If you’re receiving Social Security payments, could you make due with $523 less than you are currently getting?
And if the day comes when you do see such a cut, who would you blame?
The question isn’t some remote hypothetical. Experts now predict Social Security’s main Old-Age and Survivors Insurance fund will become insolvent in 2032, a scant six years from now.
As a newly released report from the nonprofit Committee for a Responsible Federal Budget notes, the fund would then be able to fund only 76% of its current benefits.
For years, I’ve noted that politicians tend to avoid dealing with problems that won’t become emergencies during their time in office. But those days are ending. As the report notes, insolvency is “projected to occur during the terms of the next elected Senators and President.”
Who gets the blame?
So, who will you blame? The current president and Congress, or the many who came before and did nothing to head off a crisis?
My money is on the set of leaders who will be in office at the time. That’s human nature. But, as the report said, “Yet we have known for 42 years that, without changes, Social Security would become insolvent.
“And for the last 16 years, the cost of Social Security’s retirement program has exceeded its cash income, forcing it to pay benefits in part by using its trust fund reserves.”
Like so many monetary crises, this one is taking years and years to slowly develop, but when the tipping point comes, it’s likely to leap out at us suddenly, as if by surprise.
Utahns hit hard
So, what will a Social Security program limping at 76% look like? That’s the gist of the report, and it’s not good news for Utahns.
The report includes an analysis of the likely benefit cuts by state. Utah is tied for ninth highest in that category, at $523 per month, which the report said is more than the average senior citizen spends on groceries per month. The cuts would affect an estimated 423,029 Utahns, or 12.1% of the current population, impacting 0.08% of the state’s GDP.
At the least, it would leave thousands of seniors struggling to meet their obligations, which may be even more difficult today if the current inflation rate continues.
The report says today’s “candidates and policymakers must decide how they will secure a program vital to millions of Americans. That starts with putting forward a plan …”
I have participated in interviews with nearly every candidate and officeholder in Utah for many years now. With the exception of two Democrats running this year for the 1st congressional district — Nate Blouin and Michael Farrell — nearly all have listed either the national debt or Social Security reform among their priorities.
Possible solutions
To be fair, many of them have introduced credible bills to fix those things in various ways, but none has gained traction in a Congress preoccupied with partisanship and an aversion to compromise on important issues.
Solutions aren’t elusive. They generally involve a combination of raising the retirement age for young workers, reducing benefits for wealthier retirees, raising the current $184,500 cap on taxable income or enacting small tax hikes.
Yet, in 2023, President Joe Biden shut off debate on the matter when, during his State of the Union address, he accused Republicans of wanting to destroy Social Security. As I wrote at the time, it was political theater designed to draw a clear line between the parties. Republicans erupted in catcalls denying the charge.
After that speech, it seemed as if a bipartisan agreement had been forged to leave Social Security alone at all costs. But, as the Committee for a Responsible Federal Budget’s report makes clear, Social Security won’t leave politicians alone — not for much longer, in any case.
The program never was meant to be a personal retirement account, but for too many people it is their only source of income in old age.
“One-in-five Americans — 63 million in total — would be impacted if Social Security’s retirement program faced a 24% cut today,” the report said. That includes about 54 million retired people and nine million who collect as survivors and dependents. If one thing can be said about this group, it is that they vote.
Maybe, when the time comes, Congress will simply change the rules and vote to fund the program fully through general income tax collections, adding the total to the yearly deficit and the ballooning national debt.
But that would be merely trading one problem for a much larger and more serious one. Either way, unless real solutions are enacted, the day surely will come when angry people will look for someone to blame.