Social Security

Social Security Cost Growth Should Be Slowed, Not Accelerated

In a speech in Elkhart, Indiana on Wednesday, President Obama discussed retirement security, saying, "We can’t afford to weaken Social Security. We should be strengthening Social Security. And not only do we need to strengthen its long-term health, it’s time we finally made Social Security more generous, and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned. And we could start paying for it by asking the wealthiest Americans to contribute a little bit more. They can afford it. I can afford it."

He did not specify what the expanded benefits or tax increases would look like, but broad-based benefit increases would not be the best use of resources and would put the cart before the horse in terms of ensuring solvency. In addition, increasing taxes on the rich would help Social Security's finances but would not fully ensure 75-year solvency and would become a more inadequate solution over time, especially if it is enacted along with benefit increases.

The Opportunity Cost of Increasing Social Security Spending

Targeted benefit enhancements for Social Security recipients who need them most certainly should be considered in the context of a reform plan, and indeed they have been included in a number of bipartisan plans put forward in recent years.

But before advocating for broad expansions that would increase overall costs, policymakers must recognize that both costs and benefits are already growing rapidly. As recently as 2008, the program's costs consumed only 11.6 percent of payroll, well below the nearly 13 percent raised by the payroll tax and other sources. By 2035, that cost will grow to 16.6 percent according to the Social Security Trustees and almost 19 percent according to the Congressional Budget Office (CBO). Both the number of beneficiaries and benefit levels (as we discuss below) will grow significantly over time.

MY VIEW: Maya MacGuineas

Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt, wrote a commentary that appeared in the Wall Street Journal Washington Wire. It is reposted here.

MY VIEW: Marc Goldwein

Marc Goldwein is the Senior Vice President and Senior Policy Director of the Committee for a Responsible Federal Budget. He wrote a guest post that appeared on the RealClearPolicy blog. It is reposted here.

MY VIEW: Jim McCrery and Earl Pomeroy

Former U.S. Representatives Jim McCrery (R-LA) and Earl Pomeroy (D-ND) are the co-chairs of the McCrery-Pomeroy SSDI Solutions Initiative, a project of the Committee for a Responsible Federal Budget. They wrote a commentary that appeared on The Hill's Congress Blog.

The Nine Social Security Myths You Shouldn't Believe

Social Security is a vital program for tens of millions of people. Unfortunately, the program is on a fiscally irresponsible path towards insolvency by as soon as 2034. There is not enough discussion among policymakers to bring this program back to its solvency. Instead, discussion perpetuates many myths about the program. Yesterday, CRFB released a new report on the “Nine Social Security Myths You Shouldn’t Believe,” which aims to provoke conversation about the truths of Social Security.

Read the full paper here, or a summary of the myths related to the 2016 campaign.

The 9 myths are:

  • Myth #1: We don’t need to worry about Social Security for many years.
  • Myth #2: Social Security faces only a small funding shortfall.
  • Myth #3: Social Security solvency can be achieved solely by making the rich pay the same as everyone else.
  • Myth #4: Today’s workers will not receive Social Security benefits.
  • Myth #5: Social Security would be fine if we hadn’t “raided the trust fund.”
  • Myth #6: Social Security cannot run a deficit.
  • Myth #7: Social Security has nothing to do with the rest of the budget.
  • Myth #8: Social Security can be saved by ending waste, fraud, and abuse.
  • Myth #9: Raising the retirement age hits low-income seniors the hardest.

Event Recap: McCrery-Pomeroy SSDI Solutions Initiative Recommendations Release

On Wednesday, April 6, the McCrery-Pomeroy SSDI Solutions Initiative released its final recommendations and book of policy proposals dedicated to improving the Social Security Disability Insurance (SSDI) program. The book, SSDI Solutions: Ideas to Strengthen the Social Security Disability Insurance Program, represents the culmination of a nearly two-year effort to foster discussion on ways to improve the SSDI program for its beneficiaries as well as those who pay into the program and the economy as a whole.

A video of the event can be found below as well as a detailed recap:

Blahous Tells it Like it is with Social Security

Voters say they want a candidate that “tells them like it is,” but as Social Security Trustee Charles Blahous describes, that may mean facing difficult realities about Social Security. In just six years, the Social Security Disability Trust Fund is expected to become exhausted, triggering benefit cuts if no action is taken. Also, the larger Social Security Old Age trust fund is scheduled for insolvency within 15 to 20 years.

MY VIEW: Maya MacGuineas

Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt, wrote a commentary that appeared in the Wall Street Journal Washington Wire. It is reposted here.

Four Fiscal FactChecks from the Past Month

As the 2016 Presidential primary season rolls on, CRFB continues to fact check the candidates on budget-related statements made during the campaign on our Fiscal FactCheck site. Within the past month, we have fact checked four statements, all related to federal spending. Below is a summary of each of them.

Reducing Fraud Would Make Social Security Solvent

At the February 13 Republican presidential debate in South Carolina, Donald Trump stated that he would make Social Security solvent by reducing waste, fraud, and abuse in the program, citing thousands of 106-year-olds on the program who likely do not exist. We noted that only a tiny fraction of Social Security beneficiaries were found to be deceased and only 13 Social Security beneficiaries were over age 112. Even eliminating all improper payments would save just a small fraction of what would be needed to ensure solvency. Thus, we found that Mr. Trump's statement was false.

Our Rating: False

Sen. Lankford and Sen. Manchin Ask For Continued Reform on the SSDI Program

Senators James Lankford (R-OK) and Joe Manchin (D-WV) sent a letter Thursday to Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) pushing for sustained momentum on addressing improvements to the Social Security Disability Insurance (SSDI) program.

Despite the postponement of the SSDI trust fund’s exhaustion until 2022 by the payroll tax reallocation contained in the Bipartisan Budget Act (BBA) of 2015, more is needed to be done in order to achieve long-term program sustainability. Lankford and Manchin commended the BBA’s small SSDI reforms while urging the Finance Committee to continue working further on options that will improve the program’s solvency. Quoting the 2015 Social Security Trustees’ report, they note:

The 2015 Social Security Trustees report recommended “Any necessary resource reallocation that does occur should not be regarded as a substitute for action to sustain the finances of DI and Social Security as a whole, nor enacted in a manner that has the effect of further postponing those required corrections.” Although the Act temporarily extended the solvency of the SSDI program and included some small improvements to the program, it did little to improve the program’s long-term finances or to improve the structure of the SSDI program for beneficiaries and taxpayers. We hope you agree that more substantial reforms are needed.

Syndicate content