. There is no politically tenable way to do this without cutting Social Security or Medicare.”
https://www.vox.com/politics/2024/3/12/24098773/trump-social-security-medicare-cuts-entitlements-position-2024
Don’t Let the Government-Shutdown Charade Distract You From the Debt Crisis
“While controlling discretionary spending is important for fiscal responsibility, for reducing government waste, and for negotiating the proper size and scope of federal activities, the current shutdown debate is largely symbolic. America’s biggest fiscal challenge lies in the unchecked growth of federal health care and old-age entitlement programs. Repeated shutdown fights and a slew of temporary continuing resolutions have gotten us no closer to reforming Social Security and Medicare.”
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“The longer Washington waits to fix autopilot spending, the more damage they’ll do. The Congressional Budget Office’s latest long-term budget outlook projects that U.S government spending will consume nearly 30 percent of the economy by 2053—almost 40 percent higher than the historical average. Congress is expected to rack up more than $100 trillion in additional deficits over those 30 years—more than four times what the U.S. government has borrowed over its entire history. Who will lend the U.S. government such vast sums?
The main drivers of this increase are heightened interest costs and the growth in health care and Social Security spending. With Medicare and Social Security responsible for 95 percent of long-term unfunded obligations, according to the Treasury Financial Report, there’s simply no way any serious fiscal reform effort can leave these programs untouched. Every other part of the budget will either stay steady or decline slightly. Other so-called mandatory programs, including various welfare programs, retirement benefits for federal employees, and some veterans’ benefits, are projected to decline as a share of the economy. Discretionary spending depends on what Congress decides to spend each year; if historical trends hold, this part of the budget will decline by one-sixth. And yet this is the part of the budget that all this shutdown fuss is about.”
https://reason.com/2023/09/14/dont-let-the-government-shutdown-charade-distract-you-from-the-debt-crisis/
Why You Will Be Getting Social Security After All
Sam Seder Debates Social Security With Guy Who Called Him ‘F—king Idiot’ On Twitter
Social Security Will Be Insolvent by 2033
“If nothing changes, Social Security benefits will be subject to a 23 percent cut in a decade.”
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“Since any changes to shore up Social Security’s bottom line will likely require huge tax increases or changes to how benefits are paid, policy makers are also running out of time to implement those changes in ways that don’t cause major disruptions to the economy and Americans’ retirement plans.”
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“The most straightforward solution to Social Security’s problem is to raise the payroll taxes that fund the program to make up for the shortfall on the benefit side of the ledger. But that would only exacerbate the problem by placing a bigger burden on younger, generally poorer workers.
According to the report, Social Security could be kept afloat for the next 75 years by hiking the payroll tax by 4.15 percentage points in 2034 (or implementing a smaller increase sooner). The payroll tax is currently charged at a 16.5 percent rate, with employers and employees each covering half. That works out to a nearly 25 percent tax hike. Alternatively, the report says, benefits could be cut by about 25 percent.”
LC: We could also fund it by higher taxes on the wealthy.
Republicans’ and Democrats’ Refusal To Reform Social Security and Medicare Is Political Malpractice
“To pretend that Social Security and Medicare shouldn’t be touched is nothing short of political malpractice. Over the next 30 years, the two programs will run a $116 trillion shortfall. This number accounts for the significant amount of interest payments on the debt the government will ring up in the process. While we might be able to stumble along indefinitely, all that borrowing will slow—perhaps even halt—our economic growth, making funding the programs that much more difficult.”
The radical proposal to let Medicare and Social Security lapse, explained
“Florida Republican Sen. Rick Scott’s plan to “rescue America””
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“Scott’s proposal would radically overhaul how the federal government operates, forcing Congress to re-pass every federal law or else let them lapse — a move that, in Democrats’ telling, would endanger much of what the government does, including beloved federal programs like Medicare and Social Security.
It’s a short proposal, with little detail to flesh it out. But on its face, its meaning is plain: Every five years, every federal law would need to be passed anew in order to stay on the books.”
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““Instead of making the wealthy pay their fair share, some Republicans want Medicare and Social Security to sunset,” Biden said in his State of the Union address. “It is being proposed by individuals. I’m politely not naming them, but it’s being proposed by some of you.”
It was a new twist on a familiar trope: Republican proposes cutting government benefits, Democrat attacks him for it. And it seems to have left a mark: After more than a week of uproar since the State of the Union, Scott formally revised his 12-point “rescue America” plan to specify that its provision requiring every federal law to be re-passed every five years would not, in fact, apply to Social Security and Medicare. And so, at least officially, the senator has papered over the main political weakness of his plan.”