Social Security’s Solvency Dilemma: Drawing Closer and Closer
Social Security’s Board of Trustees will soon be issuing their annual assessment of where the program stands in relation to long-term financing, and it appears likely to some forecasters that the date for exhaustion of the program’s trust fund reserves will move as many as two- to four-years closer. In addition to the continuing effect of demographics (longer life spans, dwindling workforce participation, for example), many observers point to the COVID-19 pandemic’s devastation of the U.S. economy and its sluggish recovery as indicators that the depletion projection will be accelerated.
So, what’s likely to happen? That’s the theme of Forbes Contributor Bob Carlson’s post on forbes.com, wherein he outlines some of the preliminary thinking expressed by the Biden administration during the 2020 election run-up. Among the thoughts voiced by the Biden camp during the election cycle were a guaranteed minimum benefit increase, a monthly increase for long-term beneficiaries, improved benefits for widows and widowers, and an increase in cost-of-living adjustments, offset by application of payroll taxes on income above $400,000. Carlson also comments on similar recommendations made in Rep. John Larson’s (D-CT) Social Security 2100 bill (H.R. 860), as well as contrasting proposals made by the late Rep. Sam Johnson (R-TX).
Observing that resolution of the solvency will likely be some combination of higher taxes and lower benefits, Carlson’s article closes with this overall assessment: “Whatever details Congress settled on, when it’s over I expect today’s beneficiaries and those who are likely to be beneficiaries in a few years will be in the same position or better off than they are today (except for those with higher incomes). Those younger than 45, especially those with higher incomes, will be worse off than under the current system. Except for those with lower incomes, they’re likely to pay higher lifetime taxes and receive lower benefits than under today’s system.”
Click here to read Bob Carlson’s full article…
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills previously introduced and merging them with the Association’s own well researched ideas. One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years. Read AMAC’s plan here.