Indirectly Addressing Social Security’s Woes
In Late August, House Ways and Means Committee Chairman Kevin Brady (R-TX) praised the 1.6 million jobs created this year and the highest level of wage gains since 2009, largely attributing these factors as evidence of the efforts underway in the current administration to spur economic growth. Although not specifically stated at the time, there were implications that this positive economic trend has the potential of creating a positive impact on Social Security’s future cash flow. In a post on www.fool.com by The Motley Fool’s Sean Williams, this impact may in fact be an indirect approach to addressing at least part of the program’s solvency problem documented in the program’s 2018 annual Trustees Report. Williams observed that job growth “could increase payroll tax revenue above and beyond the Trustees’ growth projections, presumably leading to a net cash surplus rather than an outflow.”
This strengthening of America’s labor market could portend a continued upward trend in tax revenue coming into the Social Security system, and coupled with the potential for a diminishing of the need to withdraw from Trust Fund reserves to cover shortfalls, could result in an extension of Social Security’s anticipated insolvency beyond its current 2034 projection. Only the months ahead can determine if the current economic boom can have a material, long-term impact on Social Security’s eventual dilemma. That’s why it’s important to remain dedicated to a permanent fix for the program’s problems. As Williams points out in his post, fixing the problem will require “direct intervention and amendments from Congress,” something the Association of Mature American Citizens (AMAC) has long recognized and has been strongly advocating for in Washington.
Read Williams’s post here, and then take a look at AMAC’s plan for a more permanent solution here.