What 2020 Candidates are Saying About Social Security (Part 1)
This being an election year there is talk again about what the candidates propose to do about the Social Security program which most recent projections suggest will run out of money by 2035. The Medicare program projections are more dire, with that program now expected to be insolvent by 2026 which is 3 years earlier than was predicted in 2017.
I have written about this problem a few times over the past 10 years but Washington D.C. has done nothing about it except to raise the full retirement age gradually for baby boomers – those born between 1946 and 1964 – who are now or will soon be reaching retirement age. There are a few reasons for this problem. One is that people are living longer in retirement and thus collecting benefits longer than was ever anticipated. The aging population is also a cause. Back when Social Security was instituted the ratio of workers contributing to Social Security versus retirees collecting benefits was much greater than it is now. It is not difficult to do the math and see that more people taking money out and less people putting money in is going to be a problem.
What makes it worse is that as the percentage of Americans with traditional pensions has declined and with only about ½ of all American households owning retirement accounts at all, Social Security will be for many the only source of guaranteed lifetime income in retirement. Eventually this will need to be addressed. Whether that happens in the next 4 years is not a given but let’s take a look at what Republican and Democratic candidates are saying.
During his campaign in 2016 President Trump said he wouldn’t be in favor of cutting Social Security benefits and said again in his State of Union address a couple of weeks ago that he would protect both Social Security and Medicare. At other times he has said he would eventually look to cut entitlement programs although not specifying which ones. He has made no attempt, however, to fix the insolvency problem. Additionally, his latest proposed budget included cuts of $72 billion to the Social Security disability program. Other proposed changes would make it potentially more difficult to qualify for SSD benefits. Some of the Democratic candidates have spoken a little more specifically about their proposals. Next week I’ll talk about them.