What Is the Truth about Social Security?

            Democrats and particularly President Joe Biden are lying to the American people about Republicans and Social Security. Biden has been campaigning for Democrats across the nation. In Florida, he told the people that the Republicans are threatening the future of Social Security if they take power in Congress. He portrayed the future of Social Security as being misleading and undermines the future of the program.

            The truth is that the future of Social Security is not secure. The program is running out of time and money, and the increasing debt and spending have crowded out options to reform it. Rachel Greszler suggested that there are seven things that Americans should know, “so that they can make informed decisions about their own futures and about which Social Security reforms would be best for them.” 

1. Workers’ Social Security taxes aren’t set aside for their retirement. Despite the notion that the social security taxes that workers pay are saved to fund their future benefits, the federal government has consistently used Social Security’s revenues to pay for other government spending, issuing Social Security’s trust fund IOUs in return. And starting 12 years ago, Social Security began paying out more in benefits than it collects in taxes, which requires cashing in on those IOUs and adding to deficits. But those IOUs will run out in about 12 years.

2. Social Security is not secure. If policymakers do nothing, Social Security’s retirement program will be insolvent in 2034 and benefits will be cut by 23% across the board.

3. Social Security has a $20.4 trillion shortfall. Part of the reason Social Security is so popular is because it has paid out more in benefits than it takes in taxes. Social Security’s combined old-age and survivors’ insurance and disability insurance programs are scheduled to pay $20.4 trillion more in benefits than they will collect in taxes over the next 75 years. That’s a shortfall of about $157,000 for every household in America. Confronting that reality is why Social Security reform is so difficult, but the longer policymakers wait, the higher that cost will rise.

4. The cost of inaction is exponential. Between just 2010 and 2020, Social Security’s combined retirement and disability programs’ unfunded obligations surged from $8.6 trillion and $71,000 per household to $20.4 trillion and $157,000 per household. Those costs will continue to grow until policymakers confront Social Security’s insolvency.

5. Social Security is a bad deal for current and future workers. Social Security may have been a good deal for Biden’s generation, but it’s not a good deal for current and future workers. A Heritage Foundation analysis showed that the average younger worker could receive nearly three times as much as Social Security can provide if they were instead able to save Social Security taxes in their own retirement accounts…. Even low- wage workers making about $20,000 a year could have 40% larger incomes in retirement as a result

6. Democrats’ plan for Social Security would hasten insolvency and exacerbate shortfalls. Democrats have a proposal – “Social Security 2100: A Sacred Trust” – that they say will expand Social Security benefits, reduce the program’s shortfalls, and conform to Biden’s pledge to not raise taxes on people making less than $400,000. But that claim is disingenuous at best. Their “Sacred Trust” uses 75 years of tax increases on high-income earners to pay for just five years of benefit increases for everyone. If those benefit increases were made permanent – as is the intent of its supporters – “Social Security 2100: A Sacred Trust” would hasten Social Security’s insolvency by two years (to 2032) and increase the program’s already massive shortfalls by an additional 21%.

7. Democrats’ plan for Social Security would require a $3,000 tax hike for a typical household. Making the benefit increases of “A Sacred Trust” permanent would require raising Social Security’s payroll tax from 12.4% to 16.7% (in addition to the proposal’s tax increases on people making over $400,000). That would equal an extra $3,000 per year and $11,800 total in Social Security taxes for the median household.

            It is no secret that Social Security reform will be difficult and painful, and Americans should know this information. Yet, Democrats seek to make it a political matter instead of helping the difficult discussions and actions to take place.

            It is impossible to go back to the past to make changes. However, we can take a serious look at the problem and fix it as soon as possible. The way to fix it is for Congress to “refocus the program on its original purposes; namely, providing financial security and protecting seniors from poverty.” They can do this by “reducing Social Security’s drag on personal incomes and nest eggs” and by making “more people – and the entire economy – better off.”