Have lawmakers cried wolf one too many times about Social Security?
For years, Americans have been told the entitlement program is on the brink of insolvency — and still it chugs along.
There is also fear of making any changes to the program given its popularity among Americans — making it one of the “third rails” of politics.
But Sen. Mitt Romney has made shoring up the program one of his priorities, especially as its cost promises to be a future driver of the nation’s debt.
“None of my colleagues are in favor of cutting benefits for current retirees or those nearing retirement; but we must find a way to make sure Social Security is there for the coming generations — without continuing to add trillions of dollars to the national debt,” Romney told the Deseret News. “We have a moral responsibility to act and the clock is ticking.”
Democratic and Republican senators agreed with Romney’s sentiment that the clock is ticking at a hearing Wednesday, as they heard testimony from the director of the Congressional Budget Office that the Social Security trust fund is expected to be drained in the next 10 years.
At the Budget Committee hearing, Chairman Sheldon Whitehouse, a Democrat from Rhode Island, said Social Security and Medicare will drive half of all spending growth in the national budget over the next decade.
“Without new revenue, Social Security will only cover 80% of its projected benefits by 2035. That’s only 12 years away,” Whitehouse said, calling Social Security the “nation’s most effective anti-poverty program.”
But there are wide disagreements between the parties on what should be done to save Social Security. Democrats want to increase taxes, including the Social Security payroll tax, while Republicans have suggested curtailing benefits for younger workers and wealthy taxpayers.
Whitehouse said he has proposed a bill, the Medicare and Social Security Fair Share Act, that would increase taxes to secure the program.
There’s a cap on Social Security payroll taxes — taxpayers will only pay on the first $160,200 they earn this year. And the tax is not levied on investment income or capital gains. Democrats would like to change that and extend the tax to income earned above $400,000 a year, Whitehouse said, keeping with President Biden’s promise not to raise taxes for families who earn less than that amount.
Romney, a Republican from Utah, has proposed a bill, called the TRUST Act, that would require Congress to form “rescue committees” for several of the failing government trust funds, including the one for Social Security, and task them with coming up with a bipartisan plan for reform.
He views it as the only way to find a solution, given how politicized the conversation around the program has gotten.
“It is irresponsible and reckless for Washington to continue to ignore the impending collapse of our federal trust funds,” Romney said. “The Congressional Budget Office estimates that Social Security’s old age trust fund is projected to reach insolvency within the next decade. This means that in 10 years, our nation’s seniors could see an automatic 25% reduction of their Social Security benefits, and hardworking Americans could face steep tax increases to cover the shortfall.
“The first step to rescuing Social Security is for both parties to be honest with Americans about this impending crisis — the unserious proposals and dishonest claims put forth to score political points must stop,” he continued. “Americans are counting on us to save the programs they rely on. Passing legislation like my bipartisan TRUST Act would be a logical next step. The TRUST Act creates a process for members of both parties, from both the House and the Senate, to bring forth proposals to save each of our federal trust funds.”
In the latest Deseret News/Hinckley Institute for Politics poll, Utahns were asked what reforms they favor for Social Security.
Jason Perry, director of the University of Utah’s Hinckley Institute of Politics, said the question was asked in the latest poll because of the potential changes to the program.
“Our very own Sen. Mitt Romney is looking at potential legislation to address what might happen in the future on Social Security,” Perry said. “It’s something that has been talked about for a very long time. And because we may see legislation, it’s important to understand where Utahns are, and we’re probably going to be consistent with where a lot of people are across the country.”
The reforms receiving the most support were allowing younger workers to invest part of their Social Security contributions in private funds, with 34% of respondents choosing that option, while another 34% said they would support lawmakers reducing or eliminating benefits for high income recipients.
Republicans were more likely to support allowing younger workers to privately invest, with 38% choosing that option, while 48% of Democrats in Utah chose reducing or eliminating benefits for high-income recipients as the best reform.
Less popular reforms included:
- Raising taxes, with 13% of voters choosing that option;
- Raising the retirement age, 9%;
- Reducing benefits for everyone, 6%;
- And eliminating the program all together, which received just 4% support.
“This is a hard issue,” said Perry. “It’s complicated. And the results of our own poll shows there is no easy or uniformly approved-of answer to the problem.”
He pointed out that after years of people paying in, they expect the money to be there to help them in the future. But the solutions people favor are run through a “political filter.”
But still, “No option got over 50%, which shows just how difficult this one is to navigate,” he said.