For many years there have been dire warnings that Social Security is little more than a government-run Ponzi Scheme, and could eventually “run out” if even more dire actions aren’t taken.
However, Social Security is NOT a Ponzi Scheme and while its reserve funds will be depleted, the majority of its benefits will still be covered by taxpayers.
Moreover, even if Congress is unable to adjust the structure of the program by 2035 – including via tax increases, benefit reductions, or another method – Social Security will be able to continue providing benefits to elderly Americans just as it has done for decades.
Yet, if nothing is done, Social Security may have to reduce payments by as much as 20 percent as early as 2032. Currently, upwards of 66 million people receive benefits, with the average coming in around $1,691 according to January 2023 data from the Social Security Administration (SSA). Those cuts could see the payments reduced to $1,352 – which would essentially wipe out the cost of living adjustments (COLAs) that have bumped up the payments in recent years to keep track with inflation. That is bad news for the huge majority – 88 percent – of Americans who have said that they are counting on Social Security to see them through retirement, according to a survey conducted earlier this year for Newsweek.
It is also easy to see why Social Security is becoming a hot-button political issue, and President Joe Biden has pledged to rebuff any efforts to cut any Social Security benefits. Former President Donald Trump has adopted a similar policy.
Yet, Trump’s main GOP rivals are now taking a different approach – a potentially more realistic view of the situation – and are calling for changes that will most certainly impact those now entering the workforce, as well as those in higher income brackets.
Speaking to the Des Moines Register’s editorial board in May, former Vice President Mike Pence called out the policies of both Trump and Biden, stating, “My old running mate’s policy is identical to Joe Biden’s. I think that both Joe Biden and my former running mate have made it clear that they won’t even discuss Social Security or Medicare reform, and I just think that’s unacceptable.”
Pence continued, “I think that policy is insolvency,” and called for raising the retirement age in the coming decades.
Former Ambassador to the United Nations Nikki Haley went even further when she suggested changing the age of retirement for those Americans in their 20s, while she also called for limiting Social Security and Medicare benefits for wealthier Americans.
“What you would do is, for those in their 20s coming into the system, we would change the retirement age so that it matches life expectancy,” Haley explained in an interview with Fox News, emphasizing, “It’s the new ones coming in. It’s those in their 20s that are coming in. You’re coming to them and you’re saying, the game has changed. We’re going to do this completely differently.”
Such a move isn’t likely to be welcomed by those of Generation Z or younger Millennials who are now struggling to pay off student loans, which could limit their ability to even think about saving for retirement for years and possibly decades.
However, at a Town Hall earlier this year, Haley added, “It is unrealistic to say you’re not going to touch entitlements. The thing is you don’t have to touch it for seniors and anybody near retirement. You’re talking about the new generation, like my kids coming up.”
Thinking About Tomorrow Today?
The notion of raising the retirement age may not sit well with some individuals, but Trump’s GOP rivals are simply suggesting this could be part of a solution that ensures there is something rather than nothing waiting for younger Americans when they reach retirement.
“We don’t have to make any changes to these programs for anybody over the age of 40,” Pence said. “But for Americans under the age of 40, most of whom don’t think they’re going to get anything from these programs, I think we can introduce common sense, compassionate reforms.”
That sentiment was shared by Florida Governor Ron DeSantis, currently Trump’s closest rival in recent polling, who said, “Talking about making changes for people in their 30s and their 40s so the program’s viable — that’s a much different thing, and something I think there’s going to need to be discussion on.”
Yet, cutting benefits for younger people will still leave the bulk of the problem unresolved, notably as the Social Security funding crisis is projected to arrive decades before even the oldest Millennials receive their first checks.
“It clearly would not address the shortfall, or the short- to medium-term problem we’re going to have in 10 years or less,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, a nonpartisan think tank, told The Washington Post.
There will be no easy solution, but empty promises from any candidate aren’t going to refill Social Security’s coffers.
Author Experience and Expertise
A Senior Editor for 19FortyFive, Peter Suciu is a Michigan-based writer. He has contributed to more than four dozen magazines, newspapers, and websites with over 3,200 published pieces over a twenty-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a Contributing Writer for Forbes and Clearance Jobs. You can follow him on Twitter: @PeterSuciu.
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