The Social Security trust fund reserves will be depleted in less than 10 years but both President Biden and former President Donald Trump offer only vague promises to protect it 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 sooner than previously expected. The updated forecast is based on factors, including slowing economic growth and longer lifespans.
If the trust fund goes bust, it would result in a 23% percent cut in annual benefits for all of the program’s estimated 70 million recipients in 2033.
Fears of reduced benefits have pushed voters to rank Social Security as one of the most important issues of the 2024 election. A February YouGov poll asked voters to rank various issues and Social Security was at or near the top with almost all respondents saying it was “very” or “somewhat” important. That held true across all demographics, including age and political affiliation.
Mr. Biden and Mr. Trump have cast themselves as protectors of Social Security, yet neither have 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 benefit of their strategic vagueness was recently highlighted by the Republican Study Committee, a large group of House Republicans who offered up a budget plan that tacked the Social Security issue by proposing raising the Social Security retirement age and lowering benefits for high earners.
The plan did not call for any cuts or delaying of retirement benefits, though it did call for 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, saying the proposal “rigs the economy for the wealthy and large corporations against middle-class families.”
Mr. Biden called it an “extreme” proposal that “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 fairly detailed plan to protect Medicare, another entitlement program that is equally popular and very expensive. The blueprint included as much ink on improving customer service as the Social Security Administration as it did on strengthening the program itself.
During his 2020 presidential campaign, Mr. Biden vowed to save the program by increasing Social Security payroll taxes for people making more than $400,000 annually.
That plan has been absent from all of 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 overhauling Social Security, saying any changes would hurt seniors. However, Mr. Trump recently suggested reining in spending on the program could bolster 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 seized on his comments, saying he was talking about cutting Social Security itself. Mr. Trump sought to clean up his comments in an interview with Breitbart, saying, “I will never do anything to jeopardize or hurt Social Security and Medicare.”
During his presidency, Mr. Trump was similarly vague on Social Security. His fiscal 2021 budget called for billions in Social Security cuts, slashing the maximum amount of retroactive benefits for disabled workers, and reducing Supplemental Security Income benefits for those who live with other SSI recipients.
But Congress rejected those proposals and he never pushed for 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 kick the can down the road.
“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, there are only three options for lawmakers 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 says the solution is not an either-or situation but rather 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 keep working into their late 70s or early 80s.
None of the proposals have gained any real political traction. Democrats in the House and Senate last year unveiled a bill that would raise the minimum earnings subject to Social Security payroll tax to $400,000 from its current level of $160,200. It would also 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 Elizabeth Warren, Massachusetts Democrat, have introduced a bill that would apply Social Security payroll taxes to incomes over $250,000 while also having the wealthy pay taxes on their investment and business income.
None of those bills got much support and Republicans have met political opposition of their own.
The House Budget Committee Republicans this month advanced a resolution that would create a fiscal commission that would look into spending cuts on health care and welfare programs.
Social Security advocates and the White House have slammed the resolution, accusing them of wanting to slash benefits and harming the elderly and low-income individuals.
Last year, a group of 176 House Republicans advocated raising the retirement age at which full Social Security benefits can be accessed to 69, but that idea also failed to garner much support.
Lawmakers can’t keep avoiding the Social Security issue because it is already becoming a full-blown crisis, said Ms. MacGuineas.
“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.”