POLITICAL ROUNDUP: Debates on impending Social Security cuts continue

By 2032, Social Security benefits must be cut by 22% to save the Old-Age and Survivors Insurance Trust Fund, say members of Congress and other pundits.

The U.S. debt reached $40 trillion, begging the question if the 22% figure will be higher. In 2024, U.S. Rep. Randy Feenstra, R-Iowa, addressed this question before the Social Security Subcommittee hearing on the Social Security Trust Funds in 2024.

He asked whether Social Security spending adds to the national debt, and was told yes, because the U.S. government did not save any of the excess payroll taxes the Treasury Department collected when the fund had a surplus.

“Instead, the U.S. government turned around and spent those payroll taxes on other things,” states the article on Feenstra’s inquiry titled, “Social Security Spending Adds to the National Debt,” on the Cato Institute website, Cato at Liberty Blog, published June 5, 2024.

Payroll taxes collected in excess of what was needed to pay Social Security benefits simultaneously increased government spending in decades past, while leaving future workers with a debt owed to Social Security, states the article.

“This fiscal paradox underscores the intricate challenges of managing long-term entitlement programs on a pay-as-you-go basis within the broader context of federal budgeting,” states the article.

On Aug. 5, U.S. Sen. James Lankford, R-District 51, spoke before the Senate Finance Committee on the topic.

“This is a moment we should talk about stabilizing the program, and the concern is everyone knows in six years we have an insolvency issue,” Lankford said. “That red light on the dash has been flashing for a long time, but the challenge is when we have a conversation about Social Security, it immediately becomes an issue of fear-mongering across the country that this is all about taking benefits away.”

He said Congress is trying to get to a point where no one loses benefits.

“In fact, we stabilize the program long-term is the goal of this, but it is a real challenge to have a grown-up conversation about this to try to figure out how do we resolve it,” Lankford said. “I am one that’s supportive of this committee doing this work to be able to resolve something or to pull together a bipartisan/non-partisan commission made up of members to be able to make recommendations.”

Within Congress, some spend time on the issues of Social Security and some don’t, and it is beneficial to pull people from both sides of the aisle to do the work and bring it back to Congress for a vote, Lankford said.

“I was part of a small group that met with President Barack Obama years ago when the House changed over and it was a Republican House, Democratic Senate and Democratic president,” Lankford said. “Obama’s response in a private conversation, was ‘I didn’t campaign on this. We’re not going to work on this.'”

He shared a press release from AARP accusing Congress of stopping Social Security benefits.

“We need to have a conversation that doesn’t make people afraid that seniors are going to be attacked,” Lankford said.

All representatives of Cherokee County, on state and federal levels, were asked to give input on this week’s question. None had responded by press time.

On the Facebook Forum Aug. 15, readers were asked, noting Congress’ retirement accounts are funded by taxpayers: “Are you a recipient, and are you OK with sacrificing 22% of your benefits? On a typical $2,084 payment, that would bring down the monthly payment to $1,625 – estimates based on amount after deductions. What action should Congress take, if any, to save Social Security?”

Nick McIntosh asked if the same questions had been asked from 2008-2020. Those presidents were George W. Bush, Obama and Donald Trump. (In fact, it has been asked at least three times by TDP since 2009.)

Julie Gahn asked how Social Security’s financial situation would be if the government hadn’t borrowed against it when it had surpluses.

“It seems like our taxes were spent on pork barrel projects and now we’re left footing the bill again,” Gahn said.

Gahn shared some research on the debt to the Social Security trust funds.

“The federal government has accumulated roughly $2.4 trillion to $2.7 trillion in intergovernmental debt owed to the Social Security Trust Funds,” Gahn said. “This massive total represents historical payroll tax surpluses that were spent on general government operations in exchange for special-issue U.S. Treasury securities (IOUs).”

Mark Jones is sure certain powers, including banks, want to squeeze the issue to reopen an old idea of everyone putting some of the money into the stock market.

“Probably not the worst idea long term, but [it] would be manipulated,” Jones said. “The other issue is that the earlier they had started on a solution, the better answer we could have. Waiting until the car nearly hits the wall just creates sequentially worse solutions.”

He said a solution is vital, and he has kids in their 40s who believe they won’t see any return on their taxes paid into the system.

Win Belcher said reform has not been an issue Democrats or Republicans have wanted to confront, and instead of governing they have taken the “kick the can down the road” approach to postpone the inevitable outcome.

“Issues such as the decrease of payers into the fund due to the retirement of baby boomers, with lower birth rates in subsequent generations, young adults entering the work force at later ages, the regulation of who qualifies for payments, as well as the increase of life expectancy for a program originally designed to be an ‘end of life’ program, not a retirement program, are also structural issues,” Belcher said.

What you said

In a poll on TDP’s website, readers were asked, “Given all the money being spent by the federal government at this time, do you feel confident they’ll take action to save Social Security?” The answer with the most answers, at 41.5%, was “absolutely not confident they’ll save it”; 26.8% voted, “absolutely confident they’ll save it”; 22% chose “not very confident they’ll save it”; and 9.8% were “somewhat confident they’ll save it.”