Every working person in the United States has had a thought or two and many opinions about the current state and future of Social Security, making it a tough topic for politicians. People worry that after paying into it their entire working lives, it won’t be there for them when they retire.
That worry is based on things like a federal government estimate that the Social Security trust fund will be used up by 2033, less than 20 years away, reducing benefits to 75 percent of what is promised.
Experts and individual workers and taxpayers alike agree that something has to change for Social Security to be a truly sustainable program.
Financial economist Larry Kotlikoff says there are two options for what needs to happen now: either increase the Social Security payroll tax rate or make a permanent 23 percent cut to all OASDI benefits. Neither of these is likely to be a popular fix with taxpayers, retirees, or politicians. Social Security and what to do about it is quickly becoming a major topic for debate with candidates preparing for November elections.
Lawton Retirement Plan Consultants LLC president Robert Lawton says that while most people he counsels don’t believe Social Security will be there for them when they retire, he reassures them that it will. However, he predicts that future Social Security benefits will look different than they do now.
New York Republican congressional candidate Elise Stefanik agrees, saying that Social Security needs to be modernized to better meet the needs of the people it’s designed to protect. She proposes raising the retirement age for future generations, means testing Social Security so those with more resources aren’t collecting the same as those with fewer or no resources, and adjusting the cost of living with a chain-weighted consumer price index. She’d also support lifting the cap on payroll tax for income above $117,000. Maxwell School of Citizenship Dean Emeritus John L. Palmer says these are all well-worn options that both parties have reviewed, except for means testing, which is the most contested and debated option in the Social Security discussion.
Lawton says to look for means testing because it’s going to be a necessary adjustment for a sustainable program as well as a more equitable distribution of the funds. He believes the Social Security retirement age is another change that is coming because we are all living longer, and benefit collection ages will have to be moved back three to five years.
More changes that Lawton says we can all expect to see in Social Security include incentives to continue working, longevity indexing to account for longer life spans, and adjustments to the payroll tax, including eliminating the compensation cap or increasing the rate.
California’s competitors in the House races are facing Social Security benefits as a key issue for midterm elections, with monitors closely watching statements and votes. The Progressive Change Campaign Committee predicts that candidates who support protecting and expanding Social Security benefits will win over candidates who want cuts. Mike Honda, Eloise Gomez Reyes, Elizabeth Warren, and Mike Eggman are four who support protecting Social Security, and Ro Khanna and Pete Aguilar favor cuts. Taxpaying voters, especially those nearing retirement, are paying attention to which side of the Social Security debate candidates are on.
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