cts Biden Forgot About Social Security in His Florida Retiree Speech
In a speech Tuesday, Joe Biden claimed that Democrats would protect Social Security and that Republicans could threaten its future. However, the “reality” Biden presented is deceitful and threatens Social Security’s future.
Social security’s future is uncertain. The program is running low on time and money, and recent increases of debt and spending have made it difficult to reform.
These are seven facts Americans should know to make informed decisions about their futures and which Social Security reforms will be most beneficial for them.
- Social Security taxes paid by workers are not set aside for retirement. The federal government has used Social Security’s revenue to pay for other government spending and issued IOUs from Social Security’s trust fund. Social Security began paying more in benefits than it collected in taxes 12 years ago. This means that the IOUs have to be cashed in and deficits added. However, these IOUs will expire in 12 years.
- Social Security isn’t secure. If policymakers don’t act, Social Security’s retirement plan will collapse in 2034. Benefits will also be cut by 23% across all levels.
- Social Security’s deficit is $20.4 trillion. Social Security’s popularity is due to the fact that it has paid more in benefits than it takes home in taxes. Social Security’s combined old age, survivors’ and disability insurance programs will pay $20.4 trillion more in social security benefits than they will receive in taxes over the next 75 year. This is a $157,000 shortfall for every household in America. This is why Social Security reform is so difficult. However, the longer policymakers wait, then the cost of Social Security reform will rise.
- Inaction can lead to a huge financial loss. Between 2010 and 2020, Social Security’s combined retirement/disability programs’ unfunded obligations soared from $8.6 Trillion and $71,000 per household up to $20.4 Trillion and $157,000 per house. These costs will continue to rise until Social Security policymakers face insolvency.
- Social Security is not a good deal. A Heritage Foundation analysis found that the average worker younger than 35 could get three-times as much from Social Security if they were able to save Social Security taxes in retirement accounts. The Heritage Foundation’s news outlet, The Daily Signal. Saving on your own can result in a 40% increase in retirement income for low-wage workers earning less than $20,000 per year. Personal savings can be passed to family members and friends. This is especially important for lower income Americans who are less likely than others to be able save beyond Social Security. One in five black men will pass away between the ages 45 and 65. This means that they will have to pay thousands, if not hundreds of thousands, into Social Security. They could also get very little in return.
- Democrats’ plan to Social Security would accelerate insolvency and exacerbate shortages. They have a proposal – “Social Security 2100: Sacred Trust” – that they claim will increase Social Security benefits and reduce program shortfalls. It also conforms to Biden’s promise to not increase taxes on those earning less than $400,000. This claim is at best disingenuous. Their “Sacred Trust” has 75 years of tax increases for high-income earners in order to pay for five years of benefit increases. If these benefit increases were made permanent, as is the intention of its supporters, “Social Security 2100: Sacred Trust” would accelerate Social Security’s insolvency by 2 years (to 2032), and increase the program’s already huge shortfalls by 21%.
- A typical household would need to pay $3,000 more in taxes under the Democrats’ Social Security plan. To make the benefit increases of “A Sacred Trust permanent”, Social Security’s payroll tax would need to be raised from 12.4% to 16.7%. This is in addition to the proposed tax increases for people earning over $400,000 This would add $3,000 to the annual cost of Social Security taxes and total Social Security taxes for the median household at $11,800.
Social security reform is complex, and Americans must recognize that. Disingenuous proposals are not appropriate in the much-needed discussions and actions to preserve and enhance Social Security.
Although there is no way to reverse past mistakes that have made Social Security so popular, and so indebted to the taxpayers, there are ways to protect the most vulnerable Americans and improve Social Security for future generations.
Congress can refocus this program on its original purpose, namely to provide financial security and protect seniors from poverty. It’s possible to make more people, and the entire economy, better off by reducing Social Security’s impact on personal incomes.
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